TAXline News: December 2020
Frank Haskew, Head of the Tax Faculty, reports on recent developments at the Tax Faculty.
The 2020 Wyman Symposium
On 21 October 2020, we held our first virtual Wyman Symposium, which explored the digital agenda. My thanks are owed to the speakers who, between them, covered a range of perspectives on the roll-out of the digital agenda and making tax digital (MTD) for income tax, scheduled to start in 2023. The speakers were: Jane McCormick, recently retired as global Head of Tax at KPMG; Paul Aplin, former ICAEW President and Chair of the Tax Faculty; Gary Turner, CEO of Xero; and Louise Dunstan Rice, a Deputy Director at HMRC. For the Q&A session we were also joined by Roy Wallace, the MTD programme director at HMRC. If you missed the event, you can watch a complete recording of it by following the links to our webinars from the Tax Faculty homepage.
COVID-19 revisited
Any thoughts that the various support schemes introduced in the response to coronavirus pandemic would by now be unwinding have proved to be far off the mark. After the announcement that the Job Support Scheme would start on 1 November 2020, it was then announced that the scheme would be deferred and the existing CJRS scheme would continue with increased support, although employers will be required to pay employers’ NIC and pensions. The situation is changing all the time so please keep an eye on our daily articles on the ICAEW website.
House of Lords Finance Bill Sub-Committee
On 5 October 2020, I gave evidence, along with colleagues from the CIOT and ICAS, to the House of Lords Finance Bill Sub-Committee. The Committee is making enquiries into a select number of draft clauses, which are proposed to be included in the Finance Bill 2020-21. These include: proposed tightening of the promoters and enablers of tax avoidance schemes rules; a new proposal for tax checks on various licence applications; and changes to HMRC’s civil administration powers, which will override one of the existing safeguards in Sch 36, Finance Act 2008 that requires a third-party taxpayer information notice to be approved by the Tribunal. We followed up our oral evidence with written evidence, which will be published shortly.
Committee meetings
During the month, there were meetings (all virtual) of the Tax Policy and Reputation Committee, the Private Client Committee and the Practitioner Tax Committee, as well as various meetings with HMRC that covered a range of topical issues.
Consultation responses
On 5 October 2020, we responded (ICAEW Representation 82/20) to the government’s plan to boost the employment of military veterans through a temporary relief on employers’ secondary NIC contributions. We expressed concern that the scheme is unlikely to deliver the expected benefits due to the economic situation and the administrative burden involved.
On 9 October 2020, we responded (ICAEW Representation 90/20) to a consultation published by HM Treasury about whether changes should be made to the ways that tax relief is given on pension contributions made by lower earners. Under current rules, a lowearning individual’s take-home pay can be affected depending on whether a net pay scheme or a relief at source scheme is used. We expressed the concern that, in the current climate, this is not the right time to impose further admin burdens on employers.
On 12 October 2020, we responded (ICAEW Representation 91/20) to a consultation published by HMRC on possible options to change the scope of qualifying expenditure on R&D tax credits. We supported plans to review qualifying R&D expenditure to ensure it is well targeted, but we also suggested HMRC should consider whether R&D relief could be extended to support all industries.
On 15 October 2020, we responded (ICAEW Representation 93/20) to a consultation document published by the Welsh government, which sets out some options for reforming the existing procedures and which would enable the Welsh government to respond more quickly to events that have an impact on the tax system. We agreed that the current powers and processes are not sufficient to make changes to the tax system quickly, and that the Welsh government needs appropriate powers to do so.
TAXguides
At the time of writing, we have several new and updated TAXguides in progress. Take a look at our website to see what guidance is available to Tax Faculty members to support you in your day-today work.