Frank Haskew, Head of the Tax Faculty, reports on recent developments at the Tax Faculty.
The 2021 Hardman Lecture
The 2021 Hardman Lecture Our first virtual Hardman lecture, Making Tax Digital – what does it mean for tax professionals?, took place on 2 February. It was presented by Jane McCormick, former global Head of Tax at KPMG, and was introduced by Raj Shah, Chair of the Tax Faculty. Our thanks go to Jane for her most illuminating talk on how tax authorities around the world are making the dash to digital, and what it all means for tax advisers.
The 2021 Budget
The 2021 Budget took place on 3 March 2021. Anita Monteith appeared on BBC Radio 4’s Money Box Live that afternoon to discuss the announcements. In addition to the faculty posting a number of news items on Budget Day, on 5 March we posted our detailed budget commentary, which can be found at icaew.com/TFbudget. Many thanks to Lindsey Wicks for undertaking a superb job of editing the document, and to all the team for their contributions.
We also presented a Budget webinar on 5 March, for which more than 1,300 members registered. I would like to thank my colleagues Anita Monteith and Caroline Miskin for presenting with me, and Richard Jones for managing the many questions we received. We are reviewing the questions, but an area that has generated much interest is the new investment ‘super deduction’, and there’s continued interest in the next versions of the SEISS grants. We plan to have further webinars on these areas in due course.
Helping members through the COVID-19 support schemes
HMRC’s announcement of a waiver of late filing penalties for self assessment returns filed by 28 February 2021 was followed on 18 February by a further welcome announcement of an easement on late payment penalties. The faculty engaged with HMRC on these easements and published information for members.
Engagement with policymakers
On 24 February, we met with the Financial Secretary to the Treasury to discuss our Budget letter. We considered the forthcoming consultation on compulsory professional indemnity insurance and raised concerns about the need for quarterly reporting in making tax digital for income tax and corporation tax programmes. On 1 March, the Treasury Committee published its well-considered report Tax after Coronavirus, which included a number of references to oral evidence submitted by Anita Monteith.
Making Tax Digital
The Tax Faculty’s MTD for ITSA working group met to discuss progress with the pilot. We continued to engage with HMRC on the MTD for ITSA proposals and held several informal discussions with HMRC on the MTD programme. We remain concerned about the requirement to file quarterly reports that will increase admin burdens and costs, and which we do not think will provide any useful information to HMRC.
On 23 February, we sent a letter to the Financial Secretary setting out these concerns and raised it with him in our meeting the following day. We will continue to press the case for quarterly reporting to be deferred or dropped from the MTD proposals. We convened a round-table discussion of Tax Faculty members to discuss the MTD for corporation tax consultation where, again, concerns were raised about the need for quarterly reporting. The comments we received at the round table formed the basis for our subsequent representation.
Committee meetings
During the period, there were virtual meetings of the Tax Policy and Reputation Committee, the Practitioner Tax Committee and the Private Client Committee.
Representational work
On 18 February, in advance of an expected consultation document, myself and colleagues from ICAEW’s professional indemnity (PI) insurance team met with HMRC to discuss how PI supports professional standards and the public interest. We met with the new HMRC team working on implementing the proposed new regime for late submission and payment penalties, where legislation was subsequently published in the Finance Bill. We also attended a meeting with HMRC’s Tax Administration Framework Review team, and a call for evidence is expected to be published on 23 March 2021.
Regular engagement forums have included the Representative Body Steering Group, the Charter Stakeholder Group, the Virtual Communications Group, the IR35 Forum, and the Trusts and Estates Agents Advisory Group. There was a special meeting of the IR35 Forum to discuss tax/NIC off sets.
Webinars
We held several webinars in the period. Topics included the VAT construction reverse charge, MTD for ITSA, IR35 and employment status, getting R&D claims right, and the key tax risk areas for companies in 2021. Anita Monteith joined Rebecca Benneyworth on a revival of TAXtalk, aimed at the Small Practitioner Community. The links are on our website.