TAXline News: July 2022

We are delighted to welcome Ed Saltmarsh as our new VAT and Duties manager. Ed will take over responsibility for our VAT and Duties Committee and develop our expertise in trade matters and customs duties. Ed was formerly a VAT senior manager with BDO in Southampton. We would like to thank Neil Gaskell for coming out of retirement to provide cover while we searched for a new manager, wish him all the best in retirement, and wish Ed all the best in his new role.

During the period we finalised and submitted our response to the online sales tax consultation. Following the round table reported last month with the Office of Tax Simplification (OTS) to discuss the OTS property income review, we submitted a follow-up representation setting out concerns about specific property issues that the Making Tax Digital (MTD) programme needs to address. We also submitted a representation on the OTS’s evaluation of PAYE. 

We made an informal written representation to Matt Warman MP, who is leading the review set up by the prime minister on the future of work, and to HMRC on a range of other employment tax and NIC issues including paying tax/NIC early, forms P11D, and updating minutes of consultative forums on gov.uk. Finally, a Tax Faculty working party commented on the ICAEW consultation on a revised approach to CPD as it will apply to those working in tax. We also held a follow-up meeting with the ICAEW’s CPD project director. 

We continue to engage extensively with HMRC’s MTD team. We held meetings with them to discuss several areas of concern, including the implementation timetable, the burden of quarterly reporting and its impact on smaller businesses, and how the reporting of property income under MTD will interact with the basis period reform proposals.  

During the period we attended a meeting of the seven professional bodies that together publish Professional Conduct in Relation to Taxation (PCRT). Topics discussed included the role played by the PCRT in supporting the raising standards agenda. As it is five years since the current PCRT was revised to include the five standards for tax planning, it was agreed to undertake a review of the PCRT and Helpsheets. The review will take place over the summer and the latter half of 2022. We would welcome any comments from members – please email them to me.

We held a regular quarterly catch-up with the HMRC tax intermediaries team, where we discussed the likely next steps in the raising standards agenda and also raised continued concerns from members about HMRC’s service standards. We also attended meetings of the HMRC Charter Stakeholder Group, the Powers and Safeguards Forum and the Penalty Reform Forum. 

We attended meetings of CFE, the European tax adviser body. Items discussed included CFE’s ethics quality bar paper, the EU Commission proposal to publish a consultation document on regulation of tax advisers and the potential role of the CFE paper in any such regulation. We also attended a meeting of the tax directors of the Global Accounting Alliance (GAA). Topics covered included digital tax developments by the national tax authorities, the likely next steps in the Organisation for Economic Cooperation and Development Base Erosion and Profit Shifting Pillar 1 and 2 proposals, regulation of tax advisers and feedback from GAA members on the round-table meeting hosted by the International Standards Ethics Board (IESBA) on possible changes to the existing ethical code in relation to tax. 

On 18 May, Anita Monteith and Caroline Miskin gave presentations and hosted a panel session at ICAEW’s MTD Live event at Chartered Accountants’ Hall. They were joined for the panel session by two representatives from HMRC. ICAEW Technical Manager Richard Jones hosted a webinar on basis period reform and HMRC’s proposals for dealing with estimated figures. He was joined by Tom Brown, Senior Policy Adviser in the Small Business and Trading Policy Team at HMRC to explain the potential options being considered. Our thanks go to Tom for joining the webinar. You can watch it again by following the links on our website. 

In a joint project with the Chartered Institute of Taxation and the Society of Trust and Estate Practitioners, our existing TAXguide on the treatment of loans secured on foreign income or gains by remittance basis users has been updated to include new material from HMRC, including highlighting some new examples that have been added to HMRC’s Residence, Domicile and Remittance Basis Manual.