Brexit and Social Security

Brexit and 16 May 2019 28 Discovery 42 social security exam results assessments Robert Salter and Yvanna Pert on Results and prizes from the CIOT Keith Gordon on the Tooth case the challenges of a hard Brexit and ATT May 2019 exams and the questi on of ‘staleness’ www.tax.org.uk www.att.org.uk

Excellence in Taxation NovemberAugust 2018 2019 www.taxadvisermagazine.com

A simpler way of giving The OTS’s second report on inheritance tax seeks to simplify the tax rules, explains Bill Dodwell, page 6

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CONTENTS

Welcomes Features 2 CIOT President’s welcome Summer reﬂ ec� ons … and a farewell Inheritance tax Professional skills Glyn Fullelove 6 A simpler way of giving Bill Dodwell 2 2 You have the power! Jo Maughan 4 ATT Vice President’s reports on the OTS’s second report on provides advice on how to get a be� er welcome inheritance tax, which seeks to simplify work-life balance Remember the � me and clarify the tax rules. PROFESSIONAL SKILLS Richard Todd INHERITANCE TAX

Education From the Technical team 28 CIOT results 30 Joint programme results 31 ATT results

Technical From the Technical team 45 Welcome 45 Making Tax Digital for VAT 46 R&D tax credit claims Risk management 10 The right balance Ruth Cook explains 46 HMRC le� ers and the risks associated with disclosing ‘cer� fi cates of tax posi� on’ informa� on to third par� es Residence and domicile 47 Structures and Buildings 24 Considered revelati ons Sharon McKie MANAGEMENT OF TAXES Allowance and Simon McKie examine disclosure in self-assessment returns in the light of 48 Energy-saving materials Warranti es and covenants increasing HMRC’s enquiries into 49 HMRC’s Employment Tax 1 4 The right route Stuart Pibworth explains ma� ers of residence and domicile Fora why it is important to be aware of the PERSONAL TAX 50 Mutuality of Obliga� on diff erences between warran� es and and CEST covenants LITRG 50 Fi� h Money Laundering OMB 38 Online help Meredith McCammond Direc� ve provides an overview of LITRG’s 51 Scotland: devolved taxes Brexit and social security technical website guidance 52 A social care tax for Wales? 16 Crunch ti me Robert Salter and Yvanna PERSONAL TAX MANAGEMENT OF TAXES Pert consider the compliance New LITRG guide for the 52 challenges that a hard Brexit may Stamp Duty Land Tax self-employed involve for those subject to Where are we now? SDLT has become 53 Pre 6 April 2016 state interna� onal social security 4 0 increasingly complex. Jo White provides pension lump sums EMPLOYMENT TAX an overview of the rules. INTERNATIONAL TAX INDIRECT TAX Briefi ngs From 30 Monck Street Discovery assessments Jaws 2 Keith Gordon considers the 55 Outgoing President’s 4 2 Court’s decision in the latest instalment speech of the Tooth case. 56 AGM 2019 minutes MANAGEMENT OF TAXES 57 Business rates debate 58 Women in Tax 58 ATT President’s inaugural speech 60 ATT Spring conference Season

Branch events Shariah fi nancing Dates for your diary 61 19 The Shariah compliant refi nancing trap Mohammed Amin provides guidance avoiding traps for the unwary when Recruitment using Shariah compliant ﬁ nancing 62 The best industry roles PERSONAL TAX OMB www.taxadvisermagazine.com | August 2019 1 President’s page New in 2019 from [email protected] Glyn Fullelove

Summer reﬂections… and a farewell

ugust is a month for holidays, of course, and roost. The system is now becoming so complex, mindful that many of you regard Tax Adviser government finds it increasingly difficult to Aas essential holiday reading, this month’s legislate without there being adverse unexpected President’s page will take a slightly broader view of consequences. One current example is the the tax world. situation where hospital consultants are refusing to I have been in many meetings over the years take on additional shifts because of extremely high where the sentiment that the tax system would marginal tax rates they face on the amounts they be much better if it was simpler was expressed. would be paid, due to the consequent tax impacts Indeed, we have an Office of Tax Simplification on their pension contributions. (OTS) in the UK, established to provide advice to Ultimately, the tax system has to work for the Chancellor on the simplification of the tax taxpayers, tax authorities and governments; I fear system. All the Directors of the OTS have been we are reaching a point where it does not work closely associated with the CIOT, two of them being satisfactorily for any of those groups. Whilst this former Presidents, and the CIOT has been a strong confirms that there is no lack of work for the latest supporter of the OTS’s work. We welcomed the incumbent as Director of the OTS, it also suggests sensible suggestions made in the recent OTS review some more overarching thinking is needed by of inheritance tax. government as to what sort of tax system is However, before we seek simplification of actually needed in the 21st century. any tax measures, it is necessary to consider why complexity has arisen in the first place. There is one Peter Fanning reason for the complexity of tax measures that I As many of you know, Peter Fanning, the have seen come up time and time again during my Institute’s Chief Executive Officer, retires time as a tax professional – and that is the need for on 2 August 2019. Under Peter’s guidance, fairness. There are very few tax measures which the operations of the Institute have been can be introduced into today’s complex economic transformed. His achievements include two and social world without creating anomalies and office moves, and, as St Paul’s is to Christopher unfair or undesirable tax outcomes. This leads Wren, I am sure 30 Monck St will be to Peter. to exemptions from the main measure, and Our IT capabilities have also been substantially then exclusions from the exemptions where the upgraded, and the new CIOT website, coming in exemption creates ‘undeserving’ beneficiaries, the autumn, will be another of Peter’s legacies and often anti-avoidance legislation to either to us. Peter has also been central in cementing back up the main measure or avoid abuse of the our relations with fellow professional bodies exemptions. Taxpayers and their representatives abroad and at home, most recently with the are generally the first to demand the need for agreement on the joint programme with ICAS. fairness in legislation, and we must thus accept our I am sure all members will wish to join with own responsibility for its complexity, and perhaps me in wishing Peter, and his wife Katharine, a admit there is some element of inevitability of such happy retirement. At our July meeting, Council complexity. Had Aladdin been a tax adviser, and recorded its thanks for Peter’s outstanding had asked the genie to grant him a fair and simple contribution to the Institute. tax system, I think the genie would have answered: I will be back from holiday in September, ‘You can choose between fair and simple – I can’t when I will have the pleasure of welcoming Peter’s give you both!’ successor, Helen Whiteman, to the Institute – of The tax system In the last 20 years, in my view, there has which more, next month! has to work for been a further driver for complexity. Chancellors Enjoy the summer! have become wary, for varying political reasons, taxpayers, tax of large scale tax reforms or of significant changes authorities and to the main ‘headline’ income tax rates (except in emergencies, such as around the economic governments; I fear crisis of 2008/09). This has led to a proliferation of we are reaching a measures to raise or relieve tax in particular areas, and changing features in individual taxes rather point where it does than the tax as a whole. For a long time, this has not work satisfactorily been successful in achieving the government’s revenue goals without too much political capital Glyn Fullelove for any of being needed. Unfortunately, the chickens – or President, CIOT these groups should it be the geese? – are now coming home to [email protected]

2 August 2019 | www.taxadvisermagazine.com www.claritaxbooks.com 01244 342179 New in 2019 from

www.claritaxbooks.com 01244 342179 ATT welcome [email protected] BETTER TOGETHER Richard Todd

Remember the time

ave you ever noticed, when you are collapsed over two and a half years ago, there is working on something particularly nobody in Stormont to take this forward. Habsorbing, time really does fly? I was One argument for such a low rate was to put working on a report in the office recently and, in Northern Ireland on a similar standing with the the absence of telephone calls or email pings to Republic of Ireland. It was argued that Ireland remind me to come for air, time really did fly. It has greater success in attracting foreign direct was not quite lunchtime, but my coffee cup still investment due to the low rate of corporation held the dregs of my first hit of the day: normally tax. Do you recall the EU forcing Ireland to + the cup barely has time to cool down. collect €13 billion in back tax last year from Casting my eyes, I took in the surroundings Apple? While that was not directly because of of my workspace: an assortment of pens of the 12.5% corporation tax rate, I understand it varying colours and ink levels; a pencil rubber was a contributing factor. broken in half; a handful of white paper dots And now we have Brexit – ‘bigger fish to fry’, from an overflowing hole punch; my collection as the saying goes. The business community now of ATT mouse-mats (easier to find historic tax faces a serious dilemma – no local Government, data than searching online); and, of course, tax and therefore no influence in the EU Departure legislation of various colours and thicknesses. meetings, and no clear guidance for local 2,500 CIOT MEMBERS HAVE ALREADY The most popular, and therefore most used, are businesses. dog-eared with pieces of paper bearing cryptic In 2017, the NI Affairs Committee at CHOSEN TO BECOME JOINT MEMBERS OF notes and references sticking out. The spines are Westminster was told there are some 177,000 well-cracked. HGVs and 208,000 light vans crossing the Irish But I do spy one book in rather pristine land border every month. I am unsure how that THE ATT. condition – perfect spine, perfectly flat and compares with the Port of Dover. I am aware square, no paper markers. Sporting a cover of that there have been failed attempts to hold four years’ worth of dust. I reach out carefully, a ‘dress rehearsal’ to gauge the effects of a As an existing CIOT member, you Secondly, you will also get access to leaving a distinct thumb print in the dust, and ‘No Deal’ Brexit (Operation Stack) but nothing already receive several benefits but benefits unique to ATT including but slide it off the shelf with utmost reverence. Have similar appears to have been considered in I just discovered a first edition hiding up there? If Northern Ireland. you can get access to an additional not limited to: it is signed, could I flog it and retire? Some commentators have suggested collection of benefits that are only The Corporation Tax (Northern Ireland) tailbacks extending to over 10 miles from the available to ATT members by becoming • Tolley’s annual tax guide Act 2015. Right, that explains why it has never border as vehicles wait to be cleared to enter the been used. Parliament passed the Act in March Republic of Ireland. There will not be a similar a member of the ATT. • Finance Act hard copy 2015. Subject to commencement regulations, tailback to enter Northern Ireland – the UK • Whillan’s tax rates and tables the Act would devolve the power to set the Government has already announced there will First and foremost, you will be entitled • Conferences rate of corporation tax to the Northern Ireland be no new customs checks or procedures for Assembly. The Assembly had to demonstrate that Irish goods entering Northern Ireland from the to use the ATT designation so you can its finances were on a sustainable footing. Republic of Ireland. let current and prospective clients and The NI Assembly would have the power to While the uncertainty over Brexit remains, it set the main rate of corporation tax in respect remains a challenge to advise clients in Northern employers know you are dedicated to of certain trading profits (probably as low Ireland on their exposure to taxes on both sides your profession. as 12.5%). The rate would apply to all of the of the border. trading profits of a company if that company was micro or SME, and the company’s employee time and costs fell largely in Northern Ireland. In today’s dynamic world, membership of a tax professional body can be a reliable The rate could also apply to the profits of large companies attributable to a Northern Ireland constant that is there to support you throughout your career. Why not have two trading presence. Certain trades and activities constants? Join the ATT today! would be excluded from the scope of the rate – such as lending and investing activities. Control over the corporation tax base, including I spot one www.att.org.uk/joint reliefs and allowances, would remain with the book in rather UK Parliament. I looked this up on the internet rather than crack the book open. pristine condition, The power to set a Northern Ireland rate Richard Todd sporting a cover of @ourATT on has not yet been devolved, hence the pristine ATT Vice President condition of the book. As the NI Assembly [email protected] four years’ dust v 4 August 2019 | www.taxadvisermagazine.com BETTER TOGETHER +

2,500 CIOT MEMBERS HAVE ALREADY CHOSEN TO BECOME JOINT MEMBERS OF THE ATT.

As an existing CIOT member, you Secondly, you will also get access to already receive several benefits but benefits unique to ATT including but you can get access to an additional not limited to: collection of benefits that are only available to ATT members by becoming • Tolley’s annual tax guide a member of the ATT. • Finance Act hard copy • Whillan’s tax rates and tables First and foremost, you will be entitled • Conferences to use the ATT designation so you can let current and prospective clients and employers know you are dedicated to your profession.

In today’s dynamic world, membership of a tax professional body can be a reliable constant that is there to support you throughout your career. Why not have two constants? Join the ATT today! www.att.org.uk/joint

@ourATT on v INHERITANCE TAX

INHERITANCE TAX A simpler way of giving

The OTS’s second report on inheritance tax seeks to simplify and clarify the tax rules, explains Bill Dodwell.

KEY POINTS n January 2018, Chancellor Philip administrative aspects of the tax. The zz What is the issue? Hammond asked the Office of Tax most striking point is that over 270,000 The OTS’s second report on inheritance ISimplification to review inheritance estates are required to file inheritance tax contains 11 recommendations tax. The key part of his letter said: tax forms – but less than 10% (fewer to deliver a more coherent and ‘The review should include a focus than 25,000 estates) actually have a understandable structure of the tax. on the technical and administrative tax liability (see Fig. 1). There was little zz What does it mean to me? issues within IHT, such as the process of information available about inheritance The proposed simplifications – submitting returns and paying any tax tax, since the manual systems used and including lifetime gifts, capital due, as well as practical issues around the small number of taxpayers meant gains tax, businesses and farms routine estate planning and disclosure. It there was little investment in gathering and term life assurance – would could also look at how current gifts rules data. One big benefit of the OTS’s review reduce the administrative burden of interact with the wider IHT system, and was that HMRC’s Knowledge Analysis and inheritance tax. whether the current framework causes Intelligence group gathered substantial zz What can I take away? any distortions to taxpayers’ decisions amounts of information – which has now Delays in the new Chancellor’s response surrounding transfers, investments and been published. are likely in the current climate, but a other relevant transactions.’ Inheritance tax was introduced in positive reception would benefit tax The first report was published 1986 and applies primarily on death, but advisers, donees and recipients. last November and focused on the also to gifts made to individuals within

6 August 2019 | www.taxadvisermagazine.com INHERITANCE TAX

seven years of death and to lifetime gifts PROFILE other than to individuals, charities and qualifying political parties. It’s not a gift Name Bill Dodwell tax, such as applies in Ireland and which Email [email protected] applied in the UK under the previous Proﬁle Bill is Tax Director of the Office of Tax Simplification and Editor in Chief of Tax Adviser magazine. He is a past president of the capital transfer tax regime. Currently, it Chartered Institute of Taxation and was formerly head of tax policy brings in about £5.2bn, which should be at Deloitte. He is a member of the GAAR Advisory Panel. Bill writes in seen in the context of total taxation of a personal capacity. about £750bn. It’s a tax rather defined by its reliefs and exemptions, which at least enough money to add about £50,000 to zz a review of business exemptions theoretically vastly exceed the tax raised the general nil rate band. It would also to ensure they are focused on the (see Fig. 2). mean an additional 5,000 or so estates policy goals and are consistent across The nominal cost of the £325,000 nil would be liable to pay inheritance tax. different taxes. rate band is about £17bn. Charity reliefs The final observation concerned are about £900m, which is almost all agricultural and business property Lifetime gifts represented by the exemption for gifts to relief. Again, the comments overvalued There are several exemptions from charity with a small amount for the 4% the costs of the reliefs, thinking that inheritance tax relating to lifetime gifts, rate reduction where at least 10% of the their abolition could allow the rate of which haven’t changed since the 1980s. estate goes to charity. Business property inheritance tax to be cut to 20% from These are exemptions for the first £3,000 relief costs over £700m, with agricultural 40%. This proved over-optimistic; the given away each year, for individual gifts property relief costing another £300m. numbers from HMRC suggest that the rate of up to £250, gifts to someone getting The OTS carried out a survey to seek could only be cut to 33%. married or entering a civil partnership evidence for its work. There were over and regular gifts out of a person’s 3,000 responses, with the majority being The most striking point disposable income. from individuals actually or potentially is that over 270,000 The survey and other consultations affected. The OTS also received 500 have revealed that the taxation written comments. estates are required to ﬁle of lifetime gifts is both widely inheritance tax forms – but misunderstood and administratively Alternatives? burdensome. Some respondents wanted the OTS to less than 10% (fewer than Accordingly, the OTS recommends look at alternatives to inheritance tax. 25,000 estates) actually the following steps: However, that wasn’t within the remit zz Replace the multiplicity of lifetime set by the Chancellor. Where possible, have a tax liability. gift exemptions with a single personal though, data was published to help gift allowance, to be set at a sensible others considering alternatives. One of Recommendations level, and incorporate an increased the ideas put forward is that inheritance The report contains 11 recommendations lower threshold for small gifts. The tax should be scrapped and replaced by to deliver a more coherent and exemption for regular gifts should be capital gains tax on death. Whilst perhaps understandable structure of the tax. reformed or replaced with a higher more people are familiar with capital Four main areas are grouped as packages, personal gift allowance. gains tax, imposing it on death would where some elements have an Exchequer zz Shorten the seven-year period to mean that about 200,000 estates would cost and others raise money. They are: five years (significantly reducing the be liable to pay it instead of the 25,000 zz the taxation of lifetime gifts; workload on executors) and abolish liable to inheritance tax. The underlying zz looking at who pays tax where the tapered rate of inheritance tax reason is that the CGT exempt amount is lifetime gifts are taxable; (which many find works in a counter- £12,000 – not £325,000. The overall yield zz simpler exemptions for lifetime intuitive way). Data made public for would be halved as well, even if the main gifts; and the first time shows the tax paid on residence exemption was removed on death. Half the money and eight times as many returns… There is unfortunately no FIG. 1: NUMBER OF INHERITANCE FORMS RESULTING available data on other replacement tax IN TAX BEING PAID options, such as a gift tax. Other suggestions were to abolish the residence nil rate band – and instead Total UK deaths each boost the general nil rate band by a similar year; around 590,000 amount. The residence nil rate band does turn out to be complicated to understand, IHT forms since it applies only on death, where the completed each deceased owned a main residence, has a year; around total estate below £2m and leaves money 275,000 to lineal descendants (principally children and grandchildren). However, most of the Number of forms each objections came from those who disliked year resulting in tax; the policy – which goes beyond the around 24,500 simplification remit of the OTS. It’s also worth understanding that if the residence band were abolished, it would give only Source: OTS: Inheritance Tax Review – second report www.taxadvisermagazine.com | August 2019 7 INHERITANCE TAX

FIG. 2: BREAKDOWN OF NET CAPITAL VALUE substanti ally all the acti vity is trading. OF ESTATES FOR 2015/16 This is a version of the substanti al shareholdings’ exempti on for the sale of trading companies and is generally 14% 1% 2% 4% Agricultural property relief taken to mean that over a period 80% of the assets, profi ts and employees are 14% Business property relief engaged in trading acti viti es. By contrast, the equivalent test for inheritance tax is Charity exempti on ‘mainly’, which is taken as meaning that just over 50% of the acti vity is trading- 1% Spouse exempti on related. The OTS recommended that the government should consider whether Other reliefs these diff erences were justi fi ed in the light of policy objecti ves. Nil rate band/Transferable nil rate band One area where distorti ons can apply concerns the so-called capital Taxable estate gains tax uplift on death. CGT isn’t 64% charged on death and the benefi ciaries Source: OTS: Inheritance Tax Review – second report receive the property at market value. The report recommends that this uplift FIG. 3: LIFETIME GIFTS TO INDIVIDUALS BY YEAR BETWEEN GIFT shouldn’t apply where an inheritance AND DEATH tax exempti on also applies. Instead, the benefi ciary should take over the capital Years Number Net value of Net tax chargeable Average gift Median gift gains base cost of the deceased. This of gift s gift s (£m) (£m) value (£) value (£) means that there would sti ll be no tax to 0-1 1,590 160 15 98,000 31,000 pay (either CGT or inheritance tax) where the business or farm remains in family 1-2 1,120 140 18 124,000 41,000 ownership. However, if it is sold then 2-3 980 110 11 115,000 50,000 one level of tax on the growth in value would apply. 3-4 830 120 12 144,000 64,000 A similar approach should apply 4-5 740 110 8 152,000 72,000 where the inheritance tax spouse 5-6 700 120 6 172,000 100,000 exempti on applies; aft er all, if property had been transferred between living 6-7 770 110 1 144,000 94,000 spouses it would go on a no gain, no loss 7-14 160 20 0 133,000 77,000 basis. Having diff erent rules on death encourages people to hold on to assets Total 6,890 890 71 129,000 53,000 when it would be bett er to transfer Table Notes: them earlier. Number of gift s is diff erent from the number of estates. One estate may have made multi ple gift s. Gift s in 7-14 relate to those where transfers into trust are involved. Source: OTS: Inheritance Tax Review – second report Term life assurance Whilst term life assurance might be a niche area, the OTS was aware that gifts six or seven years before death inheritance tax and capital gains tax, as policies written in trust remained is low (see Fig. 3). well as in relati on to the reliefs available outside the estate but without this for businesses and farms. Aspects of the complexity, the proceeds would form Finally, where there is inheritance regime distort the decisions that families part of the estate. In many cases, tax to pay on lifetime gifts, the OTS face when passing assets to the next inheritance tax would probably not recommends that the government generati on, where there are diff erent apply, due to the spouse exemption explore options for simplifying and tests applying to what is broadly the and/or the nil rate band. However, it clarifying the rules on who is liable to pay same acti vity. seemed an unnecessary complexity for this tax, and how the £325,000 threshold a protection product. Accordingly, it was is allocated between different recipients. At present, lifetime donees recommended that all term assurance At present, lifetime donees are primarily are primarily liable for any should be exempt from inheritance tax. liable for any inheritance tax on the gift This recommendation did not extend to they receive – and the nil rate band is inheritance tax on the gift any policy with a savings element, such allocated to gifts in the order in which they receive. as whole life assurance. they are made. As a Chancellor-commissioned Few – other than specialists – The underlying policy is to permit report, it has been laid before Parliament appreciated this and many people don’t family businesses and farms to pass to and it will be for the new Chancellor to seek tax advice before giving away the next generati on without a tax lability consider a response. No doubt it won’t assets or money. – so they can remain in family ownership, be near the top of his in-tray but we without needing to be sold to pay tax hope that the proposals will be taken Capital gains tax, businesses and liabiliti es. However, there are diff erent forward in the future. farms defi niti ons for trading acti viti es in capital The full report is at: bit.ly/2xyDkhb The OTS consultati on highlighted gains tax and inheritance tax. Business and the animation highlighting the main complexity in the interacti on between asset holdover relief in CGT requires that points is at: bit.ly/2GokVsA.

8 August 2019 | www.taxadvisermagazine.com SAE E AE

THE ATT IS PLEASED TO ANNOUNCE THE 2019 JOINT AAT-ATT MASTER COURSE SERIES IN AUTUMN ATES AN LOCATIONS:

ondon – Saturday 5 ctober Birmingham – Wednesday 30 October oliday Inn Bloomsbury, Coram Street, London, WC1N 1HT Novotel Birmingham Centre, 70 Broad Street, Birmingham, B1 2HT London – Wednesday 23 ctober York – Tuesday 5 ovember Holiday Inn Bloomsbury, Coram Street, London, WC1N 1HT Novotel York Centre, Fishergate, York, YO10 4FD Exeter – Saturday 26 ctober London – Tuesday 12 ovember Mercure Exeter Southgate Hotel, Southernhay East, Exeter, EX1 1QF oliday nn ensinton ih treet rihts ane ondon

SPEAKE: FEES: Michael Steed 215 AT, C and AAT embers 50 Nonmembers Cochairman of the ATT Technical Steering roup & ead of Tax, BPP

iit wwwattorgukaatatt2019 or ore eti

6 - 8 September 2019 Book online at: University of Warwick www.tax.org.uk/artuc2019

Lecture topics include: • Don’t Panic! – current issues with transactions in securities • A refresher on trust taxation OPEN Pete Miller, The Miller Partnership Chris Erwood to non • Practical issues in handling an HMRC enquiry • Stamp duty for OMBs – the points a tax adviser should know members Jessica McLellan, Blick Rothenberg Paul Giles • Capital allowances pitfalls and the FA 2019 structures and buildings • How to maximise R&D tax claims and navigating the revised allowance goodwill/intangibles regime Steven Bone, The Capital Allowances Partnership Limited David O’Keeffe, Aiglon Consulting DISCOUNT • All you need to know about the new termination payment rules • Making Tax Digital – what happened and what comes next? for three or more members attending Caroline Harwood, Crowe UK LLP Rebecca Benneyworth, Rebecca Benneyworth & Co from the same • Till Death Us Do Part – sorting out taxes on separation and divorce firm Sofia Thomas, Sofia Thomas Ltd Sir Geoff Hurst MBE, former professional • Changes to the taxation of non-resident company landlords: the move footballer, will be the guest speaker to CT Sponsored by: Sarah Squires, Old Square Tax Chambers Sir Geoff Hurst MBE, former professional footballer, will be the guest sp

Conference fee: £600 www.taxadvisermagazine.com | August 2019 9 RISK MANAGEMENT

RISK MANAGEMENT

The right balance Ruth Cook explains the points to consider in order to properly weigh up the risks associated with disclosing informati on to third parti es

KEY POINTS zz What is the issue? There are a number of situati ons in here are a number of situations suggest possible ways of managing or which a practi ti oner may be asked in which a practitioner may be mitigating those risks. There is often a either to release informati on to a third asked either to release information balance to be struck – the bigger the party or to give consent for their client T to do so. to a third party or to give consent for risk (in terms of size or likelihood), the zz What does it mean to me? their client to do so. Their first impulse, stronger the protection needed. In many In order to manage risk, it is almost especially if the request comes from a cases, this will need to be balanced with always essenti al to seek some basic current client, is to want to be helpful the practicalities of obtaining the ‘ideal’ informati on about the request and and provide the information or consent protection. the intended recipient(s) and weigh up to its disclosure as quickly and efficiently the risks. as possible. Key information to establish zz What can I take away? However, in order to manage risk, it About the request In all decisions, it is fundamental to is almost always essential to seek some zz What is the source of the request comply with any legal, regulatory, basic information about the request and and is the requestor acting on their professional and ethical obligati ons. the intended recipient(s) and weigh up own behalf or someone else’s? Then there is likely to be a need for the risks. Having done so, a decision can zz What is the reason for the request judgement taking into account the be made as to whether those risks can be and how will the information be used practi ti oner’s own or fi rm’s risk and / how they should be managed using the by the recipient? Understanding this the reason for, and risks associated tools available. is crucial to the risk assessment and with, the request in order to sett le on The purpose of this article is to subsequent decision on the level a measured response based on the explain the points to consider in order of protection needed in order to circumstances. to properly weigh up the risks and to manage the associated risks.

10 August 2019 | www.taxadvisermagazine.com RISK MANAGEMENT

using the information. For example, investigating accountants doing buy side due diligence often approach other advisers direct but the main risk will be in respect of their client’s use of the information.

About the information zz What is the nature of the information the adviser is being asked to provide? z{ Tax computations/HMRC correspondence: These may belong to the client – if so they must normally be released; z{ Copies of past advice provided to the client: Consider how much protection is already built into the advice. Is there a link back to the engagement letter and term? Is it clear who the information was prepared for? Is the purpose clear? Is there a statement that it cannot be relied upon by anyone other than the client? Is there any explicit restriction on it being passed on? z{ Answers to specific questions related to past services or further explanations in the form of a direct discussion with the recipient and / or their advisers: In this case, answers should be limited to explanations in respect of past services and not amount to the creation of new advice addressed to the third party. If ‘new information’ is required (e.g. an update in respect of developments since the original advice was provided), this should be PROFILE prepared as a new piece of © Istockphotos/mbolina advice addressed to the client Name Ruth Cook and released to the third party Position Director with appropriate protection. Company PwC zz Will/could the information include Email [email protected] any of the following? Proﬁle Ruth heads up a team which provides risk support to the z{ Client confidential information: Deals Tax and FS Tax teams at PwC. She previously specialised in Even if there are no explicit Insurance Tax and moved to the Risk Team 12 years ago. Ruth is a clauses in the engagement Chartered Tax Adviser, a Chartered Accountant and a member of the letter or terms of business, tax joint Professional Standards Committee. professionals have an obligation of confidentiality to their zz Who will be releasing the information disclose the information to other clients. It is also likely that the and how will it be released? Is the parties, e.g. advisers or insurers? engagement letter and terms of client seeking permission to release It may be appropriate to limit business will include obligations the information (maybe as required disclosure permission or require to keep a client’s information under the practitioner’s terms of further protection. confidential. The terms may business) or will the practitioner be include limited permission for directly involved in providing the This information will help to the practitioner to disclose but information to the third party? establish whether there is a legal or if not covered, formal consent zz Will the information be sent to professional obligation to disclose may be needed. recipients individually or accessed via and what risks are involved. It’s worth z{ Third party confidential a data room or similar? bearing in mind that the requestor may information: Consider whether zz Will the recipient want to onward not be the only, or even the main, party the information is subject to a www.taxadvisermagazine.com | August 2019 11 RISK MANAGEMENT

confidentiality agreement or KEY FACTORS TO CONSIDER other restriction on onward disclosure. If so, consent from Legal or regulatory These obligations may ‘trump’ any other considerations the relevant third party may Professional These could result in obligations either to disclose be needed. and ethical information or to keep it confidential z{ Personal data or sensitive personal data: Obligations Contractual Consider all relevant contracts – could include engagement in respect of personal data letter, terms of business, confidentiality agreement, hold will be covered by relevant harmless letter or other agreements Need help selecting data protection legislation. Commercial Releasing the information and getting the appropriate Understanding this becomes consent and protection in place will take time even more crucial if the Risk assessment What risks arise, and how can they be managed? Judgement information includes sensitive may be needed to strike an appropriate balance between personal data. It’s also possible an MTD solution? being helpful to the client or third party and managing the that the engagement letter or risk exposure other contractual terms will include further restrictions. The details of GDPR or equivalent where circumstances prevent a responsible for any consequences are beyond the scope of this signed non-reliance or hold harmless arising as a result of the disclosure of article but crucial to consider. letter from being obtained; the information (see below). zz The above information appended as zz Then think about the risk of liability With over 400 MTD solutions on offer, how Key factors to consider a notice or caveat in the information or claim arising and an appropriate, See the box above. In all decisions, it is being released; measured response: fundamental to comply with any legal, zz Any disclaimers included in the z{ Client – a claim might arise do you choose? A checklist can help you make regulatory, professional and ethical original information. This may be as a result of any unintended obligations. Then there is likely to be a sufficient if the information already consequences following the need for judgement taking into account includes clear disclaimers and the release of information; this can the right selection. Things to consider… the practitioner’s own or firm’s risk and associated risks are considered be managed as part of a client the reason for, and risks associated to be low; consent letter (as referred with, the request in order to settle on zz An indemnity from the client in to above); a measured response based on the respect of any possible claim by the z{ Requester or direct user – see 1. What’s its provenance? Does it come from a vendor with circumstances. third party. This may be appropriate tools above; where the client has a strong interest z{ Other users – e.g. insurers. If the tax compliance experience? Key tools available to help manage in the information being provided requestor seeks permission to risk to the third party but, for whatever onward disclose the information, 2. Can it perform simulated submissions to test the process? Not all of these will be possible or reason, adequate protection cannot consider which of the key tools practical in all cases: be obtained from the third party. This available are most appropriate 3. How compatible is it with your accountancy systems? zz A non-reliance or hold harmless is sometimes included in standard to manage the additional risk. letter addressed to the recipient terms of business, so may already If the risk is high, separate hold 4. Can you view past, present and future obligations and and signed by them. The letter be in place; harmless arrangements may be would normally either require that zz Decline to provide the information appropriate; HMRC Business Tax Account data? no onward disclosure be made or or limit the amount of information z{ Other third parties – consider allow limited permission for onward disclosed. This may be appropriate if who else might get access to the 5. Are users assigned role-based or restricted access to data? disclosure (e.g. to legal advisers). This a request is excessive, inappropriate information and which of the would be the preferred approach or if providing the information is key tools available can help to 6. Can it scale to support large volumes of data across multiple in higher risk situations and might commercially impractical. manage the risk; include an indemnity against third z{ Loss of control as a result of entities, even those outside your remit? party claims; Managing appropriately onward disclosure – any parties zz In the case of access to information On the basis of the information gathered, receiving the information as a 7. Is it keeping ahead of the evolutionary curve of digital via an electronic data room or consider any constraints on what can be result of onward disclosure by similar, a ‘click through’ acceptance done, weigh up the risks and consider the recipient will have no direct tax regulation? of non-reliance terms included as how they can be managed appropriately: obligations to the practitioner. part of a data room access or other zz First, consider any legal obligations Once control of distribution is online or electronic access method to disclose or not to disclose or lost, any disclaimers built into (effectively an electronic version any conditions which must be the information released are Call us now on 01784 777 700 of the non-reliance letter referred complied with. the main protection. If wide to above); zz Next, consider any professional disclosure is contemplated, zz A notice addressed to the third party and contractual obligations to the seeking an indemnity from the or stating the terms upon which the client or third parties, including the client or the initial recipient may information is released, including need to seek consent or permission be appropriate. limitations on scope, that the advice prior to agreeing to release the was prepared with only the client’s information requested. The client The terms of a practitioner’s interests in mind, that it may not consent letter should set out clearly professional indemnity cover are T: 01784 777 700 apply in all circumstances, and what will be disclosed so that there beyond the scope of this article, but it confirmation that no responsibility is no misunderstanding. Acceptance would be wise to check whether there or liability is accepted. This approach should also be sought that the are any special terms relating to release E: [email protected] may be appropriate in situations client will not hold the practitioner of information to third parties. W: www.taxsystems.com 12 August 2019 | www.taxadvisermagazine.com Need help selecting an MTD solution?

With over 400 MTD solutions on offer, how do you choose? A checklist can help you make the right selection. Things to consider…

1. What’s its provenance? Does it come from a vendor with tax compliance experience? 2. Can it perform simulated submissions to test the process? 3. How compatible is it with your accountancy systems? 4. Can you view past, present and future obligations and HMRC Business Tax Account data? 5. Are users assigned role-based or restricted access to data? 6. Can it scale to support large volumes of data across multiple entities, even those outside your remit? 7. Is it keeping ahead of the evolutionary curve of digital tax regulation? Call us now on 01784 777 700

T: 01784 777 700 E: [email protected] W: www.taxsystems.com WARRANTIES AND COVENANTS

WARRANTIES AND COVENANTS

KEY POINTS zz What is the issue? For historic tax exposures, protecti on generally takes one of two forms: warranti es and/or covenants. The scope The right and draft ing of that protecti on will oft en turn on the tax due diligence undertaken and the relati ve bargaining strengths of the parti es. zz What does it mean to me? In the heat of negoti ati ons and the desire to ‘get the deal done’, someti mes the route legal diff erences between, and eff ecti ve protecti on provided by, warranti es and covenants can be overlooked. Those diff erences were highlighted in the recent High Court decision in Oversea-Chinese Banking Corporati on Ltd v ING Bank NV (the OCBC decision). zz What can I take away? Whether tax warranti es off er suffi cient protecti on for a purchaser on a share sale will depend on the circumstances. However, it is important that the diff erences between tax warranti es and tax covenants, and the protecti on they provide, are understood and properly explained to both purchasers and sellers. © Istockphotos/Angel Mato © Istockphotos/Angel

Stuart Pibworth provides guidance on warranti es and covenants, and explains why it is important to be aware of the diff erences

n share acquisitions, purchasers the SPA or ancillary documentation liability; and customarily seek protection in regarding the position of the target as at 3. it has mitigated its loss. Othe share purchase agreement the date of signing of the SPA (sometimes (SPA) for historic exposures (including repeated at completion). Where the warranty has been tax exposures) of the company/group If it transpires that the warranty was breached (and the purchaser overcomes being acquired (target). For historic tax incorrect, the seller will be in breach of the hurdles outlined above), the exposures, protection generally takes contract and the purchaser will, prima purchaser is enti tled to be put in the one of two forms: warranties and/or facie, have a damages claim against positi on it would have been in if the covenants. The scope and drafting of the seller. However, to bring a claim wrong (the breach) had not been that protection will often turn on the against the seller the purchaser needs to committ ed and recover damages for the tax due diligence undertaken and the demonstrate, broadly, that: loss of bargain. relative bargaining strengths of the 1. it has suffered a reasonably For breach of warranty on share parties. foreseeable (and quantifiable) loss as sales, the longstanding principle is that However, in the heat of negotiations a result of the breach; the measure of damages is the diff erence and the desire to ‘get the deal done’, 2. the seller had not disclosed the between the true value of the shares and the sometimes the legal differences between, and effective protection EXAMPLE 1 provided by, warranties and covenants can be overlooked. Those differences ACo acquires TargetCo from BCo for £10 million on 31 July 2019. As part of the were highlighted in the recent High Court negoti ati ons, BCo gave a tax covenant to ACo in respect of all pre-completi on decision in Oversea-Chinese Banking tax liabiliti es of TargetCo. Subsequently it turns out that TargetCo had not paid a Corporation Ltd v ING Bank NV (the OCBC corporati on tax liability of £250,000 for the period ended 31 December 2018. Provided decision). that none of the exclusions / limitati ons apply, and ACo complies with the relevant procedural requirements, as the liability relates to a pre-completi on period, ACo would Warranties be able to bring a claim under the tax covenant against BCo for an amount equal to the liability (i.e. £250,000). It is irrelevant whether the liability has any impact on the value Warranties are statements of fact made of TargetCo. by the sellers (or a subset of them) in

14 August 2019 | www.taxadvisermagazine.com WARRANTIES AND COVENANTS

value of the shares as warranted. In other PROFILE words, what is the diminution of value of the shares arising from the breach of warranty? Name Stuart Pibworth Generally, a court could be expected to Position Tax solicitor take the price paid for the target as evidence Company Weil, Gotshal & Manges (London) LLP of the value of the shares as warranted. To Email [email protected] show the impact of the breach on value, Proﬁle Stuart advises clients on a broad range of complex UK and international tax matters, including in the context of corporate and a comparison of that amount to the arm’s private equity transactions, group restructurings, private funds, length amount that would have been finance matters, equity incentive arrangements and tax litigation. paid had the true position been known is Stuart is also a Chartered Tax Adviser and recipient of the John Wood Medal from the required. In turn, that requires expert input Chartered Institute of Taxation. and consideration of the methodologies used by the purchaser in computing the purchase price for the shares. for a purchaser to bring a claim under Goods Act 1979 by analogy to support its Given these inherent complexities, a tax covenant than for breach of a tax position. the primary purpose of asking for tax warranty. However, sellers may resist The seller advanced the well- warranties is often to gather information giving a tax covenant on the basis that established principle described above about the target, through the resulting they want a ‘clean break’, rather than that, in the case of a breach of warranty in disclosure exercise. If any exposures are subject themselves to the sword of a share sale, the purchaser is only entitled identified, the purchaser could then look Damocles until the tax covenant expires to recover the difference between the to obtain additional protection in respect (which is sometimes as much as seven true value of the shares and the value of of that liability through a tax covenant or, years from sale, or longer). For certain the shares as warranted (i.e. diminution if the seller is not prepared to provide a sellers (such as private equity houses), it is in value). tax covenant, a price reduction or seek simply not practical (and often impossible) In her judgment, Moulder J reiterated insurance cover for the identified risk. to give these covenants. the well-established principle that, for breach of contract, the claimant is entitled Tax covenant OCBC decision to be put in the position that it would A tax covenant is a contractual obligation The OCBC decision concerned an alleged have been in if the wrong had not been on the seller to pay to the purchaser an breach of warranty in a SPA. The facts are committed and to recover damages for amount equal to any tax-related liability relatively straightforward: the loss of bargain. It was further noted within its scope. The tax covenant can either zz The purchaser agreed to purchase the that, in this case, no diminution in value of be general (covering all pre-completion tax target for USD$1.466bn. the shares was alleged by the purchaser liabilities of the target) or specific (covering zz Under the SPA, the seller warranted resulting from the Liability. certain identified historic tax exposures), that the target’s accounts for the Addressing the purchaser’s argument, and usually also includes protection against period ended 31 December 2008 Moulder J concluded that neither the certain costs the purchaser may incur in (the Accounts) gave a ‘true and fair’ authorities nor textbooks supported the bringing a claim. view of the target as at that date (the purchaser’s position that the measure The key difference from a tax warranty Warranty). of damages for breach of warranty is that the purchaser does not need to zz The purchaser alleged that the of quality on a share sale could be a prove a loss in the general sense. Instead, seller failed properly to record in hypothetical indemnity and the amount provided that the liability falls within the the Accounts a liability in respect of which could have been claimed under that scope of the covenant (and is not restricted certain equity derivative transactions hypothetical indemnity. by any contractual exclusions or limitations), amounting to USD$14.5 million Moulder J went on to note that the seller is required to pay to the buyer (the Liability) and so breached although it may be necessary to adjust on a pound-for-pound basis an amount the Warranty. the valuation methodology to determine equal to the liability (see Example 1). It the loss of bargain, neither the authorities is irrelevant whether the liability has any The purchaser argued that if there nor the textbooks support an entirely impact on the value of shares. In other were no breach of the Warranty, the different measure of damages for breach words, even if the value of the shares Accounts would have disclosed the Liability of warranty on a share sale other than the remains unchanged, the purchaser will still and the purchaser would have obtained diminution of value of the asset (being be able to claim against the seller. an indemnity from the seller in respect of the target). It is also irrelevant whether the the Liability and so been able to recover On this basis, Moulder J rejected the purchaser: USD$14.5 million from the seller under that purchaser’s argument. 1. had knowledge of the liability or the indemnity. In advancing this position, the liability was disclosed (see Example 2); or purchaser submitted that diminution in Final remarks 2. mitigated its loss. value is not the only measure of damages Although the OCBC decision concerned an for breach of warranty in a share sale and accounts warranty, the principle should Therefore, from a practical and sought to apply the principles relating to equally apply to the measure of damages evidentiary perspective, it is usually easier damages on sale of goods under the Sale of for breach of tax warranties. Whether tax warranties offer sufficient protection for EXAMPLE 2 a purchaser on a share sale will depend on the circumstances. However, it is The facts are the same as Example 1 except that BCo disclosed that liability to ACo important that the differences between against the ‘paid all tax’ warranty. Although the disclosure would preclude a claim by tax warranties and tax covenants, and the ACo against BCo under that warranty, absent any express contractual provisions to the protection they provide, are understood contrary, the disclosure itself should not preclude ACo bringing a claim against BCo under the tax covenant. and properly explained to both purchasers and sellers. www.taxadvisermagazine.com | August 2019 15 BRExIT AND SOCIAL SECURITY

BRExIT AND SOCIAL SECURITY

KEY POINTS zz What is the issue? The EU Social Security Coordinati on Regulati ons currently ensure that employers and employees with internati onal duti es only pay social security contributi ons (such as NIC Crunch time in the UK) in one country at a ti me. However, if the UK leaves the EU Robert Salter and Yvanna Pert consider the without a deal (‘hard’ Brexit), the coordinati on rules in place between the compliance challenges that a hard Brexit UK and the EU may end. may involve for employers with employees zz What does it mean for me? Employers need to understand the subject to internati onal social security potenti al consequences of a no-deal Brexit and identi fy key compliance requirements, in order to deal eff ecti vely with any changes. This arti cle looks at the implicati ons of a no-deal scenario for employees and employers with internati onal duti es. zz What can I take away? With the uncertainty around Brexit, it is important for employers to have a conti ngency plan in place in the event of a no-deal. Getti ng fi nance, tax and HR departments to work closely together to address the issues that arise is an important step but understanding the potenti al impact of such a scenario (for example a possible double social security charge) and the risk from a cost and people’s perspecti ve, is crucial.

Social Security, the EU and Brexit Although advisers will be aware that social security is a tax (and in many respects one of the biggest revenue streams for the UK and EU countries generally), it is oft en forgott en that in comparison zzWorkers with separate jobs in more a. The UK conti nues to accept (at least to most ‘taxes’, it is heavily regulated than one member state, for example, for an ‘interim period’), that EU- by the EU, specifi cally when people are would usually pay Social Security in based employees and self-employed moving ‘internati onally’ e.g.( on formal their ‘home locati on’ (subject to some individuals working in the UK remain secondments or as regular business conditi ons being met). subject to the EU regulati ons and travellers), or have worked in other not liable to Nati onal Insurance countries within the EU (including EEA and More informati on is provided in the Contributi ons (NICs); Switzerland), as local employees over their arti cle ‘European delights’ in the April b. UK-based employees working in the EU working lifeti me. So with the possibility of 2018 issue of Tax Adviser. The EU-wide on assignment aft er a hard Brexit could a no-deal Brexit sti ll a considerati on, this arrangements outlined would conti nue become liable to double contributi ons– arti cle looks to highlight the implicati ons to apply in the UK for an interim period, if i.e. both UK NICs and overseas Social of such a scenario for employees and the UK Parliament accepts the Withdrawal Security contributi ons; employers, who are presently on or could Agreement that had been provisionally c. In some cases, other EU countries may in future have internati onal duti es. agreed between the EU and the UK. not impose host country Social Security on secondees from the UK because: The position today The advice from HMRC z there is a historical Social Security At the present ti me, whilst the UK is a HMRC has published advice on the Agreement between the UK and member of the EU, we have the following implicati ons of a no-deal Brexit e.g.( the country concerned which in arrangements for employees (and the in December 2018 and April 2019) and eff ect becomes ‘re-acti vated’ in the self-employed): the Government has also made various case of Brexit; or zzAll workers are only liable to Social regulati ons e.g.( SI 2019/ 722), allowing for z the other jurisdicti on may relax Security in one EU member state. changes to the Social Security Regulati ons its domesti c Social Security zzThis is usually the state in which they in the case of a no-deal Brexit. Whilst regulati ons for an interim period work, but they can remain in their there are some uncertainti es in the (e.g. for secondees from the UK home system in some situati ons – publicati ons from December 2018 and April who are already in the other jurisdicti on on assignment (and e.g. if they are posted overseas for 2019, one would suggest that in the case covered by an A1) prior to the up to fi ve years, if they obtain an A1 of a no-deal Brexit, you could have the date of any hard Brexit). The EU C e r ti fi c a e.t following positi on:

16 August 2019 | www.taxadvisermagazine.com BRExIT AND SOCIAL SECURITY

PROFILE Name Robert Salter Company Blick Rothenberg Tel 020 7486 0111 Email [email protected] P r o ﬁ l e Robert Salter works at Blick Rothenberg Limited, a leading Crunch time accounti ng, business advisory and tax fi rm in London. Robert specialises in expatriate tax and employment tax issues with many of his clients being high-growth companies expanding internati onally.

PROFILE Name Yvanna Pert Position Tax Manager Company Tolley Email [email protected] P r o ﬁ l e Yvanna is a technical writer with Tolley. She specialises in Employment Taxes and contributes to various tax publicati ons. She qualifi ed with EY, working in their global mobility team and focussing on expatriate taxes. Yvanna is also a committ ee member of the ATT/ CIOT London branch.

1950s or 1960s, and may provide: with the modern working world. zz For coverage for only the shortest The agreement with Switzerland is, in assignments (e.g. the French/UK contrast, much more restricti ve. Whilst agreement only covers assignments of it ensures that the EU Regulati ons will up to 6 months); and conti nue between the UK and Switzerland, zz They don’t typically address modern this coverage only applies for individuals working patt erns and issues such as who are working internati onally between cross-border employees, home offi ce these two jurisdicti ons prior to Brexit. tele-workers based for part of their Any internati onal employees seconded ti me in other jurisdicti ons, short-term to Switzerland aft er Brexit, for example, business travellers or internati onal, would only be covered by the terms of the non-executi ve directors who are non- historical Swiss/UK Totalisati on Agreement resident in the country where they are with the pitf alls that this could bring in a director. certain situati ons. As such, it may, for

© Istockphotos/Delpixart example, in some cases be benefi cial to Though it is possible (indeed hopefully bring forward a planned secondment has ‘recommended’ that the probable) that some of these issues will to Switzerland from the UK, so that it member states should show some be addressed as we progress, realisti cally commences before 31 October (the fl exibility in this regard, although this will be quite a long-term process. For present Brexit date). if/when the UK becomes a 3rd example, it may not be politi cally possible country (i.e. it has left the EU or the EEA), internati onal social security to update the French/UK Totalisati on The options for employers/employees arrangements are not an area that Agreement at the present ti me, so that So, is it possible for employers/ the EU has any direct or formal it covers longer-term assignments (and employees to avoid double social security involvement and oversight over. does the French Government even wish contributi ons arising in the case of a hard to update the Treaty?), or to agree new Brexit? The answer is ‘it depends’. agreements with countries with whom we For example, in some cases, Social Security Totalisation presently have no agreement. companies may choose to send people Agreements to other EU countries as local transferees Whilst the UK has a reasonably extensive Ireland and Switzerland (i.e. so that they give up the home country network of Totalisati on Agreements, On a more positi ve note, the Government employment contract and accept a local we would suggest that for mobile EU has, however, been able to reach new employment contract for the period employees, these do not, from an overall agreements with both Ireland and overseas). This would usually ensure that perspecti ve, represent a ‘fair replacement’ Switzerland from a Social Security both the employee and the employer for the existi ng coverage provided by the perspecti ve. Both of these new are only liable to social security in the EU Social Security regulati ons. Employers agreements only come into eff ect in the one locati on on their regular salary and and advisors in parti cular need to note the case of Brexit. allowances. However, this is not just a following challenges: The Irish agreement is a ‘full questi on of tax planning. Employers will a. The UK does not presently hold agreement’ and, in very simple terms, is also need to consider a wide range of Totalisati on Agreements with a number designed to mirror the existi ng EU Social other factors including: of EU member states (e.g. Poland, Security regulati ons. As such, it would, for zz HR and employment rights; Romania, Czech Republic); example, cover both existi ng and future zz Pension enti tlement; b. The agreements that the UK has with assignments between the UK and Ireland zz The family positi on of the EU member states are typically ‘out- and also covers home workers, business employee; and of-date’ – i.e. they oft en are from the travellers and the other issues associated zz Employee preferences (in many

www.taxadvisermagazine.com | August 2019 17 BRExIT AND SOCIAL SECURITY

THE TAKEAWAYS that they pro-actively address the issues and communicate effectively and clearly 1. Employers (or self-employed individuals working across the EU), may become liable with their employees, if they want them to to double contributions in the case of a no-deal Brexit; work internationally and fulfill the roles that 2. Unlike with income or corporate taxes, social security regulations don’t provide for are required in this regard. off-setting ‘tax credits’ – so a liability to double social security contributions can be a real and very significant cost to employers and employees; Conclusion 3. Employers with internationally mobile employees will need to consider and review Though much remains uncertain about Brexit the budgets closely in the run-up to a no-deal Brexit and, for example, re-review the business case behind certain working patterns or secondments; and the impact that this will have on the EU 4. The timing of assignments may, in some cases make a difference. It may be better, (and wider European economy), any no-deal for example, to bring planned assignments forward to before Brexit, so that Brexit will have significant consequences on employers/employees can benefit from any relaxations that particular countries those companies with internationally, mobile decide to offer to existing (pre-Brexit) posted employees from the UK. employees who ‘touch’ the UK in some 5. Seek professional advice and keep this issue under constant review, as the position way. This is particularly the case, for those from a Brexit position continues to develop and evolve. employees who are legally employed in the UK and active in other countries. The changes will require finance, countries – e.g. France, Italy), host entity to avoid the risk of double tax and HR departments to work closely employees are very attached to their contributions arising because of a no-deal together and address the issues that arise social security rights and entitlements Brexit lose home country social security pro-actively. Given the uncertainties and would not necessarily be willing to rights, how should employers address these with Brexit and the exact ‘nature’ of give these up willingly. concerns? Is it simply a question of offering how this will look and develop, some more money – e.g. extra allowances as companies may want to adopt a ‘wait and From a more strategic perspective, ‘compensation’ (and would the budget allow see’ approach before making any lasting employers may also need to review the this)? Or does the home country scheme decisions. However, the complex nature of over-arching structure of their business provide for voluntary contributions as an the issue and the potentially far-reaching – specifically with regard to where alternative? And how do the voluntary costs impact that this area could have on both international, pan-European roles are and benefits compare to the core, regular costs and people (in many cases the based, but also with regard to their HR state rights? Or might it be appropriate to absolute critical factor for a company’s philospohy and approach. try and provide additional ‘private insurance ongoing success), mean that companies For example, if individuals going on provision’ in some cases? As there is not should be developing their ideas and international transfer and having their likely to be any ‘one size fits all’ solution in proposals in this area now rather than employment contract transferred to the this regard, companies will need to ensure simply hoping for the best.

The Worshipful Company of Tax Advisers

Join us for our next history of tax event with guest Death Taxes - a UK History speaker Peter Allen, whose talk will trace the history of death taxes in the UK from the Roman period via Date: 8th October 2019 the Middle Ages and Magna Carta through Capital Time: 5:45pm for 6pm start Transfer Tax and Estate Duty to Inheritance Tax. Speaker: Peter Allen Venue: 30 Monck Street, Westminster, London, SW1P Peter is an Assistant Professor of Accounting and 2AR Taxation at the University of Nottingham

Prior to the invitation to join the staff at Nottingham in Cost: £18 for members of the Worshipful Company of Tax January, Peter worked in the tax policy field for 5 years, Advisers and their guests, £20 for non-members. originally with the Tax Faculty of the ICAEW and Supper: There will be a supper organised after the talk at afterwards the Office of Tax Simplification. Peter is a a nearby venue. member of the CIoT and an FCCA and worked in tax The event is open to everyone with an interest in the practice during the 1980s and in tax lecturing and tax history of tax. For more information please visit technical fields since the 1990s, principally for the www.taxadvisers.org.uk Mercia Group, BDO and Taxsoft but also for BPP and Kaplan.

Please contact Karina Pomeranceva on [email protected] to book your place

18 August 2019 | www.taxadvisermagazine.com SHARIAH FINANCING

SHARIAH FINANCING

KEY POINTS zz What is the issue? UK Islamic banks use a structure known as diminishing shared ownership to off er real estate fi nance in a manner The Shariah compliant with Shariah — Islamic religious requirements. Tax law has been enacted for this but is not comprehensive. Accordingly, the use of the structure to refi nance appreciated real estate triggers crystallisati on of the inherent capital gain. compliant zz What does it mean to me? Clients may use this structure without realising they have triggered a CGT disposal. That can lead to them fi ling incorrect tax returns. zz What can I take away? reﬁ nancing Clients need to be advised of the taxati on issues in Shariah compliant refi nancing before undertaking it. Where large amounts are involved, it Mohammed Amin provides may be possible to devise a bespoke guidance avoiding traps Shariah compliant soluti on that avoids triggering a CGT disposal. trap for the unwary when using © Istockphotos/coldsnowstorm Shariah compliant fi nancing

he purchase of real estate, whether falls as it is paid on a smaller proportion Changes in UK tax law have a principal private residence or an of the property. eliminated these problems. FA 2003 Tinvestment property, is normally The structure is illustrated in s 71A eliminates the double SDLT charge. funded in part by equity provided by Diagram 1 with the equivalent of a ITA 2007 s 564M and CTA 2009 s 510 the purchaser, and in part by interest 25% deposit. mean that for income tax purposes bearing debt provided by a bank or other Prior to specific legislation to enable and corporation tax purposes the rent financial institution. it, this structure gave rise to several UK receives the same tax treatment as However, many Muslims consider tax problems: interest would receive. that Islam prohibits receiving or paying zz 75% of the property undergoes two interest. Accordingly, alternative sales (from Seller to Bank, and from Reﬁ nancing appreciated property acquisition structures have been Bank to Purchaser) giving rise to Where property has little or no debt developed which comply with the double SDLT. attaching to it, either because the rules of Islam as interpreted by Shariah zz The tax treatment of rental expense debt has been paid down or because scholars, but which do not involve the and rental income is often very the property has appreciated in value, payment of interest to the finance different from that of interest. it is quite common for the owner to provider. Shariah scholars allow Consider for example rent being paid refinance it to take on more debt. transactions to have similar economics to a foreign bank. Private individuals do this to obtain to debt, provided they do not involve borrowing money or paying interest. DIAGRAM 1: ISLAMIC MORTGAGE WITH DIMINISHING SHARED The most common structure used by OWNERSHIP CONTRACT, 25% EQUITY Islamic banks in the UK is known in tax law (ITA 2007 s 564D and CTA 2009 25% Price s 504) as diminishing shared ownership. It involves the purchaser and the bank buying the property jointly. The 25% purchaser occupies the whole property, Seller Purchaser and pays rent to the bank on the Slices of bank’s share of the property. The rent 75% Price property can be fixed, but is more often re-set Payments periodically, and in practice is set by 75% 75% for slices reference to market interest rates plus Rent of property the bank’s margin. Over time, the purchaser gradually Bank buys out the bank’s share of the property (almost always at original cost), and as Purchaser has sole occupancy and pays rent to Bank on proporti on owned by Bank. the purchaser does so, the level of rent www.taxadvisermagazine.com | August 2019 19 SHARIAH FINANCING

DIAGRAM 2: DIMINISHING SHARED OWNERSHIP REFINANCING would require primary legislation. TRANSACTION FOR 75% While the Treasury has power (now contained in TIOPA 2010 s 366) to vary Sells 75% the alternative finance arrangements of building provisions by regulation, in my opinion Owner Bank that power is not broad enough to enable a regulation to specify that the sale to the bank for refinancing Pays price for 75% = £375,000 purposes is not a disposal. However, drafting innovation is DIAGRAM 3: FUTURE CASH FLOWS IN DIMINISHING SHARED not required because there is existing OWNERSHIP REFINANCING TRANSACTION statutory language which could readily be re-purposed. This relates Owner pays rent to bank on bank’s 75% share of the building. to the tax law (ITA 2007 s 564G and CTA 2009 s 507) for investment bond arrangements. 75% reacquired by Owner in slices Owner Bank This exists to facilitate an Islamic finance structure called sukuk in Arabic. The structure normally entails Owner pays cash to bank to gradually buy out the bank’s an Owner selling real estate to a 75% share of the building. Rent reduces correspondingly. Special Purpose Vehicle (SPV) which pays for it by issuing investment bonds. The Owner then pays rent to money they can spend or give to family bank’s share of the property in slices, as the SPV and eventually buys back the members, and real estate investors do illustrated in Diagram 3. real estate. this as part of the financial management The SDLT reliefs cited above also apply As well as the basic law for of their real estate portfolio. to this transaction, so there should be no investment bonds cited above, there Taking on additional interest SDLT on either the sale of 75% by Owner are further provisions made in FA paying debt, even if it is secured on the to Bank, or its reacquisition. Also, the rent 2009 Schedule 61 para 5. In brief, they property, involves no tax consequences. paid will receive the same tax treatment as require (using the terminology of the There are no SDLT transactions, and interest would receive. transaction above): taking on extra debt secured on the However, the sale by Owner to Bank zz Owner to transfer land to the SPV property does not constitute a disposal of 75% of the property is a part disposal of and the SPV to agree that when of that property for capital gains the property for capital gains tax purposes. the SPV ceases to hold the land, tax purposes. There are no specific relieving provisions. it will be transferred back to the Muslims who consider that paying If the property is the Owner’s principal original owner. interest is religiously prohibited cannot, private residence, the part disposal will zz SPV to issue sukuk which relate of course, refinance by taking out a loan not give rise to any CGT liability. Otherwise to the land. secured on the property. However, the however it is a taxable disposal. If the zz SPV to lease the land back to diminishing shared ownership structure building is now worth say £500,000 and owner to generate income for the can be used for refinancing purposes. cost £100,000, then the taxable gain purposes of the sukuk. This is illustrated in Diagram 2. For is £300,000 computed using the part zz Within 120 days, the creation of simplicity, this assumes that the Owner disposal formula. a first legal charge on the land in before refinancing has attained 100% Perhaps because Islamic finance favour of HMRC to provide security ownership of the property. The property is a relatively niche subject, there is for the SDLT that would otherwise is assumed to be worth £500,000 and a surprising lack of awareness of this be payable on the sale of the land the Islamic bank agrees to buy 75% of it exposure amongst professionals serving from owner to SPV. for £375,000. clients who might engage in Islamic zz The SPV to issue sukuk to investors In future, the Owner will pay rent financing of real estate transactions. In which raise for the SPV cash of not to the bank, and will buy back the my view, eliminating this tax exposure less than 60% of the value of the

20 August 2019 | www.taxadvisermagazine.com SHARIAH FINANCING

PROFILE Name Mohammed Amin Email [email protected] Website www.mohammedamin.com Proﬁle Prior to retirement, Amin was a tax partner in PricewaterhouseCoopers LLP and their UK Head of Islamic Finance. In retirement he continues to write on Islamic finance as well as his many other interests

building at the time it was sold by SPV, the lease from SPV to the owner, evidence based approach to policy owner to SPV. and the sale of the building by SPV changes. To date, evidence of the zz SPV continues to hold the land as an back to the owner are not treated as scale of the issue has been limited asset for the purposes of the sukuk disposals. making justification of a change in until the sukuk are terminated. The CIOT has raised this problem legislation challenging. All tax policy zz Within 30 days of the sukuk with HMRC, and suggested equivalent is kept under review and any new terminating, the land is transferred legislation to FA 2009 Schedule 61 para evidence as to the extent to which back to the owner. 5 should apply where part or all of the existing legislation is affecting zz The sale from SPV back to owner building is sold, and then re-acquired market outcomes will be considered does not take place more than 10 using diminishing shared ownership. carefully as part of that process.’ years after the initial sale from the However, the Government has currently Accordingly, advisers need to be owner to the SPV. declined to legislate, giving the response aware of the problem to avoid their below with authorisation to publish it: clients stumbling into this CGT trap, Provided these conditions are ‘The government recognises the need for and to point out the correct reporting satisfied, then for CGT purposes each of greater stability in the tax system and as obligations if a disposal has already the sale of the building by the owner to such, recognises the importance of an been triggered.

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www.taxadvisermagazine.com | August 2019 21 PROFESSIONAL SKILLS

PROFESSIONAL SKILLS

KEY POINTS zz What is the issue? Stop waiting for others or your organisation to give you the work-life balance you want. Instead, decide to create it yourself. You have zz What does it mean to me? This article is for you if want to shift your perspective on what work-life balance is, and want more of it in your career and life. zz What can I take away? Inspiration, plus three steps you can the power! implement to create a better work-life balance for yourself.

o you find yourself thinking: ‘I’m too busy. I’ve got too much to do. DI get no time for myself’? Asking yourself the same old question: ‘How can I get a better work-life balance?’ What if I told you, you can. And what if I told you, the solution lies with you. Let me explain with two anecdotes. ‘Perhaps you’re over-thinking it,’ said my best friend Sarah, glass of Malbec in hand. ‘Why don’t you just ask him?’ Her comment jolted me. In that moment, I realised no one was going to do it for me. I needed to act. So I did. I asked my boss if I could work four days a week. Dipti Thakrar, a Freelance Head of Tax and a CPD Tax Tutor remembers: ‘People in London questioned me. When I said, I’m meant to be the main carer [of my children], they asked why? When I said, I have to take a lower paid job, they asked, why? Something inside of me woke up.’ The common thread? Both of us had people to challenge us. ‘Catalysts’, as Dipti calls them. What they said jolted us. Most importantly, we noticed the jolt, It implies that an activity is either work or What do we all have in common? questioned our assumptions and woke up. non-work; that we have binary choices; We took responsibility. We seized our In my case, it was 2004. I was a senior and that there’s an ideal balance to be power. We updated our mindsets – the international tax manager in a FTSE 50 strived for. Rather, what matters to us lenses, filters and assumptions through company. Married, no kids. The company professionals, in my experience, is having which we were seeing the world. We didn’t have a flexible working policy. My enough time to spend on what we enjoy, decided to believe that we could have boss asked just one question: ‘What will and feeling happy and healthy. I prefer the what we wanted. Then we acted. We put happen if you have an urgent deadline and phrase ‘work-life blend’. Now, what new in the effort to create it. To quote George it’s your non-working day the next day?’ perspectives does that open up? Bernard Shaw: ‘The only people who get ‘I’ll organise my work so I can meet the And it’s not just me and Dipti who have on in this world are the people who get deadline, or I’ll work my non-working day the ‘work-life’ blend we want. Mark, an up and look around for the circumstances and take the day in lieu,’ I said. ‘I don’t Associate at a well-known law firm, works they want, and if they can’t find them, they expect you or anyone else to pick it up.’ three and a half days per week so he can make them.’ This is what he wanted. He said he’d talk train for iron man competitions. Louise, a At this point you may be thinking: to HR; that he thought it’d be okay. Within Big 4 Senior Manager, recently moved to ‘Okay, I get it. But what now?’ I nine days, I had my first day off. I spent it her first in-house role. She negotiated four recommend three steps: build your self- making a checked, fabric box. days per week even though the role was awareness; promise yourself; and move Dipti got herself an in-house Head of advertised as full-time. Martin, a freelance forward inch by inch. Global Taxes role in Finance, in London for tax contractor takes three to six months two days per week. She’d leave home for off to travel when each contract finishes. 1: Build your self-awareness London Monday evening after bath time, Chris Mattos, the former editor of this Self-awareness is defined as being the and would be back by tea on Wednesday. magazine, has a portfolio career: he has his conscious knowledge of one’s own She says she remembers thinking: ‘This is own growing tax practice, he’s the FD for character, feelings, motives and desires. it! This is work-life balance.’ two of his clients, a charity trustee, home Become more self-aware to understand Work-life balance – let’s examine schools his children and is the Director of what you really, really want and what’s that phrase for a moment. I don’t like it. Stroud Fringe. stopping you. You can do this by:

22 August 2019 | www.taxadvisermagazine.com PROFESSIONAL SKILLS

PROFILE Name: Jo Maughan Jo Maughan Position: Career & Executive Coach, Speaker, Author provides advice on Company: Your Thinking Partner Limited Tel: 07771 542457 how to get a better Email: [email protected] Website: www.jomaughan.co.uk work-life balance Proﬁle: Jo Maughan is a leading career & executive coach whose first career was in tax, most latterly as a Tax Director for BP’s UK marketing businesses. Today she inspires and equips tax, legal, and finance professionals to get more of what they want and to be their whole, best selves at work and in life.

would your ideal life look like? What 3: Move forward step by step does your heart yearn for? Write it You won’t create the work-life blend down uncensored. Picture it in your you want in one go. It’s a process. You’ll mind’s eye. need to stay focused on your promise to zz Journalling and reflection: Get yourself yourself, then move forward step-by-step. an A5 notebook and carry it around in These tips will help you: your bag. Spend five to 15 minutes each zz Develop a ‘go-to’ phrase to guide day to consciously reflect and journal to you: Mine is: ‘It’s my life. I can do yourself along the following lines: what I want.’ Dipti references back to zz Record the ‘jolts’ you notice each what’s most important to her – her day. When you have ten to 20 children. She says: ‘If I’m giving up jolts, stand back and spot the time with my kids, then it’s got to be themes. It’s very likely there is amazing. Otherwise, I won’t do it.’ one, e.g. a pattern of behaving, a zz Learn to say ‘no’ and stop doing what regular assumption or belief. Ask you don’t want to do: There are many yourself, how is this serving me? online resources and short courses zz Reflect on the extent to which that teach you how to say ‘no’. In my you’ve kept your promises to experience though, if you find saying yourself about work-life blend ‘no’ difficult, it’s probably because (see below). For example, did you you have an unnoticed limiting belief leave on time on Friday in the way. When you unearth it and (N.B. not early but on time) uproot it, everything will change: you like you promised yourself you will be able to say ‘no’. If you suspect would? If yes, acknowledge this is you and you’re ready to change, yourself. If no, what got in your engage a coach.

© Istockphotos/RichVintage way? How can you get over that zz Schedule your priorities: ‘The key is obstacle next time? What do you not to prioritise your schedule but zz Looking for ‘catalysts’: people who need to change in yourself to to schedule your priorities’, Stephen will ask you direct and awkward honour your promise to yourself? Covey. For example, book a 30 minute questions:Their role, although they meeting with yourself each lunchtime don’t know it, is to help you notice 2: Promise yourself to go for that walk so you exercise your own filters, lenses, assumptions I realised I wasn’t allowing myself a better and spend time in nature. Set a and limiting beliefs. If you don’t have work-life blend because I was telling reminder on your phone to read in people like this in your life, get yourself myself I had to work hard to prove I was bed at 10pm. a mentor or coach. good at my job. My underlying limiting zz Use ‘dead time’: Next time you’re zz Looking out for ‘jolts’: Jolts are the belief was that I wasn’t good enough. waiting for the train, don’t micro-moments when you feel Once I realised this, I was able to promise automatically check your emails negative emotions of any kind. Notice myself that I wouldn’t believe it any AGAIN. Use the time to do something your thoughts in these moments longer; that I’d allow myself to do an ‘80% related to your promise. For me this because they’ll illuminate what’s good enough job’, which freed up time to was: read some of my coaching book, stopping you. For example, here’s one do other things, including rest and relax. connect with coaches on LinkedIn, of my micro-moments: ‘Why don’t My big promise was to leave tax and start just ‘do nothing’. For you, it may you just say “no”,’ he suggested. I felt my own coaching business. To get there, be to learn Spanish, prepare your anxious. I thought: ‘I can’t do that. I made small promises to myself, such as case for flexible working, or balance She won’t like it. She’ll be cross.’ I ‘doing nothing’ (relaxing) for at least 30 on one leg to improve your core discovered I believed I had to put minutes each day. What promise will you stability. others’ needs and wants before my make to yourself? zz Be 100% present to the moment own. A limiting belief. I realised it But before you do, do this: Take you’re in: You’ll enjoy your work wasn’t true. I also realised that I’d need responsibility. Really ‘get’ that it’s only and non-work time more when your to let go of this belief if I was to create you who can create what you want for thoughts aren’t wandering off to what a better work-life blend. yourself. Stop making excuses. Stop just happened or what will happen zz Deciding on your definition of success: thinking, ‘if only they would...’. It’s tomorrow. Practice mindfulness to What is it you really, really want? What down to you. help you stay ‘in the moment’. www.taxadvisermagazine.com | August 2019 23 RESIDENCE AND DOMICILE

RESIDENCE AND DOMICILE

KEY POINTS zz What is the issue? Determining domicile often requires a detailed historical enquiry to acquire evidence proving the intentions of the taxpayer concerned and, often, the intentions of his father and, sometimes, Considered of his mother and ancestors at multiple times in the past. zz What does it mean to me? The costs of dealing with an ill-informed HMRC officer making ill-considered, blanket demands for information, both revelations relevant and irrelevant, in a piecemeal fashion over an extended period is likely to be several times the cost of dealing with an enquiry where such a duly considered and comprehensive disclosure has been made with the return. zz What can I take away? Sharon McKie and Simon McKie examine In determining whether complex sets of facts fall within two such vague and disclosure in self-assessment returns imprecise concepts, one can rarely reach a conclusion which has practical in the light of the increasing number certainty. The best the taxation adviser and intensity of HMRC’s enquiries into can usually achieve is a conclusion which he considers probable and some matters of residence and domicile evaluation of the degree of probability.

The importance of residence and domicile Most taxing jurisdictions determine the extent to which they subject a person to The interconnectedness of residence zz Guarding against penalties:First, how tax by reference to short- and long-term and domicile does one minimise the chances of connecting factors. For Inheritance Tax purposes, since the tax’s penalties being imposed in the event In the UK tax system, these factors inception, an individual has been treated as if that, in due course, the Tribunal takes are respectively residence and domicile. he were domiciled in the UK if he is resident a different view of the correct taxation Both, even after the enactment of the here for an extended period (Inheritance treatment of one’s client’s transactions Statutory Residence Test in the Finance Tax Act 1984 (IHTA 1984) s 267). Similar from the treatment reflected in Act (FA) 2013, are concepts of the upmost provisions were enacted for many purposes his returns? complexity and imprecision. of Income Tax and Capital Gains Tax by the zz Finality: Secondly, how does one give Finance (No. 2) Act 2017 s 29(1) with effect one’s client the best possible chance that Determining residence and domicile from 6 April 2017 (Income Tax Act 2007 (ITA assessments made on the basis of the requires detailed historical enquiry 2007) s 835BA). So in order to determine treatment reflected in his returns will Determining domicile often requires a how an individual is taxed, one often has become final once the statutory enquiry detailed historical enquiry to acquire to determine both his country of domicile period has expired? evidence proving the intentions of the and his country of residence for many fiscal zz Balancing immediate and future costs: taxpayer concerned and, often, the years, including years before the enactment Finally, how does one minimise the intentions of his father and, sometimes, of of the Statutory Residence Test. Doing so costs of an enquiry by HMRC into one’s his mother and ancestors at multiple times often requires the gathering and evaluation client’s residence and domicile status in the past. of detailed and voluminous evidence relating and how does one balance the costs of Lord Wilson SCJ famously said in to many years. comprehensive disclosure in the client’s the case of Gaines-Cooper (R (on the tax return against the uncertain costs of a application of Davies & Another)) v HMRC Certainty is unobtainable future enquiry? and R (on the application of Gaines- In determining whether complex sets of facts Cooper) v HMRC [2011] STC 2249 at para fall within two such vague and imprecise Guarding against penalties 20) that determining a person’s country concepts one can rarely reach a conclusion A person who submits a tax return on the of residence may require ‘a multifactorial which has practical certainty. The best the basis of a view of his residence or domicile inquiry.’ taxation adviser can usually achieve is a which affects his Income or Capital Gains Even though the Statutory Residence conclusion which he considers probable and Tax liability with which the Tribunal or Court Test has been enacted since Gaines-Cooper some evaluation of the degree of probability. in due course disagrees will have submitted was decided (in FA 2013 s 218 and Sch 45), a return containing an inaccuracy. FA 2007 such is the imprecision of the concepts The problem of uncertainty Sch 24 para 1 imposes a penalty on a person used in that test that a multifactorial That poses, with particular acuteness, three where, inter alia, that person gives to HMRC enquiry is still required to determine problems with which tax advisers are always a self-assessment tax return under Taxes residence in all but the simplest cases. faced to some degree. Management Act 1970 (TMA 1970) s 8 and

24 August 2019 | www.taxadvisermagazine.com RESIDENCE AND DOMICILE

PROFILE Name Simon McKie Position Partner Company McKie & Co (Advisory Services) LLP Email [email protected] Considered Proﬁle Simon has specialised in solving the taxation problems of private clients since the early 1980s. Simon is a former Chairman of the Faculty of Taxation and of the Faculty’s Inheritance Tax & Trusts Sub-Committee and of the Capital Taxes Sub-Committee of the Chartered Institute of Taxation. revelations PROFILE Name Sharon McKie Position Partner Company McKie & Co (Advisory Services) LLP Email [email protected] Proﬁle Sharon has practised taxation since 1994 and has specialised in the taxation of private clients since 1997. She has a particular expertise in the management of complex tax litigation. She is a member of the Succession Taxes Sub-Committee of the Chartered Institute of Taxation and a former member of that Institute’s Capital Taxes Sub-Committee and of its Stamp Duties Working Group. She was awarded the Chartered Institute of Taxation’s Fellowship Medal for the best fellowship submission of the year in 2014.

to think that the agent would not do so the taxpayer’s behalf, the taxpayer may be competently and efficiently and that he has assessed under the extended time limits provided the agent with all the information even if he has taken all reasonable care to which the agent has specifically requested avoid the inaccuracy. or which the client might reasonably have TMA 1970 s 36A extends the time period supposed was necessary for the agent to for assessment to 12 years for losses of

© Istockphotos/artisteer complete his return on his behalf accurately. Income Tax or Capital Gains Tax which are not This evidence might, of course, be brought about deliberately and which relate to two conditions are satisfied. The first preserved merely by way of retaining an offshore matter or transfer. condition is that the document contains correspondence and other relevant an inaccuracy which amounts to, or leads documents. It is useful, however, to submit Discovery to, an understatement of a liability to tax, a detailed disclosure with the relevant tax The time period within which HMRC may a false or inflated statement of a loss or a return to HMRC which, by setting out all of make an assessment is further restricted by false or inflated claim to a repayment of the relevant facts and analysis, demonstrates the discovery provisions. tax (FA 2007 Sch 24 para 1(2)). The second the care taken. As we shall see, doing so If HMRC’s assessment to Income Tax condition is that the inaccuracy was careless is also essential if the client is to have the and Capital Gains Tax on an individual is not or deliberate (FA 2007 Sch 24 para 1(3)). highest practical chance of obtaining finality made in the course of, or on the closure of, The burden of proving that the once the period for HMRC to enquire into his an enquiry, it may be made under TMA 1970 inaccuracy was careless or deliberate falls return has expired. s 29 on the making of a ‘discovery’. Where on HMRC (see Gardiner v HMRC [2014] tax which ought to have been assessed has UKFTT 421 (TC) and Burgess, Brimheath Finality not been assessed due to an error in an Developments Ltd v HMRC [2015] UKUT 0578 TMA 1970 ss 34, 36 and 36A – extended individual’s self-assessment return, if the (TCC) at para 38). HMRC accept that this is time limits enquiry period has ended without an enquiry the case (see HMRC’s Compliance Handbook TMA 1970 s 34 provides a general rule being raised or an enquiry into the relevant Manual para CH81122) but, in practice, limiting the period during which an year has been closed, the under-assessed tax it is prudent for the taxpayer to preserve assessment to Income Tax or Capital Gains may only be assessed under TMA 1970 evidence to rebut a contention by HMRC that Tax can be made to not more than four years s 29 and then only if one of two conditions is the inaccuracy was careless or deliberate. after the end of the year of assessment to satisfied (TMA 1970 s 29(3)). A person is liable to a penalty for the which the assessment relates. The first condition is that the under- submission of an inaccurate document Longer periods for assessment, assessment ‘was brought about carelessly or where the document is given to HMRC on however, apply, under TMA 1970 s 36, deliberately by the taxpayer or a person acting that person’s behalf. He will not, however, where a loss of Income Tax or Capital Gains on his behalf’. be liable in respect of anything done or Tax is brought about carelessly (extending The second condition is that at the time omitted by his agent where he satisfies the period to six years) or deliberately when an officer of the Board ceased to be HMRC that he took reasonable care to avoid (extending the period to 20 years) by the entitled to give notice of his intention to the inaccuracy (FA 2007 Sch 24 para 18(3)). A person assessed. For this purpose, a loss enquire into the taxpayer’s return in respect taxpayer wishing to ensure that a penalty will brought about by the person assessed of the relevant year of assessment, or in a not be imposed for an inaccurate document, includes a loss brought about by another case where a notice of enquiry into the return therefore, would do well to preserve person acting on his behalf (TMA 1970 has been given the time when a partial or evidence that he has appointed a tax agent s 36(1B)). So if a taxpayer’s tax agent final closure notice in respect of the under- with the requisite qualifications to correctly makes a careless or deliberate error in assessment is issued, ‘the officer could not complete his tax return, he has no reason a self-assessment return submitted on have been reasonably expected, on the basis

www.taxadvisermagazine.com | August 2019 25 RESIDENCE AND DOMICILE

of the information made available to position which is unsupportable on the law The increased frequency and indiscriminate him before that time, to be aware’ of the or the evidence. vigour of HMRC’s enquiries under-assessment (TMA 1970 Even taxpayers with larger sums at stake, may s 29(4) & (5)). HMRC’s standard lists of requested be tempted to skimp on this initial expense in So, if the under-assessment has information and documents the hope that their domicile and/or residence not been brought about by a careless HMRC’s Residence, Domicile and Remittance status will not be enquired into by HMRC. In or deliberate error in the return, no Basis Manual gives, at para RDRM23080, a the past, such an approach, although in most assessment may be made after the time list of ‘the types of information that might cases unethical, may have been the course when the enquiry window closed (under be requested during an enquiry’. It lists 41 of action which generally produced the most TMA 1970 s 9A(2)) (which will normally categories of information and 27 categories favourable results for taxpayers. HMRC’s have been 12 months after the day on of documents. The paragraph says that ‘any enquiries into domicile and residence matters which the return was delivered) if, at that information request should be tailored to were woefully inadequate and unethical time, ‘the officer could not have been the particulars of the individual’s claim’ but, taxpayers were tempted to make claims not to reasonably expected, on the basis of the as discussed below, it is clear that HMRC be domiciled or resident in the UK which were information made available to him before officers are routinely demanding all or most unjustified in the knowledge that such claims that time, to be aware of the situation of the information in the list without first were unlikely to be enquired into by HMRC [leading to the under-assessment].’ considering its relevance. with any vigour. The information made available for this The equivalent section in the Manual Where the tax at stake is significant, purpose is narrowly defined (TMA 1970 concerning residence enquiries has been the probability of avoiding an enquiry into s 29(6) amendments to this sub-section withheld from publication under ‘exemptions transactions treated on the basis that the are to be made under F(No.2)A 2017 ss 6(1) in the Freedom of Information Act 2000’ taxpayer is non-UK resident or non-UK and Sch 24 para 20(2)&(3) with effect from (HMRC’s Residence, Domicile and Remittance domiciled is now very small. Even where the a day to be appointed). Basis Manual para. RDRM10635). Anecdotal tax at stake is quite modest, it would be very The prudent course, therefore, is evidence suggests that HMRC officers, unwise to assume that the relevant return will for an adviser to advise his client that if in respect of residence matters, are also not be the subject of an enquiry. HMRC has anything in his tax return is dependent routinely using some form of checklist to greatly increased the number and the intensity on his residence and/or his domicile, the demand information and documents without of its enquiries into domicile and residence ‘white space’ in his tax return should refer properly considering the relevance to the questions. Unfortunately, it has not done so in to an attached document which sets out taxpayer concerned of the information a rational, proportionate or ethical manner. all the information relevant to determining requested. Members of the major professional bodies the status concerned at the relevant dates Although HMRC’s indifference to concerned with taxation have reported that, in and an analysis which determines the the burden placed on taxpayers by its its conduct of domicile enquiries, HMRC now status by applying the information to the indiscriminate demands for irrelevant routinely asks for a very extensive standard law relevant to determining the status information is reprehensible, where list of information and documents from the concerned. a taxpayer’s return is to include a client regardless of the relevance of the items comprehensive disclosure in respect of his requested, abuses the issue of information Balancing immediate and future costs residence and/or domicile, the taxpayer is notices, and conceals its position and concerns Careful drafting best served if his adviser gathers, before in the early stages of the enquiry process, If such a disclosure is to achieve its he provides his advice, all the information thereby unnecessarily prolonging its enquiries. purpose it must be very carefully drafted and documents which HMRC is likely to Members have also reported that HMRC’s to ensure that all relevant information, request if an enquiry is launched and by officers lack an understanding of the basic legal not just the information favourable to his tax agent providing with the taxpayer’s concepts, write so poorly that they are unable the treatment adopted by the taxpayer, disclosure a comprehensive statement of to communicate accurately their requests and is included and that all relevant technical that information, including the information position to the taxpayer, and treat taxpayers issues are covered and that arguments contained in the documents referred to generally as if they were dishonest and with unfavourable to the taxpayer are its sources, unless it clearly cannot be unconcealed hostility and aggression. objectively set out so as to demonstrate relevant. Any apparent inconsistencies in the The result of such behaviour is that the that the taxpayer has considered them information and documents can be explained vulnerable and, in particular, the elderly, are and has reasonably concluded that they in the disclosure so that the information is so intimidated that there is a serious risk that are invalid. placed in its proper context. they will make settlements which are not in Indeed, there will be matters where accordance with the law. the treatment adopted is simply, as a A costly process matter of judgement, more likely than The trouble with such an approach is The best policy not to be the correct construction of that such a disclosure requires the input The best way of minimising the risk of the relevant law so that the opposing of a considerable amount of expensive one’s clients being treated in this way and arguments are not invalid but merely less professional time and for the drafter to have of resisting such treatment when it arises likely to be correct than those on which considerable technical and literary skills, is for a client to make with his return a full the treatment adopted by the taxpayer skills which command a high hourly rate. and considered disclosure of the type we is based. If that is the case the disclosure It therefore involves a considerable initial have described. The costs of dealing with should say so. investment. an ill-informed HMRC officer making ill- An additional benefit of such a The tax at stake in smaller cases will considered, blanket demands for information, disclosure is that it enables the taxpayer to often not justify such an investment. It is a both relevant and irrelevant, in a piecemeal demonstrate to HMRC that the treatment fundamental failure of our tax system that it fashion over an extended period is likely to adopted is, indeed, the correct, or at least has become so complex that many taxpayers be several times the cost of dealing with an the most supportable, one so that time simply cannot afford to determine their tax enquiry where such a duly considered and is not wasted, as it so often is in HMRC liabilities with reasonable accuracy and to a comprehensive disclosure has been made enquiries, with HMRC starting from a reasonable level of probability. with the return.

26 August 2019 | www.taxadvisermagazine.com Indirect Taxes Annual Conference 2019

Save the date – Tuesday 8 October 2019 Full day conference at America Square Conference Centre, No.1, America Square, 17 Crosswall, London EC3N 2LB Topics to be discussed: •Partial Exemption update: keeping up to •VAT case law update date with the latest changes and case law • Brexit and the impact for UK indirect • International VAT: Practical aspects in the tax, including the current/future UK, the EU and beyond, including Brexit position on reliance on CJEU case latest •Partial Exemption update: keeping • Property & construction: Current issues, up to date with the latest changes domestic reverse charge and property and case law case update Book online at: www.tax.org.uk/indirecttaxes 2019

Conference fee: 3 booking before 1 August 2019 0 thereafter

Scotland Branch Annual Conference 2019

Friday 8 – Saturday 9 November 2019 Book online at: Doubletree Hilton Dunblane Hydro www.tax.org.uk/scotland2019 Topics include:

• The Finance Act and topical tax issues • All you always wanted to ask about •Revenue Scotland rr eer FA A eorge demergers but were afraid to ask! ihe teron e o hrtere Aountnt ete ier A Feow rtner he ier eenue otn • Getting to grips with the new rtnerhi • Seeking statutory clearances from Entrepreneurs’ Relief regime • The ten tenets of estate planning HMRC eter ne A Feow FA eter o runhion A FA A rtin oert e eer ne onuting Intre uon eenue n uto •Tax avoidance tackled? – the changed • Scottish taxes update • Practical aspects of employee share landscape hrotte rour A on A Feow incentives for private companies erek Frni A Feow Aote A Intitute o hrtere Aountnt o ren ion on i A rriter hrtere Aier err Fir otn roie her Full Conference: oth u ootion on Fri night n inner Members £450 (£410); Students £290 (£260) Conference: one on Members £200 (£180); Students £130 (£110) Early bird discount rie uote in rket to ooking on or eore 30 September 2019

www.taxadvisermagazine.com | August 2019 27

CHARTERED INSTITUTE OF TAXATION

RESULTSEXAM Results and prizes May 2019

he Chartered Institute of Taxation, the commenting on the results said: ‘I would like to figure are 30 candidates who were on the ACA principal body in the United Kingdom offer my congratulations to all the candidates CTA Joint Programme and 22 candidates who Tconcerned solely with taxation, who have made progress towards becoming a have now fully completed the Tax Pathway by announced on 24 July 2019 the results from its Chartered Tax Adviser as a result of passing one passing the CTA element. examinations taken by 1,526 candidates on or more papers at the May 2019 examination. ‘A large number of candidates took 8 and 9 May 2019. In addition, 638 Tax Pathway 125 candidates have now successfully completed advantage of the transitional provision which candidates sat a combination of ATT and CTA all of the CTA examinations and we very much allows them extra time to sit their Principles papers. look forward to welcoming them as members of of Accounting computer based exam after The Institute President, Glyn Fullelove, the Institute in the near future. Included in this completing all of their written papers.’

CTA prizes and awards has been awarded to Luke Hanratty of Thame The John Beattie Medal for the candidate with The Institute Medal for the candidate with who is employed by Saffery Champness LLP in the highest mark in the Advanced Technical Paper the best overall performance attempting the High Wycombe. on Human Capital Taxes. The medal has been Awareness Paper and two Advanced Technical awarded to Jacob William Inson Stokes of Cannock Papers (all at the same sitting). The medal has The Avery Jones Medal for the candidate with who is employed by Deloitte LLP in Birmingham. been awarded to Florence Barnes of London, the best performance in the Application and Professional Skills Paper. The medal has been where she is employed by Macfarlanes LLP. The Ronald Ison Medal for the candidate with the awarded to Louisa Lingard of London, where she highest mark in the Advanced Technical Paper The Gilbert Burr Medal for the candidate with is employed by EY. on Taxation of Individuals. The medal has been the highest mark in the Advanced Technical awarded to Marion Denby of Cambridge, where Paper on Taxation of Owner-Managed The Chris Jones Prize for the candidate with the she is employed by Deloitte LLP. Businesses. The medal has been awarded to highest total marks in two Advanced Technical Papers (taken at the same sitting). The prize has Lewis Anthony McDonald of Southampton, The John Tiley Medal for the candidate with the been awarded to Tamara Shaw of Cheltenham where he is employed by PwC. highest mark in the Advanced Technical Paper who is employed by Ballard Dale Syree Watson on Taxation of Major Corporates. The medal The Victor Durkacz Medal for the candidate LLP in Hampton Lovett. has been awarded to Sophie Randle of Coton with the highest mark in the Advanced Meadows who is employed by Deloitte LLP in Technical Paper on Domestic Indirect Taxation. The Croner-I Prize for the candidate with Birmingham. The medal has been awarded to Josef Szekeres the highest distinction mark in an Advanced Technical paper. The prize has been awarded to of London, where he is employed by PwC. The Wreford Voge Medal for the candidate with Marion Denby, winner of the Ronald Ison Medal. the highest mark in the Advanced Technical Paper The Spofforth Medal for the candidate with the on Cross-Border Indirect Taxation. The medal has The Medals, Prizes and Distinctions are highest mark in the Advanced Technical Paper been awarded to Hannah Emmett of St Ives who is awarded for each examination paper subject on Inheritance Tax, Trusts & Estates. The medal employed by EY in Cambridge. to the discretion of Council and the attain- has been awarded to Erica Catherine White of ment of a satisfactory standard, regardless Nelson who is employed by Saffery Champness The Ian Walker Medal for the candidate with the of whether the examination requirements for LLP in Harrogate. highest mark in the Awareness Paper. The medal membership have been met.

CTA distinctions Lewis Anthony McDonald (PwC, Southampton) Natasha Mary Lines (Haines Watts London Louisa Lingard (EY, London) (Application and (Advanced Technical: Taxation of Owner LLP, London) (Advanced Technical: Taxation of Professional Skills: Human Capital Taxes) Managed Businesses) Individuals) Katherine Dziewulski (RSM UK, Reading) Christopher Turner (EY, London) (Advanced Kerrie Louise Willis (RSM UK, London) (Advanced (Application and Professional Skills: Human Capital Technical: Taxation of Owner Managed Technical: Taxation of Individuals) Taxes) Businesses) Kiera Harrison (UHY Hacker Young, Manchester) David Blackler (Deloitte LLP, London) (Application Marion Denby (Deloitte LLP, Cambridge) (Advanced Technical: Taxation of Individuals) and Professional Skills: Human Capital Taxes) (Advanced Technical: Taxation of Individuals) Jemma Fleming (EY, London) (Advanced Technical: Kelly Scrutton (BDO, Ipswich) (Application and Tamara Shaw (Ballard Dale Syree Watson LLP, Taxation of Individuals) Professional Skills: Inheritance Tax, Trusts & Estates) Hampton Lovett) (Advanced Technical: Taxation Daniel Simper (PEM, Cambridge) (Advanced John Kean (Newtongrange) (Application and of Individuals) Technical: Taxation of Individuals) Professional Skills: Inheritance Tax, Trusts & Estates) Jordon Armstrong (Grunberg and Co Ltd, Hannah Emmett(EY, Cambridge) (Advanced Distinctions are awarded to candidates whose London) (Advanced Technical: Taxation of Technical: Cross-Border Indirect Taxation) answers reflect an exceptional level in the Individuals) Advanced Technical Papers and the Application Sophie Randle (Deloitte LLP, Birmingham) Sarah Greenaway (Grant Thornton UK LLP, and Professional Skills Paper. Distinctions are not (Advanced Technical: Taxation of Major Bristol) (Advanced Technical: Taxation of awarded for the Awareness Paper. Corporates) Individuals)

28 August 2019 | www.taxadvisermagazine.com EXAM RESULTS

CTA results RESULTSEXAM In addition to success in the required papers and Computer Based Examinations, the criteria of experience must be satisfied to be eligible for membership of the Institute. The following candidates have met the examination requirements for membership.

A Fettes J (Inverness) Luftig J(London) Rich V (Basingstoke) Adam R (London) Finney E (Exmouth) Rodaway M (London) Allan A (Paisley) Francis S P (Winchester) M Rouse R (London) Arya T (London) Furne J E (Woodford Green) Marsden H (Milton Keynes) Ascough J (Newcastle) Maurice K (London) S Austin D J (Bodmin) G Mcardle A (Belfast) Sandor E (Pease Pottage) Avital B (Stanmore) Gelman A (Hove) Mcardle D (Trinity, Jersey) Sawyer C H (Dunmow) Azam U (Harrow) Glover K (Edinburgh) Mccaffrey A(Enniskillen) Scrutton K (Sproughton) Gomes M B P P (Guildford) Mcdonald L A (Southampton) Selby M (Salisbury) B Graham J (Glasgow) Mcevoy G (Newry) Simpson E (Norwich) Barnfield H (Cheltenham) Green J M (Salisbury) Mcilroy R (Ballyclare) Small G A (Chester Le Street) Barry R L (Cardiff) Greenwood S (Leeds) Mcilroy R (Belfast) Smith J (Bristol) Bateman S C (London) Melnyczuk S (London) Smith J (Cardiff) Beere J (Harlow) H Moss J (York ) Smith J (Norwich) Bergin A (Londonderry) Hall R (Windsor) Moyeen J (London) Spalding H (Fareham) Blakeney D (Caterham) Hames J R T (Durham) Murray W (Leeds) Stevenson A (Edinburgh) Bowie I (Alconbury) Hawkshaw K (Basingstoke) Stokes J W I (Cannock) Brunsden-Brown E (Exeter) Hayden L (Cambridge) N Sumon M (Birmingham) Burke A (London) Hillyard W (Salisbury) Nandha R (Milton Keynes) Burnside A (Belfast) Hussain M (Purley) Nash E (London) T Targett R M G (Bristol) C I O Taylor C (Harrogate) Charman J A (Watford) Inglis J (Feldkirche) Odwar S M (London) Thake G (Cambridge) Clare J (London) Theochari E (Harpenden) Claydon-Knights L (Rayleigh) J P Thompson A D (Colchester) Cooper A S (Horley) Jackson C (Bristol) Pace K H (Torquay) Thorburn K (Birmingham) Jones E (Witney) Pagan P J (Edinburgh) Tobutt L (Bedford) D Parmar J (Harrow) Darby T (Salisbury) K Paton D (Guildford) U Davies R (London) Kaur K (Greenhithe) Pattison S (Dundee) Uddin K (Luton) Davies R (Reading) Kelly R (Tadworth) Peattie (Stockbridge)D Demmery L (Tring) Korta J A (London) Petrusev C (Dunbar) W Drummond G F (Edinburgh) Ku T (London) Pledger R (Carlisle) Walji A F (Peterborough) Dziewulski K (Reading) Poulton J D (Wolverhampton) Watson G (York) L Webber S (Battle) E Law A (Trowbridge) Q Willis K (London) Eastman K J L (Godalming) Leesi K (Cobham) Qureshi U (Harrow) Wilson S (Reading) Edwards J (Edinburgh) Levy M (London) Wright D (Frome) Little N(Newtownabbey) R F Long J (Swindon) Ramm O (Guildford) Fattah H (Clarkston) Lowe T (Brentwood) Ramsay L E (Edinburgh)

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www.taxadvisermagazine.com | August 2019 29 ACA CTA JOINT PROGRAMME

RESULTSEXAM

The following candidates have met the ACA CTA Joint Programme examination requirements for the Chartered Institute of Taxation and The Institute of Chartered Accountants in England and Wales as a result of the May 2019 examination session and are eligible to apply for membership of both bodies subject to meeting the experience requirements.

A G L Pearce C (Portsmouth) Auld J (Hull) Georgiou G (London) Lambert S (Thetford) Pope M (Solihull) Gidado R (London) Lewis M (Malvern) B Gooderham M (Diss) R Bolton M J H (London) M Richmond M (Preston) Bryan L (Leeds) H Mahmood A (Leeds) Byers C (Leeds) Hardy J (Lancaster) Munt R (Lincoln) S Hargreaves A (Blackburn) Simpson A J (Stoke-On-Trent) C Hurley H (London) N Carter E (Horley) Nadeem R (Birmingham) W K Webster V (Solihull) F Kennedy D (London) P Westmoreland A (Blackburn) Fleming J (London) Khan I (Birkenhead) Palmer S D (Rugby) Wotton N (Eastleigh) Foster S (Derby) Kirkaldy A (Accrington) Pang J T H (Lightwater)

NAVIGATE THE COMPLEXITY OF TAX Tolley®Guidance Find solutions quickly, understand how to apply them and avoid undue risks. Tolley®Guidance gives you direct access to critical, comprehensive and up-to-date tax information that you can rely on. Written exclusively by tax professionals for tax professionals, Tolley®Guidance combines tax technical commentary with practical guidance, so you can conﬁ dently deal with your clients’ needs. Whether you need to update your knowledge, gain deeper understanding or gather information about a specialist area, Tolley®Guidance can help you with step-by-step examples and simple guides. Devote more time to clients, instead of hunting for answers.

30 August 2019 | www.taxadvisermagazine.com

ASSOCIATION OF

www.att.org.uk TAXATION TECHNICIANS

RESULTSEXAM RESULTSEXAM Results and prizes May 2019

The Association of Taxation The Association President, Jeremy candidates can study at their own pace, Technicians, the oldest and largest Coker, commenting upon the results whether they are working towards full body concerned solely with tax said: ‘I am delighted to congratulate membership or simply wishing to obtain compliance, announced on 24 July all the successful candidates from one or more Certificates of Competency 2019 the results of its examination the May sitting of our exams. In total, in their specialist area. This flexibility taken by 966 candidates on 8 966 candidates sat 1,786 papers and continues to be popular. and 9 May 2019. The Association 1,348 passes were achieved with 94 ‘I look forward to meeting as many reports that a high standard of distinctions awarded for outstanding new members as possible at one of our performance was achieved by many performance. admission ceremonies held at the House candidates. ‘Our modular system means that of Lords.’

ATT prizes and awards

The Medals and Distinctions are The Collingwood Medal to Amelia Hay of Wilmslow, where awarded for each examination paper The Collingwood Medal has been she is employed by Rock Advisory. subject to the discretion of Council awarded to Katrina Sutherland of The Johnson Medal is awarded to and the attainment of a satisfactory Glasgow who is employed by Skills the candidate with the best overall standard, regardless of whether Development Scotland in Stirling. The performance when passing both the the examination requirements for Collingwood Medal is awarded to the Computer Based Examinations in membership have been met (with the candidate with the highest mark in Professional Responsibilities & Ethics exception of the Association Medal). Paper 3 – Business Compliance. and Law within a six month period. The Tolley Prize The Association Medal The Stary Medal The Tolley Prize has been awarded to The Association Medal has been The Stary Medal has been awarded Elouise Everett of Dover. The Tolley awarded to Richard Nicholas Coldham to Elspeth Jamieson, winner of the Prize is awarded to the candidate of Betchworth. The Association Jennings Medal. The Stary Medal is taking three written papers at one Medal is awarded to the candidate awarded to the candidate with the sitting and obtaining the highest total taking three written papers at one highest mark in Paper 4 – Corporate marks on those three papers. sitting obtaining the best overall Taxation. result including having passed both The President’s Medal Computer Based Examinations in The Kimmer Medal The President’s Medal has been Professional Responsibilities & Ethics The Kimmer Medal has been awarded awarded to Lilly-Ann Walters of Cardiff, and Law. to Celia Northern of Bedford, where where she is employed by Deloitte LLP. she is employed by MHA MacIntryre The President’s Medal is awarded at The Ivison Medal Hudson. The Kimmer Medal is the discretion of the President to an The Ivison Medal has been awarded awarded to the candidate with the outstanding candidate or candidates to Meera Alkesh Desai of West highest mark in Paper 5 – Inheritance not otherwise eligible for a prize. Harrow. The Ivison Medal is awarded Tax, Trusts & Estates. to the candidate with the highest Prizes and Medals are only awarded mark in Paper 1 – Personal Taxation. The Gravestock Medal provided the papers are of a The Gravestock Medal has been sufficiently high standard. The Jennings Medal awarded to Emma Robinson of Belfast, The Jennings Medal has been where she is employed by PwC. The Distinctions awarded to Elspeth Jamieson of Gravestock Medal is awarded to the Passes with Distinction for each Edinburgh who is employed by candidate with the highest mark in Certificate paper are listed on the Johnston Carmichael (Scotland) Ltd in Paper 6 – VAT. document at the end. Distinctions are Elgin. The Jennings Medal is awarded only awarded to candidates whose to the candidate with the highest The Johnson Medal answers reflect an exceptional level in mark in Paper 2 – Business Taxation. The Johnson Medal has been awarded a paper.

www.taxadvisermagazine.com | August 2019 31 CAREER GUIDANCE IF YOU MAGNETIC ARE NEWLY QUALIFIED NORTH Ian Riley, Director of Longman Tax Recruitment and former tax professional, answers some of the GUIDING YOU TO THE BEST TAX JOBS IN THE NORTH OF ENGLAND key questions facing newly and recently qualified ATT and CTAs. UK TAX ACCOUNTANT CORP. TAX ADVISOR / NEWLY QUALIFIED ALTRINCHAM £45,000 to £50,000 LEEDS up to £35,000 + bonus A super opportunity to join a global and rapidly growing group. Supporting the Group Great opportunity to join an award winning Top 10 firm. This is a Corporate Tax SO, WHAT’S YOUR OVERALL ADVICE? Tax Manager you will be involved in a range of corporate tax work including assisting compliance role within a large, well-established compliance team led by a highly with global transfer pricing and country by country tax reporting. You will need a experienced director. Within 5 minutes’ walk of Leeds Train Station, this role will be ideal We recommend to candidates that they take some time to review reasonable level of UK Tax experience and most likely be at assistant manager / new for someone newly qualified looking to embed their experience within a supportive, their situation and consider their options. We certainly don’t advocate manager grade. The role has real scope for further development as the business grows. people centred workplace. Eager for career advancement? This is the place to work. rushing into any decisions but it is a good idea to think about what REF: R2966 REF: S2916 you like about your current role, what other areas of tax appeal to you, how ambitious you are and what your longer term aspirations are both in terms of career satisfaction and earnings potential. CORPORATE TAX ADVISORY AM PERSONAL TAX ASSISTANT MANAGER MANCHESTER To £40,000 LANCASHIRE To £40,000 Newly qualified CTA and ready to take your career to the next level? This is a great This dynamic and fast growing independent firm has an opportunity for a recently qualified HOW CAN I GET MORE SPECIFIC opportunity for someone looking to broaden their corporate tax advisory knowledge at a ATT or CTA to join the personal tax team in a key role with great future prospects. You will be PERSONAL ADVICE? global firm that will provide the ideal platform to build a long term career in a supportive responsible for the personal tax compliance work on a portfolio of clients and provide support and dynamic environment. Flexible working and great benefits on offer. on interesting tax advisory work. A good opportunity for those wanting to gain exposure to tink te ke ere i to n a recritent conltant o kno REF: A3000 advisory work in a supportive environment. REF: A3001 the tax market and who you feel you can trust, someone who wants to work with you over the long term and build a relationship with WHAT’S THE FIRST THING YOU you. A good consultant will provide you with balanced advice over the FIRST INDUSTRY ROLE IN-HOUSE, GROUP TAX ACCOUNTANT TYPICALLY SAY TO SOMEONE WHO course of your career, act as a sounding board for your own thoughts HARROGATE up to £35,000 DOE LEEDS up to £45,000 and be able to tell you about the full range of career opportunities Part or newly qualified? Ideal opportunity for a first move into industry for someone with A fast paced role covering indirect and direct taxes for a large organisation based in Leeds. IS NEWLY QUALIFIED? right across the market so if and when you do move you can make either corporate tax or financial analysis skills from practice or inhouse. This newly created This exciting opportunity centres around tax reporting and improving controls. Work includes UK an informed decision. In addition, sometimes it is necessary to role provides exposure across all taxes, with core activity being UK corporation tax, VAT, and European VAT, EC Sales and Intrastat, HMRC submissions, tax liability forecasting, Employment First and foremost, it must be a massive congratulations! Everyone in think strategically and plan a move to get more of the right type of the tax profession knows how tough the exams are and how much experience to help you end up in the job you aspire to – again a good employer taxes and PSA. Working in a small, experienced team you will have the opportunity Tax filings, PSA and share options. Ideal for someone newly qualified looking for an interesting, hard work is required to get through them – so enjoy the moment. consultant can help you here. Rather than simply scanning the job to consolidate your tax skills and grow your career with this respected global firm. broad and challenging in-house tax environment. Then the key thing, I believe, is to make sure you take stock and start boards or responding to messages on social media, I would strongly REF: S2989 REF: S2965 having a think about what you would like to achieve over the next few recommend taking a proactive approach and seek out a recruitment years, the direction you’d like your career to go in the long term and consultant who you can build a good long term relationship with. o o can e or alication to et effect VAT ANALYST IN HOUSE TAX MANAGER (INT’L FOCUS) MANCHESTER £35,000-40,000 SOUTH MANCHESTER £65,000 to £70,000 WHAT IS THE CURRENT TAX JOB Our client, a global household name, is in the process of setting up a new in-house VAT compliance Our client is looking for a technically strong International Tax Manager to coordinate a variety WHY IS THIS SUCH A CRUCIAL TIME? function based in central Manchester and is looking for an enthusiastic and experienced VAT of tax compliance activities in the Group and provide technical support to regional finance e career eciion o ake a a nel alie are roal MARKET LIKE IN THE NORTH? preparer to join the team. An attractive package is on offer including basic salary and other teams globally. Reporting to the FD as part of an existing tax team. You will need strong tax amongst the most important you will ever make. At this stage of your e arket for nel an recentl alie C an i er benefits including healthcare, working from home and above all a rewarding career. skills and exposure in International Tax, experience in US tax reporting is preferable. career you will have more options open to you than at any other point buoyant with demand exceeding supply (due to demographic changes REF: R2995 REF: R2999 which can be quite overwhelming especially in light of the amount of and a lack of trainees joining the profession a few years ago). So, if messages and calls you will no doubt receive from recruiters. However, you choose to look for a new role you may well get the chance to it is important to take time to consider your longer-term career have several meetings with organisations of different sizes and in aspirations to make sure that you are in a role that is going to help different disciplines. you achieve your goals. For example, during my tax career I worked in ta fro tartin a a raate tro to nel alie and then on to manager grade in the following years. Had I wanted to move into another area of tax at this point it would have been very ifclt ien ear in a ecialit area an te ier earnin a a anaer oe tot an aice en alie aot lon term goals could have avoided this situation. Tel: 0333 939 0190 Web: www.taxrecruit.co.uk Mike Longman FCA CTA: [email protected]; Ian Riley ACA: [email protected]; Alison Riordan: [email protected]; Sally Wright: [email protected] CAREER GUIDANCE IF YOU MAGNETIC ARE NEWLY QUALIFIED NORTH Ian Riley, Director of Longman Tax Recruitment and former tax professional, answers some of the GUIDING YOU TO THE BEST TAX JOBS IN THE NORTH OF ENGLAND key questions facing newly and recently qualified ATT and CTAs. UK TAX ACCOUNTANT CORP. TAX ADVISOR / NEWLY QUALIFIED ALTRINCHAM £45,000 to £50,000 LEEDS up to £35,000 + bonus A super opportunity to join a global and rapidly growing group. Supporting the Group Great opportunity to join an award winning Top 10 firm. This is a Corporate Tax SO, WHAT’S YOUR OVERALL ADVICE? Tax Manager you will be involved in a range of corporate tax work including assisting compliance role within a large, well-established compliance team led by a highly with global transfer pricing and country by country tax reporting. You will need a experienced director. Within 5 minutes’ walk of Leeds Train Station, this role will be ideal We recommend to candidates that they take some time to review reasonable level of UK Tax experience and most likely be at assistant manager / new for someone newly qualified looking to embed their experience within a supportive, their situation and consider their options. We certainly don’t advocate manager grade. The role has real scope for further development as the business grows. people centred workplace. Eager for career advancement? This is the place to work. rushing into any decisions but it is a good idea to think about what REF: R2966 REF: S2916 you like about your current role, what other areas of tax appeal to you, how ambitious you are and what your longer term aspirations are both in terms of career satisfaction and earnings potential. CORPORATE TAX ADVISORY AM PERSONAL TAX ASSISTANT MANAGER MANCHESTER To £40,000 LANCASHIRE To £40,000 Newly qualified CTA and ready to take your career to the next level? This is a great This dynamic and fast growing independent firm has an opportunity for a recently qualified HOW CAN I GET MORE SPECIFIC opportunity for someone looking to broaden their corporate tax advisory knowledge at a ATT or CTA to join the personal tax team in a key role with great future prospects. You will be PERSONAL ADVICE? global firm that will provide the ideal platform to build a long term career in a supportive responsible for the personal tax compliance work on a portfolio of clients and provide support and dynamic environment. Flexible working and great benefits on offer. on interesting tax advisory work. A good opportunity for those wanting to gain exposure to tink te ke ere i to n a recritent conltant o kno REF: A3000 advisory work in a supportive environment. REF: A3001 the tax market and who you feel you can trust, someone who wants to work with you over the long term and build a relationship with WHAT’S THE FIRST THING YOU you. A good consultant will provide you with balanced advice over the FIRST INDUSTRY ROLE IN-HOUSE, GROUP TAX ACCOUNTANT TYPICALLY SAY TO SOMEONE WHO course of your career, act as a sounding board for your own thoughts HARROGATE up to £35,000 DOE LEEDS up to £45,000 and be able to tell you about the full range of career opportunities Part or newly qualified? Ideal opportunity for a first move into industry for someone with A fast paced role covering indirect and direct taxes for a large organisation based in Leeds. IS NEWLY QUALIFIED? right across the market so if and when you do move you can make either corporate tax or financial analysis skills from practice or inhouse. This newly created This exciting opportunity centres around tax reporting and improving controls. Work includes UK an informed decision. In addition, sometimes it is necessary to role provides exposure across all taxes, with core activity being UK corporation tax, VAT, and European VAT, EC Sales and Intrastat, HMRC submissions, tax liability forecasting, Employment First and foremost, it must be a massive congratulations! Everyone in think strategically and plan a move to get more of the right type of the tax profession knows how tough the exams are and how much experience to help you end up in the job you aspire to – again a good employer taxes and PSA. Working in a small, experienced team you will have the opportunity Tax filings, PSA and share options. Ideal for someone newly qualified looking for an interesting, hard work is required to get through them – so enjoy the moment. consultant can help you here. Rather than simply scanning the job to consolidate your tax skills and grow your career with this respected global firm. broad and challenging in-house tax environment. Then the key thing, I believe, is to make sure you take stock and start boards or responding to messages on social media, I would strongly REF: S2989 REF: S2965 having a think about what you would like to achieve over the next few recommend taking a proactive approach and seek out a recruitment years, the direction you’d like your career to go in the long term and consultant who you can build a good long term relationship with. o o can e or alication to et effect VAT ANALYST IN HOUSE TAX MANAGER (INT’L FOCUS) MANCHESTER £35,000-40,000 SOUTH MANCHESTER £65,000 to £70,000 WHAT IS THE CURRENT TAX JOB Our client, a global household name, is in the process of setting up a new in-house VAT compliance Our client is looking for a technically strong International Tax Manager to coordinate a variety WHY IS THIS SUCH A CRUCIAL TIME? function based in central Manchester and is looking for an enthusiastic and experienced VAT of tax compliance activities in the Group and provide technical support to regional finance e career eciion o ake a a nel alie are roal MARKET LIKE IN THE NORTH? preparer to join the team. An attractive package is on offer including basic salary and other teams globally. Reporting to the FD as part of an existing tax team. You will need strong tax amongst the most important you will ever make. At this stage of your e arket for nel an recentl alie C an i er benefits including healthcare, working from home and above all a rewarding career. skills and exposure in International Tax, experience in US tax reporting is preferable. career you will have more options open to you than at any other point buoyant with demand exceeding supply (due to demographic changes REF: R2995 REF: R2999 which can be quite overwhelming especially in light of the amount of and a lack of trainees joining the profession a few years ago). So, if messages and calls you will no doubt receive from recruiters. However, you choose to look for a new role you may well get the chance to it is important to take time to consider your longer-term career have several meetings with organisations of different sizes and in aspirations to make sure that you are in a role that is going to help different disciplines. you achieve your goals. For example, during my tax career I worked in ta fro tartin a a raate tro to nel alie and then on to manager grade in the following years. Had I wanted to move into another area of tax at this point it would have been very ifclt ien ear in a ecialit area an te ier earnin a a anaer oe tot an aice en alie aot lon term goals could have avoided this situation. Tel: 0333 939 0190 Web: www.taxrecruit.co.uk Mike Longman FCA CTA: [email protected]; Ian Riley ACA: [email protected]; Alison Riordan: [email protected]; Sally Wright: [email protected] EXAM RESULTS

In addition to success in the required Certificate papers and Computer Based Examinations the criteria of experience must be satisfied to be eligible for membership of the Association.

The following candidates have met the examination requirements for membership, either by passing their final Certificate paper(s) in the May 2019 session or by passing their final Computer Based Examination(s), having previously passed the three required Certificate papers (denoted by an *) from 1 January – 30 June 2019.

A Donaghy B (Belfast) I Morris O (Sheffield)* Adithian D (Bengaluru) Donald P (London)* Ilchenko V (London)* Mukhopadhyay A (Bristol)* Ahmad N (Leeds)* Donneaux J (Nicosia, Cyprus)* Murrell G (Sutton Coldfield)* Akhtar S (Reading)* Draycott J (Stoke-On-Trent)* J Mustafa A (Stockton-On-Tees) Aulak D K (Birmingham)* Jay S (King’s Lynn) E Jeffreys G (Sidcup) N B Edwards N (Frome)* Jones A (Coventry)* Nandha R (Milton Keynes)* Bailey E M (Macclesfield)* Ellis R (London)* Joyce S (Lichfield) Netherway Z (Bristol) Baker S (Yeovil) Ellis T (Banbury) Nicholls L (Hereford) Baldwin M (Orpington)* Eveleigh J (Barnet)* K Nobbs G (Peterborough)* Balogun S (Chatham) Kambli K (Reading) Northcott N(Exeter) * Bandell M (Norwich) F Kearney G (Newry) Northern C (Bedford) Barclay H (Dartford) Fletcher S (Birmingham)* Kearns B (Wigan)* Barclay J (London)* Franklyn N (Polegate) Kirkham A (Warrington)* O Barker K (Reading) Fung S T H (Manchester)* Korn O (Nottingham) Olak K (Glasgow)* Barratt J (Thorpe Bay)* Kulkarni S (Bangalore, India)* Olasupo A (Stevenage)* Barton A (Winnersh) G Oliver J (Cambridge)* Barton S (Leicester)* Gabriel B (London)* L Osborne M (Bognor Regis) Beeke S C (Carshalton)* Gallen N (Omagh)* Laheney T (Bristol)* Ben-Nathan A (London)* Gammon C E (Chislehurst)* Lam C W (Oxford) P Berglund N A D (Edinburgh) Ganie M (London)* Lam H (London)* Paget T (Nottingham) Blair L V (Brampton)* Gareze J (Cuckfield)* Lamb A (Benfleet) Parkins F (Bankfoot)* Bleasdale T (Hartlepool)* Gargett C(Darlington) * Law (Glasgow)* Parsons T (London)* Blum B (Salford)* Gearing C (Ayot St Peter)* Lear T (Bristol) Patterson A (Omagh) Bolster L (Belfast)* Ghizdeanu A (London)* Lee A (Virginia Water)* Paul A (Cambridge)* Boynton M (Stockton-On-Tees)* Gill N (Henlow)* Leeves M (Littlehampton) Payarira G (Walsall) Brace R (Nottingham)* Gillan J (Ballymena)* Loader K (Taunton) Pedulla F A (Manchester)* Bradbury W (Bathgate)* Goddard B (Aldershot)* Lubbock A (Bedford) Phillips C J (Southampton)* Bradley K (Derry)* Godwin H (Reading)* Phillips G (Guisborough)* Brockley E (Wigan)* Goodwin S (Broxbourne)* M Pickles G (Keighley)* Brown D (Melton Mowbray) Gottschalk S (Lisburn)* Macdonald P M (Bathgate)* Pitcher A (Street) Brown E M (Newcastle Upon Tyne) Gould E (London)* Mackenzie A S (Inverness)* Polson-Owusu D (London) Butler K (Falmouth) Mactaggart T (Newton Abbot) Porter A (Leicester)* Byrne J (Reading)* H Madan I (London)* Pozo Riqueni M (London)* Hallowell S (Barnet)* Madlani S (London)* Procter E (Lancaster) C Hanton A (St Albans)* Mason B (Southampton) Pulatov T (Kingston Upon Thames)* Catchpool E (London)* Hardwick C A (Manchester) Maynard G (Cambridge) Cestari G (London)* Harrell C L (Benfleet)* McGovern R (South Shields)* R Chawla A N (Heston) Harris J (London) Mcadam J (Chester)* Rana J A (Barnstaple)* Chetter I(Wolverhampton) Hart A (Wymondham) Mcbrearty S J (St Helier, Jersey)* Ravji N (New Malden)* Choi M (Newcastle Upon Tyne)* Hillman S D (Southampton)* McCann K (Bonnyrigg)* Read H (Mansfield) Choudhury K F (Newcastle Upon Hodgson R (Hexham)* Mckeon M (Leeds)* Redfearn B (Lincoln) Tyne)* Hodkinson L (Hesketh Bank)* Mee V A (Leicester)* Rees D (Romsey)* Chowdhury S (Dartford)* Holland C J (Bruton)* Miah B (London)* Rhynas M (Aberdeen)* Chuah Y (London)* Holland S (Hove)* Michaels C (London)* Richardson M (Sunderland)* Clark S L (Yeovil)* Holm A (Richmond)* Millar R (Altrincham)* Richardson R J (Bristol)* Coleman E (Oakham) Holmes S E R (London)* Miller A (Edinburgh)* Ritina R (Manchester)* Corkery E (Tonbridge) Holmes J (Ashford) Miller D (Aberdeen)* Robinson E (Belfast) Hudspith D (Whitley Bay)* Milos J (Bury St Edmunds)* Robinson P (Salford)* D Huggin N (Edinburgh) Mistry K (London)* Rodgers E (Dromore)* D’Agostino M (Northampton)* Hughes M E (Pwllheli) Mitchell N (Fareham) Romanyuk N (Dagenham)* Davey B (Nottingham) Hughes S (Portsmouth) Miteva E V (Birmingham)* Ross A (Glasgow)* Dennis H (Paddock Wood)* Hume T (Newcastle Upon Tyne)* Mitford E (Washington)* Rossiter M J (London) Dickinson J (Penrith)* Hurren J (St Albans) Moore L (Manchester)* Rowe A J (Swindon) Disley A (Ellesmere Port)* Hussain A (Manchester)* Moore S (Newcastle Upon Tyne)* Dodd S (Wrexham) Huyton J (Reading)* Moreton N (Orpington)* S Dokka L D (Wokingham)* Morgan D (Bristol)* Sahotay J (Ilford)*

34 August 2019 | www.taxadvisermagazine.com EXAM RESULTS

Sangha S (Uxbridge) Sorokina A (Nottingham)* Thurgood S (Hitchin) Washington L (Wokingham)* Sarai D S (Birmingham)* Squire N J (Plymouth) Tucker S (Cambridge)* Watt C (Glasgow)* Sasagawa Y (London)* Srisuthakar S (Sutton)* Way C (Cheltenham)* Schooley-Frame R (St Austell)* Staicu A (London) U Webb S K (London) Scott G (Edinburgh)* Stanford H (Sittingbourne)* Uddin J (London) Whelan C (Kempston) Shah A (Stanmore)* Stantschew E (Kirkby Stephen)* Whittle A (Newton Abbot)* Shah N (Thornton Heath)* Starkey C (Arundel)* V Wild A J (Horley)* Shepherd R (Alderley Edge)* Stephenson R (Stonehaven)* Vishakha V (Bangalore, India) Wild S (Reading)* Simeonova R (London)* Stevens F (Bristol) Varden J (Nuneaton) Willbourne-Benfield W Simmons C M (Newcastle Upon Stylianou S (London)* Vargas A (Tonyrefail) (Southampton)* Tyne)* Sutherland K (Glasgow) Verner L (London)* Willett J(Haverhill) * Simpson L (Magerafelt) Sylvester J (London)* Viljoen D L (Burgess Hill)* Willis J (Hockley) Small L (Whitley Bay)* Wilson H L (Felixstowe)* Smalley O J (York) T W Winter R (Colchester)* Smith D (London)* Taylor S (Glasgow)* Walker B J (South Croydon)* Wood J (Newcastle Upon Tyne)* Smith E (Southsea) Taylor-Caldwell J (London)* Walker M (Banbridge )* Smith P (Oxford) Tchorz M (Nuneaton) Waller P (London)* Y Smith S (Glasgow) Thomas A C (Berwick-Upon- Wan H P (Newcastle Upon Tyne)* Yousuf M (Hyderabad, India) Snoddy P (Marlborough)* Tweed)* Ward L (Manchester) Sohor M (Bolton) Thuposy S (London) Warren H (Bristol)*

ATT distinctions Onions G M (London) Hale P (Windsor) Paper 4 – Corporate Taxation Owen K (Swansea) Hampson I R (Southampton) Adithian D (Bengaluru, India) Paper 1 – Personal Taxation Perry L (Trowbridge) Howie C (Edinburgh) Fairweather S (Larbert) Balciute G (Bristol) Pindoria A (London) Jamieson E (Edinburgh) Hummelgaard H (London) Balciute G (Manchester) Rengger A (Burgess Hill) Lam Y Y C (London) Hussain U A (Nottingham) Bandey H (London) Romanelli L (London) MacDonald C (Glasgow) James B (Belfast) Blunt R (Cambridge) Sykes J (Wetherby) McCann M (Manchester) Jamieson E (Edinburgh) Campbell H E (Glasgow) Thinju A (Greenford) McGeown S (Salisbury) King G (Reading) Cogan M (London) Travers N E (London) McGowan M (Aylesbury) Procter E (Lancaster) Coldham R N (Betchworth) Turner T (Cambridge) Pindoria A (London) Randall S (Reading) Coulson L (Bristol) Waller H (Sheffield) Rengger A (Burgess Hill) Waters J (Manchester) Desai M A (West Harrow) Walters L-A (Cardiff) Sagayam Rajaratnam P (Harrow) Dobson O (Swindon) Waterfall J D (Erith) Smith H C (London) Paper 5 – Inheritance Tax, Emerson S (Harrogate) Wilding L (London) Walker M A (Airdrie) Trusts and Estates Everett E (Dover) Wilkinson L G (Whitley Bay) Walters L-A (Cardiff) Brown E M (Newcastle Upon Tyne) Garley S (Staines-Upon-Thames) Wyatt T F (Manchester) Wilding L (London) Holmes J (Ashford) Hampson I R (Southampton) Wilkinson L G (Whitley Bay) Northern C (Bedford) Hillard A E J (Douglas, Isle of Man) Paper 2 – Business Taxation Wilson M (London) Romanelli L (London) Howie C (Edinburgh) Attwal R K (Southall) Scott H (Dursley) Humphrys Y-W (Chepstow) Azad Z (Chesham) Paper 3 – Business Tidy J (Eastleigh) Lam Y Y C (London) Badat A (Bolton) Compliance MacDonald C (Glasgow) Bates B (Nottingham) Barker K (Reading) Paper 6 – VAT McAtear J (Penrith) Brown E M (Newcastle Upon Tyne) Everett E (Dover) McDonnell T J (Corby) McCallum F P G (Edinburgh) Brown W (Stratford Upon Avon) Franklyn N (Polegate) Robinson E (Belfast) McMurran C S (Belfast) Campbell H E (Glasgow) Mitchell N (Fareham) Mooney H (London) Coldham R N (Betchworth) Sohor M (Bolton) Morshead P (Reading) Emerson S (Harrogate) Sutherland K (Glasgow) Nash J M (Tadley) Everett E (Dover) Walters L-A (Cardiff)

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contact: [email protected] www.taxadvisermagazine.com | August 2019 35 Pathway to Partner More than just technical expertise and timesheets

Alicia Crisp joined MHA MacIntyre Hudson as a graduate CV advice. I think it’s very trainee at the North London office in 2007, qualifying as a important that young people chartered accountant in 2010. Alicia became partner in 2017, looking at the profession see at the time the youngest in the firm. Last year she was ranked it as a ‘people’ job, as well at number 1 on Accountancy Age’s 35 under 35 ‘Spotlighting as one that includes some Young Talent’. She runs a portfolio of clients with a focus on good technical challenges working with owner managed businesses across London and and varying career prospects. south Hertfordshire, from new start-ups to long-standing The different routes into both companies. accountancy and tax means the profession really is open Having stayed within one firm from trainee to partnership what to anyone with the right skills Want a tax role would you say are some key attributes for people looking to and a willingness to work hard. progress their career at MHA? It’s not all about technical excellence and timesheets, for a firm How many people do you that will develop like MHA, people skills and building relationships are key, be that work with and what do you supporting a trainee, mentoring someone looking for promotion, look for in team members? dealing with a technical client query or networking with referrers My immediate team is seven people but the nature of my client and prospects. Each partner is different and will have developed base means I regularly work with a whole range of specialists. and challenge you? their skills and network to become a key part of the business – While I will be with my client every step of the way it is great to whether that is as a portfolio leader or technical advisory expert. know we have people who specialize in everything from complex reconstructions, details of property VAT projects and R&D (to name Having an entrepreneurial streak is also useful when it comes to just a few) who will really take ownership of projects. finding solutions to clients’ varying businesses, family set ups and problems, which are often complex. I am a firm believer that you get back what you put in, that doesn’t mean that you have to work twelve hours every day of the week, What do you think makes MHA MacIntyre Hudson a good firm but I want everyone to make the most of the opportunities to learn to work for? and develop, it will make people want to invest in you. The firm is expanding quickly and has big ambitions which means there are great opportunities available and a wide variety of work. Are there different challenges facing those looking for enter the profession compared to when you started and what advice would We have a strong emphasis on client contact and care, staff work you share? hard to build an in depth understanding of client needs to ensure Costs of studying are increasing so there is pressure on making the that advice given is tailored and relevant. Combined with some ‘right’ decision while at the same time technology is developing so top-level specialists we can offer client service to be proud of. rapidly – it must be hard to decide what to study. Apprenticeships such as the AAT are a great way to balance getting professional At the same time we are small enough for each individual to be key training while earning money. to our success, the partners here work closely supporting staff. We are keen to share knowledge and experience to ensure people of That said, it is never too late to change your mind or take some all levels get involved with clients and build their own relationships. time out, accountancy was a last minute career change for me Hard work and a good attitude get recognised and rewarded, coming out of university and I have never looked back! everyone has their own level of aspiration which the firm supports with a fantastic internal training programme. The best advice I can give is to be open about who you are and what you value. A key strength in any team is the diversity of skills, In addition to this we remember that work life balance is key – abilities and life experiences. Be frank about what you can bring macintyrehudson.co.uk while there are busy periods we promote participation in sports to the table and authentic about what motivates you - while you MHA MacIntyre Hudson is recruiting firmwide at qualified level and and social events and always remember family life comes first. need to have your interview answers prepped you need to let the above across all areas of tax. Join our tax team and gain exposure to T: +44 (0)20 7429 4100 interviewer see ‘you’. So, what things are you involved with at MHA MacIntyre Hudson a wide variety of clients from across many industries. outside of client work? Get in touch Historically I helped develop and ultimately lead the employee At MHA MacIntyre Hudson we want to uncover your potential. We nurture forum, encouraging staff from across the firm to come together to If this sounds like an environment where you can flourish, explore ways to create some firmwide initiatives. This included a please view our latest vacancies: macintyrehudson.co.uk/ talented individuals, enabling them to rise to new challenges. campaign to introduce charity days across the firm which started careers this year. If you can’t see a vacancy that suits your current needs or aspirations, please contact us speculatively by emailing: Visit our careers page to discover your next tax role. I’m also very keen on encouraging young people into the [email protected] or contact our London office at profession, where I can I attend careers support sessions, offer 020 7429 4100 work experience opportunities as well as provide interview and Now, for tomorrow Pathway to Partner More than just technical expertise and timesheets

LITRG

KEY POINTS zz What is the issue? You might come across tax/benefit queries outside your immediate area of authorisation/expertise or get asked for help with issues by clients who actually can’t afford to pay you for Online help your services. Meredith McCammond zz What does this mean for me? provides an overview It can sometimes be difficult to find the of LITRG’s technical website guidance correct balance between assisting your client in these situations and leaving them in the lurch – but help is available. zz What can I take away? Via the LITRG website, there is a free, detailed source of general tax and tax credit information available for you to direct your clients to, that can act as a starting point for them being able to deal with the issue themselves.

An overview of LITRG’s technical website guidance – main text The remit that the Council of the Chartered Institute of Taxation (CIOT) gave to LITRG when establishing it in 1998 was: ‘To target for help and information those least able in the community to afford tax advice and make a real difference to their understanding of taxation and to work and benefits. In our tax basics guide, Detailed to make the tax system more friendly to for example, we have pages including We recognise that guidance aimed at their needs.’ ‘introduction to the tax system’, ‘how is my informing non-tax specialists about the way In pursuing the first part of this remit tax collected?’, ‘digital services – dealing in which rules work needs to be different (the bit in italics), we have developed a with your tax and tax credits online’ and from that aimed at specialists. However, we website that offers free information in ‘enquiries, penalties, appeals, complaints also recognise that such guidance should plain English on aspects of the tax and and debt’. be sufficiently detailed to (a) inform people related welfare systems that are relevant Information on each page is broken about anything they may be entitled to claim to individuals on lower incomes. down into question and answer style, (reliefs, allowances, exemptions, etc.) while as we try to anticipate the questions (b) ensuring that they are alerted to any legal www.litrg.org.uk that taxpayers are likely to be asking or procedural requirements that could carry Initially, our intention with our website themselves. This helps to make the a penalty if they did not comply or result in a was to plug gaps in HMRC’s own material, content approachable and also provide relief being withdrawn. but much of HMRC’s material was lost important context. There are many examples on GOV.UK when it moved to GOV.UK. As a result, our While we are aware that that in many where, in an attempt to reduce complex technical guidance has grown significantly places, GOV.UK has made things ‘simpler, technical language and concepts to simple in recent years and the number of clearer, faster’ for taxpayers (indeed terms, accuracy is sacrificed. One example is website visitors along with it – from a few we link to GOV.UK where we consider with the marriage allowance. One condition thousand when we started out, to several it is helpful), we are conscious that the to be satisfied in order to claim the marriage million today. ‘sparing’ GOV.UK approach to tax guidance allowance is that neither member of the Our technical information is split into can cause problems for unrepresented couple pays tax at a rate higher than the easy-to-use tax guides, including: tax taxpayers. As such, when writing our own basic rate. However, the narrative on the basics, employment, self-employment, technical content, we are driven by the GOV.UK application page https://www.gov.( migrants, pensioners, and tax credits following principles: uk/apply-marriage-allowance) reads: ‘To benefit as a couple, you need to earn less OUR OTHER WEBSITES than your partner and have an income of Originally set up with the aid of an HMRC grant we have two other websites: £12,500 or less.’ zz www.disabilitytaxguide.org.uk (aims to support disabled people who take on a This is incorrect, and is no doubt carer and thereby potentially become an employer); and stopping eligible people from making claims zz www.taxguideforstudents.org.uk website (does what it says on the tin!). that could improve their financial position, for example where one spouse’s income is We have had a separate agreement with HMRC each year since 2010/11 to develop and mainly made up of dividends and the basic maintain our www.revenuebenefits.org.uk website for advisers on HMRC’s paying (as rate of tax is 7.5% rather than 20%. We have opposed to collecting) function, covering chiefly tax credits, child benefit and (more spoken to HMRC’s GOV.UK guidance team recently) the transition to universal credit. The technical solution for this website about the need for some more detailed is delivered by the London Advice Services Alliance (LASA). The site won a Tolley’s ‘second tier’ guidance on the marriage Taxation award for best technological innovation in 2012. allowance and hope this will appear soon. While no ‘guidance’ can ever be perfect

38 August 2019 | www.taxadvisermagazine.com LITRG

PROFILE Name Meredith McCammond Position Technical officer Company LITRG Email [email protected] Online help Tel 07384 810692 Proﬁle Meredith has been with LITRG over six years. She leads on their work on labour market issues including agency workers/ intermediaries and gig economy. She has a particular interest in guidance and in the user experience of LITRG’s websites, and runs their care and support employer website: www.disabilitytaxguide.org.uk

incomes needs to look across both systems A regular news feature means the and we try to ensure that our tax and welfare most up-to-date technical and related guidance cross-refers and is joined up as far administrative matters are highlighted. as possible. For example, we have recently posted For example, someone might have a series of articles https://www.litrg.( successfully determined that a small org.uk/search?search_api_views_ amount of income they have made from fulltext=loan+charge&=Apply) designed selling things online falls under the trading to try and inform people about the loan allowance. But does it count as income for charge. You can subscribe for our news tax credits? What about universal credit? updates here (https://us6.list-manage.com/ Our trading allowance information provides subscribe?u=f96149cc03&id=58c63702e8). those answers (https://www.litrg.org.uk/ The website also contains a section on tax-guides/self-employment/what-trading- dealing with HMRC, particularly if you have allowance). additional needs or need enhanced support

© Istockphotos/anyaberkut (https://www.litrg.org.uk/getting-help). Up-to-date/on-trend We also have a ‘contact us’ facility. As as it is not a substitute for individual advice, Out-of-date guidance can be inaccurate and well as receiving comments that help us we do try to ensure that something is not misleading. We update our website both in with the campaigning aspects of our work, presented as being the whole story if it is not. the run up to the next tax year and also on an we often receive requests for help. LITRG is Where there are exceptions or complexities, ad hoc basis – for example, where internally, a committee of the CIOT so we do not give we endeavour to flag this and to provide or via feedback provided by website users, advice ourselves (leaving that job to members clear signposts to more help – this may we identify an area of guidance that needs of the CIOT and the ATT!), we nevertheless be HMRC manuals and/or a pathway to correcting or updating for recent changes. aim to reply to everyone who contacts us. further support from TaxAid or Tax Help for We are always grateful to those who point Normally this involves signposting people Older People. out any changes that are required, as this to general information that we think will be helps to improve our content. helpful or to further support if needed. Use of examples By on-trend, we mean that guidance The use of examples is widely recognised as should be relevant for people – it needs Final thoughts an essential part of ‘good’ guidance. While to evolve as trends emerge. For example, We hope this article has given you an examples are often used to help explain despite the fact that the vast majority of overview of the help that people are able to complex or nuanced areas, they can also agency workers are now told by agencies find on our main website and that you will be very helpful in explaining fundamental to work through umbrella companies, consider using it and sending your clients to concepts – such as tax codes or rates and there is a lack of information on GOV.UK for it, where appropriate (if you are not already allowances. workers explaining or even acknowledging doing so!). We get a significant number of queries the presence of umbrella companies in most A quick caveat: we are a small team with demonstrating that fundamental tax agency supply chains (https://www.gov.uk/ limited resources – our website is aimed at concepts are often not understood. For agency-workers-your-rights). people on lower incomes and mainly covers example: ‘I started work in November… Our own guidance for such workers areas of the system that we consider may and I have been told I may be allowed a tax (https://www.litrg.org.uk/tax-guides/ be most relevant to them. It is not possible rebate because of an allowance of earning a employment/am-i-employed-self-employed- (or desirable), for our website to reflect the certain amount before paying income tax.’ both-or-neither) tries to counter this, giving entirety of tax law. That said, we often hear We try and address this by tailoring our them practical information that they can feedback from members that they find the guidance to our audience and through our hopefully use and apply to the circumstances website extremely helpful in their work, use of examples. This then provides a solid before them. especially for areas of tax that they don’t foundation on which more advanced or deal with day to day, and some even use it sophisticated information can be added. What else can I ﬁnd? for training within their firm. There are also clear and easy-to-understand If we do cover an area, then we try Holistic factsheets to download and print on our utmost to ensure our material is as It is impossible for those on low incomes many key/tricky subjects (such as on the accurate and thorough as possible. To to consider their overall financial position savings and dividend tax allowances, the this end, if you have any feedback on without understanding their tax position, P800 process and payments on account) our website or if you do not think we their welfare benefits position and how the and other useful resources such as videos, have covered something we should have, two systems interact. Guidance on issues annotated forms, introductory flipbooks and please do contact us (https://www.litrg. that are likely to be relevant to those on low sample letters. org.uk/contact-us).

www.taxadvisermagazine.com | August 2019 39 SDLT

SDLT

KEY POINTS zz What is the issue? The rules on what level of Stamp Duty Land Tax (SDLT) is payable have become increasingly more complex. What was once seen as a relatively straightforward tax to calculate now means that different people could pay different SDLT charges on the same transaction. zz What does it mean to me? With the introduction of Scottish Land and Buildings Transaction Tax (LBTT) and the Welsh Land Transaction Tax (LTT) depending on where the land transaction takes place you could be under one of three different sets of rules within the UK. zz What can I take away? This first article in a series provides an overview of the rules.

he rules on what level of Stamp Duty Land Tax (SDLT) is payable have Tbecome increasingly more complex. What was once seen as a relatively straightforward tax to calculate now means that different people could pay different SDLT charges on the same transaction. With the introduction of Scottish Land and Buildings Transaction Tax (LBTT) and the Welsh Land Transaction Tax (LTT) depending on where the land transaction takes place you could be under one of three different sets of rules within the UK. My comments focus on the rules fundamental to property transactions in England and Northern Ireland. This article discusses the basic fundamentals of SDLT. In my next article, I will consider the main Where are considerations for individual purchasers. The comments across both articles are by no means the whole picture but give a flavour of some of the more ‘typical’ transactions I come across. The two articles we now? do not detail any partnership transactions nor rules specific to corporate purchasers SDLT has become increasingly complex. which have their own rules and need to be considered carefully. Nor do they Jo White provides an overview of the rules. cover leases. © Istockphotos/RyanKing999

Basic fundamentals of SDLT occupy land, a tenancy at will, an advowson or grounds of such a building; or (right to appoint a clergyman or vicar), 3. An interest in or right over land that Chargeable interest franchise or manor. subsists for the benefit of a building A chargeable interest is defined within A right over land can include an option within (1) and (2) above. Finance Act 2003 s 48. It means: (FA 2003 s 46 explains this further) and a. An estate, interest, right or power in overage therefore it is not just the ‘normal’ The tests within the legislation refer or over land in England or Northern sale of the land itself or long leases. to actual and suitability for use. The use Ireland; or for which the purchaser intends to apply b. The benefit of an obligation, restriction Residential property after the transaction date is almost always or condition affecting the value of any Residential property is defined within FA irrelevant. such estate, interest, right or power 2003 s 116 as: Gardens and grounds are residential 1. A building that is used or suitable for property. Whilst it is easy to identify the other than an exempt interest. use as a dwelling, or is in the process garden, it is often harder to identify the of being constructed or adapted for grounds. HM Revenue & Customs guidance An exempt interest is any security such use; and states that: ‘Garden or grounds’ includes interest (i.e. a mortgage), a licence to use or 2. The land that forms part of the garden land which is needed (my emphasis) for

40 August 2019 | www.taxadvisermagazine.com SDLT

the reasonable enjoyment of the dwelling, PROFILE having regard to the size and nature of the dwelling. This is usually a question of fact Name Jo White depending on the individual circumstances Position Tax Consultant of the case. [SDLTM30030] Company Kreston Reeves HMRC have confirmed their view on Tel 01403 253282 Email the position where the garden is sold [email protected] Proﬁle Jo provides tax planning advice and support to a wide range separately. They have confirmed that of clients including individuals, businesses and trusts. She specialises the land, which was part of a residential in IHT planning including the effective use of trusts to help ensure property, remains that way even if it is sold a family’s wealth can be maintained for future generations, property tax planning separately. They have further confirmed including advice on VAT, corporation tax, income tax, SDLT, CGT for both property that if at the effective date there is no investors and developers, and research and development reliefs. longer a building as defined under Finance Act 2003 s 116(1)(a) as it is derelict or demolished then those grounds/ gardens rules apply in circumstances including, but Due date for payment are no longer residential. not limited to: SDLT is payable within 14 days from the 1. Where a repayment or assignment effective date of transaction. This reduced Non-residential property of debt forms part of the transaction from 30 days with effect from of 1 March This is also defined within the same part [Finance Act 2003 Schedule 4 para 8] 2019. ‘Effective date’ is when the contract and means any property which is not 2. In the event of contingent is substantially performed. In most cases residential property. Non-residential consideration [FA 2003 s 51] this is completion, however this is not property also includes a transaction where 3. Where the purchaser is a company and always the case. ‘Substantially performed’ six or more separate dwellings that are the the vendor is connected with them – is defined in Finance Act 2003 s 44(5). subject of a single transaction involving deemed market value [FA 2003 s 53] Including: the transfer of a major interest in, or the zz The purchaser (or a person connected grant of a lease over them. HMRC have Linked transactions (FA 2003 s 108) with the) takes possession of the confirmed that providing they are under a Transactions are linked for the purpose whole, or substantially the whole, of single contract, even if there are different of SDLT where they form part of a the subject-matter of the contract, or completion dates, these rules could apply. single scheme, arrangement or series of zz A substantial amount of consideration This is especially important in the cases transactions between the same vendor and is paid or provided. of multiple purchases and indeed more purchaser or persons connected with them. recently property portfolio incorporations Connection for this purpose is defined HMRC confirm ‘substantially’ where Finance Act 2003 Schedule 15 in Corporation Tax Act 2010 s 1122. means 90%. detailing the partnership provisions cannot Where transactions are linked the total Things to note here are as follows; be applied. aggregate consideration is calculated to possession can include the receipts of work out any SDLT payable. rents or profits or rights to receive them Consideration HMRC will seek to apply these rules in (s 44(6)). SDLT is calculated on chargeable a wide-reaching manor. There is no time In circumstances where the vendor consideration. Chargeable consideration limit for these rules to apply and therefore allows the purchaser to access the for this purpose is set out in FA 2003 strictly speaking a transaction between the land this could also bring forward the Schedule 4. same vendor and purchaser could be linked effective date. A contract must exist Chargeable consideration, except even if they had taken place, say, for the effective date to be earlier than where expressly provided, is any 20 years apart. completion. Allowing someone to occupy consideration in money or money’s worth The key here is to consider whether a property prior to completion but where given for the transaction. This can be either or not the transactions would have taken there is no contract does not mean the directly or indirectly by the purchaser or a place independently of each other? Linked effective date has been brought forwards. person connected with him [Finance Act transactions are more likely to apply if 2003 Schedule 4 para 1]. For circumstances there has been a discount applied to the Exempt transactions where non-monetary consideration is purchase of one property due to the Finance Act 2003 Schedule 3 includes a applied, the value for this is its deemed acquisition of the second or the properties specific list of exempt transactions. Some market value. could only be purchased as one. of the more common ones are: There are a number of issues that need HMRC had previously included in their zz no chargeable consideration (except to be assessed when determining the level SDLT manuals this fact. This comment has for cases where FA 2003 s 53 applies); of consideration for SDLT purposes. Special now been deleted from their manuals but zz transactions in connection emphasises a once public view from them with divorce; EXAMPLE on this situation. zz assents and appropriations by The subject of linked transactions also personal representatives; and An example of the transaction comes up when considering properties zz variation of testamentary dispositions. where consideration is not acquired at auction. Again, these are not wholly money necessarily linked where the lots were It is normally pretty clear whether or An individual acquires a plot of land bid on completely independently of each not SDLT is expected to be payable on a from their neighbour. They agree to other which is often the case. transaction. It is however always worth pay £100,000 plus pay for the costs It is very important that any potential checking that the exemptions cannot of the land transaction. Consideration linked transactions are reviewed be applied. for this purpose is £100,000 plus the before automatically assuming that the In my next article I will consider how market value of the costs incurred by the purchaser. chargeable consideration should be these basic principles apply to property aggregated. purchases by individuals. www.taxadvisermagazine.com | August 2019 41 DISCOVERY ASSESSMENTS

DISCOVERY ASSESSMENTS

KEY POINTS zz What is the issue? One of the reasons why the Tooth case was so eagerly awaited was that some clarity was being sought on the need for a discovery assessment to be made whilst the underlying discovery was still new or ‘fresh’, i.e. not stale. zz What does it mean to me? The broad definition of deliberate inaccuracy is likely to cause considerable worry. Where an error in a tax return has been identified, there is a large risk that HMRC will now seek the higher penalties applicable to deliberate errors and/or go back up to 20 years because of the extended time limits available for deliberate errors. There is also the risk of naming and shaming. zz What can I take away? Clients should be warned of these risks and the likelihood that someone is going to have to take another case to the Court of Appeal (or beyond) to ensure that the previously-accepted meaning of deliberate is reinstated.

Background hen I ran my first few discovery cases (including Charlton, Jaws 2 WSanderson and Pattullo), it was necessary to take the Tribunals Just when you thought it was safe to talk about through the history of what is now the Taxes Management Act (TMA) 1970 s 29, discovery, we get the latest instalment of the Tooth comparing the current rules with those case. Keith Gordon discusses the Court’s decision that existed pre-Self Assessment. In the subsequent few years, however, there have been so many cases concerning the discovery rules that it is fair to assume the is a prior discovery. For example, it is not of Tax Adviser. In short, Mr Tooth took Tribunal judges are now fully acquainted enough for an officer to make a ‘protective part in an avoidance scheme which (he with them (and also the various issues that assessment’ (so as to get around an thought) entitled him to accelerate tax arise from these rules). imminent time limit) and then embark relief through the carry-back rules. As As had already been established by upon an enquiry to see whether there the tax return prepared by HMRC did not the Court of Appeal in Tower MCashback, is any basis for the officer’s assessment. allow for such a claim to be accelerated the current discovery rules are based On the other hand, the Upper Tribunal in in this way, Mr Tooth used a wrong box on the pre-Self Assessment code but Charlton and Pattullomade it clear that on the tax return to achieve his desired imposed additional restrictions on HMRC’s ‘discovers’ does not merely mean ‘forms purpose, albeit with a white space right to make a discovery assessment so the view’ (in the sense that the officer disclosure explaining what he had done. as to ‘underline the finality of the self- reasonably and honestly believes that tax HMRC quickly recognised the fact assessment’ itself. Accordingly, most of has been underpaid). Implicit within the that Mr Tooth’s return did not comply the subsequent case law has concerned word ‘discover’ is the requirement that the with their views of the law and promptly the application of the additional conditions officer acts upon the information within opened an enquiry. However, rather than required to justify a discovery assessment a reasonable period of time – whilst the enquiring into the return under the TMA (looking at the quality of the disclosure discovery is still ‘fresh’ or not yet ‘stale’. 1970 s 9A, they considered that the carry- made on the tax return and other related HMRC have steadfastly refused to back claim had been made outside the tax documentation and on the existence accept that the word ‘discovers’ carries return (albeit on the tax return form). of what is now described as careless or this additional requirement although the Accordingly, HMRC opened their deliberate conduct). Charlton/Pattullo view has become quite enquiry under the TMA 1970 Sch 1A However, this meant that many firmly established in the First-tier and provisions instead. The correctness of advisers started to overlook the need Upper Tribunals. The Tooth case was its this course of action was upheld by the for there to be a discovery and, more first outing in the Court of Appeal. Supreme Court in the case of Cotter. importantly, what is actually meant by However, the facts of Cotter proved to the word ‘discovers’. Nevertheless, as the The facts of the case be an exception and it appears that most Charlton and Pattullocases make clear, this The facts were set out more fully in my taxpayers (including Mr Tooth) had put remains an essential part of the process: an previous article on this case, ‘The honest themselves in a situation whereby the assessment will not be valid unless there Tooth’, as published in the May 2018 issue correct approach was in fact to use the

42 August 2019 | www.taxadvisermagazine.com DISCOVERY ASSESSMENTS

PROFILE Name Keith Gordon Position Barrister, chartered accountant and tax adviser Company Temple Tax Chambers Tel 020 7353 7884 Email [email protected] Proﬁle Keith M Gordon MA (Oxon), FCA CTA (Fellow) is a barrister, chartered accountant and tax adviser and was the winner in the Chartered Tax Adviser of the Year category at the 2009 Tolley Taxation awards. He was also awarded Tax Writer of the Year at the 2013 awards, and Tolley’s Outstanding Contribution to Taxation at the 2019 awards. He provides litigation support and advises on tax and related matters to accountants, tax advisers and lawyers.

been made in 2014. However, because cherry. Accordingly, it was inappropriate of a lack of clarity as to the First-tier for the matter to be remitted for further Tribunal’s decision, the Upper Tribunal findings of fact by the First-tier Tribunal. would have remitted the case back to HMRC’s appeal was therefore dismissed. the First-tier Tribunal for further findings As a result of the decision on of fact (which would probably have discovery, it was not strictly necessary led to the formal conclusion that the for the Court to consider the question relevant discovery had been made in of deliberate inaccuracy. However, the 2009). However, this proved unnecessary point was fully argued and therefore the because the Upper Tribunal endorsed the Court expressed its views. First-tier Tribunal’s views in concluding The Upper Tribunal had considered that the taxpayer had not been guilty of that there was not even an inaccuracy a deliberate inaccuracy in his tax return. in the return because, even though Mr HMRC appealed against the latter Tooth had used the wrong box so as to finding and also against the Upper accelerate his loss relief claim, he had Tribunal’s conclusion that the relevant made his position clear in the white Jaws 2 discovery had not been made in 2014. space. Therefore, taken as a whole, the return reflected Mr Tooth’s honest view The Court’s decision and was therefore not inaccurate. As I The case came before Lords Justice mentioned in my article last year, this Patten, Floyd and Males. was a conclusion which ‘caused me some The Judges were unanimous so far surprise’. Although Floyd LJ upheld this as the discovery issue is concerned, but part of the Upper Tribunal’s decision, the

© Istockphotos/Rasmus-Raahauge reached different views concerning the majority considered that an inaccuracy deliberate inaccuracy. in a return could not cease to be an s 9A provisions. Accordingly, in relation In relation to discovery, HMRC were inaccuracy merely because it is corrected to these taxpayers (including Mr Tooth) considered to have adopted an argument or explained elsewhere. HMRC made a series of ‘discoveries’ in which they had not run previously and Where the three judges were at one, or around 2014 that their enquiries had which was factually inconsistent with the however, was in relation to the second been embarked on the wrong statutory documentation that they had put before part of the test: being whether the basis. Accordingly, they issued a number the First-tier Tribunal. In short, the Court inaccuracy (in Floyd LJ’s case, assuming of discovery assessments in order to considered that the documentation that there was indeed an inaccuracy) can capture the tax that they ought to have pointed clearly to the fact that the be said to have been deliberate. All three pursued via s 9A. relevant discovery had taken place Judges decided that if the inaccurate The difficulty for HMRC is that in 2009 and that, in 2014, the only return entries were made with the s 29(1) is quite prescriptive as to what thing ‘discovered’ was that HMRC had intention of achieving ‘a particular fiscal may be discovered: it does not include previously taken the wrong procedural result’, then that is sufficient to satisfy discovering a procedural error by HMRC. path – such a discovery not in itself the statutory test. What must be discovered is, essentially, coming within the scope of s 29(1). In this Therefore, but for the question on that the original tax was wrong. On the regard, the Court’s conclusion was very discovery, the Court of Appeal would facts of the Tooth case, that must have similar to that of the Upper Tribunal. have allowed HMRC’s appeal and upheld occurred back in about 2009, although However, the Court considered that the assessment. there was no clear finding of fact in that the Upper Tribunal was wrong to remit respect. Given the apparent five-year the case back to the First-tier Tribunal Commentary gap between the original discovery and for further finding of fact. This was In respect of the discovery point, the the actual assessment, the question because HMRC’s case before the First- Court of Appeal has reflected the of staleness has naturally arisen – in tier Tribunal was that the discovery had longstanding view that a party needing Pattullo, an 18-month delay was occurred in 2014 whereas the evidence to prove something in a case should described as too long ‘on any view’. put forward was clearly inconsistent usually be expected to do so at the first The Upper Tribunal felt that the with that (or at least did not prove the hearing and is not to be given a second First-tier Tribunal had reached an point being made by HMRC). In the chance with the benefit of hindsight. unjustified conclusion when it formally circumstances, it was not appropriate One of the reasons why the Tooth decided that the relevant discovery had for HMRC to have a second bite of the case was so eagerly awaited was that

www.taxadvisermagazine.com | August 2019 43 DISCOVERY ASSESSMENTS

some clarity was being sought on the consider the requirement for HMRC to is pending. On the other hand, I am need for a discovery assessment to be issue the assessment whilst the discovery hopeful that the Tribunals will manage made whilst the underlying discovery is still fresh. to distinguish most cases from the was still new or ‘fresh’, i.e. not stale. I must, however, admit to being particular facts of Tooth so as to bring Although a series of First-tier and Upper astonished by the Court’s decision on the meaning of ‘deliberate’ much closer Tribunal decisions have emphasised the deliberateness. As the Judges made to the generally-accepted view that it importance of HMRC acting reasonably clear, ‘there is no question of Mr Tooth requires a deliberate attempt to pay less promptly, HMRC have never quite or his advisers having acted dishonestly tax than is known to be due, and the accepted that they need to act with or even reprehensibly’. However, they First-tier’s decision in Leach appears to any alacrity and say that they are considered that this did not prevent the be such an example. bound only by the statutory time limits. inaccuracy from being a deliberate one. Consequently, recent Upper Tribunal In my view, the conclusion (whilst, as I What to do next decisions (whilst following the previous noted last year, being supported by a So far as the staleness point is case law) have referred to the need for literal interpretation of the statutory concerned, it is probably best to await clarity from the higher courts. words) takes no account of the broader the Court of Appeal’s consideration of In Tooth, the question of staleness statutory landscape – indeed, it does not HMRC’s appeal in Beagles. was not directly relevant. However, it immediately explain why HMRC should However, the broad definition of was clearly in the background because be given longer to assess a taxpayer deliberate inaccuracy is likely to cause HMRC would not otherwise have needed who has honestly made an error after considerable worry. Where an error in to put all their efforts in showing that proper thought than a taxpayer whose a tax return has been identified, there the discovery took place as late as error is attributable to carelessness. And is a large risk that HMRC will now seek in 2014. Indeed, the Court of Appeal a similar point can be made by looking the higher penalties that are applicable expressly endorsed the view that a at the penalty code where deliberate to deliberate errors and/or will go back discovery represents something new errors are treated as more serious than up to 20 years because of the extended and that this is implicit from the word careless ones. time limits available for deliberate itself. Furthermore, the discovery must In my view, HMRC have got lucky on errors. There is also the risk of naming relate to the conclusion itself (i.e. that this point and, although they are likely and shaming. too little tax had been paid) rather to be disappointed by the fact that they Clients should be warned of these than the reason for that conclusion. lost on the discovery point, I think that risks and the likelihood that someone is These comments will no doubt prove they ought to be reluctant to risk the going to have to take another case to the encouraging to Mr Beagles whose appeal Supreme Court revisiting the meaning Court of Appeal (or beyond) to ensure (due to be heard in October 2019) is of deliberate inaccuracy, although that the previously-accepted meaning of when the Court of Appeal is next due to the grapevine says that an application deliberate is reinstated.

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44 August 2019 | www.taxadvisermagazine.com TECHNICAL

Financial guidance and advice Financial guidance and advice Welcome to the Technical Team August Technical Newsdesk Newsdesk Articles Author(s) Thursday 11 July was ‘L-Day’ – the day on which the government publishes the draft Introduction Richard Wild p45 clauses for the Finance Bill. It’s probably Making Tax Digital for VAT Richard Wild fair (and pleasing) to say that this year there were few surprise INDIRECT TAX GENERAL FEATURE p45 measures. The Digital Services Tax, off-payroll working rules for the private sector and the changes to Private Residence Relief Processing of R&D tax credit claims were already timetabled to commence from April 2020 and so Sacha Dalton and RDEC claims – current delays these measures appeared as expected. Consultation had also been p46 LARGE CORPORATE OMB undertaken around rules to give HMRC secondary preferential creditor status for particular taxes, tax abuse involving company HMRC letters and ‘certificates of tax Margaret Curran insolvencies, and the corporate capital loss restriction, and these position’ to individuals with offshore p46 measures also appear, again effective from around April 2020. income, gains and assets – an Perhaps what was a surprise was the absence of a number of update for CIOT members measures. For instance, the government consulted in 2017, and MANAGEMENT OF TAXES published draft legislation in July 2018, for a new penalty regime GENERAL FEATURE for late submission and late payment of taxes. Much of this regime Structures and Buildings Allowance Emma Rawson was originally intended to be in place for the commencement of – secondary legislation and Sacha Dalton Making Tax Digital, yet it looks like it could be at least 2021 before HMRC response p47 this will be introduced. A number of other measures were perhaps LARGE CORPORATE OMB notable by their absence, such as around the hidden economy and ‘conditionality’, amendments to tax returns, preventing abuse of Changes ahead for installing energy- Jayne Simpson the R&D scheme, and the 1% SDLT surcharge for non-UK resident saving materials p48 purchasers of residential property – though none of these are ‘off INDIRECT TAX the table’ and we may well see them in a future Finance Bill. HMRC’s Employment Tax Fora Matthew Brown The technical teams of CIOT, ATT and LITRG will be making EMPLOYMENT TAX p49 representations on many of the draft clauses, and if you have any Mutuality of Obligation (MOO) Matthew Brown comments please send them to us in the usual way. and Check Employment Status for p50 Tax (CEST) EMPLOYMENT TAX Making Tax Digital for VAT Transposition of the Fifth Helen Thornley, Money Laundering Directive: John Stockdale INDIRECT TAX GENERAL FEATURE consultation responses p50 INHERITANCE TAX As we approach the first quarterly submission deadline for MTD Scotland update – consultation on Joanne Walker, for VAT, we report below on a number of developments that a policy framework for devolved Helen Thornley might affect you and your clients. taxes; call for evidence on the p51 7 August 2019 is the deadline for the first quarterly VAT Financial Memorandum to the Non- returns due under MTD (June to August, or ‘stagger one’ returns). Domestic Rates (Scotland) Bill We have been working with HMRC to identify and resolve some GENERAL FEATURE of the gremlins in the system and we keep the CIOT (www.tax.org. uk/MTD) and ATT (www.att.org.uk/MTD) websites up to date with A social care tax or levy for Wales? Kate Willis developments as they arise. PERSONAL TAX p52 New LITRG guide for the Claire Thackaberry Online VAT certiﬁcate self-employed p52 For businesses signed up to MTD, the ability to view the online GENERAL FEATURE VAT certificate was lost. HMRC have been working to resolve this PERSONAL TAX OMB and the vast majority of taxpayers signed up to MTD are now able to view their VAT certificate in their Business Tax Account. Pre 6 April 2016 state Kelly Sizer The functionality for agents to access this information should pension lump sums p53 be delivered this month. In the meantime, agents can call the PERSONAL TAX VAT helpline (0300 200 3700) or ask their client to obtain the information. The functionality for a small number of taxpayers with non- To contact the technical team standard accounting periods will be delivered later this year (date about these pages, to be confirmed). please email: Sacha Dalton, Overseas businesses Technical Newsdesk editor Notwithstanding some mixed messages, overseas businesses [email protected] can join MTD now in advance of their 1 October 2019 mandation date. HMRC have informed us that they are experiencing an www.taxadvisermagazine.com | August 2019 45 TECHNICAL

issue affecting some overseas customers who have either not would be useful for them to manage expectations by providing registered for VAT properly, or where HMRC do not hold the some reassurance that what appears to be a clear lack of sufficient correct information on their system. For example, if the address resource within the R&D team is being addressed. We said that it held is the address of the UK based tax agent, this means that would also be helpful for taxpayers and advisers to know when it is HMRC’s system will not recognise it as an overseas business for expected that the situation will improve and that processing times the purposes of MTD; therefore, when the overseas business will begin to come down. tries to sign up, the system will assume it is UK based and ask for HMRC have responded, acknowledging the delays currently a company registration number to check with Companies House, being experienced, saying that this is due to a combination of which cannot be provided. HMRC are currently looking at the best recent staff losses and extremely high volumes of claims being way to address this issue and the affected customers, and will have submitted to HMRC. a fix in place before 1 October. HMRC say they are taking action to reduce the delays in both We suspect this may also be why some overseas businesses R&D payable tax credits and RDEC claims. HMRC have redeployed have not received the expected deferral letters from HMRC, in staff from other work areas and recruited new staff to speed up which case they should contact the VAT helpline to request one. processing and payments. In our letter we said that, understandably, the delays in processing claims are causing a significant amount of unnecessary Direct debits contact between taxpayers, advisers and HMRC. We suggested There have been a number of occasions where HMRC have not that it would be helpful if HMRC could publish the expected collected direct debit payments from businesses. One of the turnaround times more widely than the current email circulation to contributory factors to this is where the business (or their agent) members of the R&D Consultative Committee (RDCC) so that calls signs up to MTD too close to their VAT return submission deadline simply to chase the progress of claims can be minimised. HMRC and so leaves insufficient time to allow HMRC to transfer their have responded saying that they will continue to keep agents records to their new systems. An inhibit has now been put in place updated on the latest position through the weekly update email to prevent this arising, but if you are unclear as to the correct time to RDCC members, as well as updated ‘auto response’ messages to sign up please see GOV.UK (https://tinyurl.com/yy3omjc8) or the to emails sent in to the R&D mailbox to inform customers and illustration on the CIOT website www.tax.org.uk( /sign_up). manage expectations. If you or your clients have experienced this issue in relation HMRC note that by bringing in wider resources to the R&D to their pre-MTD returns, HMRC state that they are rectifying team, it may appear that some claims are being processed ahead the situation as a matter of priority and expect to have collected of others. This is due to training requirements and HMRC will strive all outstanding payments by 22 July. If payment has not been to deliver a fair and balanced service dealing wherever possible collected by this date, contact the VAT helpline. with claims in date order. As noted above, we remain in discussions with HMRC We will continue to monitor the position and hope to see an about MTD, so please keep an eye on our websites for ongoing improvement in processing times as a result of the action HMRC developments. are taking in the near future. To assist us with this, we would like to hear from members regarding their experiences of dealing Richard Wild with R&D claims and, in particular, processing times. Please email [email protected] [email protected].

Sacha Dalton Processing of R&D tax credit [email protected] claims and RDEC claims – current delays HMRC letters and ‘certiﬁcates

LARGE CORPORATE OMB of tax position’ to individuals CIOT has written to HMRC regarding the current delays in HMRC with offshore income, gains and processing claims for R&D tax credits and RDEC claims. HMRC say they are addressing the problem and we will continue to monitor assets – an update for CIOT the position, hoping to see improvements soon. The CIOT wrote to HMRC to express our concern at the current members position regarding processing times of claims for R&D tax credits and RDEC claims by HMRC. The problems that the significant delays MANAGEMENT OF TAXES GENERAL FEATURE currently being experienced are causing has been raised with us by a number of our members. The most recently published processing The CIOT has recently published an update for members which times at the time of writing (Monday 8 July) are: provides information about HMRC’s letters and some guidance to zz R&D tax credits – processing claims submitted on 4 April 2019 help members decide the most appropriate way to respond if a (thus taking 95 days); and client receives one of the letters. zz RDEC claims – processing claims submitted on 20 December The full update and an example of a recent letter and 2018 (thus taking 200 days). certificate of tax position are provided on our website –www.tax. org.uk/tax_position_cert. Before publishing the update, we shared Clearly, these processing times are much longer than the it with HMRC to check that it accurately reflects HMRC’s position. service level which HMRC aspire to for payable tax credits of 28 days. Background We asked HMRC to explain the reasons for the delays and Over the past couple of years, HMRC have been sending out letters what is being done to address the problem, suggesting that it to UK individuals who they have identified as having received

46 August 2019 | www.taxadvisermagazine.com TECHNICAL

income, gains or assets from overseas accounts or investments. minimis level below which mistakes do not need These have been prompted by information HMRC have been to be disclosed. receiving in the last few years from overseas tax authorities under (b) If no disclosure is needed, the person should Automatic Exchange of Information (AEOI) agreements about UK consider sending HMRC an explanation by letter. residents with financial accounts and investments overseas. HMRC Where no response is received, HMRC will follow also undertake some additional risk assessment before sending up so not responding at all will attract more the letters. attention from HMRC. Responding to the initial The most recent letters sent this year have come from letter will therefore mitigate the risks of further HMRC’s ‘Risk and Intelligence Service, Offshore’ and are based on action being taken by HMRC. information from tax information exchange agreements with other countries, including as a result of the Common Reporting Standard. If possible, try to respond within the 30 days provided by HMRC. However, if it is not possible or practical to respond fully What’s in the letters? to the letter within this timescale, consider contacting HMRC HMRC’s letters use standard wording and start by informing the either by telephone or letter to agree a more realistic timescale individual that HMRC have information showing that they may with them. have received overseas income or gains which is taxable in the UK. 3. Consider very carefully whether to sign and return the The letters tell the individual that it is their responsibility to tell ‘Certificate of tax position’. HMRC about their UK tax liabilities from offshore income and gains Although the declarations in the ‘Certificate of tax position’ anywhere in the world, and that it is important they check that are similar, if not completely identical, to those on the self- they have declared all their UK tax liabilities. The letters suggest assessment tax return, there are two important differences. seeking professional advice if the person is not sure whether they Unlike the tax return: have declared all their overseas income or gains. The letters are zz there is no legal obligation on the individual to complete the being copied to the individual’s tax agent if they have one. ‘Certificate of tax position’ and return it to HMRC; and HMRC generally give 30 days to respond and all of the letters zz the period covered by the ‘Certificate of tax position’ – and include a ‘Certificate of tax position’ form, which HMRC ask the therefore the declarations – is not restricted to a particular individual to complete and return whether they have additional tax year. It applies to all years. tax liabilities to disclose or not. HMRC use the ‘Certificate of tax position’ because it helps them minimise the number of ‘no Also, the certificate does not have a de minimis level. response’ cases they would otherwise need to follow up. We In discussions between the CIOT and HMRC, HMRC have told discuss the details of the wording in the certificates in more detail us that they will accept a response by letter should an individual in the full update on our website (www.tax.org.uk/tax_position_ choose not to complete the declaration. cert) and also at (3) below. In view of the serious consequences of making a false declaration, it may be preferable to respond by letter to HMRC, What you should do if a client receives one of these letters particularly if, after reviewing their tax affairs, the individual from HMRC believes that their affairs are correct and up to date and they 1. Check the position. do not need to make a disclosure. Responding by letter enables HMRC is saying in the letter that they are aware the person has an explanation to be included, which could pre-empt further overseas income, not that their tax return is necessarily wrong. queries by HMRC. If the individual needs to make a disclosure However, HMRC do carry out some risk assessment before but chooses not to complete the ‘Certificate of tax position’, it sending a letter, so it will be essential to check whether the would be good practice to respond to HMRC’s letter in writing individual’s tax affairs are correct and complete to the best of and advise HMRC that a disclosure via the WDF (or other their knowledge and belief before responding to the letter. method) is being made. 2. Respond to HMRC’s letter, whether or not there is anything With data from overseas now being constantly received to disclose. under AEOI agreements, HMRC are adopting an approach of (a) If a disclosure is required, the letter advises that this sending out batches of letters at regular intervals. Members must be made via the Worldwide Disclosure Facility should be aware that this approach will continue for the (WDF). However, HMRC cannot compel a taxpayer foreseeable future. to use any specific method for their disclosure and using the WDF may not necessarily be the most Margaret Curran appropriate method. Depending on the individual [email protected] circumstances of the taxpayer, other approaches may be better: for example, Code of Practice 9 (COP9) (Contractual Disclosure Facility). Agents should therefore consider their client’s specific Structures and Buildings circumstances and advise on the most appropriate method for a disclosure. Allowance – secondary A CIOT member must comply with the fundamental principle of professional competence legislation and HMRC and due care as set out in Professional Conduct in Relation to Taxation (PCRT). This means that they response should not undertake professional work which they are not competent to perform unless they obtain LARGE CORPORATE OMB appropriate assistance from a suitably qualified specialist. Advice from another adviser specialising The regulations for the new Structures and Buildings in tax disputes may therefore be needed if the Allowance have now been passed by Parliament. The final agent does not have the necessary expertise to version of the secondary legislation was published with handle a disclosure themselves. There is no de HMRC’s response to previous rounds of consultation in June. www.taxadvisermagazine.com | August 2019 47 TECHNICAL

A new class of capital allowances – Structures and Buildings zz more flexible rules for expenditure incurred after a Allowance (SBA) – was announced with immediate effect at building or structure has come into use; Budget 2018. In outline, the SBA provides relief for qualifying zz providing for SBA where a structure or building is expenditure on new non-residential structures and buildings purchased from the Crown or other person not within incurred on or after 29 October 2018 on a 2% per annum the charge to UK tax; straight line basis. zz modification of the rules where a person makes a As reported in May’s Technical Newsdesk (see https:// contribution to another; tinyurl.com/y5pcebca), a draft Technical Notice was released for zz clarification that assets used for purposes ancillary to consultation at the time of the Budget announcement, followed residential use include those situated on land within by draft secondary legislation in March 2019. the curtilage of a residential structure or building; The final version of the secondary legislation was laid zz modification of some of the amendments to TCGA before Parliament on 17 June 2019 (see https://tinyurl.com/ 1992, including on prevention of double taxation, yyvwdysf). demolition and capital contributions; and The regulations were debated and passed by the House of zz clarification of the commencement provisions and Commons on 3 July 2019. Our criticism of the general process of the rules surrounding renovation or conversion of a the introduction of these new rules was mentioned during the building where a developer is involved. debate. Peter Dowd (Labour) said: ‘The Chartered Institute of Taxation rightly criticised the HMRC have indicated that guidance will be published Government over these new regulations, stating at the time of which will provide definitions and examples to assist with the 2018 Budget that “it is neither sensible nor responsible for areas of ambiguity. In particular, this guidance will: the government to introduce reliefs into the tax system at a time zz provide further explanations of what constitutes before they have consulted upon the scope and application of qualifying expenditure; the relief or fully considered, and are therefore able to legislate zz explain the definitions used in the legislation, such as for, the details of the relief.” It concluded that these regulations dwelling-house and mixed-use building; will only complicate matters, particularly given that plant and zz cover the new, more flexible rules regarding cases machinery are excluded. That means that taxpayers are still where expenditure incurred after a building comes required to identify the plant and machinery in buildings, with into use can be claimed; and the same grey area that currently exists between buildings, zz clarify the treatment of successive leases. fixtures, plant and machinery. The administration of this new allowance will be substantial and burdensome for businesses, As some of these definitions and issues are likely to be flying in the face of the Government’s initial promise to simplify quite key to the operation of the SBA, it is disappointing the tax system.’ that they will only be addressed in guidance, rather than Our work to achieve our charitable objectives, including in primary or secondary legislation. Nevertheless, we look a legislative process which translates policy intentions into forward to reviewing the guidance when it is published. statute accurately and effectively, without unintended In addition, we would be interested to hear from consequences was also recognised by Kirsty Blackman (SNP), members about any practical issues that arise when it who began her speech: comes to applying these new rules in practice. Please ‘Let me begin by thanking the Association of Taxation send details to either [email protected] or technical@ Technicians and the Chartered Institute of Taxation, which att.org.uk. have provided me with some information so that I can help to scrutinise this incredibly technical piece of legislation.’ Emma Rawson Sacha Dalton The full debate can be found at https://tinyurl. [email protected] [email protected] com/yxj2ttgq. Also in June, HMRC published their response to the consultations on both the Technical Notice and draft legislation (see https://tinyurl.com/yxw36xpn). Changes ahead for installing HMRC’s consultation response confirms that there are no major changes to the previously announced scope of the SBA. energy-saving materials In particular, the secondary legislation has not widened the boundaries for qualifying use, which maintains a wide exclusion INDIRECT TAX for residential property which includes dwellings, prisons and student accommodation. Following the recent consultation period (as reported The legislation covering the evidence requirements which in June’s Technical Newsdesk: https://tinyurl.com/ must be met by claimants also remains largely unchanged y24beqvy), The Value Added Tax (Reduced Rate) (Energy- from the draft regulations published in March 2019. Saving Materials) Order 2019 was laid on 21 May and HMRC acknowledge that it may be difficult to meet these comes into effect on 1 October 2019. requirements in some cases, in particular when a structure or The Order amends the scope of Group 2 (installation building is purchased from an overseas vendor. HMRC suggest of energy saving materials), Schedule 7A to the VAT that this issue will be addressed in guidance. The legislation Act 1994. does, however, allow evidence of expenditure to be obtained The changes arise as a result of Court of Justice of the from any previous owner of a structure or building (and not just European Union (CJEU) case C-161 /14, which found that the immediately previous owner as was originally proposed). the UK had applied the reduced rate too widely and that Other changes in the final legislation include: the reduced rate should only apply: zz removal of the seven-year limit on expenditure incurred zz for customers meeting a social policy; or prior to commencing a qualifying activity; zz when energy-saving materials (ESMs) are installed in zz new provisions to provide relief to lessees for capital private dwellings, the cost of materials may not be a expenditure they have incurred when a lease expires; significant part of the value of the supply.

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The UK’s social policy for the purposes of the reduced rate for In this article we summarise meetings of three of HMRC’s ESMs includes ‘qualifying customers’ who are: employment taxes forums, which are attended by CIOT zz qualifying persons; volunteers, from June 2019. HMRC publishes the minutes of the zz a relevant housing association; or meetings on GOV.UK. zz a relevant residential property. Employment and Payroll Group (EPG) The definition of qualifying person is at Note 6, Group 3 to The group is the main HMRC forum for employment tax related Schedule 7A of VATA 1994. The social policy does not currently matters and met on 11 June. The agenda opened with a include environmental concessions. discussion of the job-related accommodation rules, following HMRC’s announcement earlier this year that the customary What is changing? rule no longer applied in the further and higher education a. Removal of wind and water turbines as ESMs sector. While there was a feeling that the current job-related Both wind and water turbines will be removed from the list accommodation rules were out of date, it was acknowledged of products that qualify as ESMs in Note 1 of Group 2 to that there were many that have relied on them for a very long Schedule 7A VATA 1994. For all customers, whether they meet time and any change would need to consider the effect on the social policy or not, the VAT position on both goods and these people. services will become standard rated from 1 October 2019. The change to the NICs Employment Allowance (EA) b. The 60% goods rule announced last year was discussed. From 6 April 2020, it Where supplies of installed ESMs are to qualifying customers, will only be available to employers with employer’s NIC the VAT position for supplies, other than wind and water of less than £100,000 for the prior tax year. This will require turbines mentioned above, will be unchanged. For customers additional boxes to be added to the monthly Employer Payment not meeting the social policy, the VAT liability will depend on Summary (EPS). whether the proportion of the cost of goods compared to the Lastly, DWP explained how the Universal Credit (UC) process overall price exceeds 60%. Where the cost of goods is 60% works and the interactions between employee/claimant, the or less, the VAT position is unchanged, i.e. the reduced rate employer, HMRC and DWP. DWP commented that employer applies to both the goods and the installation services. compliance, particularly around RTI reporting ‘on or before’ Where the cost of goods as a proportion of the overall price payments are made, was much improved, and although they of installation exceeds 60%, the goods will be standard rated. receive around 2,000 disputed earnings assessments each week However, note that for these supplies, the Order still allows an about 70% of the assessments, which are based on the RTI data, apportionment enabling the installation services to remain as prove to be correct. reduced rated so two VAT rates will apply. There are several further matters to note: Collection of Student Loans (CSL) Consultation Group zz Reduced rating can still apply where the supplier and The group held its second quarterly meeting of 2019 on 4 June customer have entered into a contract before 1 October and most of the time was taken up with updates from HMRC, 2019, or where the customer has paid in full, even where the the Department for Education (DfE) and the Student Loans installation takes place after this date. Company (SLC). zz Where an installation of ESMs are part of the construction HMRC reported back on the implementation of the services for a newly constructed residential dwelling, the rules collection of Postgraduate Student Loans (PGLs) through the for zero-rated construction services may be applicable*. tax system, which commenced in April 2019. A knock-on effect zz Where the installation is part of a larger contract of works, of the error with the publishing of the new starter checklist the apportionment on reduced rated installation services (and earlier in the year has been many employers continuing to use qualifying installed goods) may be superseded by the rules the wrong starter checklist for new employees! HMRC have on composite supplies. Where the contract is for a standard also started ‘more frequent data sharing’ (MFDS) of RTI data rated refurbishment, the supply of installed ESMs may also with SLC and weekly files (plus the first monthly payments file) form part of the standard rated composite supply*. have been validated and passed to SLC. The increase in the repayment threshold for Scottish borrowers from 2021 was *Professional advice may be required. noted. This will require HMRC to introduce a new plan type to Further guidance is available on GOV.UK (https://tinyurl.com/ identify those borrowers. y35q7b4y). A table showing the various VAT rates before and Lastly, the DfE provided a brief overview of the report on after 1 October 2019 is on the CIOT website https://tinyurl.com/( Post-18 education (an increase in the threshold and number of y6me8xv8). years to repay is recommended, together with a widening of the income to take account of). The government’s response is not Jayne Simpson however expected until the autumn. [email protected] Statutory Payments Consultation Group (SPCG) The CIOT was invited to join the SPCG and attended our first meeting on 27 June. The group is a sub-group of the EPG and its HMRC’s Employment remit includes the full range of statutory payments. The current focus of the group is Statutory Bereavement Tax Fora Pay (SBP), which will be introduced from April 2020. For SBP, the definition of a bereaved parent will be much broader than EMPLOYMENT TAX for other statutory payment purposes and will extend to any unpaid carer of a child where the person has cared for the child A round up of HMRC employment taxes related consultative for at least four weeks. SBP entitlement will be two weeks forum meetings, including the Employment and Payroll (either as one block of two weeks or two separate weekly Group, Student Loan Consultation Group and Statutory blocks). Secondary legislation should be published later in the Payments Consultation Group. year and we requested that a draft be published this summer. www.taxadvisermagazine.com | August 2019 49 TECHNICAL

We also asked that SBP guidance be published this year so that, The stated objective of the transposition is to ensure for example, employer processes can be readied to take account that the UK’s anti-money laundering and counter-terrorist of this new statutory benefit before it comes into force. financing (AML/CTF) regime is kept up to date, effective and proportionate. The government intends that the new Matthew Brown provisions will come into force in national law by 10 January [email protected] 2020, in line with Article 4 of 5MLD. Chapter 9 (Trust Registration Service) 5MLD expands the scope of the Trust Registration Service (TRS) by requiring trustees or agents of all UK and some non-EU resident Mutuality of Obligation and express trusts, within the sense intended by the Directive, to register those trusts with the TRS, whether or not the Check Employment Status trust has incurred a UK tax consequence. It also requires the government to share data from the register with a range of for Tax persons under certain circumstances.

EMPLOYMENT TAX ATT response The ATT focused its comments on Chapter 9 of the The CIOT has written to HMRC regarding the meaning of mutuality consultation and the implications for UK resident trustees, of obligation (MOO) and its application to HMRC’s Check and endorsed the CIOT response to other areas of the Employment Status for Tax tool (CEST) following various discussions consultation. at the IR35 Forum and HMRC papers on MOO. Implementation of the Directive will significantly expand The IR35 Forum has been discussing the application of mutuality the scope of the existing register and the sheer scale of of obligation (MOO) to HMRC’s Check Employment Status for Tax tool this task cannot be underestimated. Given the low level (CEST). This follows discussions last year concerning the accuracy of of understanding of trusts by the general public, we think CEST and disputed views on the meaning of MOO. that it will be extremely hard to identify and register all In July 2018, HMRC published their views on the meaning of MOO, the express trusts in existence which are affected by the explaining why CEST does not explicitly look at MOO (https://tinyurl. new rules. com/y2ttva6e). There were then some extensive discussions at the Guidance: The government does not expect to specify forum (as well as many other comments on HMRC’s position, including a full list of types of express trust that need to register. from the CIOT), culminating in a further HMRC paper being presented Instead, the onus will be on trustees and agents to to the forum in February 2019 and an invitation to members of determine if the definition is met. We are concerned that the forum to comment (https://tinyurl.com/y26zjr89). The CIOT unrepresented trustees – and those who cannot access responded in April 2019 but can only now report on our submission. funds from the trust to meet the costs of advice – will While HMRC’s view is that MOO establishes the existence of a struggle to comply without robust guidance. While it will contract, not whether it is one of employment or self-employment, be impossible to list all the situations where an express we think MOO is not simply to be seen as a prerequisite of any trust might arise, guidance which covers a significant contract involving a business and an individual with the question of proportion of possible situations is essential and a clear list employment/self-employment status to be subsequently determined of both what is, and what is not, intended to be registered with reference solely to other factors. Rather, we think that MOO is is needed. intrinsically a factor in itself – albeit not necessarily determinative – as Data collection: The consultation recognises that regards whether an engagement is employment or self-employment. data collection for the existing Trust Register is onerous. Consequently, we think that consideration of MOO, in terms of We called for the removal of the current requirement to the ongoing relationship between the worker and engager, deserves provide National Insurance numbers for individuals, which much more emphasis in HMRC’s papers on MOO, within CEST and in is inconsistent with the information required for directors/ HMRC’s Employment Status Manual (ESM). In particular, we think the shareholders at Companies House. We see no reason to issue of whether the individual is paid for periods of inactivity requires collect different information based on whether or not the more emphasis. trust pays tax. The purpose of the Register is to gather The discussion at the IR35 Forum is ongoing and updates on this information on ownership and, since some trusts pay tax topic will follow. in some years but not in others, consistent requirements regardless of tax status will avoid confusion. Matthew Brown The burden of data collection will increase under the [email protected] new Directive as it requires trustees to provide details of nationality and residency for all beneficial owners. Timescales: The ATT considers that the proposed deadline of 31 March 2021 to register all existing trusts Transposition of the Fifth which have not previously registered is insufficient given the numbers involved and we called for this period to Money Laundering Directive: be extended. For new trusts, the requirement to register within consultation responses 30 days will be impractical or impossible in some circumstances. For example, it is too short a period where INHERITANCE TAX a trust is created on death. We suggested that trustees should have a year from the date of the settlor’s death to The ATT and CIOT have responded to the HMT Consultation report the creation of the trust – which would tie in with the on the Transposition of the Fifth Money Laundering Directive deadline for reporting IHT charges. (5MLD) published on 15 April 2019 commenting on the Penalties: We agreed that a tax-based penalty system is implications for trusts and their trustees. no longer appropriate where registration is not linked to tax

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consequences and suggested that a series of modest fixed penalties increasing with the period of the delay, together Scotland update – consultation with an appeals process, would seem reasonable. Penalties need to be proportionate where it is clear that there has on a policy framework for been no deliberate failure to register. We would like to see HMRC continue their risk-based approach to charging devolved taxes; call for penalties and a period of grace in which trustees who have only just become aware of their obligations can comply. evidence on the Financial Data sharing: Under the Directive, trustees will be required to prove to new advisers that the trust is registered. Memorandum to the Non- We suggested that this could be done electronically, with trustees authorising the Register to release data directly to Domestic Rates (Scotland) Bill whoever needs it. Legitimate interest: Under the Directive, anyone with a GENERAL FEATURE legitimate interest will be able to request certain information on trusts on the Register. The ATT is concerned that, without CIOT made a written submission to the Finance and Constitution appropriate safeguards such as a right of appeal, the risk of Committee of the Scottish Parliament in response to its call for loss of privacy could deter people using trusts even when a evidence on the Financial Memorandum to the Non-Domestic trust would otherwise be an appropriate solution. Rates (Scotland) Bill. CIOT and LITRG made a joint submission The ATT response can be found at www.att.org. in response to the Scottish government consultation on a uk/ref337. policy framework for devolved taxes, to which ATT submitted a separate response. CIOT response We noted the government’s recognition that UK trusts Call for evidence on the Financial Memorandum to the present a low risk of money laundering and terrorist Non-Domestic Rates (Scotland) Bill financing, and its keenness to ensure that the registration The CIOT recently submitted written evidence to the Local process is applied proportionately, an approach that is Government and Communities Committee on The Non-Domestic consistent with the Directive. Rates (Scotland) Bill (the Bill) – as reported in July’s Technical 5MLD does not define a trust, but leaves it to each Newsdesk (https://tinyurl.com/y3q3oxyw). We followed this up state to determine which types of trust or similar legal with a submission to the Finance and Constitution Committee in arrangement are comparably similar to a corporate or response to their call for evidence, which focused on the Financial other legal entity. In arriving at that determination, CIOT Memorandum to the Bill. indicated that the Directive should be construed purposively. The Committee sought views on whether the Financial Accordingly, as the Directive is aimed at registration of the Memorandum accurately reflected the financial assumptions beneficial ownership of ‘entities’, CIOT’s position is that only made and whether it reasonably captures the costs associated where a UK trust may constitute an ‘entity’ comparable to a with the Bill. corporate, should it fall to be registered. We noted that our responses back in 2016 and 2018 to the Barclay UK law often employs a trust mechanism where Review Group (www.tax.org.uk/ref170) and the Scottish Government the approach in most European jurisdictions would be (www.tax.org.uk/ref491) respectively on the reform of non-domestic contractual (and thus clearly outside of the scope of 5MLD). rates concentrated on principles. We did not consider the financial To reflect appropriately the intent of the Directive in UK law assumptions directly, but we did indicate that in respect of reliefs, and effectively fight money laundering with proportionate changing them from application-based to automatic would make it measures, we believe that the definition for a UK express more difficult to track their value or cost. trust should be informed by the current widely-recognised We raised a concern about the lack of independent forecasts UK tax definition: property held in trust other than property associated with the Bill. This is because the Scottish Fiscal Commission held by a person as trustee for another person who is has chosen not to produce the forecast, as it did not have enough absolutely entitled to the property as against the trustee. information to do so, because many of the specifics are to be set out Where a person is absolutely entitled to trust property, we in secondary legislation. The Scottish Government therefore produced submit that it is not held in a separate ‘entity’ in the sense internal forecasts to accompany the Bill. intended by the Directive. We also pointed out that it is possible that some of the By applying the Directive’s approach purposively and assumptions on which the Financial Memorandum is based may be using an existing and sensible UK definition, most bare trusts open to question. For example, assessors currently have criminal and nominee arrangements would not require registration. powers where ratepayers fail to provide information. Following CIOT is concerned that there are currently insufficient enactment of the Bill, they will also have civil powers to act where safeguards to prevent disclosure of personal information ratepayers fail to do so, as will local authorities. An assumption is about trustees and beneficiaries to someone claiming to made, when assessing the financial effects, that because use of the have a ‘legitimate interest’ in such disclosure. We believe criminal powers is low, assessors and local authorities will only serve that an ombudsman should determine such requests. a civil penalty in 50% of cases. Given the burden of proof is lower for In relation to requests for information on trusts holding civil penalties, it does not seem reasonable to estimate the use of civil non-EAA companies, it appears implicit in the proposal penalties based on the use of criminal penalties. In addition, while we that the person making the request must be able at least to believe assessors and local authorities should exercise discretion, and identify the trust which is the object of the enquiry. cancel or reduce penalties where appropriate, an approach whereby The CIOT response can be found at www.tax.org. assessors and local authorities assume at the outset that they will uk/ref554. not issue penalties in all cases will not encourage compliance from ratepayers and is likely to result in the perception that treatment is Helen Thornley John Stockdale inconsistent and unfair. [email protected] [email protected] The full CIOT submission can be found at: www.tax.org.uk/ref556. www.taxadvisermagazine.com | August 2019 51 TECHNICAL

Consultation on a policy framework for the devolved taxes However, a regular cycle for ‘care and maintenance’ measures The CIOT and LITRG submitted a joint response to the Scottish will become increasingly necessary with further devolution of Government consultation on a policy framework for the taxes to Scotland. Our main concern regarding the proposed devolved taxes. The ATT submitted a separate response. budget cycle is that some public feedback phases will occur The consultation arose out of the Scottish Government’s in December and January, when it is very hard for many Programme for Government 2018-19, in which it made a tax practitioners to find the time to provide comments commitment to establishing a more strategic and structured and feedback. process to engagement, legislation and delivery around the The full CIOT-LITRG submission can be found at: www.tax. fully devolved taxes. This recognises the fact that there are not org.uk/ref544 only two fully operational devolved taxes (Land and Buildings The full ATT submission can be found at: www.att. Transaction Tax and Scottish Landfill Tax), but that there are org.uk/ref335 two more on the horizon, in the form of Air Departure Tax (the introduction of which has been deferred) and Aggregates Levy. Joanne Walker Helen Thornley The framework will not affect the shared tax, Scottish income [email protected] [email protected] tax, or the assigned tax, VAT. Alongside the consultation on the policy framework, the Scottish Government, together with the Scottish Parliament, has established a working group to consider possible changes to the legislative framework and A social care tax or levy for processes for the fully devolved taxes. In order to inform the responses, CIOT undertook a survey Wales? of members of CIOT, ATT and the Institute of Chartered Accountants of Scotland (ICAS). This was aimed at members PERSONAL TAX based in Scotland or those with an interest in Scottish devolved taxes. There were 130 responses in total. We made the survey The Welsh Government considers a social care levy for Wales. data available to the Scottish Government, as well as the In October 2017, the then Cabinet Secretary for Finance and Local written submission. Government announced four new taxes that the Welsh Government The Scottish Government proposes to re-introduce the would consider, using its new powers to introduce specific new taxes Devolved Tax Collaborative (DTC) as an annual tax forum at provided under the Wales Act 2014. These included a social care levy. which it can set out future tax policy priorities and receive The Welsh Government subsequently commissioned an independent feedback on emerging tax proposals from a wide range of report, Paying for Social Care (PDF, 974KB) (https://tinyurl.com/ stakeholders. We broadly welcomed this proposed use of the yy7xopck) by Professor Gerald Holtham to examine the economic case DTC, while noting that in order not to exclude stakeholders for such a contributory tax or levy system. Under Professor Holtham’s it might be necessary to consider moving the DTC around the proposals, individuals would contribute a proportion of their income country, providing different means of accessing it and providing to a social care fund, ranging from 1% to 3% according to age. assistance to third sector organisations for example, who might The CIOT’s Welsh Taxes Sub-committee is engaging with the provide valuable insights, but struggle to attend due to lack Welsh Treasury in relation to their work on these possible new of resource. taxes including the social care levy. The CIOT’s Policy Director, John The consultation set out a proposed four phase legislative Cullinane, spoke recently at a conference in Cardiff on how to fund and policy cycle, the first three phases of which would take social care in Wales; the presentation considered the issues that may two years – from the start of high level consultation at the arise in converting policy into tax law. DTC through to the enactment of legislation. The fourth phase John Cullinane’s blog on the CIOT website at: would be a post-implementation review, some three years www.tax.org.uk/wales_SCL considers these issues. following the enactment of the legislation. We indicated that overall this proposed cycle appears Kate Willis sensible, and pleasingly seems to incorporate some of the 10 [email protected] steps towards making tax policy better, as set out in Better Budgets, the joint CIOT/IFS/IfG report published in January 2017. We noted the importance of having a regular, certain cycle, to assist in ensuring that the tax regime is fair, simple New LITRG guide for the self- and certain and avoids unintended consequences. However, we thought the Scottish Government should have flexibility employed in certain circumstances, to enable it to deal with urgent issues that arise outside the normal cycle. Ideally, there would GENERAL FEATURE PERSONAL TAX OMB be a commitment not to make inappropriate use of such flexibility, and there should be a means of holding the Scottish The Low Incomes Tax Reform Group (LITRG) has recently published Government to account if they do not follow the normal cycle. a detailed guide to help self-employed individuals and voluntary The ATT response endorsed the comments in the CIOT/ sector advisers who help the low-income self-employed. LITRG response in addition to making some comments The 100-page guide (https://tinyurl.com/y5m6sow4) is intended of our own. to supplement existing material in the self-employment section of the We support the return of the DTC but think it will need LITRG website (https://tinyurl.com/y5cgq8h5). The guide is a response a clear agenda to clearly identify the gaps this new forum is to LITRG’s concerns that the low-income self-employed do not fully intended to cover. We suggested that it could be a place to pick understand their tax position and the interaction with some benefits, up on any post-implementation reviews or discuss Revenue and to worries about the impact of reduced guidance and face-to-face Scotland’s Charter of Standards and Values. help for taxpayers from HMRC. We broadly welcomed the introduction of a Scottish It explains some of the less common tax rules affecting the Finance Bill although at this stage, with only two devolved self-employed and includes an in-depth case study showing how a taxes, it should not need to be a substantial document. newly self-employed taxpayer would prepare their accounts and Self

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Assessment tax return. Our guide outlines the differences between mention the tax treatment and even if you delve deeper into that the tax system and the rules for the self-employed in tax credits and site and find the further guidance from the Department for Work universal credit. It also explains about recent changes such as the and Pensions (https://tinyurl.com/y4e7rmhu), there is no detail trading allowance, as well as signposting to where to get further help about how it works. and includes a glossary explaining key accounting and tax terms. The paragraph relating to choosing when to get the lump sum The guide is organised into two parts. The first considers the main payment concludes by saying people should contact HMRC if they areas that concern most self-employed people with straightforward are not sure what the tax position will be, but LITRG have found tax affairs. It also covers in greater detail more complex areas which that our website enquirers’ experiences in contacting HMRC for may arise, for example, if you are claiming certain state benefits or help are poor. have additional tax obligations such as registering for the Construction We have also received complaints of misinformation from Industry Scheme (CIS). The second part includes general useful both HMRC and DWP helplines, and of people getting pushed information such as advice on contacting HMRC, important tax back and forth between the two. deadlines and checklists. For example: The guide was published at the beginning of the current tax year ‘I contacted DWP and was told the lump sum will be taxed and and so far has had over 10,000 visits and received positive feedback told to contact tax office if I want to know more. I contacted tax from voluntary sector advisers. We hope that tax agents might also office twice. First I was told the lump sum will be taxed, but there similarly find it useful, for example to help educate clients who are is £30,000 exemption. I phoned a second time to confirm what I thinking of starting their own business. was told previously. This time I was told there is no exemption and the only exemption I would get would be £11,850 for 2018/ 19 tax Claire Thackaberry year and the lump sum would be included as my income. When [email protected] I mentioned that the explanation I saw on the website was not as I was told, I was told to contact DWP, for they deal with state pension taxation. I contacted DWP again and was told the lump sum would be taxed.’ Pre 6 April 2016 state pension We are quite concerned at this and other similar examples, lump sums particularly given that it is extremely difficult for people to understand the rate at which they would pay tax on their PERSONAL TAX other income and hence the rate applicable to their lump sum. Tax advisers will know that of course you can appear to Kelly Sizer looks at LITRG website visitors’ tax problems when be a non-taxpayer when in fact you are (albeit one with no claiming ‘old’ state pension lump sums net liability), due to the way other tax reliefs and so-called People who reached state pension age before 6 April 2016 ‘allowances’ operate. were able to defer claiming their state pension and then, when Such misunderstandings can make an enormous difference claiming it, they can choose between an increased regular pension to the tax people pay on their lump sum. We have heard from or taking a lump sum. Those reaching state pension age on or after people who have received four and five-figure tax bills because that date can only claim an increased pension if they defer. for example the tax credit received from the transferable tax Those choosing a lump sum find that it is taxed in its own allowance for married couples, or the dividend and personal way, with a flat rate being applied according to the top rate of tax savings allowances (in fact nil rates of tax for someone who the individual’s other income determines. So a non-taxpayer on would otherwise be a taxpayer) have made it look like they were other income will pay 0% on their lump sum, a basic rate taxpayer a non-taxpayer. will pay a flat 20% and so on. The lump sum itself cannot push We are hoping to secure a meeting with the HMRC and the claimant into a higher tax bracket. See ‘Lump Sums’, Tax the DWP to raise some of the queries that we have seen from Adviser December 2017: www.taxadvisermagazine.com/article/ members of the public. If you have come across these or any lump-sums. other issues with deferred state pension lump sums, we would be The Low Incomes Tax Reform Group website provides some interested to hear about them. Please email Kelly Sizer. guidance on the tax treatment of state pension lump sums, given that official guidance is minimal. The main GOV.UK guidance on Kelly Sizer deferred state pensions (https://tinyurl.com/y36rfwv7) does not [email protected]

Recent submissions Further information Date sent CIOT Devolved taxes: policy framework consultation www.tax.org.uk/ref544 06/06/2019 Call for Evidence on the Non-Domestic Rates (Scotland) Bill Financial Memorandum www.tax.org.uk/ref556 06/06/2019 Transposition of the Fifth Money Laundering Directive www.tax.org.uk/ref554 10/06/2019 ATT Devolved taxes: policy framework consultation www.att.org.uk/ref335 06/06/2019 Transposition of the Fifth Money Laundering Directive www.att.org.uk/ref337 10/06/2019 LITRG Work and Pensions Committee Inquiry: Support for the bereaved www.litrg.org.uk/ref355 29/05/2019 Scottish government consultation: Devolved Taxes – a policy framework www.litrg.org.uk/ref356 06/06/2019 Low Pay Commission: April 2020 National Minimum Wage rates www.litrg.org.uk/ref357 10/06/2019

www.taxadvisermagazine.com | August 2019 53 European Branch 12th Young International Tax Practitioners Conference in conjunction with the 73rd International Fiscal Association Congress. You are invited to the YIN Seminar at the IFA Global Congress 2019

Tuesday 10 September 2019 Royal Festival Hall

This year the Internaonal Fiscal Associaon’s annual congress for leading tax experts from all over the world comes to London for the rst me in years and our very popular annual oung Internaonal Corporate Tax Praconers Conference will be combined with the Congress’s oung IFA Network Seminar on the Tuesday aernoon of the Congress, which is entled Internaonal Tax: The Ten ear Challenge and will focus on how young professionals will need to help shape the rapidly changing internaonal tax landscape.

Delegates registering will also be able to aend one of the aernoon seminars of the Congress on Indirect Taxaon and Financial Services, Hybrid Instruments and Enes or The Taxaon of Space, will be invited to oin Congress acipants for a buet lunch and may aend the evening social n assocaon event of the Congress, a concert at St. Paul’s Cathedral featuring the Cathedral Choir and the Royal Philharmonic Orchestra with the Young IFA Even beer, why not oin us for the whole Congress, four days of high level technical discussions with more than pacipants on two Network main subects and seminars plus many social events. Full details are available from the Congress Website www.ifalondon.com. Lower registraon fees are available if you are an IFA member. Details of Bish Branch membership can be found at www.ifa-uk.org.

The CIOT/ATT European Branch and New Tax Professionals Committee in Association with the Young IFA Network Save the date for this rare opportunity! Book online at:www.tax.org.uk/12thyoung

ADIT Conference 2019 Friday 13 September

We are pleased to announce the inaugural ADIT Conference to be held in London this September. The Conference will include sessions focused on emerging topics in international tax, giving access to industry insights and experiences from renowned professionals.

Topics to be discussed: Conference fee: • Trends in international taxation • Taxing the digital economy • Tax aspects of the UN sustainable • Women in Tax ADIT Affiliates and students: development goals • International tax panel discussion in • Double tax agreements and the Multilateral association with ITRAF Instrument • Further topics and speakers to be announced £100

Speakers include: Non-ADIT fee: Mukesh Butani (BMR Legal, New Delhi), Indraneel Chaudhury (PwC, Bangalore), Bill Dodwell (Office of Tax Simplification, London) Glyn Fullelove (President, Chartered Institute of Taxation), Rhiannon Kinghall Were £120 (Macfarlanes, London), Nikhil Mehta (Gray’s Inn Tax Chambers, London), Sam Mitha CBE (former Deputy Director of Central Policy, HMRC, London), Diane Ring (Boston College Law School, Boston), Jim Robertson (UN Subcommittee on Extractive Industries Taxation, Edinburgh), Heather Self (Blick Rothenberg, London), Parthasarathi Shome (ITRAF, Bangalore), An Theeuwes (Shell, The Hague), Jefferson VanderWolk (Squire Patton Boggs, Washington DC) Ironmongers’ Hall Shaftesbury Place, Book online at: London, EC2Y 8AA United Kingdom www.adit.org/conference

54 August 2019 | www.taxadvisermagazine.com BRIEFINGS

CIOT Outgoing President’s address AGM This is even more relevant to HMRC today. In my view, Good afternoon. One of the zero tolerance does not work, great strengths of our Institute expecting taxpayers to be saints is the process of renewal does not work, opening enquiry when new voices come into after enquiry with no effective the conversation. It is hard to exit strategy does not work, believe that it is a year since I was opening enquiries just to see standing here outlining the issues whether anything is afoot does I saw as important and what I not work. Does that mean HMRC intended to concentrate on as can simply relax its guard? No, it President. means that HMRC must do better Diversity and inclusion, at being able to better see the Ray McCann a transparent organisation, wood from the trees or perhaps our relationship with HMRC, the poodles from the rottweilers! upon HMRC that frankly it is and conversation. We have many professional standards and Our apologies, of course, to unable to carry. amazing people who work for us unqualified tax advisers, and us dog lovers. Then there is the CIOT itself. and many more who volunteer. playing our part of combatting The fact is that if the UK had It is dear to all of our hearts. As You should all be proud of what money laundering. Very many high levels of non-compliance, trustees, members of Council we achieve together especially in miles have literally passed since HMRC would struggle to cope are charged with its care. Open, how the CIOT help the less well then. Progress has been made and with very high levels of inclusive, modern, aspirational off through LITRG. on all of those issues, although non-compliance the task would and relevant are all words that There are numerous some present bigger challenges be beyond HMRC no matter should be and are associated others to whom I owe a debt of than others. how many staff they had. So with the CIOT. New modern office gratitude, everyone at Joseph There is not time to look HMRC must be more open in space, new up to date technology Hage Aaronson but in particular at each in detail but among acknowledging that we will and new faces all contribute to Emma Chamberlain, who has the key issues for me were our improve the system of tax in the energy that a large successful somehow managed to do her relationship with HMRC and the UK only when government charity must have and, in the past own work and mine over the what if anything should be done and HMRC regard professionally year, we have moved forward on past year! Anthony Thomas, about tax advisers who are qualified agents as partners in all of those fronts. John Andrews, Stephen Banyard, not members of a professional the delivery of quality services But that is the past. The John Whiting and numerous body. The past year has seen to taxpayers. At its best, HMRC CIOT must always look to the others who know who they HMRC subject to more criticism provides world class customer future so before I hand over to are and who I hope will forgive and from all sides. From the service. The challenge for HMRC Glyn some thanks are necessary. me not mentioning them. To conversations I and others have is to make its best the norm, not I mentioned at the start our the Financial Secretary and the had with senior members of the exception enjoyed only by process of renewal. Today is not various members of HMRC, thank HMRC, I have no doubt that they the largest companies and the just about a new President but you for the engagement. are sincere in wanting to be a very wealthy. renewal of our Council. And on Of course, I could not have modern open organisation that The other big issue is behalf of us all, can I thank Emma done any of this without the cares for its customers. unqualified tax advisers. I Chamberlain, Keith Gordon, Ian support of Helen and my family They simply seem to struggle am pretty sure that in some Menzies Conacher, Chris Brydone over many years. In particular, to put that ambition into darkened corner of HMRC, and of course Andrew Hubbard. can I thank Peter Fanning, our practice. Part of this is cultural. plans are afoot for some form And to Keith, congratulations on Chief Executive, for his counsel, Sadly, ‘we are all at it’ seems of regulation. I might be wrong, your success at last week’s Tax knowledge and friendship. I wish to remain a driver within some time will tell. But any form of Awards, very well deserved. him well for what comes next, parts of HMRC but the larger regulation that does not have the Today they all leave a Council since as you know he will leave part of HMRC’s difficulty is the professional bodies at the heart that, I am certain, is significantly his Chief Executive role later this scale of the task. A few years ago, of it will be less, perhaps wholly, stronger for their contribution. year. I know that Glyn will say I quoted Churchill in an article ineffective. And let me also record our thanks more about Peter. when he said, ‘You will never What is certain is that any to Sam Younger who stepped Talking of Glyn, he will be reach your destination if you professional standards devised down recently after four years as a fine CIOT President and I can stop and throw rocks at every by HMRC must inevitably be of Lay Observer to Council. honestly say that my year has dog that barks.’ Plainly this can less value than PCRT. To go down For my own part, a huge been much more fun and in part mean different things to different that route would not only allow thank you to Roz Baxter, John only made possible through his people so it is perhaps better to unqualified advisers to continue Cullinane and Paul Davies, and all support as Deputy President and say that you have a better chance to operate free from the broader of the staff in Monck Street. To all I thank him for that. My thanks of reaching your destination if framework within which CTAs of the members of the CIOT I met also to Peter Rayney and to John you only throw stones at the currently operate; it would on my travels in the past year, Preston. John concludes his four right dogs. also impose further burdens thank you for the warm welcome years of service as an honorary www.taxadvisermagazine.com | August 2019 55 BRIEFINGS

Officer today. Glyn with Peter with me, the solidarity and inclusion at the very centre All an individual can do is sow and Susan as Deputy and Vice companionship on our travels of what we do. That work will the seeds so thank you to President will be a great team. but to Tracy let’s just make a I am sure continue with Glyn everyone who has supported To Tracy Easman, President deal never to be on the same and beyond. It’s nice to think and continues to support of the ATT, and to Paul Aplin, train or flight at the same time. that individuals bring about that ambition. President of the ICAEW, thank Finally, I have tried to put change but in truth only people It has been a privilege. you for the way you have worked transparency, diversity and working together can do that. Ray McCann

CIOT AGM 2019 MINUTES

EVENT 3. Minutes of last meeting 4. Ordinary business 4.2 Election of Members The President reported 4.1 Annual Report and of Council Minutes of The Annual General that the Minutes of the last Financial Statements On the proposal of Keith Gordon, Meeting of Members of the Annual General Meeting No questions were raised seconded by Keith Bell, it was Chartered Institute Of Taxation were approved for signing on the Annual Report and RESOLVED that Anne Fairpo, held at One Great George as a correct record by the Financial Statements. The who retired under Members’ Street, London SW1P 3AA on President at the meeting President confirmed, for the Regulation 21 and offered Tuesday 21 May 2019 at 16.45 of the Council held on 3 purposes of transparency, that herself for re-election was Present: The President, Ray July 2018. he had received a letter from thereby re-elected as a member McCann in the Chair. 39 The President reminded a member querying why costs of the Council. Members. The Secretary was in those present that only were higher than for previous It was reported that over attendance. members who had paid their years. It was confirmed that this 99% of the proxy votes were 2019 subscriptions were was because of the premises in favour. 1. Apologies permitted to vote and if any move and the investment in The Secretary reported that member in the room had new IT infrastructure. 4.3 apologies had been received already voted electronically On the proposal of Mike On the proposal of Anne from 11 Members. they must refrain from voting Thexton, seconded by Lynne Fairpo, seconded by Moira in the room. He confirmed Poyser, it was RESOLVED that Kelly, it was RESOLVED that a 2. Notice convening the that the CIOT was pleased that the Annual Report and Financial single resolution be put to the meeting electronic voting has again Statements for the year ended meeting for the re-election of At the invitation of the encouraged greater member 31 December 2018 be received the Members who were co- President, it was agreed that participation in the voting and adopted. It was reported opted to the Council since the the Notice convening the process with over 1,800 that over 99% of the proxy last Annual General Meeting meeting be taken as read. members voting. votes were in favour. and who retired in accordance with Members’ Regulation 20 and offered themselves for re- election namely: (a) Charlotte Barbour (b) Nikhil Mehta (c) Penelope Tuck

On the proposal of Anne Fairpo, seconded by Moira Kelly it was further RESOLVED that the above members of Council, all of The then President Ray McCann (right) presented Emma whom retired under Members’ The incoming President, Glyn Fullelove, presented an Chamberlain with her Past Council Member’s badge engraved Regulation 20 and offered illuminated scroll to the retiring President, Ray McCann to reflect her years of service as a Council Member themselves for re-election, be and were thereby re-elected members of the Council. It was reported that over 98% of the proxy votes were in favour. (a) Charlotte Barbour (b) Nikhil Mehta (c) Penelope Tuck

5. Appointment of auditor On the proposal of Sarah Hewson, seconded by Chris The then President Ray McCann (right) presented Andrew The then President Ray McCann (right) presented Keith Lallemand it was RESOLVED Hubbard with his Past President’s badge endorsed Gordon with his Past Council Member’s badge engraved that Buzzacott LLP be and were to reflect his years of service as a Council Member to reflect his years of service as a Council Member thereby re-appointed auditor to

56 August 2019 | www.taxadvisermagazine.com BRIEFINGS

the Institute to serve from the Chamberlain and Keith Gordon Fullelove as President. Glyn which appeared in the July issue of termination of the meeting with Past Council Member’s Fullelove then took the chair. Tax Adviser. until the termination of the badges engraved to reflect their next succeeding Annual years of Council service. Andrew 8. Incoming President’s 9. Vote of thanks General Meeting. It was Hubbard was re-presented address A vote of thanks was proposed reported that over 97% of the with his Past President’s badge The incoming President, by Karen Bullen and seconded by proxy votes were in favour. now endorsed with his years of Glyn Fullelove, presented Reshma Johar. It was RESOLVED Council service. an illuminated scroll and a that the thanks of the membership 6. Retiring President’s Past President’s badge to the be accorded to the Officers and address 7. Investiture of new ofﬁcers retiring President, Ray McCann, the Council of the Institute for The President delivered an Ray McCann, the retiring as a mark of the Council’s their work during the past year. address, the text of which President, invested Susan Ball appreciation of his services to appears in this issue of Tax as Vice President, Peter Rayney the Institute. Glyn Fullelove President Adviser, and presented Emma as Deputy President and Glyn delivered an address, the text of 2 July 2019

CIOT

line with the economy, there the property taxes regime should be annual revaluations to be transparent. Schurder Business rates debate and empty rates relief should be complained that the whole reinstated to a certain extent. burden of proof is on the rate EVENT Successive increases in business payer when appealing; annual of land and there is no vacancy rates have led to a burden that revaluations may take the Time to retain, reform or issue (because you are just going is unsustainably high and out need for appeals out of the replace business rates? to tax it whether it is being used of kilter with the true value of picture, he suggested. Vauxhall A CIOT/IFS debate on taxing or not). Taxing property taxes the premises that a business is UK did research in relation to commercial property asked improvements, he noted. occupying, and is well above all the local property taxes whether it was time to retain, On the other hand, property OECD average. it pays across Europe, said reform or replace business rates. taxation is robust, better On an alternative online Schurder. The UK occupies Stuart Adam, Senior understood and combines a sales tax, Kelly has doubts, saying 8% of its total floor space in Research Economist at the wealth tax (on land) with a this is not just a retail problem Europe, but accounts for 67% Institute for Fiscal Studies (IFS), service tax (on properties), said with business rates and that the of the property taxes that it said that business rates are not Wyatt, adding that few countries future of retail is ‘Omni channel’ pays across Europe. That is the killing the high street. Adam said have just land taxes. (property and online) in any case extent to which the UK’s system that in the long run, because While property tax is so it does not make sense to tax a overtaxes all businesses, there is only a limited amount unpopular, most people different part of the same sector. he stressed. He urged the of land for shops, especially in recognise the equity of taxing Her instinct is to look at OECD’s Government to review all places such as central London property, he acknowledged; work on taxation of the digital rates, reliefs and exemptions to where rents and business rates current problems are the result economy, as opposed to coming ensure those that remain are are highest, cutting business of years of making property the up with anything too radical. ‘fit for purpose’. rates will simply lead to higher heart of social and economic On land value tax, she said During a Q&A session, rents. Replacing business rates aspiration. Transaction and conceptually it is appealing, when asked if a land value tax with a land value tax would revenue taxes are widespread as it incentivises use of space may be more environmentally be economically efficient and easy, whereas wealth taxes in the most optimal way and sound, Adam said carefully and would redistribute from and development taxes are improvement to land. Her targeted instruments may be owners of less developed land more difficult and contentious, concerns are that she is not sure better. The panel was asked if in prime locations to owners he added. Land value tax is what optimal use of space means they agree that business rates of highly developed properties supported by economists but and there will be big winners in the long run are borne by in remote locations. A key difficult to implement. and losers such as charities the landlord. Schurder thought practical challenge is valuing land The debate was held and organisations that get this would be the case if we separately from buildings on it, before an audience at the reliefs at the moment, planning immediately abolished business which will need careful study British Academy in London, on considerations – and valuations rates, but he is asking for a of possible methodologies and 18 June 2019. CIOT President will become more contentious. modest reduction only. Former other countries’ experiences, Glyn Fullelove was the Chair. Business rates is a key OTS Director John Whiting said he said. On reforming business The speakers used slides to contributing reason for the land value tax will lead to more rates, the economist said some present their arguments, which decline of the high street, subjectivity, more scope for improvements are happening can be viewed at the bottom of said Jerry Schurder, Head of argument, and be less easy to already and there is scope for this page. Business Rates at property administer, whereas rates are further improvements. Rachel Kelly is Senior consultants Gerald Eve. He said at least a little more objective. Peter Wyatt, Professor of Policy Officer (Finance) at the a property based tax should A video of the debate can Real Estate Appraisal, University British Property Federation. continue within the basket of be found at: https://www.tax. of Reading, said there is an The property industry wants corporate taxes, and a property org.uk/propertydebate. The undeniable economic case for a an agile and responsive tax based tax should be based slides can be found at: https:// land value tax; it only taxes the system, said Kelly, adding the on annual rental values. It is www.tax.org.uk/media-centre/ unearned value, for example. total business rates burden wrong that rates are based on blog/media-and-politics/ He said it would incentivise should be reduced, the total assessments done two years time-retain-reform-or-replace- development or improvement tax yield should fluctuate in earlier. He is very keen for business-rates. www.taxadvisermagazine.com | August 2019 57 BRIEFINGS

CIOT Women in Tax holds inaugural Aberdeen event EVENT a forum for networking and The networking breakfast skills development. follows a number of successful Plans are already underway events that the group have for a second event in Aberdeen organised in Scotland as it later this year, following the continues to build its presence success of the breakfast. Details north of the border. At the of this and other future events end of May, resilience coach will be posted on their LinkedIn Emma J. Bell spoke at an page at: https://www.linkedin. event in Edinburgh on the com/company/women-in-tax- role of resilience strategies in aberdeen-branch. supporting career development. Further information on The Women in Tax network the network and its activities works to raise the voice of across the country can be women working across the tax found at its website: profession as well as providing www.womenin.tax.

CIOT ATT Stephen ATT President’s inaugural speech

EVENTS Easman at the London Transport zz How we enforce standards Barnﬁeld Museum. It was a delight to meet of professional conduct; and Jeremy Coker and talk to some of the original zz How we enforce Anti-Money AWARD ATT President AGM Speech members of the Association, and Laundering regulations. Thursday 4 July 2019 hear first-hand the history of Stephen Barnfield has been how it came to be. What shone I will also say a little about awarded a Certificate of Not being American, the 4th of through that evening was how the various penalty regimes Merit for his services to July has never really meant a lot dearly the members, old and and some of my concerns the Technical work of the to me. But, within the last few new, hold the Association in about them. Institute. minutes this has all changed. I their hearts. It was inspiring to Stephen has been have had the distinct honour of learn that the formation of the Advancement of public an active volunteer since being appointed your President Association was the culmination education 2007 and Vice Chair of – President of the Association of over two years of planning and First, education. We are an the Management of Taxes of Taxation Technicians, research. The foundations were educational charity. I used to sit (MOT) Sub Committee since the foremost body for tax well laid for an organisation that on our Exam Steering Group, so 14 May 2013. compliance professionals in the constantly looks forward, and is I’ve seen first-hand the changes He has attended UK. What makes it even more proud to take a leading role in we’ve made to the nature and countless meetings and humbling, is that I have been the field of tax compliance. content of our exams, and to input into lots of our appointed by a mix of eminent From a handful of original reflect the changing landscape submissions – not just for tax practitioners and esteemed members, we now have over of our tax legislation. Changes MOT but also for Corporate members of this profession. 9,000 members and Fellows and we must continue to make in Taxes and Succession To say I am really proud is continue to grow each year. the years ahead. In the midst Taxes. He is always willing an understatement. To say I do The event also provided me of all this change, it is right that to go the extra mile and not recognise the magnitude with an opportunity to remind we do all we can to make access contribute to a variety of the appointment would be myself of the charitable objects to education as seamless as of things – often at short misleading. I am chock full of that provide the structural pillars possible. Our new Foundation notice. He has attended nervous excitement at the mix of on which this Association is Level Qualifications are a great the less glamorous challenges that face me and this based. Our objects remain noble, example of this. Stepping stones working groups with HMRC wonderful Association of ours but the way in which we achieve which enable people to progress, taking CIOT comments over the next year. them may have changed a bit in over time, to full membership of and feeding back – often We reached the milestone the last 30 years. I want to pick our Association. spotting things others of 30 years earlier this year. I on three of these: As of yesterday, there were had missed. was privileged to attend the zz How we advance public three of them. Foundation celebrations hosted by Tracy education; Qualifications in:

58 August 2019 | www.taxadvisermagazine.com BRIEFINGS

zz Personal Taxation; zz Business Taxation; and zz VAT Compliance.

And I am delighted to announce that just this morning, Council agreed to go ahead with a new Foundation Level Certificate in Transfer Pricing. There’s more. I was at a family event recently and a number of parents were discussing options for their children who will be expecting A-level results next month. This Tracy Easman, outgoing President, is presented with a ATT Officers for 2019-20. Left to right: David Bradshaw gave me the opportunity to sing scroll and past President’s medal by the new ATT President, (Vice President), Richard Todd (Deputy President), the praises of the Trailblazer Jeremy Coker Jeremy Coker (President) Apprenticeship scheme. This is a government Recent enhancements consistently high standards of I could go on. But I am not backed initiative, under which to PCRT cover areas which, AML supervision. here today to moan. I am here, individuals can get what some unfortunately, are the ones that This may just be the start, humbled to be asked to be part of us might remember as ‘on the tend to get picked up by the and there is a real possibility of of the team that will help our job’ training. It remains a viable press – artificial or contrived even more regulation to come. Association stride forward into option for our children who may schemes. For the avoidance of This means that we have to our 31st year, fully cognisant of not see university as the next doubt, we do not do these. work even harder to ensure the challenges we face. step in their development. While PCRT is a collaboration that the interests of members zz Keeping our education Anecdotal evidence does, between a number of the and the public are adequately offer current. however, indicate that while professional bodies, the elephant represented. zz Maintaining our high employers may want to embrace in the room is the proliferation So, I say again that: ‘It is professional standards. these initiatives, the actual of agents, registered with if, and only if, the government zz Responding to whatever implementation is not as easy HMRC, who are not members keep the professional bodies in government throws at us as it says on the tin. We ask that of any professional body; the loop (through consultation on AML, and regulation government continue to engage and consequently, end up and regular interaction) before more widely. with us early in the process so not operating within similar making new announcements zz And of course, remaining that potential problems can be guidelines. and regulations, that meaningful at the forefront of the tax identified and ironed out prior to At the moment, HMRC have and workable progress will be compliance debate. implementation. to deal with all agents in the made.” (That applies in AML as There is no doubt that same manner, with resources elsewhere.) I am that confident There will be hurdles along achieving the ATT qualification that are continuously being in the ability of our members. the way. These will require the today demonstrates that a major restricted each year. I do not Government should use this management of change. We benchmark has been achieved. believe that this is sustainable. resource so that we can work will be holding a strategy day One which marks our members And this may be one of the together towards giving our in October to address some of as qualified both by examination reasons we are seeing a lot country the taxation system that these issues; and to plan for the and practical experience. more being passed on to the it deserves. future of our association. professional bodies. These are exciting times in Standards of Professional Penalties tax. I have a fervent desire to Conduct Anti-Money Laundering Talking about what is deserved, ensure that at this time next This practical experience is One of the things that has been it is understandable that while year we will, with the help of my further augmented by the way passed on to us is enforcement most taxpayers try to stay on the leadership colleagues, Richard in which we enforce professional of compliance with Anti-Money straight and narrow, sometimes Todd and David Bradshaw, my standards, the second object I Laundering Regulations, the last things do not quite work out fellow members of Council, our mentioned. of the three objects I mentioned. as planned. In a fair society, Chief Executive Jane Ashton Members of the ATT are You will already be aware it is to be expected that the and the wonderful members committed to the highest that we monitor and supervise sanctions befit the transgression. of staff at Monck Street, be standards of professional some of our members for However, the way the various even stronger, fully armed with conduct. Our guidance – AML purposes. This has been penalty regimes have grown a clear strategy to ensure that Professional Conduct in Relation impacted by the introduction over the years is nothing short the vision of the founders does to Taxation (PCRT) – provides of OPBAS (The Office for of an epidemic. Each regime, not flounder. the primary, principal, practical Professional Body Anti-Money seemingly seeking to outperform May I conclude, in the spirit and most up to date guidance Laundering Supervision, for the others, both with the size of of the 4th of July, with a quote for a tax professional wishing to those of you who don’t know the penalty and complexity of from President number 44: practise in the UK today. it). This is a regulator set up by how it is calculated. ‘Change will not come if we Tracy screamed about this the government to strengthen In a tax system where we wait for some other person or from the rooftops and I will the UK’s anti-money laundering have been desperately seeking some other time. We are the continue to do the same. If you supervisory regime; and ensure simplification for so long, do we ones we’ve been waiting for. We do not have the PCRT saved on that professional body AML really need so much legislation are the change that we seek.’ your mobile devices, you should. supervisors, like us, provide just to explain penalties? Thank you. www.taxadvisermagazine.com | August 2019 59 BRIEFINGS

ATT ATT Annual Spring conference season round up

CONFERENCES On the property front, Act, the session moved on to Corporation tax losses we covered the changes to look at some of the specific We didn’t manage to Another successful season of the taxation of non-residents practical issues which affect squeeze this session into ATT conferences was brought which took effect from April partnerships. These included every event but, where it to a close in early July this 2019 before turning to the the implications of an asset was covered, we looked year. A total of 548 delegates many changes on the horizon being on or off balance sheet at the April 2017 changes attended conferences in for UK property owners too. and the impact on Business to the use of carried Bristol, London, Haydock, These include the introduction Property Relief. The session forward losses, splitting Dunblane, Belfast, Newcastle of a 30-day reporting concluded with consideration these into the good (the and Birmingham. requirement for UK residents of the capital tax implications new relaxations), the bad As in previous years, disposing of UK residential of incorporating a partnership (the restriction for larger regular speakers Michael property from April 2020 when the partners have companies) and the ugly (the Steed and Mike Thexton and a recent consultation concluded that it is time additional administration were joined at the front proposing changes to private to move into a corporate and anti-avoidance by ATT Technical Officers residence relief and letting structure. measures the new rules have Emma Rawson, Will Silsby relief from the same date. introduced). and Helen Thornley, as well Employment Tax Update as a representative from the Professional Standards For the employment taxes Regional variations Professional Standards team The Professional Standards update, we looked at changes Where possible, of Charlotte Ali, Jane Mellor team representative gave to scale rates and treatment presentations were tailored and Heather Brehcist. delegates a refresher on of low-emission cars before to the local audience. In In brief, the sessions some of the latest changes moving onto contractor tax Dunblane, we were grateful covered the following topics: in this area, such as the new issues, off-payroll working and to have as our Chair ATT electronic edition of PCRT some of the latest IR35 cases. Council Member Senga Prior. Topical Tax Update and updated Professional Senga was able to highlight As is traditional, the Rules and Practice Guidelines MTD for VAT and general for delegates the work that conference started with a run (PRPG). Delegates then had VAT update ATT does in Scotland with through of recent key changes the opportunity to work With many delegates about the Scottish Government and developments. As ever, through a number of case to submit the first returns and Revenue Scotland. In this was a busy session studies based on real life for clients under MTD, other locations, reference with plenty for delegates to queries that the team have we looked at some of the was made to the arrival take away. received. These sessions were practical issues arising. These of Welsh Income Tax from very well received. ranged from issues with the April 2019. Capital Gains Tax Update Agent Services Account to a This was another packed Planning and partnerships discussion on how HMRC will Closing session, with plenty of As a variation from the usual be approaching penalties. The conferences were again recent changes to cover. For themes of sole traders and For general VAT issues we lively affairs with plenty Entrepreneurs’ Relief we companies, we looked in looked (where time permitted) of audience interaction, looked at the extension to the this session at the next most at what can be said about the which helps to bring the qualifying period and the new popular business structure impact of Brexit (not a lot at topics to life. Thanks as ever definition of personal company, – the good old general this stage!) and the changes must go to the Events and as well as the relaxation partnership. Starting with that the new reverse charge Marketing team in Monck where shareholdings have a bit of light revision on for the construction industry Street who kept everything been diluted. aspects of the Partnership will bring. running smoothly.

ATT ATT sponsors AAT Annual Conference

CONFERENCES on 13 and 14 June. The ATT Foundation Qualifications. to discuss a range of tax sponsored the event and AAT members were keen technical issues with past Over 300 AAT members took the opportunity to talk to find out more about the President of the ATT, Michael attended the 2019 AAT Annual to AAT members about the qualifications, particularly the Steed. During the conference, Conference at the Crowne benefits of ATT membership, Foundation Qualifications. Michael’s tax presentations Plaza in Stratford-upon-Avon the ATT qualification and ATT Many also took the opportunity proved extremely popular.

60 August 2019 | www.taxadvisermagazine.com Branch events AUG-SEP 2019 Where do you get your CPD?

Does your firm provide your CPD needs? Have you tried a local Branch event before? Would you like the opportunity to meet with CTAs, ATTs and other professionals in your local network? Why not go along to a local Branch event? Below we have listed branch events taking place up to 15 September 2019. However, please visit your local branch website as there may be some events which have been planned since this list was sent to print.

Journal of The Chartered Institute of Taxation and The Association of Taxation Technicians Birmingham & W Midlands Property Relief Suffolk Thursday 12 September Andrew McKenzie-Smart Wednesday 11 September 30 Monck Street, London SW1P 2AP. Entrepreneurs’ Relief – Croydon Professional Standards and tel: 020 7340 0550 The CIOT is a registered charity – No. planning and update 18.30-20.00 Technical update – recent 1037771; The ATT is a registered 18.00-20.00 changes will affect your work charity – No. 803480 South Wales as a Tax Adviser Cumbria & SW Scotland Tuesday 10 September Charlotte Ali and Richard Wild EDITORIAL Editor-in-chief Bill Dodwell Thursday 12 September Property Tax Update 18.30-20.00 Publisher Jonathan Scriven Autumn Tax Update Kate Willis and Will Silsby Editor Angela Partington 14.00-17.00 14.00-17.00 [email protected] tel: 020 8401 1810 Web editor Sophia Bell European [email protected] Tuesday 10 September th ADVERTISING & MARKETING 12 Young International Advertising Sales Jimmy Jobson Corporate Tax Practitioners [email protected] Conference in conjunction Commercial Marketing Director with the 73d IFA Congress Sanjeeta Patel 12.00-17.30 PRODUCTION Production Assistant Nigel Hope Harrow & North London Design & Technology Manager Elliott Tompkins Thursday 12 September Designer Jo Jamieson Capital Allowances update Steven Bone Offices LexisNexis, Quadrant House, The Quadrant, Sutton, Surrey SM2 5AS. 18.45-20.15 tel: 020 8686 9141 UK print subscription rate 2019: North East England £103.00 for 12 issues Europe print subscription rate 2019: Thursday 12 September £136.00 for 12 issues Annual Wine Tasting O/S print subscription rate 2019: £136.00 for 12 issues

Northern Ireland For Tax Adviser magazine subscription Friday 13 September queries contact 0330 161 1234. Finance Act update or email [email protected] Robert Jamieson For any queries regarding late 09.15-13.00 deliveries/non-receipt please direct to Derek Waters, Shefﬁeld Magazine Distribution Administrator Derek Waters [tel] 020 7400 2898 Tuesday 10 September [email protected] Corporation Tax Update Reprints: Any article or issue may (plus AGM) be purchased. Details available from [email protected] Emma Rawson 16.30-18.00 © 2019 Chartered Institute of Taxation (CIOT). Printed by Stones Ashford Ltd, Somerset & Dorset Ashford, Kent. Thursday 5 September This product comes from sustainable Tax enquiries and forest sources. Reproduction, copying or extracting by any means of the compliance update whole or part of this publication must Kevin Igoe not be undertaken without the written 16.00-19.00 permission of the publishers. This publication is intended to be a general guide and cannot be a substitute for South London & Surrey professional advice. Neither the authors Monday 2 September nor the publisher accept any responsibility for loss occasioned to any person acting Professional and Practice or refraining from acting as a result of Standards and AML material contained in this publication. CIOT/ATT Professional ISSN NO: 1472-4502 Standards Team Guildford 18.30-20.00 Wednesday 11 September Business and Agricultural www.taxadvisermagazine.com | August 2019 61 To place an advertisement contact: Recruitment [email protected]

We’re looking for a... Private Client Tax Manager Huntingdon £attractive

We have an opportunity available in our Huntingdon offi ce for an ambitious professional, who has signifi cant previous Private Client Tax experience. This is an interesting and varied role which provides scope for personal and career development. You will head up the Private Client Tax team in Huntingdon, and work closely with the Private Client Tax Partner and with the rest of the team across the region. You will draw on your strong technical For career advice, jobs and to expertise to provide excellent front-line client service, alongside supervising the work of more junior staff and assisting with their development. You will also be actively involved in business development activities. upload your CV, register now Skills Required • You should hold the CTA qualifi cation (or be • Highly articulate with excellent communication • Ability to provide technical support across free at: qualifi ed by experience). ICAEW, ACCA and/ and interpersonal skills. Aptitude in explaining the fi rm. or STEP qualifi cations would be benefi cial. complex matters in a straightforward and accessible manner. • A demonstrable track record in business • Experience of successfully managing a development activity. www.taxation-jobs.co.uk portfolio of private clients alongside reviewing • Accomplished in managing competing self assessment tax returns completed by deadlines and client expectations. Skilled in • Self-motivated, hard working, fl exible and other staff. Previous exposure to all aspects controlling budgets and billing. prepared to undertake some travel within of Personal Tax compliance work within a Cambridgeshire and to our Cambridge professional services environment is essential, • Ability to work autonomously whilst also offi ce as required. to include:- Capital Gains Tax planning, IR35, building/developing a team. Previous Remuneration planning, Trusts/IHT, P11D. experience of supervising and reviewing the work of more junior staff is essential.

We offer an attractive salary with many beneﬁ ts in a friendly working environment. We have an extensive in-house training programme for all staff. Ensors Chartered Accountants To apply, please send your CV together with a covering letter stating your current salary to [email protected] Making you more than just a number quoting reference ‘hunts-pctmgr’, or by post to our HR Department at the Ipswich ofﬁ ce. www.ensors.co.uk

TAX MANAGER PROVIDE EXPERT TECHNICAL ADVICE

Cambridge, c.£60,000 + benefits This AIM listed and rapidly expanding biotech group with a global reach, is looking to recruit a Tax Manager to support the Head of Tax in all aspects of taxation. This is a newly created opportunity and ideal if you are considering your first move into industry. The core focus of the role will be managing the UK tax compliance process and tax reporting, but there is plenty of scope to gain exposure to R&D/patent box, transfer pricing, indirect tax, US tax and supporting on tax initiatives for the group. You will be ACA/ACCA/CTA qualified with a strong academic background and demonstrable exposure to UK corporate tax/tax accounting. Additionally, you will have a commercial mindset and relish the chance to apply your knowledge in a business setting. In return, you will be @TaxationJobs oered an intellectually stimulating role in a highly regarded business with every opportunity to develop your career in commerce. Ref: 3584102 For further details contact Mark White on 0121 236 5277 or email [email protected] www.taxation-jobs.co.uk

From the publishers of hays.co.uk/taxation

62 August 2019 | www.taxadvisermagazine.com For career advice, jobs and to upload your CV, register now free at: www.taxation-jobs.co.uk

@TaxationJobs www.taxation-jobs.co.uk

From the publishers of

MEET YOUR ADVISERS

GEORGIANA HEAD ALISON TAIT

Director Director

Tel: 0113 426 6672 Tel: 0113 426 6671 Mob: 07957 842 402 Mob: 07971627 304

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Share Schemes/Reward In-House VAT Manager Manchester – £45,000 to £53,000 + car + bens Manchester – £excellent + benefits Big 4 firm seeks a share plans lawyer or CTA to join their Reward This diverse business requires VAT filings in a number of Team in Manchester. In this role, you will deal with a wide range of jurisdictions across Europe. They are looking for a VAT share schemes work from assisting with transactions to bespoke Manager to join their European VAT compliance team to both plans for OMBs. This firm has a great flexible working policy, and prepare and review returns, identify risks and support internal will consider a part time or full time appointment. Excellent quality and external audits. You will also be involved in business work on an impressive client base makes this a really interesting project launches that have a VAT compliance impact, and will opportunity. Could suit a lawyer looking for a change of scene and also manage a team of VAT Analysts. You should be ACA/CTA a better work-life balance. You might currently work in London qualified, with experience of working in a VAT compliance and be looking to return to the North. Call Georgiana Ref 2825 function. Call Alison Ref: 2831

Global Mobility Director In-House VAT Compliance Senior Manager Birmingham or Manchester – to £100,000 Manchester – £excellent + benefits Key role in the development of the regional expatriate tax offering This is a fantastic opportunity for a senior VAT specialist to for a Big 4 firm. Our client seeks an experienced Global Mobility head up a team in a diverse and exciting business. You will professional to be based in either Manchester or Birmingham. In ensure that the business remains VAT compliant, manage this role, you will lead the management of compliance (prepared a team of VAT experts, work alongside the Director of VAT overseas) and the management of client relationships and advisory compliance on strategies to improve the level of assurance work. A large part of your role will be the day-to-day running of a team. in VAT, identify and mitigate risk and participate in cross Ideally, you will be interested in process improvement, efficient functional project launches from scoping through to testing use of outsourcing and business development. This is a growing and launch. Experience in a VAT compliance environment is team and there is scope for promotion. Call Georgiana Ref: 2834 essential. Call Alison Ref: 2830

Trust Manager M&A Assistant Manager & Manager Leeds – £40,000 to £45,000 + bens Leeds – to £52,000 + benefits Our client is a well regarded law firm which is known for its highly Working in this growing team, you will provide tax structuring rated private client practice. This firm seeks a trust manager to and due diligence advice on a broad range of transactions run the everyday trust admin, trust tax and basic trust accounts to clients of all sizes and from a variety of industry sectors. for a portfolio of trusts and settlements, and potentially some The advice given and work undertaken will cover both UK related personal tax work for beneficiaries. Our client would and international transactions. You will liaise regularly with consider part-time of flexible working for the right individual. solicitors, HMRC and your clients. You should be ACA/CTA You will get to deal with some great clients and really interesting qualified, with a corporate tax background. Some experience work. You will get to work with leading private client lawyers. of transaction work is essential. The opportunity to specialise STEP or ATT would be advantageous. Call Georgiana Ref: 2818 in the FS sector should you wish. Call Alison Ref: 2547