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Addressing the tax challenges for 2018

Chairman of the Tax Faculty Carl Bayley looks to the tasks for the year ahead for the faculty, such as Making Tax Digital and Professional Conduct in Relation to Taxation, working with the CIOT and devolved tax. With a new structure and a massive volume of consultations promised for 2018, how will the faculty meet these challenges?

Taxline image cover2018 is going to be a very exciting year for the Tax Faculty. Changes ahead will see a new and revitalised structure in our volunteer body. I am looking forward to seeing those changes and watching them create an environment in which the work we do – to serve our members, provide guidance and help to government and other key stakeholders, be the voice of tax for ICAEW and a centre of excellence for the UK tax community – will blossom to a degree we have never seen before.

Does this seem over ambitious? I don’t think so. We have the team, we have the will and we are very much centre stage in the accountancy profession. Now is the time for a refreshed and rejuvenated faculty to achieve its true potential. We are 27 years old this year: it is time for us to grow up!

But growing up will not mean leaving home. We are an absolutely vital part of the ICAEW family and that is where our home lies. Far from leaving our parent, we have become a very central part of ICAEW over the past few years, more important to it than ever before – and this fact is one of the key drivers for the changes ahead.

We will see a new Tax Faculty Board which is very much integrated into the ICAEW structure – ready to provide all the guidance, support and advice that is needed. At the heart of the Institute, we will very much remain its voice on tax.

And I can’t tell you how delighted I am that this board will be chaired by my successor as Tax Faculty chairman, Mary Monfries. Many of you will already know her from the Wyman Symposium in 2016 and her Hardman Lecture in 2017, as well as numerous editorials and articles. We are very lucky to be in such good hands for the next two years.

As for myself, I am looking forward to the last few months in this, the third year of my two-year term. It has been a wonderful journey and I still have a little energy left for this final lap!

The tasks ahead

But all this is just the icing on the cake. Our refreshed structure comes at a time when there is also a great deal for us to do. As 2018 progresses, we will be getting to grips with the new legislative timetable following the first autumn budget in 20 years. The massive volume of consultations promised for 2018 will keep our staff and volunteers pretty busy. Let us just hope that the new timetable means our voice will genuinely be heard in Whitehall.

I can think of seven letters which will continue to play a major part in our work over the next year: MTD and PCRT.

The Making Tax Digital journey will continue as we move towards the introduction of MTD for VAT in April 2019. There is a great deal we need to do in advising HMRC on the implementation of the new regime and in helping our members, both in practice and in business, to prepare for it. The next year will probably also see developments in MTD for business on the income tax side and we will be there for our members on that too.

The last iteration of Professional Conduct in Relation to Taxation went live on 1 March 2017 and represented a huge stride forward in our approach to the essential guidance we need to give our members on tax planning and tax avoidance. We all have to recognise that the landscape has shifted in the past few years and we must move with the times. Having said that, my personal view is that most professionals would never have engaged in aggressive tax avoidance in the first place and, like me, are actually really grateful to have a document that simply backs up what their gut instincts have always told them anyway.

PCRT will move forwards even further in 2018 as we produce a digital version, to make it more convenient to members, and refresh some of the guidance – especially for members in business. As before, we will be working closely with the other professional bodies who are joint signatories to the document.

Working with the CIOT

Closer working with all our fellow professional bodies is highly beneficial, but we continue to develop a close working relationship with our colleagues at the Chartered Institute of Taxation (CIOT). This relationship has borne fruit already – closer working has made us more effective in how we approach HMRC, Treasury committees and much of our other representational work. This will continue in 2018, together with new initiatives which are currently under discussion. I look forward to a continuing fruitful relationship with CIOT.

One possible joint initiative we have been discussing is a Brexit working party. There will be so much that we need to do on this as a profession in 2018 – advising government, helping our members, supporting the business community, the list seems almost endless. Working together with CIOT makes a lot of sense: two heads are better than one and the two bodies jointly will have more than double the impact.

Talking of CIOT, one cannot help but think of our colleague Chris Jones, who sadly died in November. Chris played a major role in helping to bring the two institutes closer together and he will be sorely missed. We all owe him a great deal.

Devolved taxes

But we must look forward and many exciting initiatives beckon. At the time of writing, we are between the UK Budget on 22 November and the Scottish Budget on 14 December. I am one of many members who are caught in the crossfire between the two governments and am waiting with bated breath to see what happens on the 14th. This, of course, is all part of a bigger picture as further devolution of tax powers continues in all the nations which make up the UK. The first devolved taxes in Wales will come into force on 1 April 2018, including land transaction tax, yet another form of stamp duty on property to add to the growing list.

As always, the faculty continues to be involved in the development of devolved taxes in both Scotland and Wales, responding to consultations and calls for evidence and having as much of a dialogue with the devolved administrations as we are able. This work looks set to grow more important in the year, and years, ahead, so represents another area where we need to focus our attention.

In with the new

So, is it ‘out with the old, in with the new’ as we greet 2018? In the world of tax, very little seems to go ‘out’. Perhaps it’s more like ‘cope with the old, in with the new’.

About the author

Carl Bayley is chairman of the Tax Faculty and also runs his own practice, Bayley Miller Ltd