Tax simplification 

On 10 May, ICAEW attended a tax simplification roundtable with the Financial Secretary to the Treasury (FST) Victoria Atkins MP. Other attendees included ICAS, the Chartered Institute of Taxation, the Association of Taxation Technicians and the Low Incomes Tax Reform Group. The FST outlined the government’s tax simplification strategy and how the professions might help and support the simplification agenda following the closure of the Office of Tax Simplification. 

In addition, the FST also wished to discuss regulation of the tax profession, the need to improve guidance on gov.uk and the making tax digital (MTD) for income tax programme and the accompanying small business review. The FST proposed follow up meetings on simplification and regulation. 

MTD small business review

The Tax Faculty has now published its letter to HMRC setting out a summary of its thoughts on what changes are needed to MTD for income tax for smaller businesses – in particular the need for the quarterly reporting requirement to be reconsidered and the level of the threshold. The letter was reported in AccountingWeb. 

HMRC service standards

Poor service standards at HMRC continue to cause considerable concern to members. On 15 May, the Tax Faculty received a response to a pan-professional body letter to the Chancellor about poor HMRC service standards. The response emphasises that digital services are the key to improved HMRC performance. However, improvements to digital services are still some way off. In the meantime, HMRC’s budget is likely to continue to come under pressure, with the result that poor service levels will continue. The mainstream media contacted us for comments. 

VAT at 50

On 22 May, The Tax Faculty’s Technical Manager for VAT and Customs, Ed Saltmarsh, hosted the VAT at 50 conference at Chartered Accountants’ Hall. The conference was attended by 150 delegates, including a strong showing from HMRC and HM Treasury. The purpose of the conference was to discuss the future of VAT under three broad themes: simplification, sustainability and technology. 

There were keynote speeches from Jim Harra, First Permanent Secretary and Chief Executive, HMRC, and Professor Rita de la Feria, Chair of Tax Law, University of Leeds, with several other high-profile speakers taking part in the panel discussions. Alison Ring, ICAEW’s Director for Public Sector and Taxation, made the closing remarks. The Tax Faculty received great feedback and is now considering how it might build on some of the simplification themes identified at the conference. 

Professional conduct and HMRC’s agent standard

ICAEW submitted its response to the International Ethics Standards Board (IESBA) exposure draft proposing revisions to the ethical code in relation to tax planning and related services. ICAEW is continuing to work with the other Professional Conduct in Relation to Taxation (PCRT) bodies to consider how the proposed changes to the ethical code might be reconciled with PCRT in a way that preserves PCRT as the UK ‘industry ethical standard’ for tax advice. 

The PCRT bodies also attended a meeting with HMRC to discuss the recent revisions made to HMRC’s agent standard. There is concern that the growing divergence between HMRC’s agent standard and PCRT could damage the standing and importance of both documents. The meeting was productive and helped foster a better understanding that the environment in which members of a professional body operate is much wider than just compliance with PCRT. It was agreed that follow up meetings would be held with the aim of ensuring that the different purposes of both documents are clarified, and they both help to support the raising of standards across the wider tax profession. 

Tax Faculty committee meetings 

During the month there were meetings of the Employment Taxes and NIC Committee and the Tax Policy and Reputation Committee. 

Representations published

The Tax Faculty submitted three representations in the month, as follows: 

ICAEW REP 42/23 – Draft regulations: VAT provisions for drink deposit return schemes. 

ICAEW REP 41/23 – Proposed revisions to the IESBA ethical code addressing tax planning and related services (see item above).

ICAEW REP 40/23 – Land and Buildings Transaction Tax – Green Freeports Relief: consultation on proposed legislation. 

Webinars and other events 

On 2 May, Anita Monteith and Ed Saltmarsh recorded an ICAEW Insights podcast. Anita spoke about the measures announced on Tax Administration and Maintenance Day, and Ed spoke about what we have learnt from the first 50 years of VAT.

On 4 May, Business Tax Technical Manager Richard Jones gave a presentation to the ICAEW Healthcare Conference. 

On 10/11 May, Caroline Miskin attended the ICAEW stand at the Accountex exhibition. 

On 16 May, the faculty’s latest webinar was a Payroll and Rewards Update. It was presented by Ian Holloway, a member of the Tax Faculty’s Employment Taxes and NIC Committee and was moderated by Peter Bickley. My thanks to them both for an interesting webinar. 

TAXguides

The following TAXguides have been published:

TAXguide 02/23: Associated companies 

TAXguide 03/23: R&D tax relief for accounting periods spanning 1 April 2023