Frank Haskew, Head of the Tax Faculty, reports on recent developments at the Tax Faculty.
The 2021 Finance Bill
The Committee stages of the Finance Bill are now well under way and the Tax Faculty has submitted a number of briefi ngs to MPs on key topics of concern in the Bill.
Particular highlights from the briefings include comments on the new penalty regime for the late payment of income tax and VAT, which we think is overly complex and needs to be simplified. We also recommended that the changes to the construction industry scheme should be deferred to give more time to adapt to changes due to take place on 6 April 2021 and that further clarifications to the rules are needed.
Finally, we highlighted that for the new super-deduction or special rate first-year allowance for capital allowances purposes, assets purchased with a view to leasing to third parties do not qualify for relief.
The tax administration framework review
The call for evidence for the tax administration framework review (TAFR) runs to 13 July 2021 and, at the time of writing, we are still collating comments. These are also informed by the comments we received from members who watched our webinar on this subject on 5 May 2021. Please send any further comments to firstname.lastname@example.org.
More timely payment
In a similar manner to the TAFR above, the call for evidence runs to 13 July 2021 and was also covered in our webinar on 5 May 2021. Again, please send any comments to email@example.com.
Raising standards: compulsory PII
By the time that members read this, we will be close to the deadline (15 June 2021) for submitting comments to the consultation document, which proposes that all those who provide tax services should hold compulsory professional indemnity insurance (PII). If you have any final comments, please send them ASAP to firstname.lastname@example.org.
The stakeholder group responsible for inputting into HMRC’s Charter Annual Report has been looking for feedback on how HMRC has performed during 2020/21 to inform the next Annual Report. We have fed back some informal comments to HMRC, but would always welcome further comments on the Charter and its operation. Please send them to email@example.com.
Engagement letter guidance update
To support practice firms, ICAEW publishes guidance on what to include in engagement letters, including sample wordings to help firms draft letters for different services. On 7 April, ICAEW’s Technical Advisory Services updated its guidance. Following discussions with the Tax Faculty, the key change has been to include additional support on engagement letters relating to VAT returns after the introduction of the Northern Ireland protocol.
Making Tax Digital
A group of Tax Faculty staff and members held a roundtable with HMRC staff to examine some of the issues arising out of the current MTD proposals. The discussion was helpful in highlighting some of the potential difficulties and requirements around digital record-keeping and the proposal for quarterly updates, and how these aspects of the proposals might be improved.
A number of Tax Faculty staff and active members attended HMRC’s virtual spring annual stakeholder conference. In addition to attending regular stakeholder meetings with HMRC, we participated in a full meeting and two special meetings of the Representative Bodies Steering Group (RBSG).
The first special meeting of the RBSG discussed the consultation/calls for evidence on the tax administration framework, more timely payment of tax and compulsory PII. The second special meeting followed up on previous discussions about the agent dedicated line and how and when priority access might be restored.
During the period, there were virtual meetings of the Tax Policy and Reputation Committee, the Technical and Oversight Committee, and the Employment Taxes and NIC committee.
On 13 April, Caroline Miskin presented a webinar, providing an update on the self-employment income support scheme (SEISS) grants, focusing on the rules for the fourth and fifth grant applications. As mentioned, on 5 May 2021, we examined the proposals in the TAFR and the more timely payment consultation. My thanks to Anita Monteith and Caroline Miskin for making the presentations. You can watch them again by following the links on the webinar pages.