We are sorry to say goodbye to Neil Gaskell, who retired at the end of July after serving for 13 years as our VAT manager. We wish Neil well in his retirement and thank him for all his invaluable work in that time.

As reported last month, on 20 July 2021, HMRC launched a consultation on proposals to change the current tax rules on basis periods, with a proposal that taxable profits would be based on the profits in the tax year rather than the accounting period ending in the tax year. The consultation period was for only six weeks with a deadline of 31 August 2021.

As part of our response, we met with HMRC on 3 August and on 11 August, Tax Faculty staff hosted a round table to discuss the proposals. Attendees included HMRC staff, members of the Tax Faculty Board and various Tax Faculty sub-committees, as well as representatives from ICAEW Practice Committee. In addition, we also discussed the proposals with a number of other professional bodies, including the Chartered Institute of Taxation (CIOT) and ICAS.

As a result of those pan-professional discussions, ICAEW was a co-signatory to a letter to the Financial Secretary to the Treasury, which expressed a number of concerns about the proposed timetable for reforming basis periods and how it risked undermining trust in the UK tax system. We submitted our response to the consultation (ICAEW REP 72/21 Basis period reform) on 27 August, in which we concluded that the proposals should be dropped.

We attended a number of meetings with HMRC and other professional bodies on the proposals for Maxing Tax Digital for income tax. HMRC confirmed that it is pressing ahead with the proposed start date of 6 April 2023, which now leaves members and their clients with very little time to prepare for the changes, at a time when we are still waiting for the detailed regulations to be laid.

On 6 August, we attended a meeting (convened by the CIOT) of various professional bodies, with the special advisers to the House of Lords Finance Bill sub-committee, to discuss the government’s draft Finance Bill measures and to suggest possible topics and concerns for the sub-committee to consider.

We had a meeting with HMRC’s project team to consider a new workstream on the raising standards agenda, originally announced by the government in November 2020. We explained the role of ICAEW in ensuring that chartered accountants receive an excellent professional education and training and the requirements for members to maintain high ethical standards in their tax work through the need to adhere to our professional conduct rules, which includes compliance with Professional conduct in relation to taxation. We expect further engagement with HMRC over the remainder of the year as this project progresses.

We have made informal written representations to HMRC on a range of employer and national insurance contributions (NIC) issues. This includes: the interaction between employment allowance and the NIC element of the coronavirus job retention scheme (CJRS); CJRS enquiries; off -payroll working clients who are trusts; off -payroll working tax/NIC off sets following corrections to employment status determinations; crossborder working (s690 determinations); and online forms P11D(b).

During the period, there were virtual meetings of the Employment Taxes and NIC Committee, the Tax Policy and Reputation Committee and an informal meeting of the Tax Faculty Board.

We hosted two webinars during the period. On 12 August, Richard Jones, the Tax Faculty’s Business Tax Manager, joined me for a presentation on a new topic that is generating much interest in our members: freeports. We covered what freeports are and where they are located, the customs and tax benefits on offer, as well as some of the concerns about them, and whether they will succeed in driving growth and investment.

On 26 August, we hosted a webinar on the UK’s patent box regime, which was presented by Graham Steele and Will Rainford of RSM and moderated by Richard Jones. You can watch our webinars by following the links on our website.

We published three TAXguides in the period:

• TAXguide 14/21 Income tax loss carry back
• TAXguide 15/21 Off-payroll working: are you a ‘small’ private sector client?
• TAXguide 16/21 Off-payroll working: trusts as clients: ‘small’ and ‘UK connection’