Frank Haskew, Head of the Tax Faculty, reports on recent developments at the Tax Faculty.
Autumn Budget 2021 and the Finance (No 2) Bill 2021-22
We submitted a representation to MPs on the provisions in the Finance (No 2) Bill 2021-22 implementing the notification of uncertain tax treatment rules. We also submitted a separate briefing on the same subject to the House of Lords Finance Bill Committee. While we welcome the changes that have been made following consultation on the original draft legislation published in July 2021, we remain concerned that the revised provisions still include a number of major uncertainties that should be addressed through legislative amendment.
Making Tax Digital
On 14 December we attended the first meeting of the reconstituted Making Tax Digital (MTD) advisory forum for the agent representative bodies. We remain concerned about a number of aspects of the underlying policy of MTD, in particular the quarterly reporting requirements, and continue to raise these in meetings with HMRC, most recently at the December 2021 meeting of the Representative Bodies Steering Group.
Consultations and representations
At the time of writing, we are now once again working from home due to COVID-19 and as a result we have been liaising with HMRC and HM Treasury about a number of pandemic-related matters. These include the announced waiving of late filing and late payment penalties for one month for not meeting the 31 January deadline, requesting an exemption from the benefit in kind rules for employers reimbursing the cost of flu jabs and consideration of further measures to support the hospitality industry.
We attended HMRC’s stakeholder forum in December 2021. This was a hybrid event and some of the Tax Faculty team attended in person. Given that we have not had face-to-face meetings with HMRC staff since March 2020, we found it helpful to meet with them and re-establish relationships, as well as having the opportunity to raise questions and concerns. These included HMRC’s service standards, the MTD programme and what will be the next steps in the raising standards consultation, now that the government has decided not to proceed with the proposal that all providers of tax services should have compulsory professional indemnity insurance.
Representatives from the Tax Faculty Board and other Faculty Committees met with a working group of the International Ethics Standards Board (IESBA), which is undertaking a project to review the ethical standards on tax planning and related services. The project is likely to lead to strengthening of the existing IESBA ethical code on tax-related matters. The foundation of the existing UK Professional Conduct in Relation to Taxation (PCRT) is the IESBA code. However, the UK PCRT bodies unilaterally strengthened PCRT in 2017. We are therefore keen to work with IESBA to help ensure that if the IESBA code is further strengthened, any changes made are aligned with those already reflected in PCRT.
We have also continued to work with HMRC staff and colleagues at the Chartered Institute of Taxation (CIOT) to identify poor practices in the research and development (R&D) reclaim sector and how they can be addressed, noting also that the government announced further measures in the Autumn Budget and at the Tax Administration and Maintenance Day to tighten the existing rules around R&D claims.
We have made informal representations to HMRC on a range of employment tax and NIC issues including form P46(Car) for electric cars and proposed changes to all NIC calculations because of the freeports NIC holiday.
During the period, there were virtual meetings of the Practitioner Tax Committee, the Tax Policy and Reputation Committee, the Employment Taxes & NIC Committee, the Technical & Oversight Committee, and the VAT & Duties Committee.
Webinars and other events
On 8 December, Caroline Miskin joined Rebecca Benneyworth for the final edition of Tax Talk for 2021, in which they reviewed the latest developments including the measures announced in the Autumn Budget and the current position on MTD. You can watch it again by following the links on our website.
Our final two TAXguides for 2021 were TAXguide 19/21 Off-payroll working: cross-border issues and TAXguide 20/21: Treatment of loans secured on foreign income or gains by remittance basis users, a joint body guidance note (with the CIOT and Society of Trust and Estate Practitioners). Our thanks go to Lynnette Bober, a member of the Tax Faculty’s Private Client Committee, for assisting with the drafting and finalisation of the latter guidance note.