Capital 12 Domicile 28 First VAT 34 allowances issues return Alun Oliver on developments Andrew Titchener on the Neil Warren on how to ensure from Budget 2018 and practicalities faced by HNWIs, that a first VAT return is implications on investment families and entrepreneurs accurate and runs smoothly www.tax.org.uk www.att.org.uk
Excellence in Taxation NoDecembervember 2018 www.taxadvisermagazine.com
A radical departure Matt Stringer and Amanda Collinson consider the implications of the new Digital Services Tax, page 16
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C oNTENTS
Welcome Features 2 President’s page Christmas time comes around again Professional skills Scottish taxes Ray McCann 6 Calming the tempest Jo Maughan 22 Ongoing change Charlotte Barbour 4 ATT page provides practical tips for managing provides an update on recent strong emotions in the workplace developments Compliments of the season Jeremy Coker PROFESSIONAL SKILLS in Scottish taxation MANAGEMENT OF TAXES Budget Technical 8 Budget 2018 round-up Bill Dodwell From the Technical team considers the implications of Budget 2018 38 Spotlight on the Property LARGE CORPORATE TAX OMB PERSONAL TAX Taxes Sub-committee EMPLOYMENT TAX INDIRECT TAX 39 CIOT meeting with the FST MANAGEMENT OF TAXES 39 CIOT sends its analysis of the Autumn Budget 2018 to the Treasury Committee Bridge the Gap 40 LITRG Budget summary: is 26 Seasonal work spells confusion austerity really coming to an Julie Cameron looks at how people on end? low incomes can face real tax problems 41 Voluntary Tax Returns from modern working arrangements 41 Making Tax Digital: an GENERAL FEATURE update 42 Carried forward corporation Domicile tax losses: compliance 28 Regular review Andrew Titchener provides requirements an overview of the practical issues faced by high net worth individuals, families and 43 HMRC’s Employment Taxes Anti-money laundering entrepreneurs regarding domicile Forums 10 An inspector calls Jane Mellor looks at the PERSONAL TAX INTERNATIONAL TAX 43 Agents road test HMRC common issues anti-money laundering digital forms supervision visits raise and provides guidance on how to ensure that your firm Research & Development 44 Welsh rates of income tax meets AML requirements 30 Spot the difference Kathie Haunton and 44 Costs in the Upper Tribunal Sarah Goodman provide guidance in PROFESSIONAL STANDARDS 45 LITRG support NHS personal determining which supplier costs can budget holders to use CEST Capital allowances be included in an R&D claim tool 12 Integral to investment Alun Oliver LARGE CORPORATE TAX OMB 45 Professional Standards provides an overview of the capital updates allowances changes in the recent Budget
LARGE CORPORATE TAX OMB Briefings Digital Services Tax From Artillery House 16 A radical departure Matt Stringer 47 Christmas carol service and Amanda Collinson consider the implications of the new Digital Christmas office hours 47 Services Tax 47 CIOT and ATT 2019 subscription rates INTERNATIONAL TAX LARGE CORPORATE TAX Entrepreneur’s relief 48 East Midlands Branch 32 Breaking barriers Stephen Woodhouse charity event examines the impact of FB 2019’s dilution 49 Merseyside Branch event protection for entrepreneurs’ relief 49 ATT Foundation OMB Qualification 49 Sharpen Your Tax Skills VAT return An impressive start Neil Warren gives 50 CIOT/IFS Debate 34 practical tips on making sure the first VAT 51 New ADIT module return submitted by a business is 51 News from the WCOTA accurate 52 The Two Ethels: First Ladies INDIRECT TAX OMB of Tax and Accountancy IR35 20 Putting your house in order Paul Holdover relief Mason considers the effect of IR35 in the The bright red line Keith Gordon looks at Recruitment private sector 36 a case which identified an absurdity in EMPLOYMENT TAX OMB the holdover relief rules 53 The best industry roles LARGE CORPORATE TAX MANAGEMENT OF TAXES OMB www.taxadvisermagazine.com | December 2018 1 President’s page [email protected] Ray McCann Christmas time comes around again
s it just me or does it feel like no time at all since If you are a regular attendee why not encourage the Christmas tree was packed up and dragged a colleague to come next time? Dunblane was Iinto the loft? followed by a ‘meet the President’ round table The first present of the season arrived in the discussion with the Aberdeen Branch kindly hosted form of the Budget. It is disappointing that the by Deloitte. Chancellor seems to have been too busy to read My other really big event was the Northern last month’s Tax Adviser so numerous tinkering Ireland Branch dinner together with ATT President changes and a 400-page (or more) Finance Bill Tracy Easman. The two of us seem to have an will follow. Also, I am sure few of you welcomed odd effect on the weather; earlier in the year we the 30th January closure date for the review of were trapped in Edinburgh due to the ‘Beast from trusts. Frankly it is not good enough that an area as the East’ and this time it was storm something or complex as trusts is subject to a consultation slap other that resulted in the flight carrying the guest bang in self-assessment return time when you are speaker being diverted to Glasgow before it ran often at your busiest. out of fuel! All was well in the end and thanks go The sharp intake of breath announcement was to Malachy McLernon and all the members of the the Digital Service Tax (DST). To use ‘technobabble’, Branch Committee for what was a truly memorable Apple, Google, Facebook and Amazon must night, notwithstanding the single Jamieson’s with download a ‘critical upgrade’ to their UK tax ice that no matter how much I tried never seemed liability, or, maybe not. It seems clear that the DST to diminish! It was great meeting so many new is a ‘shot across the bow’ that will never see the members and students and hearing the exciting light of day if international consensus emerges on things they are doing. To paraphrase HMRC, ‘tax how to tax companies that are everywhere and does not need to be rewarding, but it very often nowhere at the same time. Here we should perhaps is’. Malachy quite properly has great pride in what be concerned; ‘America First’ will not make finding the Branch has achieved and as he said, ‘it can hold consensus easy so it could be the UK faces unhappy its head up with the best of our Branch network’. I tech giants and a US Government threatening have no doubt that the Scottish and Northern Irish retaliation whilst those critical of online companies branches are in good hands. campaign for tougher measures still! We also had our CIOT Council offsite meeting. The other big (expected) announcement was This is an occasion when the members of Council making the end (private sector) ‘client’ responsible are able to really challenge each other and examine for status within IR35. This was the intended how the CIOT fulfils its charitable objectives. This approach originally but as we know responsibility year the discussion focused on Council itself: is it was instead put on the individual. On its own this too big, small, representative, and so on. As usual will not resolve disguised employment issues; a the discussion was lively and it will influence how much deeper review is required. In the meantime, we ensure the CIOT lives up to our claim to be the the burden of ensuring that those operating ‘leading body for tax professionals’. Equally we through personal service company arrangements must always remember a point passionately made are compliant will be significant and costly. If the in Aberdeen: many of our members value the Government really wants to reduce the number ‘family atmosphere’ the CIOT and ATT have always of individuals operating through companies, had and we must not lose this as we grow and more flexible disincorporation relief needs to expand in the UK and overseas. be introduced so that tax liabilities that would And on that family note, all that remains is for otherwise arise can be rolled over. me to wish all of you, your families and loved ones, Aside from Budget concerns, last month was wherever you are, the happiest of times over again a busy one. The annual Scotland Branch the holiday season. Happy Christmas and I look Conference took place in the splendid surroundings forward to seeing you in 2019. of Dunblane Hydro with a great line-up of speakers that included Bob Trunchion, Emma Chamberlain, and Pete Miller. My congratulations go to Sean and Frankly it is not Richard and the whole of Scotland Branch. Vice- good enough that President, Peter Rayney, has been working hard to ensure that our conferences stay great value and an issue as complex as as I said in Dunblane, our conferences are one of trusts is subject to a the ways we promote our educational objectives and finding new ways to engage with you is a key consultation slap bang priority. They are great opportunities to connect Ray McCann in self-assessment with other members who might just have an idea to President, CIOT solve the client issue you have been struggling with. [email protected] return time.
2 December 2018 | www.taxadvisermagazine.com You can read the latest issue of Tax Adviser READ at www.taxadvisermagazine.com from the first of the month – featuring all of the TAX ADVISER monthly features and technical content, and accessible for desktop, tablet and ONLINE mobile. You can also find our iOS and Android apps in the app stores now.
ATT Welcome [email protected] Jeremy Coker Compliments of the season
etween writing my last page and now, we reasonably have been expected to be aware of have had both the Budget and publication the lost tax. Our suggestion that the extended Bof the Finance (No 3) Bill. These have time limits should also be excluded where the spun off various consultations and calls for taxpayer themselves provides such information evidence and, although not being one for Budget (in a full disclosure before the normal time limit) predictions, I think it is helpful that the extension has sadly not been accepted. This is disappointing of the off payroll working rules to the private and we will be making our feelings known to the sector have been deferred. It is hoped that any Finance Bill Committee. developments in this area will only occur after a For those of us involved in filing of self rigorous analysis of how they will work… or not. assessment tax returns, the beginning of That’s my wish for Christmas. December is a time to assess how much more I am writing this while out of the country. The we have to do if our clients are not to miss struggle with intermittent and relatively dubious the 31 January filing deadline for the 2017/ 18 wifi is real. This means that the sheer volume of Tax Returns. I have previously commented on information that I will have to catch up with when exclusions, i.e. those returns that can not be I get back to the UK continues to grow. It however filed online; and it is probably a good idea if you also focuses the mind on another practical identify such clients as soon as possible. Even challenge that will have to be overcome by the HMRC agree that such returns will take a little bit smaller business preparing for MTD: Connectivity more time to complete. Some guidance on what might be an issue if the person responsible for to do can be found at tinyurl.com/ya777cyf. submission of the VAT return has cause to be Many of you will be aware that there were abroad when a return is due. some 2016/ 17 returns where an exclusion Looking from the outside in, discussions applied, but the software allowed the return to be inevitably veer towards Brexit. It was a bit of a filed online.I know! surprise for me to hear an eminent commercial Well, I understand that our friends at the lawyer suggest that he did not think a deal would Revenue have suggested that they will be issuing be made; or indeed that Brexit would happen! I revised self assessment calculations in relation could only possibly comment that our political to some of such returns and these should have leaders continue to maintain that ‘Brexit means started arriving on your clients’ doormats by Brexit’. Despite my learned friend’s views, as now. Please note that we, as agents, may not be prudent tax professionals, we should be helping copied into these revised assessments. There our clients ensure that they are prepared are impacts on payment deadlines, interest and whatever the outcome. With this in mind, our penalties and so please remind your clients to colleagues at the CIOT have produced a page at forward any such correspondence to you as soon https://tinyurl.com/y97txa7t that should help you as possible. There is a danger that they may not and your clients make sense of what we, so far, recognise them for what they are. understand is coming. I understand that the page Did I mention that I was out of the country? will be updated as more information becomes Well, the sun has come out again and so I am available so please bookmark and revisit it often. going to try to read my copy of Tax Adviser, which The tinkering with the Annual Investment I downloaded via the app, in the garden. It is not Allowance (AIA) continued in the Finance Bill. that I wouldn’t proudly display the magazine Anyone that has had to prepare AIA calculations, while on holiday, it is just that the app makes it when a change straddles an accounting period, so very convenient. Try it. You’ll be pleasantly will be aware of the complexity that can be surprised. created. This is especially so when the amount of And finally, may I take this opportunity the AIA is reduced. Our technical team have asked to wish each and every one of you a merry for an ‘opt out’ where this could have adverse Christmas and all the very best in the new year. consequences for small and medium sized businesses: tinyurl.com/yb2rhlzr. The Finance Bill also introduces measures to extend the assessing time limit for non- deliberate, offshore tax non-compliance to 12 years after the end of the relevant tax Looking from year. This is bad enough. If these go through, the outside in, we understand that the extended time limits will not apply if, before the normal time limit, discussions HMRC receive information from an overseas tax Jeremy Coker inevitably veer authority (under automatic information exchange Deputy President, ATT procedures) which means that they could [email protected] towards Brexit
4 December 2018 | www.taxadvisermagazine.com ANNUAL CONFERENCE 2019
BOOKING NOW OPEN
The Association organises an Annual Tax Conference which is held across several locations in the UK. This conference concentrates on topical issues with an emphasis on the practical issues faced on a daily basis by FULL DAY the Taxation Technician. Our knowledgeable speakers provide detailed notes and illustrate their lectures with CONFERENCE practical examples gained from their experience in practice. The conference also gives you an ideal opportunity to network with like-minded professionals. Attendance at the Annual Tax Conference will contribute to your 9am – 5pm Continuing Professional Development. Speakers to include: Date City Venue Michael Steed Mike Thexton Thursday 9 May Bristol DoubleTree by Hilton Bristol City Centre SEVEN Saturday 11 May London Holiday Inn London Bloomsbury LOCATIONS Conference pricing: Thursday 16 May Haydock Haydock Park Racecourse • ATT members and students: £180 Across Tuesday 11 June Dunblane DoubleTree by Hilton Dunblane Hydro The above reduced rate also applies the UK Thursday 20 June Belfast Radisson Blu to AAT, ACCA, CIOT, ICAS, CIMA and Accounting Technician Ireland International Centre for Life Thursday 27 June Newcastle Member(s) or Student(s) Wednesday 3 July Birmingham Jury’s Inn • Non Members: £250
Register now : www.att.org.uk/attconf2019 For further information: Please email [email protected]
Spring Residential Conference 2019
Friday 22 – Sunday 24 March 2019 Book online at: Queens’ College, University of Cambridge www.tax.org.uk/src2019 Programme topics will include: Entrepreneurs’ relief – trials and tribulations Chris Jones memorial lecture – Finance Act 2019 Peter Rayney CTA (Fellow) FCA TEP, Peter Rayney Giles Mooney BSc FCA CTA, PTP Limited OPEN Tax Consulting Ltd Latest VAT hotspots The new regime for corporate losses – practical Mike Thexton MA FCA CTA (Fellow) to non members points and pitfalls Current developments in National Insurance Heather Self MA FCA CTA (Fellow), Tax Partner, Contributions Blick Rothenberg Kate Upcraft AMBCS Director, Kate Upcraft SEIS and EIS – in practice Consultancy Ltd DISCOUNT Philip Hare ACA CTA, Philip Hare & Associates LLP Non-resident CGT for three or more Practical aspects of employee share schemes Fiona Poole CTA TEP Solicitor, Maurice Turnor members attending Karen Davidson LLB (Hons) ATT, Partner, Corporate Gardner LLP from the same firm Tax & Incentives The Challenges of IR35 Conference fee: £645 Keith Gordon MA (Oxon) FCA CTA (Fellow) Barrister, Temple Tax Chambers (booking before 28 February 2019) £725 thereafter
www.taxadvisermagazine.com | December 2018 5 PROFESSIONAL SKILLS
PROFESSIONAL SKILLS Calming the tempest Jo Maughan provides some practical tips for managing strong emotions in the workplace
KEY POINTS zz What is the issue? We all encounter strong emotions in the workplace, whether our own or those of other people, and these can be difficult to handle. zz What does it mean to me? If you want to feel better equipped to deal with these emotionally charged situations, both compassionately and professionally, read on. zz What can I take away? An understanding of the psychological and physiological background, and powerful ‘in the moment’ strategies to use either when you’re feeling strong emotions such as anger or frustration, or when you’re dealing with someone feeling those emotions.
t times, we all encounter strong options.’ ‘What?’ I reply in disbelief. He say. ‘Yes’, Mark replies in an upbeat and emotions in the workplace, whether repeats exactly what he said again. I feel a expectant tone. He’s smiling. ‘There’s Aour own or those of other people. ball of anger inside, as I think about all the no easy way to say this’, I say. ‘The HR It can be difficult to know how to deal with time my colleagues and I have spent on this Committee has decided that there will them because they’re usually unexpected, project. As I start to speak, tears well up in be no bonus for anyone rated “below and in Western society we seem to have my eyes: ‘Just like that? The team has been expectations” for the year, which, as we bought into the idea that there’s no place working on this project for nine months. know, includes you.’ He rises to his feet. ‘I at work for emotions. Whereas in reality, I’ve now got to tell them it’s off. Just like didn’t agree with that rating!’ He angrily we are all human beings with feelings; that?’ I’m crying now. I’m surprised at shouts. ‘Sarah wouldn’t listen to what I had whether we like it or not, and whether we myself but I can’t seem to hold it back. I to say. All those hours travelling, weekends recognise it or not, our feelings are always feel really angry and frustrated. So much and all, and this is how I get treated!’ He there. So when they break through into the time wasted! ‘I’m sorry’, he says, ‘I should is red in the face. I stand up too. ‘I can see open, we need to have simple strategies have guessed a change was coming when you’re angry. And I can understand why. at our finger tips to be able to handle things went quiet.’ I nod, and take myself But what’s happened has happened. All we them compassionately, constructively and off to the toilet to vent my frustration, can do now is look forward.’ He sits down professionally. which for me means crying. with a thud, deflated. I sit down too. We Have you ever been in emotional Roll forward one year. We go into a then have a very honest conversation. situations like the ones I found myself small, window-less meeting room. It’s So, what’s going on psychologically and in some years ago? (Names have been certainly private. Mark is ahead of me. I am physiologically when we experience strong changed to protect the innocent.) behind, so I close the door. We sit down emotions, such as anger, frustration, shock, It’s 2009. I’m sitting at my desk opposite at the small, round table. We both know or despair at work? My clients tell me it’s my boss, who’s also sitting at his desk in this is the meeting where I will tell him helpful to understand the background, so our bright, open plan area. He looks up the amount of his annual bonus. I’m the let me explain. We will have just received from his computer, stands, and comes bearer of bad news as Mark was given a a psychological ‘trigger’; that is the limbic round to my desk. He perches on the low, ‘below expectations’ performance rating part of our brain has reacted to interpret white cupboard, and says: ‘Your project by his former manager a couple of months what someone said/ how someone looked/ is off. Bob doesn’t want to do it anymore. before. ‘As you know, I’m going to tell what we read in that email etc as a threat, He’s engaged EY to look at longer-term you the amount of your bonus today’, I the same way it did when early man saw
6 December 2018 | www.taxadvisermagazine.com www.taxadvisermagazine.com houses reason and logic, is receiving less less receiving is logic, and reason houses that brain, our of part cortex pre-frontal challenged? when freeze you Do happen. actually may it norms social current with in-line more is freezing as Interestingly, were. if we as firing are emotions our to, and we want physiologically yet and flee, or fight actually to unlikely we are mean norms Social flee. or freeze fight, to primed are we and cortisol, adrenaline, e.g. bodies our into released are hormones fires, amygdala the it: prevent we cannot fast, So second? 1/12of a just in activates Chimp Paradox The book his in brain’ ‘chimp the as it to refers Peters Steve Professor primitive. It’s logical. not is brain the of part limbic the but logical are Neither bills. the pay and family his for food buy to ability his too: existence his to athreat as my words interpreted likely most brain limbic his ‘…will heard Mark bonus…’, no When be done. things gets who – someone director atax as my existence to athreat as it interpreted brain off’, is limbic my project ‘Your heard I When jungle. the in a tiger While the limbic brain is in charge, the the charge, in is brain limbic the While brain limbic the that know you Did . December 2018 |December
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is going on for them.’ for on going is experiencing strong emotions,something order, in by them one follow (You can my tips: are Here moment’ the ‘in simple, I recommend we and on going what’s is this if So, W T S consciously. this, doing Keep B to become calmer. become to start will they Often wants. unconsciously person other the what often is which them, heard and to listened have you show you so, doing By possible. as word for word to close –as say them heard you what person the to back repeat N later. again speak and out, time take B N rational. more become and cortex, pre-frontal their engage brain, limbic their engage dis- pause, usually will They being. are they how to up person other the wake to tends emotion the naming of act mere The effective. very is it my experience in do, to thing arisky like seem can this Although angry’. are ‘you than rather angry’, seem ‘you or you’relike angry’ sounds ‘it example, For feeling. are they how person other the telling without ay nothing. hink to yourself: ‘this person is is person ‘this yourself: to hink uy time. It’s okay to suggest you both both you suggest to okay It’s time. uy reathe deeply into your diaphragm. diaphragm. your into deeply reathe ame the emotion you are witnessing witnessing are you emotion the ame otice how you’re feeling and and you’re how feeling otice hen you are feeling sufficiently calm, calm, sufficiently feeling are you hen
: When you’re on the receiving receiving the on you’re : When : When you’re feeling emotional first career was in tax, most latterly as a Tax Director for BP’s for asaDirector latterly Tax most tax, in was career first whose coach &leadership career aleading is Maughan Jo Profile Website www.jomaughan.co.uk [email protected] Email 542457 07771 Tel Limited Company Partner Your Thinking Speaker, Author Coach, &Leadership Career Position Name Jo Maughan PROFESSIONAL SKILLS 5. 4. 3. 2. 6.
tears of frustration.’ of tears are These frustrated. and angry really feel like, ‘I something said have Icould boss, my with situation the In assumptions. making likely are they as person other S shallowly. more breathe to tend we emotional, we’re when feeling deeply; more B okay, okay.’ It’s it’s brain. my limbic T angry.’ am ‘I yourself, to say example, For yourself. to feelings your acknowledge professional or leader. or professional authentic and resilient amore become you short, In challenges. you throws (and life) work when upon draw to responses and behaviours of repertoire agreater developing you to leads and alifetime lasts yourself in investment an such experience, In my emotions. and events past the process and understand fully to therapist or counsellor coach, a engage example, For work. personal some doing consider you recommend I case, the is this If reaction. past unprocessed your and reaction present your of mixture a fact in is emotion moment’ ‘present your processed; fully yet not you’ve which past the in happened that event an to back you triggering is situation present the that be may It there’sthere’s history? heat where – fits phrase this if consider circumstances, the to proportion of out was response your think you If being. ahuman being for yourself forgive view,in my my situations, both in case the was as yes, If circumstances. the in proportionate and understandable was response emotional your whether Consider happened. what W C say something they’re not expecting. not they’re something say to about be may you that aclue person other the you’re giving ‘sorry’, word the with starting By tomorrow.’ conversation this resume Let’s shock. abig been has me told now. you’ve What right out time some Ineed like: ‘Sorry, something said have Icould my boss, With next. ell yourself: ‘it’s okay, it’s okay, it’s just okay, okay, just it’s ‘it’s it’s yourself: ell ignpost how you’re feeling to the the to you’re how feeling ignpost ommunicate what you want to happen happen to want you what ommunicate reathe. Breathe, and try to breathe breathe to try and Breathe, reathe. hen you’re alone, reflect on reflect you’re alone, hen 7 BUDGET
BUDGET
current allowance. The costings imply that faster tax relief will be given on £3.8 billion. It’s the end of the line for enhanced capital allowances for energy-efficient equipment, Budget 2018 which economists have argued simply puts up the cost of such equipment. Whilst it’s a good thing to offer tax relief on more business costs, no one can say that the UK’s capital allowance regime has been simplified. Perhaps the biggest item on the business wish list was the reintroduction of tax relief round-up for purchased goodwill and customer-based intangibles. Many respondents to the consultation pointed out that the UK lags behind the rest of Europe, by failing to give tax relief on goodwill and customer-related intangibles. The government’s proposal doesn’t really respond to the calls for relief, by leaving out customer intangibles for no obviously good reason and limiting goodwill deductions to an amount no greater than other qualifying intangibles acquired in the same transaction. The 4% fixed rate allowance remains – although there is one piece of good news in that relief will be given for degrouping charges on intangibles in the same way as for capital gains assets. The big costs for business come from Bill Dodwell considers the implications of Budget 2018 the introduction in 2020 of the off-payroll working rules to private sector large and medium-sized businesses. HMRC will also udget 2018 stands out in many ways. previously-enacted 17% corporation tax rate, look at improving the employment status It was the first Budget delivered under which arrives from 1 April 2020. There were new announcements on capital allowances, checker (CEST). Regrettably, the proposals the new annual fiscal event strategy. B where the UK traditionally does badly in don’t include better appeal rights for workers It was the first since 1962 to be delivered on comparison with international competitors. incorrectly classified by the engager, no a Monday and, at an hour and a quarter, one The new Structures and Buildings allowance doubt on the basis that this would be costly of the longer recent Budget speeches. took everyone by surprise, as it goes much for HMRC to implement. I would suggest that The Chancellor opted for an early further than industrial buildings allowances the UK needs a new statutory test of self- Budget, before any agreement had been abolished by Gordon Brown. The allowance employment, as it will never be satisfactory reached between the EU and the UK on will be enacted next year but applies to new to attempt to apply the case law factors to Brexit. This posed challenges for fiscal policy construction from 29 October 2018. The modern situations. and forecasting; Philip Hammond told the cash cost is initially modest, as the allowance The £3,000 annual Employment country there would need to be a Spring applies only to new structures and is given Allowance for national insurance Budget should there be no Brexit agreement. at 2% pa. Businesses may be able to take contributions will from April 2020 be limited Despite naysayers, this wouldn’t be a the benefit in their deferred tax accounts, to employers with an Employer NI charge change to the single fiscal event policy but though, as such assets will no longer be below £100,000. This brings in about £300 rather a recognition of the huge economic excluded from tax relief. There are no million pa. importance of reaching an agreement with balancing adjustments on disposal, with the The final business tax increase comes from the UK’s largest trading partner. unamortised balance passing to the buyer. the Digital Services Tax, levied at 2% on the The Budget arithmetic emphasised that The writing down rate for fixtures drops from revenues of certain digital businesses. The this was a giveaway. Tax measures cost the 8% to 6%, apparently to be more in line with objective is to increase the overall tax levied Exchequer over £5 billion over the next five accounts depreciation, but coincidentally on those digital businesses and encourage years, with all of that in the next two years. It roughly the same as the cost of the the United States in particular into agreeing a was also a spending Budget, with additional Structures allowance. There’s an unexpected different split of tax revenues. spending of over £95 billion in aggregate two-year increase in the Annual Investment The most disappointing aspect of the over the next five years, unfunded by tax Allowance to £1 million (from £200,000). The Budget was the number of measures not increases. The flagship increases in NHS benefit of this won’t go to many businesses, consulted on, which have made it into funding and Universal Credit were supported though. Currently only some 8,000 the Finance Bill – likely to be enacted by by a considerable number of much smaller businesses routinely spend more than the Christmas. spending measures. The costly tax elements were advancing by a year the Conservative promise to PROFILE increase the personal allowance to £12,500 Name and the higher rate threshold (outside Bill Dodwell Email Scotland) to £50,000. The fuel duty freeze, [email protected] i.e. not increasing duty in line with inflation, Profile Bill is a past president of the Chartered Institute of Taxation. costs another £800-900 million every year, Until 31 May 2018, he was head of tax policy at Deloitte. He is now a which is topped up to over £1 billion by part-time senior policy adviser at the Office of Tax Simplification and freezing some alcohol duties. a member of the GAAR Advisory Panel. Bill is the Editor in Chief of Tax For business, the Budget was a mixed Adviser magazine. bag. The Chancellor chose to stick to the
8 December 2018 | www.taxadvisermagazine.com BETTER TOGETHER +
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@ourATT on v ANTI-MONEY LAUNDERING
ANTI-MONEY LAUNDERING An inspector Jane Mellor looks at the common issues anti-money laundering supervision visits raise and provides guidance on how to ensure that your firm meets AML requirements KEY POINTS zz What is the issue? Tax advisers are required to be registered for Anti-Money Laundering (AML) supervision. As a result, the firm may be visited by their AML supervisor in order to identify examples of good practice as well as areas requiring improvement, and set robust action plans for the firm to follow up. The objective is to ensure full compliance with The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) regulations and help firms achieve this in practical ways. zz What does it mean to me? Whatever your position in the firm and whether you are supervised by the CIOT, ATT or another supervisor are you aware of AML requirements and have you thought through how to meet those requirements in your day to day work? zz What can I take away? A reminder of the new obligation to carry out a risk assessment of your firm and the need for written policies and procedures as well as examples of good practice on how to comply with MLR 2017 within your firm.
Why do visits take place? firms to ask questions and receive guidance on Firms need to ensure they are alert to he CIOT and ATT are the Anti-Money particular areas of concern to them. particular AML risks which are likely to arise Laundering (AML) supervisors of: and where different risks apply in different TCIOT and ATT members who are sole What have we found through our visits? parts of the practice. For example, the types practitioner tax advisers; and other tax adviser MLR 2017 brought in a number of new of clients taken on, the sectors in which they firms where at least one of the principals in the requirements for firms to add to those which operate, the geographical links they have and firm is a member. have been around for some time. AML the type of service they provide will all feed in AML visits are part of a number of Newsletter 19 http://tinyurl.com/yb5ay2s2( ) to the risk assessment. The UK government’s supervisory tools the CIOT and ATT use to: gives a summary of changes. National Risk Assessment tinyurl.com/( zz check compliance with the regulations; Over the last year we have observed ybxzkszo) and information provided by zz identify areas where firms need that firms in general have good policies supervisory bodies (tinyurl.com/y8kz3ggm more guidance on how to meet the and procedures operating ‘on the ground’ and tinyurl.com/y74tg2an) can be useful requirements of the regulations; and and deal with risk at the outset through the sources when drawing up a risk assessment. zz identify and leverage examples of careful screening of clients. Firms must, It has been helpful to see that many of good practice however, remember that compliance with key the firms visited have added a risk assessment requirements set out in the regulations must section at the start of their policies and What actually happens during a meeting? be evidenced in writing. A mental checklist is procedures document. This provides their Visits are headed up by the Professional no longer sufficient. summary of the nature of their business, Standards team who will talk through the AML Where issues have been identified, the type of work they provide, and their risk profile of the firm and what AML policies, such as the absence of written policies and assessment of whether they consider there procedures and controls are in place with the procedures or no formal client due diligence is an overall money laundering risk rating of MLRO and appropriate senior staff. (CDD) because the client has been known to low, medium or high. Backing information The firm being visited will also be asked the member since birth, these are followed up used to reach the assessment of risk should to produce various documents including the by CIOT/ATT through to compliance. be retained. written practice risk assessment and practice Some of the key requirements are Some larger firms have reported that policies and procedures. In addition copies of discussed below and include examples of they now use their strategic management criminality checks are required where these good practice. meetings to consider not only pure have not already been provided as part of the commercial risks but any developments in the registration or renewal procedures (further Written practice risk assessment AML risk profile of their business. details in relation to the criminality check Firms have been required to take a risk based requirements can be found (tinyurl.com/ approach for a number of years but they now Written policies and procedures yag5mu7y and tinyurl.com/y9n6y2tl) have to set out their practice risk assessment Another new requirement is for the firm’s The meeting is relatively informal and in writing. The requirement applies to both AML policies and procedures to be in writing. there is always the opportunity for supervised large firms and sole practitioners. Again, this applies to all firms including sole
10 December 2018 | www.taxadvisermagazine.com ANTI-MONEY LAUNDERING
PROFILE Name Jane Mellor Position Professional standards officer Company CIOT and ATT Tel 020 7340 2785 calls Email [email protected] Profile Jane Mellor is a professional standards officer at the Chartered Institute of Taxation and Association of Taxation Technicians where she helps produce member guidance on professional and ethical matters and assists with anti-money laundering issues. Before joining the CIOT/ATT she worked as a personal tax manager in a firm of Chartered Accountants. practitioners. what CDD was received, the initial risk with the firm and sometimes on an annual basis The regulations set out what must be assessment, annual notes of risk issues thereafter. included in the policies and procedures and which have cropped up, the outcome of Guidance on training providers is available AML Guidance for the Accountancy Sector discussions with the client and an annual on the CIOT and ATT websites (http://tinyurl. (AMLGAS) provides helpful guidance indicating update of the risk assessment. com/y7okj984 and http://tinyurl.com/ that the following need to be considered zz AML checks being undertaken in ydgxxkxa). and covered: conjunction with the annual tax return zz risk based approach, risk assessment and procedures. For example when dealing Suspicious Activity Reporting (SAR) management; with the tax return the staff member It is good practice to register with the National zz client due diligence (CDD); also checks CDD records and notes the Crime Agency’s (NCA) online SAR system. zz record keeping; updated risk assessment. Once in place it ensures the MLRO is ready zz internal control; to make a report promptly if needed. It also zz ongoing monitoring; For those firms not wanting to write their provides another source of MLTF guidance. For zz reporting procedures; own policies and procedures some training registration details refer to the NCA website zz compliance management; and providers include template documents which (tinyurl.com/ydc5fbfk) zz communication can be tailored to your practice (see below re MLROs take their responsibilities seriously providers). and areas of good practice discussed include Policies and procedures should be having an open approach where members of proportionate to the size and nature of the Training staff feel comfortable raising issues with the business and seek to mitigate and manage the The regulations require all relevant employees MLRO. This is often encouraged in the small risks set out in the practice risk assessment. to be made aware of money laundering and team environment where an MLRO is located This means that it is perfectly acceptable for terrorist financing (MLTF) law and training close to the team and they are able to easily smaller firms or lower risk firms to write a brief must be provided regularly. A written record of approach them. MLROs are reminded of the document succinctly setting out what the sole training must now be maintained. importance of keeping a note of all matters practitioner or small staff team do in relation to Many firms ensure staff training is brought to their attention or considered even if all aspects of the MLR 2017. untaken on an annual basis and the sessions they conclude that a SAR is not required. The policies and procedures should often require some sort of test to be passed be subject to regular review and update. at the end. Conclusions The introduction of MLR 2017 has been a For some practices it is practical for There is a continued concern about money useful prompt for firms to look again at their everyone to watch a webinar together, for laundering and terrorist financing in the UK documents. Many firms diarise when they will others senior staff will undertake more and CIOT and ATT members are required to undertake a review – generally during their intensive training to ensure they are fully play their part in defeating it by complying quieter period of the year. trained for their role as MLRO etc. and then with MLR 2017. This means ensuring your Areas of good practice seen include: they will be in a position to cascade that practice meets not only the requirements zz Tailored new client take on forms to information to others. Firms regularly report of MLR 2017 but also those of your AML make sure all important questions have that AML issues are a standard agenda item for supervisor including the timely submission of been covered with the client, a record of team meetings. Whilst some firms undertake the AML registration/renewal form and DBS Identity documents and other CDD has training in a quiet period others undertake check where requested. been retained and risk is considered and training just as the busy season gets going, as For further guidance you should refer to the noted up front. These forms often provide that is an effective time of year to remind staff CIOT and ATT websites which link to: a useful prompt to individuals to check of the requirements. zz the legislation MLR 2017 (tinyurl.com/ on issues such as beneficial ownership There can be serious implications for firms yclwbfbp) and whether their client is a politically where they have not trained their staff and zz the Treasury approved AMLGAS (tinyurl. exposed person (and in the latter case to there is a failure to make a suspicious activity com/yafy3rr8). get senior staff sign off). They also act as a report as the staff member may rely on lack of zz a set of frequently asked questions (tinyurl. reminder to check the financial sanctions training as a defence which in turn could lead com/y8kz3ggm and tinyurl.com/y74tg2an. and proscribed terrorist lists (http://tinyurl. to a charge against the firm for failure to train com/l5dlu9t and http://tinyurl.com/ its employees. Good practice seen includes See also information on the warning signs k6uz8m8) (these checks are mandatory). not only general AML staff training but a clear of money laundering and much more on the zz Often new client forms include an annual policy of ensuring staff are given the time and Government AML Flag it Up campaign site risk assessment ‘grid’ prompting sole opportunity to read the firm’s policies and (www.flagitup.campaign.gov.uk). practitioners or staff to review CDD and procedures. In some cases, staff are asked to The Professional Standards Team is here to risk and sign off when done. sign to confirm that they have read the firm’s help. To make contact email standards@ciot. zz Spreadsheet control records showing policies and procedures when they commence org.uk and [email protected]. www.taxadvisermagazine.com | December 2018 11 CAPITAL ALLOWANCES
CAPITAL ALLOWANCES
KEY POINTS zz What is the issue? Capital allowances (CAs) have changed considerably with the introduction of SBAs and changes to Annual Investment Allowances (AIAs), Special Rate Pool and Electric Vehicle Integral to Charge Points and the withdrawal of Enhanced Capital Allowances (ECAs). zz What does it mean to me? These changes are designed to encourage immediate investment – perhaps seeking a ‘BREXIT bounce’ in investment growth and productivity, particularly over the next two years where the boosted AIAs will result in immediate 100% relief on most expenditure up to approximately £5m in the year incurred. zz What can I take away? Businesses that are planning new capital expenditure over the next few years may wish to consider altering the project timing (where possible) to seek to optimise the tax savings generated from allowances – in light of these recent changes.
urther to the Office of Tax Simplification review of Capital FAllowances and the recent Budget statement by Philip Hammond Alun Oliver provides an MP, capital allowances are clearly overview of the capital considered an integral component of UK tax. Finance (No.3) Bill 2018 (FBNo3) allowances changes in and draft legislation, only sets out the basics of these measures with further the recent Budget consultation on the new Structures & Buildings Allowance (SBAs) to refine the announcements into fully operational EXAMPLE 1 Commencement tax legislation. This was a ‘giving’ budget The Government setting out the Chancellor’s ambition Company X has Accounting Period Ending (APE) 31 March is to use Statutory to encourage businesses to spend, and 2019, then its AIAs will be calculated as thus: Instruments spend now! to introduce Capital allowances (CAs) have changed 01 April 2018 to 31 Dec 2018 (9/12 x 200,000) = 150,000 legislation, considerably with the introduction of claiming this SBAs and changes to Annual Investment 01 January 2019 to 31 March 2019 (3/12 x 1,000,000) = 250,000 facilitates rapid Allowances (AIAs), Special Rate Pool Total AIAs for APE 31 March 2019 = £400,000 introduction and Electric Vehicle Charge Points and ‘to provide the withdrawal of Enhanced Capital taxpayers with Allowances (ECAs). Structures & buildings allowances certainty’. The cynic in me wonders if the Businesses that are planning new (SBAs) increasing trend of SIs, is more because capital expenditure over the next few years SBAs are to be given at 2% for 50 years there is considerably less consultation may wish to consider altering the project on eligible construction costs incurred and scrutiny than the traditional path of timing (where possible) to seek to optimise on or after 29 October 2018 (effective primary tax legislation. the tax savings generated from allowances date) for new non-residential structures SBAs apply to new expenditure on – in light of these recent changes. and buildings. The HMRC Budget commercial structures and buildings Technical Note describes SBAs as ‘a where all the contracts for the physical Annual investment allowances (AIAs) long term commitment to improving construction works (including any Nicknamed the ‘yoyo allowance’, the the competitiveness of the UK as a preparatory works) are made in writing Government is increasing the cap on AIAs destination for investment’. The Red Book and are entered into by the parties on to £1m of qualifying expenditure from 01 stated that the introduction ‘addresses a or after the effective date. Renovation January 2019 for two years. As before, significant gap in the UK’s current capital and alteration of existing buildings will calculators will be required for all those allowances regime’. The rules are not yet also be included, as will purchases of a with accounting periods spanning the fully formed and some aspects still need new structures or buildings directly from step up, or reversion to £200,000 after 31 fathoming out – the consultation runs to the developer – subject to the contracts December 2020. See example 1. 31 January 2019. and physical construction works having
12 December 2018 | www.taxadvisermagazine.com CAPITAL ALLOWANCES
PROFILE Name Alun Oliver MCIM MBA FRICS Position Managing director Company E3 Consulting Tel 0345 2306450 Email [email protected] Profile Alun is a chartered surveyor and has specialised in property taxation for more than 25 years; he headed the capital allowances team at one of the big four firms before setting up E3 Consulting in 2003.
they are not denied SBAs under an to the asset – highlighting the need for existing contract. specialist assessment of project costs. As with VAT, the scheduling of the works may also become more important – Interaction with other CAs demolition and site clearance undertaken Expenditure eligible for Plant & together with the main build contract Machinery Allowances (PMAs) and will be eligible for SBAs, but if divided Integral Feature Allowances (IFAs) will by considerable time or even discrete continue to be eligible for these reliefs contracts then these preparatory works and thus are ineligible for SBAs. Previous will not qualify. IBA rules, gave taxpayers the choice on which to claim. Additionally SBAs Key elements expenditure will not qualify for AIAs. The old IBA basis (4% for 25 years) may Hence for tax payers to benefit from all have been more helpful, both in terms of of the available capital allowances relief cash flow, but also record keeping – given and truly optimise their tax savings, the majority of typical lease terms are they will need to undertake segregation 25 years or less. However, SBAs will be analysis of the project expenditure given on new commercial structures and into the various forms of allowances buildings expenditure, including costs for relevant – PMAs, IFAs, AIAs, Long Life new conversions or renovations from the Assets (LLAs), SBAs and, until their date the asset is brought into use for a abolition, ECAs. qualifying activity. However, an example purchase What qualifies? All the costs from a developer in the Technical Note associated with the physical creation of makes no reference to PMAs or IFAs the asset – including costs of demolition and assesses SBAs as available on the
© Getty images /iStockphoto/kodda images © Getty or land alterations necessary for purchase costs less land value. I expect construction, and direct costs required that this illustrative position ignores been entered into on or after Budget to bring the asset into existence. PMA/IFAs and AIAs for simplicity’s sake day. There are certainly similarities to Expenditure on acquisition of, or rights only and does not represent a more the ‘old IBA’ regime; but certain changes over, land (including SDLT and legal fees) radical denial of these other allowances and restrictions may counteract any in common with all other allowances is on second-hand transactions? simplification! not eligible, nor are the costs of obtaining Furthermore, SBAs are not Taxpayers undertaking their own planning permission. The claimant must available against any costs deductible construction activity can also claim have an interest in the land upon which in calculating profits chargeable to SBAs, but will need to keep documentary the structure or building is constructed. tax, such as land remediation relief, or evidence of the physical construction and There will be rules to prevent leases repairs and maintenance expenditure. contract dates being compliant. being used to give more than one party Structures are explicitly stated as separate interests in the same structure including ‘walls, bridges, tunnels’ and Anti-avoidance or building. FBNo3 references ‘highways’ but there Those embarking on recently A subsequent disposal will not is no mention of railways, piers, dams or commenced projects may feel aggrieved trigger a balancing allowance – instead, similar utility and infrastructure assets. by this radical change – there would the purchaser simply takes over the With any luck the legislation will not always be winners and losers whatever remaining allowances and continues to seek to limit structures or buildings from active date were used. However it should write them down over the remaining part these sectors by some anachronistic be noted, the Government intends to of the original 50 year period. Thus there schedule of qualifying assets/uses. include punitive anti-avoidance measures is no requirement to recalculate for a that will deny all SBAs where contracts new period, other than apportionment Dwellings are withdrawn, revoked or replaced for part periods. HMRC’s Technical Note advises that by a later dated contract. Although Purchases new and unused from ‘expenditure on residential property one wonders how easily HMRC can a developer will require a ‘just and and other buildings that function as adequately police this? reasonable apportionment’ to segregate dwellings’ will not qualify for SBAs. It Large regeneration schemes the value of land from the acquisition further defines ‘dwellings’ as buildings undertaken under frameworks or call-off costs, that would otherwise be eligible primarily intended or used for long- arrangements may need to carefully for SBAs, and presumably other eligible term residence; including university review the SBA legislation to ensure capital allowances as may be appropriate or school accommodation, military www.taxadvisermagazine.com | December 2018 13 CAPITAL ALLOWANCES
accommodation and prisons. Given incapable of qualifying use. Temporary p.a. effective from 1/ 6 April 2019, except the requirement to increase the UK disuse for two (five in exceptional for ‘ring fenced trades’ which will remain housing levels and encourage greater circumstances) years, will not deny at 10% WDAs. participation in the Private Rented SBAs to the owner, until the building or Whilst clearly this reduction will Sector these restrictions seem outdated structure is brought back into use. The slow the benefit of claiming IFAs, it is to current housing needs and trends. new construction expenditure (net of considered the AIA increase (and potential Hopefully the consultation will help any insurance proceeds etc.) will qualify SBAs on wider project costs) will offset find a balance to facilitate relief on for SBAs in its own right with a new 50 this for the majority of claimants. residential dwellings on a ‘commercial year period. scale’ – as why should this sector be any Enhanced capital allowances (ECAs) different from a care home, or hotel? Leasing & CGT One of the more unexpected changes, The current schedule of ‘Qualifying Tax simplifications are rarely that. was the announcement to end ECAs Activities’ has been pared down from Here this simplified capital allowance from April 2020. ECAs provide 100% those set out in s.15 CAA2001 and the on a straight line for 50 years without First Year Allowances (FYAs) against FBNo3 excludes certain prescribed balancing adjustments – introduces assets that were on the Energy or Water ‘holiday or overnight accommodation’. new Capital Gains Tax (CGT) changes Technology Lists, or otherwise meet the Thus it would appear that Furnished and complex measures for leasing – qualifying criteria. Holiday Letting (FHLs) are to be denied attempting to deny relief in abusive ECAs work in tandem with the SBAs – whilst still eligible for other avoidance situations. Minimum Energy Efficiency Standards forms of allowances. True simplification In simple terms, normal assessment (MEES Regulations) as part of the ‘carrot would not seek to ‘carve out’ different of each taxpayer’s respective positions & stick’ approach of Government to get qualifying activities, forcing more will prevail; so a lease on full market landlords to improve the energy efficiency segregation of different uses and rent, with no premium, would leave of UK property stock. Whilst ECAs rules allowances! the SBAs with the lessor’s property are not perfect, linking or adjusting the Live/work premises are to be investment business. Whilst a very rate of WDA – by reference to either excluded and mixed use properties long lease (say 999 years) at a token the property’s Energy Performance will also require a ‘just and reasonable ‘peppercorn’ rent and with a significant Certificate or BREEAM® rating (BRE’s apportionment’ albeit shared/dual use capital, a premium will be treated as akin Energy Assessment Methodology) – will be treated as non-qualifying – again to a sale and the lessee becomes entitled whereby the rate of WDAs could have in contrast to the treatment for PMAs, to the SBAs. been set at 100%, 75% or 50% depending upon the rating of the property – would have maintained a clear link to ensuring “True simplification would not seek to ‘carve out’ different buildings became more energy/water qualifying activities, forcing more segregation of different efficient. In light of both the SBAs and £1m AIAs, this withdrawal will only impact uses and allowances!” a relatively modest group of taxpayers. Electric vehicle charge points were IFAs and AIAs within common areas. Between these two ‘end markers’ given 100% FYA under s.38 FA(No2)2017 Lastly where the proportion of a mixed the complexity of lease transactions and effective from 23 November 2016 use property has 10% or less of the costs and potential for abuse has led to the have also been extended to 31 March/5 that could potentially be eligible for Government setting out two tests – firstly April 2023. SBAs then none would be permitted. where the premium paid is 75% or more of the sum of the capital amount and the Conclusion Non qualifying activity value of the retained interest, then the These changes are designed to encourage Where the property/asset has a lessee will have the SBAs as a deemed immediate investment – perhaps non-qualifying change of use – say it sale. A capital sum of less than 75% and seeking a ‘BREXIT bounce’ in growth and becomes a dwelling, or is acquired by the SBAs will be retained by the lessor. productivity, particularly over the next a non-taxpayer, such as a pension fund Secondly, where the term of the lease is two years where the boosted AIAs will – then the associated 2% reliefs each not more than 35 years, then the SBAs are result in immediate 100% relief on most year are lost, and not carried forward or to stay with the lessor. expenditure up to approximately £5m in recalculated. Capital allowances rarely interact the year incurred. Crown, Local Authority or properties with CGT other than disposals in a loss The new SBAs will further boost developed by charities/pension funds situation. However, the new SBAs rules the tax savings from new commercial after the effective date will not benefit propose that the taxpayer’s base cost development, but the CGT changes and from SBAs directly, but must retain will be reduced by the total value of SBAs evidential requirements to maintain some evidential records as to the start claimed up to the point of sale. Given accurate records for up to 50 years on date etc. of the notional 50 year period only a 2% per annum some investors may the construction costs and start date – if subsequent taxpayer purchasers decide not to claim SBAs, rather than have may prove to be too restrictive for many are to benefit from SBAs on the to reduce their base costs on a later sale. taxpayers to take seriously? These points remaining period. Given our experience need to be forcefully made during the in operating the ‘New Fixtures Rules’ Special rate pool consultations to see if a better balance on second hand purchases this ‘record FBNo3 clause 30 reduces the writing could be struck – so as to achieve the keeping’ could be a problematic area; down allowances (WDAs) rate for the Government ambition of continued effectively denying claims to buyers if Special Rate Pool – covering IFAs, LLAs investment in UK, without becoming there are not sufficient records. and Thermal Insulation works under s.28 too onerous and ultimately ineffectual SBAs will continue where the asset is CAA2001. This changes from 8% per – in their ambition to drive growth and damaged by fire or otherwise becomes annum on a reducing balance basis to 6% economic prosperity.
14 December 2018 | www.taxadvisermagazine.com WINTER SALE Save up to 40% on tax books lexisnexis.co.uk/taxsale
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SA-0918-067 Winter Sale-Tax-Advert2.indd 1 16/10/2018 7:43 PM DIGITAL SERVICES TAX
DIGITAL SERVICES TAX
A radical departure Matt Stringerand Amanda Collinson consider the implications of the new Digital Services Tax
KEY POINTS zz What is the issue? The UK is to introduce a 2% Digital Services Tax from 1 April 2020 on gross revenues generated from certain activities in the UK. zz What does it mean to me? Businesses which derive value from their UK user base will need to carefully consider the new provisions as details become available. DST is a radical departure from traditional taxation methods and usual international tax methodology for determining the tax base may not apply. zz What can I take away? Background to the ‘digital issue’, an overview of how DST is expected to operate, and a taster of some of the complexities that introducing this new tax will bring.
n Budget day, 29 October 2018, Chancellor Phillip Hammond Oannounced the arrival of a new UK tax: the Digital Services Tax, or ‘DST’ as it is likely to be commonly referred to by the time we go to print! DST is a radical divergence from several the ‘bricks and mortar’ business in mind. In in-country, and how to attribute value to well-established international tax principles. today’s world, many business models can the growing importance of data and user It is a tax on gross revenues (rather than operate with very little physical presence, base. The Inclusive Framework remains profits). This completely disregards the and exponential growth in technology has committed to a consensus-based response overarching principle that tax follows left the traditional system of taxing profits that addresses the challenges of the digital profits, and that profits should be split on according to jurisdictional splits of functions economy as opposed to implementing an arm’s length basis between jurisdictions, at best running to catch up (and, at worst, new taxes that act as sticking plasters based on the activities carried out by the no longer fit for purpose). whilst agreement is reached. They have employees of the multinational enterprise. When the initial BEPS committed to issue their final report in DST could apply where, under traditional recommendations were published in 2020 and are targeting the G20 Finance methods, no profits should be allocated to October 2015, there was no specific policy Ministers meeting in June 2019. the UK and where businesses have no UK recommended to deal with this ‘digital’ The European Commission (EC) has also taxable presence. problem. At the time, the G20/OECD been considering this area and published But before we get too excited, let’s suggested that changes to other action its findings in the same week as the rewind and think about where this idea has areas should be implemented first and to OECD earlier this year. The EC proposed developed from. then revisit the issue in 2020. a long-term measure of a new taxable The BEPS Inclusive Framework has presence threshold of a Significant Digital Back in time… continued to discuss possible solutions to Presence (SDP). The SDP would act as a Over five years ago, the G20 and OECD the tax challenges arising from digitalisation new permanent establishment concept identified the challenges of the digital and the Task Force on the Digital Economy and allocate profits according to traditional economy as a key part of the action plan published an interim report earlier in the functional analysis techniques. However, for the Base Erosion & Profit Shifting year. In essence, they are focused on trying the EC also noted the need for an interim (‘BEPS’) project. So key, in fact, that it was to achieve international agreement in measure – a DST. The EC recommended a labelled as Action 1. The issue was clear: certain areas – including whether digital 3% revenue based DST, levied on the gross our global tax system was designed with nexus should trigger taxable presence revenues of certain large digital businesses.
16 December 2018 | www.taxadvisermagazine.com DIGITAL SERVICES TAX
A radical departure
The recommendations included thresholds to ensure that only large businesses were PROFILE impacted and carved out a number of Name Matt Stringer business models (e-tailers, communication Position Director or payment services, crowd funders) from Company Grant Thornton their scope. Email [email protected] As with all tax matters at EC level, Tel 020 7728 3437 the proposals would require unanimous Profile Matt is an international tax director in Grant Thornton’s UK support to be implemented. As the tax team. Matt has particular expertise in international tax matters, proposals face opposition from several including cross-border financing, re-organisations, Diverted Profits Member States (including, publicly, Ireland Tax and BEPS initiatives. He is a chartered accountant and a chartered tax adviser, and the Nordics), it seems unlikely that obtaining national prizes in both sets of exams. Matt travels to the US regularly and an EC-led DST will be implemented in the co-leads Grant Thornton’s UK/US programme. His clients include a number of US headquartered technology groups. near future. Progress is not fast enough for some Member States, with Italy and Spain already having introduced draft legislative Name Amanda Collinson provisions for a DST. Position Senior Manager Company Grant Thornton Budget 2018 Email [email protected] Tel 020 7865 2186 The UK Government echoes the view that Profile Amanda is an international tax senior manager in Grant progress at both G20/OECD and EC level Thornton’s UK tax team. Amanda helps to unlock growth in dynamic has not been fast enough. As a result, organisations by advising them on complex cross-border tax matters, unless international consensus can be with particular focus on the technology industry. Amanda is a chartered accountant reached before implementation date, the and holds the ADIT diploma. UK will introduce DST from 1 April 2020.
www.taxadvisermagazine.com | December 2018 17 DIGITAL SERVICES TAX
UK to collect tax revenues which falls out of their usual remit to tax under a profit allocation method.
4. US retaliation Finally, considerations need to be made around how other countries may respond, namely the US. Kevin Brady, Chairman of the US Ways seem immediately apparent that will and Means committee has already issued need dealing with: a statement calling out the UK DST as At the time of writing, very little detail ‘troubling, inconsistent with international is known as to exactly how the tax will 1. Defining the ‘in scope’ businesses norms and ‘a blatant revenue grab’. He operate. HM Treasury is due to publish The UK Government is clearly intending has also said that changes in the UK and a detailed consultation document in the for certain large US technology companies other jurisdictions would prompt a review coming weeks. to be within the proposed provisions – of the US tax and regulatory approach in a We do, however, have an outline the world’s largest search engine and bid to determine the appropriate actions of how DST is intended to apply. It most popular social networking platform in ensuring a level playing field across closely follows the EC proposals in are sure to be signing a cheque. Online global markets. many ways, although appears to be marketplaces are harder to define. The Aside from the practical challenges, narrower in scope: conceptual idea is to tax the commissions there is a wider, more philosophical zz DST will be levied at 2% on gross earned by facilitating transactions question around whether a tax on gross revenues of specific digital activities, between UK users (whether or not they revenues of certain digital businesses where these revenues are linked to are also customers). Businesses that achieves the aim of shifting the the participation of UK users link drivers with passengers, homes international tax framework to better zz The three business models that will with renters, buyers with sellers, app align the digital world with tax collection? be ‘in scope’ are: search engines, developer with their customer base (and It is not clear that it does. For some social media platforms and online business models, revenue generated marketplaces. This seems to be from UK user interaction is not reflective purposefully narrower than EC “DST could be said to of the contribution of UK users to the proposals. undermine the broader value chain. There is good reason that the zz DST is not intended to penalise traditional international tax framework the UK user, or be a tax on online international tax system” has considered profits as a primary driver business. The tax will apply for relevant ‘success’ in country – the to revenues earned from the the list goes on) will need to pay careful size of in-country revenues may not intermediation of sales where UK attention to the consultation proposals correlate to ‘success’ at all. Whilst there users have driven the value allowing and the drafting of the definitions. are proposed limits in place such that for those sales to take place only large businesses are impacted, after zz A number of other digital business 2. Calculating the tax due the cliff edge of those tests, it is not yet models will be specifically ‘out Some businesses may already capture clear if there will be sufficient distinction of scope’: financial and payment and report their revenue streams from between an ‘adequate’ profit margin services, providing online content, UK users whereas for others, this will be business with marginal user contribution software / hardware sales, television an entirely new requirement to identify to its relative success, and a business and broadcasting services. when UK users are contributing to their wholly dependent on user interaction zz A ‘double’ threshold will be in place platform. There are also questions with super-profits in the UK. to ensure DST only impacts the around when an in-scope business falls DST could be said to undermine the largest digital businesses. Only groups to have in-scope revenues (e.g. a website broader international tax system in this with global revenues from in-scope facilitates a transaction between a UK regard, a view that is certainly held at business models of >£500 million will individual renting out his French home US and OECD level. A harsh critic might fall within scope, and the first £25 to a Zambian renter). Tracking and go so far as to call it a crude attempt at million of relevant UK revenues will calculating the DST will necessarily involve taxing a small number of US technology always be exempt new technology solutions and greater companies without due consideration of zz Safe harbours will be in place so that information needed regarding users and the global tax system and the need for loss making businesses do not suffer their location. The privacy impact of this international cooperation. DST and low profit margin businesses additional tracking and data storage will We can hope that a useful will be charged at a reduced rate need to be considered. consultation period can mean that zz DST is intended to be temporary, until challenges regarding business models international consensus is reached; 3. Enforcing collection of the tax due and revenue streams that should be in or and there is a commitment to review DST is extra-territorial, meaning it can out of scope can be well defined and that its necessity in 2025 apply in the absence of any UK taxable due thought can be given to tax collection presence. While many multinationals and logistics. We know now that UK DST The challenges of DST impacted will also have UK group is coming (with or without international It is good news that the UK will now companies and therefore be both more agreement) and only time will tell launch a detailed consultation process informed about their obligations and whether it takes helpful steps toward prior to implementation of the rules or more easily targeted by HMRC, others tackling the challenges of the digital drafting the legislation. Before seeing may not. I will let the lawyers decide economy, or distorts the tax system in an that, there a number of challenges which whether there is credible basis for the uncooperative way.
18 December 2018 | www.taxadvisermagazine.com 30TH ANNIVERSARY OF HARROW AND NORTH LONDON BRANCH
The Harrow and North London Branch of the CIOT has organised a dinner at the House of Lords on Thursday 21 February 2019 to celebrate its 30th anniversary.
As the dinner is being held in the Peers’ Dining Room, spaces are limited and tickets are being allocated on a first paid basis. The ticket price includes a private tour of the Houses of Parliament.
For further details please contact Vanessa Drake on 020 8864 0649 or email [email protected]
S S
• The Members’ Support Service aims to help those with work-related personal problems
• An independent, sympatheti c fellow practi ti oner will listen in the strictest confi dence and give support
• The service is available to any member of the CIOT and ATT
• There is no charge for this service
To be put in touch with a member of the Support Service please telephone 0845 744 6611 and quote ‘Members’ Support Service’
www.taxadvisermagazine.com | December 2018 19 IR35
IR35 Putting your house in order Paul Mason considers the effect of the implementation of IR35 in the private sector
KEY POINTS zz What is the issue? Implementation of IR35 for the private sector has been delayed until April 2020. zz What does it mean to me? It provides a 12-month reprieve for medium and large businesses even if it provides an effective exemption for the
smallest 1.5 million businesses which © Getty images/iStockphoto/erhui1979 might engage temporary resources on an off-payroll basis will look like if it is a replica of the public body to take reasonable care in arriving at its zz What can I take away? sector changes, but also because the private decision, and that it must provide information There is now certainty over timing, but sector regime will create completely different about its rationale within a 31 day time period not necessarily the effects of the change. scenarios for all parties based purely on the if requested to do so by the agency it engages, business structure of the end client engager. it essentially created a situation where the R35 in the Private Sector: 15 months for Since April 2000, the Intermediaries public sector body took the decision for which everyone to put their house in order. legislation had made the individual trading another party would be liable if that decision I ‘Off-payroll working in the private through his/her own Personal Service was wrong. sector’: the Sword of Damocles, which has Company (PSC) the IR35 decision-maker, but An agency is unlikely to quibble with a been hanging over the heads of contractors, HMRC has identified that there is a compliance ‘caught by IR35’ decision, which results in agencies and end clients, ever since April 2017, problem – in the May 2018 consultation, the PSC being paid net of tax and NICs. Yet, when HMRC introduced changes to off payroll HMRC argued that only 10% of all contractors agencies wishing to avoid any liability would working in the public sector. The issue was who should be treating their engagements certainly be more likely to challenge the never ‘if’ the changes would be incorporated as caught were doing so. HMRC believes decision to pay gross. Essentially, agencies have into the private sector; the debate raged that number should be closer to a third of all become fee-payer and quasi decision-maker about ‘when’. engagements. This prompted the Government because they can decide to pay the PSC net; There will have been a collective sigh to act in an attempt to put its own house in effectively overturning the engager’s decision. of relief within the recruitment chain that order and transfer the IR35 decision-making This situation would not change in the private implementation has been delayed until April responsibility from the PSC to the public sector sector after April 2020 onwards. 2020: contractors were preparing for their body engager. The blanket ‘caught’ decisions of many post-tax earnings to be slashed; agencies and The new public sector legislation found at public sector bodies will have meant that there end clients wondering how to enforce the ITEPA 2003, Part 2 Chapter 10 also introduced were few decisions for agencies to contest and legislation. But it merely provides a 12-month the concept of the ‘fee-payer’ – the entity we feel sure contributed to HMRC being able to reprieve for medium and large businesses which pays the PSC. An engagement directly claim in the Budget Brief issued on 29 October, even if it provides an effective exemption between PSC and public sector body would that the changes had raised £500 million for for the smallest 1.5 million businesses which make that body liable for any incorrect status the Exchequer. might engage temporary resources on an decisions. But where there are agencies in the Yet, the real sting in the tail for those off-payroll basis. And almost two months after chain, the agency immediately above the PSC operating through PSCs in the public sector the Chancellor’s Autumn Budget Statement, in the contractual chain becomes the fee-payer was the removal of the 5% allowable engagers, agencies and contractors should be and therefore responsible for the tax liability of deduction from the PSC’s income for general planning for April 2020 for a variety of reasons, an incorrect status decision. Whilst there are expenses incurred in the running of the PSC’s partly because we know what the legislation provisos within the legislation for the public business. Contractors soon realised that if
20 December 2018 | www.taxadvisermagazine.com IR35
all engagements were going to be treated PROFILE as caught, then all of the income would be accounted for as either tax/NICs or net pay; Name Paul Mason i.e. nothing to set running costs against. Position National Account Manager As a result, many contractors closed their Company Abbey Tax companies and became umbrella employees Email [email protected] Tel or left for the private sector. Although 01788 702772 Profile Paul joined Abbey Tax in 1997 and works within Abbey Tax’s strenuously denied in the Consultation, there Contractor Solutions division, having previously worked in general is sufficient anecdotal evidence to suggest that practice before moving into the insurance and consultancy arena. He has been involved contractors leaving the public sector had a with IR35 since 2001, initially on the insurance side before providing advice on the negative effect on many public sector projects. subject to contractors. A regular speaker on IR35, Paul also works closely with Abbey Tax’s Consequently, many commentators investigations specialists to ensure freelancers get the best defence in an IR35 enquiry. argued that if the public sector rules were brought into the private sector, the cost to business in terms of administration importantly, HMRC appear to be offering a that there is a balance to be struck between and increased temporary resource costs commitment to publish further guidance reviewing hundreds of engagements each year coinciding with anticipated negative impacts to help understanding, and also set out and/or simply determining that those below of Brexit would have a debilitating effect on ‘what people should do when they do not a particular level are caught? And will the the economy. agree with the business’ decision on their Government really challenge such an approach It seems the Government has listened to employment status’. when there is a tax advantage to the exchequer the concerns of the Consultation respondents Will the government enforce this through for not doing so? and delayed implementation until April 2020. legislation to provide a statutory right of Agencies will take centre stage: fee-payers The Summary of Responses issued on Budget appeal to PSCs? If so, this seems to be and also decision-makers. Caught between end Day noted that ‘in recognition of the need for counter-productive, as HMRC will be forced clients wanting them to produce solutions to organisations to set up systems to comply with to determine IR35 when it acknowledges that retain the best contractors and the pressure the reform and review existing contracts’. enquiry and enforcement activity focused from PSCs desperate for engagements to be It continued that ‘for services provided on individual PSCs is both costly and drawn deemed ‘not caught’, offering processes that to small businesses, the responsibility for out and that compliance activity alone demonstrate due diligence – possibly backed by determining employment status and paying cannot solve the problem. Therefore, why insurance – will become attractive propositions the appropriate tax and NICs will remain would HMRC want to offer a statutory right to end clients who want no interruption to with PSCs. Small businesses will not need to to appeal? their supply of temporary resource, nor the consider the employment status or deduct HMRC also addressed criticism of its repercussions of incorrect status decisions. employment taxes from the fees of people Check of Employment Status for Tax (CEST) And PSCs? The private sector changes they engage in this way.’ Tool. The Summary of Responses noted that: offer two contrasting scenarios. When working The government intends to use similar ‘HMRC is looking at where the CEST tool, for medium and large engagers, they could criteria to define small businesses as is found along with wider guidance might be improved’ be at the mercy of decisions taken above in the Companies Act 2006. The use of the and acknowledges the requirement from them. But won’t those decision-makers look word ‘similar’ is noted and we await further respondents that the tool must say more more favourably if the PSC can evidence clarification on this point. However, the about mutuality of obligation (but doesn’t the engagement is not caught based on an Companies Act 2006 defines a small business commit to doing so). independent assessment? as one which can satisfy two of the following Can the CEST tool be ‘improved’? And And won’t such an assessment be even during the year: what might the new guidance look like? more relevant for an engagement with the (i) Turnover of not more than £10.2 million Although any effort made to align the CEST 95% of businesses which the Government (ii) Balance sheet total of not more than tool more closely with case law would state will be unaffected by the change? If a PSC £5.2 million be welcomed. wants to have a fighting chance to argue an (iii) Has not more than 50 employees (but Returning to the Budget Brief, contractors engagement is not caught, then what better would one need to include temporary may be comforted that the reform will not be way to do so than a contract review? Even if employees/contractors in this number?) retrospective: ‘HMRC will focus its efforts on HMRC can successfully challenge that decision, ensuring businesses comply with the reform the PSC has undertaken sensible due diligence The section concludes: ‘As a result, over rather than focus on historic cases’. Moreover, and at the very worst should avoid a penalty if 95% of businesses will not need to apply the ‘HMRC will not carry out targeted campaigns deemed caught by IR35. reform’ and the decision and payment will into previous years when individuals start Yes, all parties have just over 15 months remain with the PSCs. paying employment taxes under IR35 for the to get their house in order, but there is The Consultation response acknowledges first time following the reform and businesses’ still one nagging doubt about the changes. an awareness of concerns that businesses decisions about whether their workers are HMRC has been very clear that it is only fair might use blanket decisions for the within the rules will not automatically trigger that two individuals working in the same employment status of groups of workers in an enquiry into earlier years.’ way pay broadly the same income tax and similar roles without recourse, should those The Brief concluded that there would NICs, even if one of them works through decisions be incorrect. ‘The government be ‘further consultation on the detailed a company. intends to further explore options for the operation of the reform to be published in However, the ‘exemption’ for the 1.5 consequences of businesses failing to use the coming months’, which would ‘inform the million smallest companies doesn’t seem to reasonable care in making their decisions’. Draft Finance Bill legislation expected to be meet that objective and seems to create to This statement is interesting for two published in Summer 2019’. a two-tier system which is inherently unfair reasons: firstly, the Government has yet to So, we have certainty over timing, but not and has the potential for continued non- equate blanket decisions within the public necessarily the effects of the change. compliance. It makes me wonder if HMRC sector as being a failure to take reasonable How will medium and large businesses can allow this exemption to continue in the care in making status decisions. But more make their decisions? Will they take a view long term. www.taxadvisermagazine.com | December 2018 21 SCOTTISH TAXES
SCOTTISH TAXES
KEY POINTS zz What is the issue? The Scottish government has used its new tax powers to make various changes, including setting five rates of income tax for 2018/19, the collection of Scottish income tax (SIT), and made changes to Land and Buildings Transaction Tax. zz What does it mean to me? The Professional Bodies (CIOT, ICAS, LSS) have called for an annual process to be put in place and it is encouraging to note that included in the Scottish Government’s legislative programme for 2018/19 is a pledge to reform the way in which devolved tax decisions are planned, managed and implemented. zz What can I take away? The tax powers in Scotland Acts 2012 and 2016 have now, broadly, been implemented. For the future, one can Ongoing expect ongoing change as the Scottish Parliament begins to fully utilise and fine tune its powers.
his time last year there was much anticipation: what would the Scottish change TGovernment do with the new powers that gave it full control over the income tax rates and bands for non-savings, Charlotte Barbour provides an non-dividend (NSND) income? In an innovative and helpful measure before the update on recent developments Budget, the Scottish Government issued in Scottish taxation ‘The Role of Income Tax in Scotland’s Budget’ (tinyurl.com/y8knpw5a, published November 2017) to encourage public taxpayers by HMRC. Of interest over the particularly in relation to withholding debate and inform their decision making. last year has been the forecasting of SIT tax, or giving tax relief at source. The Since then, five rates of income tax have versus actual receipts, and some fine Scottish basic rate now applies to a band been set for 2018/19 and Scottish income detail around who is a Scottish taxpayer. of income between £13,850 and £24,000 tax (SIT) has been collected from Scottish There has been considerable change to whilst new rates of 19% and 21% were Land and Buildings Transaction Tax (LBTT) introduced below and above this. This has BOX 1: SCOTTISH TAXES bringing into sharper focus the need for a led to issues around giving tax relief at the – DIFFERENT TYPES OF proper process for changes to devolved tax correct rate, affecting pensions tax relief DEVOLUTION legislation, Air Departure Tax (ADT) is on in the main, but also with other anomalies hold, and there have been some decisions or complications arising on items such as Fully devolved zz Land and Buildings Transaction Tax from the Scottish First-tier Tribunal Tax Gift Aid tax relief, tax relief for landlords zz Scottish Landfill Tax Chamber which provide helpful direction. on residential property finance costs, zz Air Departure Tax – on hold The Scottish Budget is to be on the 12 deficiencies relief, and the basic earnings December. assessment for childcare. HMRC had i.e. small transactional based taxes – previously prepared three technical locus in Scotland Scottish income tax notes (tinyurl.com/j9rq5e3, tinyurl.com/ SIT was implemented on 6 April 2017 pj4zbwp, and tinyurl.com/nqfu2s2) and Partially devolved (replacing the Scottish Rate of Income further guidance was issued for pension zz Income tax – but still a UK tax Tax which had been in place for one year) arrangements operating on a relief at {{Scottish Rate of Income tax – and its profile has been raised as the source basis in February 2018 (tinyurl.com/ single rate only in 2016/17 differentials between north and south y8xcx2zf). The fundamental problems are {{Scottish income tax – full control of the border have increased across not fully resolved however, and the issues of rates and thresholds for thresholds and rates, and from one year to may re-emerge if rates diverge further. NSND income 2017/18 onwards another. The direction of travel with five Differentials in the higher rate threshold {{Scottish taxpayer bands and a more progressive charging for Scottish taxpayers compared to the rest structure was set last year. (See box 2.) of the UK continue to disadvantage some Assigned SIT does not sit in isolation – and Scottish taxpayers’ in relation to claims for zz A proportion of ‘Scottish’ VAT bringing in five income tax bands makes its Marriage Allowance. Whilst amendments receipts interaction with other parts of the income to UK legislation were made last year to tax system an administrative nuisance, enable any Scottish taxpayer on starter,
22 December 2018 | www.taxadvisermagazine.com www.taxadvisermagazine.com taxation resource, withtheappointment its financefunction to include adedicated The Scottish Government isreorganising Structural changes continue to take place. The fiscalapparatus was made in July2018. 2018/892 (tinyurl.com/yap72omy), which (Commencement No. 2)Order 2018, SI 6 April2019underThe Wales Act2014 2006. They willcome into effect from 1998 andthe Government ofWales Act 11 asamendments to theScotland Act are contained inthe Wales Act2014s have been hard to spotbecause they 6 April2019onwards. Thechanges may the definition ofaWelsh taxpayer, from to subtly alter, inorder to interact with the combined marginal rate is50%. rate of53%; onself-employed earnings £46,350 suffering acombined marginal two higher rate thresholds of£43,430 and employees withearnings between the lead to those Scottish taxpayers whoare and national insurance in2018/19also interaction ofthresholds for income tax for Scottish taxpaying couples. The the allowance remains more restricted basic orintermediate rates to beeligible, The definition ofaScottish taxpayer is December 2018 |December
© Getty Images/iStockphoto/DenisTangneyJr included: been several changes to it.Thesehave commencement inApril2015there have (LBTT) hasbeennotable inthat since its Land andBuildingsTransaction Tax Devolved taxes on Scottish taxes (tinyurl.com/ycsbrm3k report (supplemented by atechnical note for 2016/17by HMRC intheirannual with the publication oftheoutturnfigures and collection, oftheamounts ofSITarose Further questions around the forecasting, compared to theFebruary 2018forecast. revenues forecast to belower by £209m document proved controversial withSIT in May 2018(tinyurl.com/ybls73ba). This body, issueditssecond economic forecast Scottish Fiscal Commission, a statutory 2018 –2021(tinyurl.com/y7mppfr2). The Scotland issued itsnew corporate planfor operational phase. InMay 2018 Revenue established andmove from start upto an developments asthefiscal bodies become welcome development. of apost ofDirector ofTaxation; thisisa Digital Economy, andtheestablishment of aMinister for PublicFinance andthe zz zz zz of Lords. Charlotte is the author of with tax issuesandhasrepresented ICASat boththeScottish Parliament andtheHouse PROFILE There are otherinstitutional around group relief, whichhasbeen Removal ofanomalies–for example effect on30 June2018. 2018 Time Buyer Relief) (Scotland) Order and BuildingsTransaction Tax (First- introduced by SSI2018/221 A new relief –first-time buyer relief, 2018 . Additional Amount) (Scotland) Act Buildings Transaction Tax (Relief from legislation,primary withLand and made retrospective, whichrequires Order 2017andthe amendment then Main Residence Relief) (Scotland) (Additional Amount-Second Homes Land andBuildingsTransaction Tax 2017/233) on30June 2017The Scottish Statutory Instrument (SSI (Scotland) Act2016; amended by a Transaction Tax (Amendment) legislation LandandBuildings from 1April2016by way ofprimary dwelling supplement, introduced A new charge to tax –additional
(‘The Order’) whichcame into Order’) (‘The and supportstheTax Board. Shehasextensive experience indealing has worked for many years inarange ofpolicyandregulatory roles, Profile Charlotte Barbourisdirector of taxation forICAS,where she 0131 347 0235 Tel cbarbour@icas Email Company ICAS Taxation of Director Position Name Charlotte Barbour Charlotte
The
Land The Management ofTaxesScotland in (Bloomsbury).
)). UK Governments agreed that itwould not EU law. InJune2018 the Scottish and European Commissionin compliance with notification to andassessment by the the exemption to the new ADT requires from APDsince2001, buttransfer of haveHighlands andIslands been exempt on flights from airportsin theScottish due to state aidrules.Passengers carried 2018. Thedelay inimplementation is Air Passenger Duty(APD)from April and was designed to replace the UK levy received Royal Assent on25July2017 Air Departure Tax (Scotland) Act2017 hold’. The legislation isinplace–the Air Departure Tax (ADT) iscurrently ‘on Departure TaxAir y8g5jawy page 61). managed andimplemented (tinyurl.com/ devolved tax decisionsare planned, a pledge to reform theway inwhich legislative programme for 2018/19is included inthe Scottish Government’s place anditisencouraging to note that called for anannualprocess to beputin Professional Bodies (CIOT, ICAS, LSS)have the income tax rates andbands.The for aScottish rate resolution setting there isonlyalimited annualprocedure considering suchamendments. Sofar, regular process for bringingforward and introduced to LBTT isthat there isno A majorconcern around the changes Process non savings andnondividends. ofScottishsummary rates andbandson and nondevolved taxes, andbox 2for a yearly return required. is effect from April2018because athree commercial leasescomes into practical the originalLBTT legislation regarding need to bemindfulthat aprovision in Government consultation. Advisers also recently beenthe subjectofaScottish provide seeding relief, whichhas changes inthepipeline, suchasto See box 1for ofdevolved asummary There remain furtherpotential Technical Update (tinyurl.com/yclj4jhv) addressed inthe most recent LBTT SCOTTISH TAXES SCOTTISH 23 SCOTTISH TAXES
be possible to introduce ADT in April 2019 – BOX 2: 2018/19 SCOTTISH RATES AND BANDS ON NON SAVINGS, instead, APD at the UK rates and bands, with NON DIVIDEND (NSND) INCOME the Highlands and Islands exemption, will continue to apply in Scotland until further notice.
Devolved tax tribunal decisions From 24 April 2017 the First-tier Tax Tribunal for Scotland was abolished and its functions and members transferred to a Tax Chamber within the newly-established First-tier Tribunal for Scotland. There have been seven first-tier decisions published since then; five regarding LBTT and two SLfT of which four were about Penalties, one on procedure, and two on Additional Dwelling Supplement. The key points of broader interest in these are first, the need to follow due process in the Revenue Scotland and Tax Powers Act 2014 (RSTPA) and, second, that UK case law may be relevant. As noted in Straid Farms Ltd [2017] FTSTC 2, paragraph 30, ‘…the Explanatory Notes to RSTPA state: “The effect of [the assignment of a proportion of Scottish VAT liabilities in Scotland using a regional legislation] is that the jurisprudence VAT; this is expected to be in place from version of HMRC’s VAT Theoretical Tax concerning the proper bounds of the tax April 2019. In essence, VAT assignment is a Liability (VTTL) model. authority’s role is imported into the devolved funding mechanism, designed to introduce tax system. This jurisprudence includes not a further link between funding and the Never a dull moment… only case law from the UK jurisdictions but performance of the Scottish economy, The tax powers in Scotland Acts 2012 and other English-speaking jurisdictions.”’ although at the time of writing the precise 2016 have now, broadly, been implemented. mechanics have yet to be announced. The For the future, one can expect ongoing VAT assignment Scottish Government is working with HMRC change as the Scottish Parliament begins to The Scotland Act 2016 provided for the and HM Treasury to produce a model of fully utilise and fine tune its powers.
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BRIDGE THE GAP Seasonal work spells tax confusion Julie Cameron looks at how people on low incomes can face real tax problems from modern working arrangements
© Getty Images/iStockphoto/evgenyatamanenko
was recently musing about the terms PROFILE under which Santa’s elves might work. For those who make toys, care Name: Julie Cameron MA, CTA, ATT (Fellow) I Position: Independent tax practitioner for the reindeer or maintain Santa’s Email: [email protected] bulging tummy, there must be a steady Profile: Julie is an independent practitioner specialising in private year round contract. Then, as the festive client tax, compliance and administration. She is also a volunteer for season approaches, Kris Kringle probably Bridge the Gap, a member of the CIOT and a Fellow of the ATT. has need of additional workers to gear up to Christmas Eve, his busiest night of the year, finishing presents, packing universal enough to extend to their existence, with little financial security. And sacks and checking the sleigh is in tip-top magical world? that is not even to start to consider tax condition for the ultimate long-haul Back in the UK of 2018, we are told status implications and workers’ rights. flight. So perhaps Santa Claus Ltd offers that for some, zero-hour contracts zero-hour and short term seasonal offer a better way to manage home Holly in the woods contracts. I wonder, then, what those and work responsibilities, but for all Holly was a typical zero-hours worker. In elves do for the rest of the year – are they workers, whatever their occupation a recent tax year, she’d had six short term laid off on Christmas Day, or at the end of and wherever they live, such contracts obtained through agencies, the 12 days; and is the tax credit system arrangements represent a precarious but also claimed tax credits to ensure a
26 December 2018 | www.taxadvisermagazine.com BRIDGE THE GAP
reasonable standard of living. Her tax problems started when HMRC issued a P800 tax calculation showing she owed This Christmas, join our many £2,036. This unfortunately coincided with correspondence from a different supporters in the tax profession part of HMRC advising that her tax credit payments would be stopped and, as she had been overpaid credits, she would need to repay £5,252 of tax credits to HMRC. Holly was facing £7,000 of debt due to HMRC, which she couldn’t afford to pay, exacerbated by the drop in income following the withdrawal of her tax credits. She contacted HMRC who Donate now and help deliver this vital service. advised her that the P800 agreed to the RTI returns made by the employers. We need: They (HMRC) passed the responsibility to Holly to query the amounts with zz 1,000 supporters to give £100 a year (that’s just £8.50 a month) those employers, none of whom she zz and 100 supporters to give £1,000 a year still worked for. In desperation Holly got in touch with TaxAid. The charity worked Will you become one of the 1,000 (or one of the 100) through each listed employer and and join our many supporters in the tax profession? identified two errors: one involved employer error, the other being an incorrect brought forward figure from Donate at www.bridge-the-gap.org.uk/donate.aspx one employment to the next. It would have been apparent that the latter was Or donate by standing order using the form at incorrect, as it did not agree to previous http://www.bridge-the-gap.org.uk/Content/Standing_Order_16.pdf employment totals, but there was no mechanism to correct this obvious error on the RTI information. It was this overstatement which had given rise maze of tax law and practice and the responded. to the withdrawal of tax credits and ways of HMRC. Workers often rely on the TaxAid established that a self- HMRC’s claim for repayment of credits engager to get the tax right and Holly was assessment record had been set already awarded. at least fortunate that PAYE had been up from the notification of self- TaxAid contacted the employer in an deducted and paid over. Many on this employment Clara had made in attempt to get them to amend the RTI type of contract are told that they are 2013. Tax returns had been issued submissions. The employer confirmed self-employed and must sort out their for three years to 2015/16 and late the income level and HMRC accepted own tax. Like Clara, who was engaged filing penalties charged for all years. this for tax credit purposes. On the as a ‘self-employed’ call centre worker Following intervention from TaxAid, income tax side, the P800 assessment in 2013. As a layperson, Clara believed HMRC found Clara’s letter about her was left unpaid and a tax return issued. what she was told and registered as self- former employer and agreed to cancel TaxAid completed this for Holly using employed with HMRC. Initially, she and the tax returns and the late filing information she supplied which resulted her co-workers had £5 a week deducted penalties. in self assessment of the correct income from their ‘pay’ allegedly to engage an Without TaxAid, Holly’s festive for the year. This cleared the PAYE debt, accountant, but in reality the company table would have looked lean and but the tax return was at risk of an was pocketing this sum. It was only when Clara might have had less presents enquiry because it was contrary to the the company went bust that the workers under the tree. TaxAid and its sister information on RTI – Holly was not yet approached ACAS for advice and learned charity Tax Help for Older People are out of the woods, but TaxAid was there that they should have been treated as there to assist those caught up in tax to help. employees and suffered tax under PAYE. situations beyond their experience and The charity provided Holly with At this point, in December 2015, understanding – and when they can’t specific instructions to pass to the Clara contacted TaxAid. The charity afford to pay for essential professional employer in another attempt to amend suggested the former workers should advice. Sadly, Santa’s elves are beyond the RTI return. Eventually, 11 months write collectively to HMRC, explain the the charities’ remit. Let’s hope the after Holly had first contacted TaxAid, situation, asking HMRC to investigate season of goodwill is extended all year the employer finally corrected the and advise them what they needed round under a special Santa Clause. RTI record, thus removing the risk of to do. Clara eventually found work enquiry into Holly’s tax return. Holly elsewhere, thinking that matters had Advice changes lives was overjoyed at this result. been resolved, but 15 months later, Throughout the year, TaxAid and Tax in March 2017, she got in touch again. Help for Older People provide essential Clara’s nightmare HMRC were chasing her for £3,000 tax advice to vulnerable people like Holly’s situation is typical of the self-assessment late filing penalties Holly and Clara – people who urgently difficulties of the ‘lone taxpayer’, trying and, although she had written to them need professional help but can’t afford to steer a way through an impenetrable to try and sort it out, HMRC had not to pay for it. www.taxadvisermagazine.com | December 2018 27 DOMICILE
DOMICILE
Domicile: a difficult question he law of domicile is not tax law at all – but as most practitioners will Tbe aware, an individual’s domicile can have wide-ranging consequences for their tax position. Recent changes have brought these issues into sharper relief. Regular Many individuals will not have reviewed their domicile position for some time and may not see the need to do so. But why is it important? What is domicile? review Domicile is a concept of private international law. The UK legal position Andrew Titchener provides an overview is summarised in Conflict of Laws, 15th edition (Dicey, Morris & Collins). As of the practical issues faced by high evidenced by its appearance in a book about the conflict of laws, it is a concept net worth individuals, families and designed to assist in deciding when the entrepreneurs regarding domicile courts of a particular jurisdiction have the right to hear an action. Whilst the effects of domicile may vary across different areas of law, the basic concepts for deciding domicile remain the same. KEY POINTS To draw on Dicey again briefly, there zz are three types of domicile: What is the issue? The law of domicile is subject to much 1. Domicile of origin; inherited from uncertainty. one’s father (or if born outside of zz What does it mean to me? marriage, one’s mother) at birth. A domicile of choice may be acquired 2. Domicile of dependence; taken more easily than previously thought. from father or mother (depending zz What can I take away? on the circumstances), until one Individuals should keep their status reaches the age of 16. The domicile under regular review. of dependence changes with the father’s/mother’s domicile during this period. 3. Domicile of choice; where one (at whether a new domicile of choice arrival in the chosen country – it could age 16 or over) has freely chosen has been acquired or not. Thus, if be formed later. The duration of actual to settle in a new jurisdiction the intention to leave one’s current residence (other than as evidence of permanently or indefinitely jurisdiction is vague, for example if a intention) is not considered generally contingency exists whereby the individual important – it could be one day (assuming It has been widely considered that will leave (say) the UK and there is an intention to reside rather than just a domicile of origin is difficult to ‘shake sufficient doubt that such a contingency travel through) or 100 years. off’ and indeed, it is the default domicile will arise (e.g. ‘when I win the lottery’), In a globalised world, people have when 2 or 3 do not apply. As we will see this will lend credence to the idea that family, friends and finances spread below, however, acquiring a domicile of a domicile of choice in the residence widely geographically and, very likely, the choice in the UK for those whose domicile jurisdiction has in fact been acquired – locations of these will have changed over of origin is overseas is not perhaps as because there is not a sufficiently realistic time. Many people to whom domicile difficult as practitioners may expect. Note scenario in which the individual will leave matters will be internationally mobile, that in this article, ‘UK’ means a domicile the country. perhaps having work or other interests in in any one of the constituent countries Note however, the burden of proof many countries and perhaps with homes of the UK. is on the person asserting the change in more than one country. Thus, intention The case law touching upon domicile (Winans v Attorney-General [1904] becomes difficult to assess – ‘cogent and of choice is substantial, and this is not the A.C. 287) and the standard of proof is clear evidence’ is required (U v J [2017] place for a full literature review. However the usual civil standard of ‘balance of EWHC 449 (Fam)), which may not always it should be noted that many of the probabilities’. be available, given the timescales on core principles deriving from the most which these matters often operate. oft-cited cases draw towards the same Practical issues with this definition HMRC may, of course, challenge an conclusion – as again summarised neatly Thus, to acquire a domicile of choice, individual’s domicile, on the basis that in Dicey (Rule 10): ‘Every independent one must both actually reside in the they have acquired a UK domicile of person can acquire a domicile of choice chosen country at some point in time and choice. How does one approach this? by the combination of residence and must intend to reside there permanently The law in this area is very fact-sensitive, intention of permanent or indefinite or for an unlimited time (temporary due to the subjectivity of intention as residence, but not otherwise.’ breaks of actual residence do not count regards permanent residence. A brief Any confusion surrounding the against this). Note that the intention of review of some of the cases in this permanence of this intention will affect permanent residence need not exist on area shows that the courts will look at
28 December 2018 | www.taxadvisermagazine.com DOMICILE
PROFILE Name Andrew Titchener Position Manager Company Grant Thornton Email [email protected] Tel 0121 232 5308 Profile Andrew works closely with wealthy families, entrepreneurs and their businesses, providing advice across family generations and a variety of business sectors. Andrew enjoys forming close working relationships with his clients and their other advisers, to deliver bespoke and practical advice in the full context of a client’s circumstances.
permanently. HMRC (or, say, a party to if they have a significant life event, but a family case) will often wish to assert also more generally to sense-check their that a domicile of choice in the UK has position, keep their records up-to-date been acquired (ignoring for the moment and take account of any development of the specific statutory rules on deemed- the case law. Additionally, specifically for domicile for tax purposes). Because it is tax, the statutory ‘deemed-domicile’ rules HMRC asserting a change of domicile, the must always be considered, although of burden of proof is on HMRC. However, course this is a much clearer test. the quality of the individual’s evidence Many readers will be aware that only remains vital – it may still be viewed with non-domiciled individuals can claim the scepticism, even ‘caution’ if it is unclear, remittance basis of taxation. In 2017, and/or they have a vested interest in rules were introduced such that many asserting no change (e.g. Holliday v Musa individuals who are non-domiciled [2010] EWCA Civ 335). Of course in practice under general law, may now be deemed- this is a problematic area – unless clients domiciled for UK tax purposes. Allied to have been meticulous record keepers this change are the twin opportunities for a long time, they may not have all of ‘cleansing mixed funds’ (until 5 April the evidence to hand, or recollections 2019) and rebasing offshore chargeable may be vague. assets for capital gains tax purposes to Finally, it bears recalling that intentions 5 April 2017 market values. Given the form and change over time; all of these impact of becoming deemed-domiciled considerations will be constantly changing will mean a loss of the remittance
© Getty images/iStockphoto/MajaMitrovic © Getty for most people as they grow older, their basis and worldwide income and gains children grow up, their business interests becoming subject to tax; this is important family ties, finances, location of friends, change etc. Perhaps they previously had to consider. career choices, quality of residence (e.g. strong evidence of an intention to move Further, as noted in the article was it just a ‘holiday’?), location and (say) back to their domicile of origin, but ‘HMRC gets more time’ by Helen Adams ownership of houses, length of residence, in fact this intention has become more and Dawn Register (Tax Adviser, October acquisition of citizenship in the new remote as the years have gone by. A vague 2018), the time limits for assessment country, languages spoken, places where or doubtful contingency to leave the for issues involving ‘offshore matters’ medical treatment was received and jurisdiction of residence may help to affirm and ‘offshore transfers’ are soon to even ‘warmth of feeling’ for the new the acquisition of a domicile of choice be extended to 12 years even where a country, amongst many other factors. there (e.g. Inland Revenue Commissioner v taxpayer took reasonable care – many This fact sensitivity is well illustrated by Bullock [1976] STC 409). previously non-domiciled individuals the numerous pages of facts recited in may have significant offshore assets. Gaines-Cooper v HMRC [2008] EWCA Civ Practicalities The tax and interest exposure resulting 1502; covering 67 years from 1937–2004. It is perhaps much easier than, prima from successful HMRC domicile enquiries This is all necessary to determine facie, it appears, to acquire a domicile of could be huge in many cases. whether the intention to permanently choice in the UK. Additionally, consider More generally, it is clear that HMRC reside in a country existed at all, and if it that a person’s intentions can (and are querying claims for non-domiciled did, or does, when did it come into being? probably will) vary over time, then the status in ever more detail and with more The timelines are crucial. The court must initially simple statement of the law of scepticism. look back at the ‘whole of the deceased’s domicile is suddenly exposed as being Our experience guiding clients life’ (or life so far in respect of the living) full of complexity. It should also be noted through these enquiries is that they (Agulian v Cyganik [2006] EWCA Civ 129), that recent case law (for example U v J require detailed evidence for, often, because ‘there is no act, no circumstance as above) has shown the UK courts more very personal aspects of the client’s in a man’s life, however trivial it may be willing to find that a UK domicile of choice lives. When these facts have to be in itself, which ought to be left out of has been acquired in circumstances that reconstructed from the person’s memory consideration’ (U v J [2017] EWHC 449 might surprise practitioners. Meticulous it is especially challenging. Combine this (Fam) citing Drevon v Drevon (1864) 34 record-keeping is vital but often with the nuances of the domicile law L.J. Ch 129). overlooked. and the turning tide in recently reported In short, everything an individual It therefore goes without saying that cases and it shows how vital it is that does and says can be evidence of their individuals should keep their domicile clients are discussing these issues in intention (or not), to reside in a country status under regular review, in particular advance with an expert. www.taxadvisermagazine.com | December 2018 29 RESEARCH & DEVELOPMENT
RESEARCH & DEVELOPMENT
KEY POINTS zzWhat is the issue? In practice, R&D claimants often find it difficult to understand how their relationships with third parties fit within the R&D tax regimes. Distinguishing between R&D services provided by Spot the diffe rence externally provided workers (‘EPWs’) and subcontracted R&D activities is particularly important for large company claimants making Research and Development Expenditure Credit (‘RDEC’) claims, where subcontracted R&D can only be claimed in limited circumstances. zzWhat does it mean for me? Understanding the distinction between the relevant qualifying cost categories will enable companies to consider the nature of their relationship with third party suppliers and other group companies, to ensure that these are appropriately documented and qualifying costs are included in the company’s R&D claim. Kathie Haunton and zzWhat can I take away? Sarah Goodman provide You will need to work out how to identify the fact pattern of arrangements, and guidance in determining the indicators HMRC might expect to see, so that a robust R&D claim is which supplier costs can be submitted and eligible costs correctly included in an R&D claim identified.
&D tax relief continues to provide BOX 1: POTENTIAL HALLMARKS POINTING TO QUALIFYING valuable cash incentives to UK EXPENDITURE ON EXTERNALLY PROVIDED WORKERS VERSUS Rbusinesses; over 240,000 R&D claims SUBCONTRACTOR PAYMENTS have been made since the R&D tax relief schemes were first introduced and £21.4 Indicators of Externally Provided Workers Indicators of Subcontract billion has been claimed in tax relief (HMRC The suppliers’ only responsibility is to The supplier is responsible for carrying Research and Development Tax Credit provide resources out specified services Statistics – September 2018 (http://tinyurl. Arrangements are for resource The supplier is responsible for how the com/gsvro67)). Although many areas of the augmentation work is performed R&D regime are now well understood, the nature of arrangements with third party Organograms show external resource The supplier is responsible for quality suppliers and other group companies can reporting directly to claimant company control procedures carried out often be difficult to determine. This means management independently that expenditure that could potentially External resource book time to internal The supplier bears the costs of any qualify can either be overlooked or non- timesheet systems rework/overruns qualifying costs incorrectly included in R&D Charges are for time incurred such as hour Warranties and sign-offs are given by the claims. See box 1. or day rates supplier when key deliverables are met We consider below the factors that help to determine whether arrangements Quality control in respect of the work There are milestone payment points with suppliers are likely to be EPW or performed by individuals is carried out by subcontract in nature, an important the claimant company concept for companies claiming relief No reports or sign-offs of deliverables are under the RDEC regime. Although costs provided by the supplier and there are no associated with the supply of EPWs can be milestone sign-offs or payments included in an RDEC claim, subcontracted R&D costs can only be claimed in a limited range of circumstances. Getting the new nexus regime. Here, arrangements Relevant definitions this distinction wrong can mean leaving that reflect an EPW relationship are The conditions for an individual to be an EPW money on the table if EPW costs are considered ‘good spend’ to the R&D are set out in the legislation at CTA 2009 s missed. If subcontract costs are incorrectly fraction. In contrast, expenditure on 1128 and, in essence, demonstrate that the claimed as EPWs, there is also the risk of subcontracted R&D to connected persons individual will operate as if they were staff of repayments and penalties. negatively impacts the R&D fraction the claimant company, but on a temporary The distinction is also relevant for and therefore the proportion of profits basis. A staff provider payment exists where companies claiming Patent Box relief under benefitting from the relief. the claimant company makes a payment to
30 December 2018 | www.taxadvisermagazine.com RESEARCH & DEVELOPMENT
PROFILE Name Kathie Haunton Position Director Company Deloitte Email [email protected] Tel 0161 455 8996 Spot the diffe rence Profile Kathie Haunton is a Director within the Global Investment and Innovation Incentives (Gi3) group at Deloitte.
Name Sarah Goodman Position Associate Director Company Deloitte Email [email protected] Tel 0113 292 1433 Profile Sarah Goodman is an Associate Director within the Global Investment and Innovation Incentives (Gi3) group at Deloitte.
in relation to the worker as indicative that of the working relationship in practice most conditions are met. Unfortunately, not and the fact pattern of the day-to-day all arrangements are as simple to evaluate arrangements. and the issues generally arise when In reviewing the RDEC filing position, considering the more subjective conditions conversations should take place with the (d and g) , particularly given there is no relevant technical staff to appropriately clear definition of ‘activities contracted out’ document what the legislation requires or of ‘subcontracted’ activities within the compared to the terms of the contract, R&D legislation and only limited guidance in how the services are actually delivered and CIRD84250. how the delivery of those services supports or overrules the conclusion drawn from Practicalities the contract. The types of questions and There are a range of situations where evidence HMRC may consider include:
© Getty Images/iStockphoto/Eoneren © Getty R&D claimants will engage with group zzwhere does day-to-day control for the companies or external suppliers and HMRC project reside and who has control a group company or an unconnected third will expect the claimant company to have over the resources used to deliver party, for the services of individuals. reviewed the contracts, invoices, group the project? A person is an externally provided recharges and specific fact patterns when zzis there flexibility for the claimant to worker in relation to the claimant company if determining whether to claim costs as EPW change the requirements of the project the following conditions are satisfied: or subcontract. as the development work progresses (a) he/she is an individual; The starting point is a review of the and what degree of autonomy is (b) he/she is not a director/employee of the contract with the supplier. In reviewing enjoyed by the persons engaged? claimant company; contracts for indications of a subcontract zzwho will bear the economic risk of (c) he/she personally provides or is under relationship, claimants should look for any irrecoverable additional project costs an obligation to personally provide definitive commentary on output based if services provided do not meet the services to the company; arrangements, a high degree of autonomy quality requirements? (d) he/she is subject to (or to the right of) enjoyed by the supplier in undertaking the zzwho owns the intellectual property the supervision, direction or control of work, strict division of responsibility and resulting from the R&D activities? the company as to the manner in which fixed milestones for payment and delivery. those services are provided; Conversely, for an EPW relationship, it is HMRC will expect evidence such as (e) his/her services are supplied to the more likely that the contract references completed timesheets, the daily allocation company by or through a staff provider specific numbers of staff and their associated of tasks and other examples of day-to- (whether or not he/she is a director or qualifications, the ability for the claimant day management such as working on first employee of the staff provider or of any to closely monitor and supervise work name terms, the ability to request a change other person); the individuals perform, and the risk of staff and the potential involvement in (f) the worker provides, or is under an and cost of any rework sitting with the performance reviews in order to accept obligation to provide, those services claimant company. costs as EPWs. The level of documentation personally to the company under the It is often the case, however, that the and support prepared should however be terms of a contract between the worker wording of the contract does not clearly or commensurate with the value to be derived and a person other than the company accurately reflect the reality of the working from the claim. (the ‘staff controller’); and arrangement. Many suppliers will have The distinction between EPW and (g) the provision of those services does not a template for their contracts or Master subcontract costs is not always relevant constitute the carrying on of activities Service Agreements, neither of which are for SMEs unless there is a requirement to contracted out by the company. likely to have been drafted with the R&D claim part of the costs under the RDEC, rules in mind. If the supplier is another but for those companies that expect to Most of the above requirements are group company, any contract or inter- move to large company claims in the near factual and relatively straightforward. In company agreement is likely to be even future, considering the way agreements fact, HMRC guidance (CIRD84100) take the more limited on detail. It is therefore also are structured may be important to their operation of ‘PAYE’ by the staff provider important to understand the actual nature later claims.
www.taxadvisermagazine.com | December 2018 31 ENTREPRENEURS’ RELIEF
ENTREPRENEURS’ RELIEF
KEY POINTS zz What is the issue? At its inception in 2008, ER was ‘introduced to incentivise and reward entrepreneurs who, with significant initiative and risk, play a key role in Breaking building and growing a business’. A difficulty, though, is that amongst the various requirements for obtaining ER, the company must be the individual’s ‘personal company’. zz What does it mean to me? A recent government consultation barriers highlighted that the loss of this Stephen Woodhouse examines the impact of FB relief on a dilution was a ‘perverse consequence’; actively discouraging 2019’s dilution protection for entrepreneurs’ relief entrepreneurs from seeking outside investment which would dilute their shareholding below the 5% threshold and jeopardise their coveted reduced rate of CGT. zz What can I take away? In so far as the loss of ER on dilution acts as a barrier to growth, the draft Finance Bill 2019 makes some headway towards remedying this outcome of the tax system.
ax free gains! Get your tax free gains!’ harked no tax policy ‘Tadviser in the history of tax policy advisers. Yet, for those seeking to make the most of government-backed tax advantages, the clamour to obtain and retain at least 5% of a company for Entrepreneurs’ Relief (ER) purposes has been relentless (or so it was until the government’s publication of the draft Finance Bill 2019).
Background At its inception in 2008, ER was ‘introduced to incentivise and reward entrepreneurs who, with significant initiative and risk, play a key role in building and growing a business’. In their bid to promote entrepreneurial exploits, the cost of ER Images/iStockphoto/ilbusca © Getty to the Exchequer is currently forecast to be in the region of £2.7 billion (http:// individual must be able to exercise at least Proposals tinyurl.com/yc6kpknh). Where applicable, 5% of the voting rights of the company As part of the government’s response it affords a reduced rate of CGT at 10% and hold at least 5% of the ordinary to the ‘Patient Capital Review’, the draft on qualifying disposals of business assets share capital of the company throughout Finance Bill 2019 posited a potential up to the lifetime limit of (currently) the period of one year ending with the remedy. For dilutions occurring on or £10 million, rather than 20% for higher date of the disposal. However, a recent after 6 April 2019 which result in an or additional rate taxpayers (excluding government consultation highlighted individual’s shareholding falling below the gains on residential property and carried that the loss of this relief on a dilution 5% threshold, an individual may effectively interest). This offers a potential total saving was a ‘perverse consequence’; actively ‘crystallise’ their gain up to that point. The (at a 20% tax rate) of £1 million per person. discouraging entrepreneurs from seeking individual must elect for their shareholding This is a substantial potential benefit for outside investment which would dilute to be treated as disposed of and reacquired entrepreneurs and obtaining the relief their shareholding below the 5% threshold immediately before the point of dilution is a main focus for the owners of many and jeopardise their coveted reduced rate (thus creating a chargeable gain to which fledgling businesses. of CGT. Further concerns were raised in ER may apply). A difficulty, though, is that amongst the consultation that entrepreneurs may A second election may be made by the the various requirements for obtaining seek an early exit to obtain ER in advance individual for that chargeable gain to be ER, the company must be the individual’s of a fundraising, rather than remaining treated as accruing to them on a subsequent ‘personal company’. In order to be an and contributing to the future growth and disposal of shares. This effectively prevents a individual’s ‘personal company’, the success of that business. ‘dry’ tax charge from arising on the notional
32 December 2018 | www.taxadvisermagazine.com ENTREPRENEURS’ RELIEF
disposal of the shares, with no proceeds of PROFILE sale to cover the tax. Name Stephen Woodhouse Initial structuring Position Partner From a structuring perspective, the Company Pett, Franklin & Co government’s proposals will not eradicate Tel 0121 348 7878 pressure to incorporate anti-dilution Email [email protected] Profile provisions into arrangements in an attempt Stephen has spent more than 30 years working in various large City firms qualifying across a range of tax matters. He to preserve an individual’s entitlement specialises in employee share schemes and related remuneration to a fixed percentage of a company after issues including share valuation. He has advised on domestic and international matters, the economic dilution resulting from a becoming an acknowledged expert on various employee benefit trusts. capital raising. Despite the potentially detrimental impact of these provisions on other shareholders and a company’s step without which a tax advantage could is difficult when determining the value propensity to raise funds in the future, this not be obtained, an obligation to disclose of shares a substantial time after the anti-dilution protection is still likely to be will be triggered. valuation applies, not to be influenced by significant for owners. If anti-dilution provisions are included subsequent events. The new legislation effectively caps in the original share structure, it seems that Third, HMRC and taxpayers may find ER where dilution happens to the value of this should not trigger disclosure under themselves with different interests for the company’s shares, ignoring minority Hallmark 9 as the dilution protection would different valuations. For instance, if EMI discounts, at the point of dilution. be incidental to the main commercial options were to be granted at the time of However, for a start-up business coming to purpose of issuing shares to reflect the fund raising leading to the dilution, maturity, substantial share value growth investment and the resulting ownership. the Company may wish to argue for a low often occurs at two points: This is more difficult, however, if valuation when granting options (albeit zz First, when external funding is shares are issued at a later date which with the benefit of minority discounts) obtained. This is when the issue with serve no purpose other than to provide but a high value for the purposes of dilution arises. Provided that HMRC dilution protection in order to preserve ER protection. This is likely to lead to accept that the value has accrued at entrepreneurs’ relief. In this circumstance, complexity with valuations and resulting the point when there is an agreement it seems that disclosure would be required risks for taxpayers and their advisers. to provide the funding but before the under the DOTAS rules. Further, once the dilution happens, so that the resulting Finance Bill legislation is in force, it would Additional issues valuation increase is captured within be difficult to argue that the tax advantage The draft provisions apply where shares are the protection of the legislation, this obtained is one intended by the legislation issued to an external investor wholly for cash should not be problematic. as the point of the shares would be to consideration. Although most investment zz Second, at the point of exit. In extend the availability and quantum of the transactions will involve the issue of shares practice, the valuation curve for relief beyond the point of dilution. in exchange for cash, the draft provisions will the company is likely to show a high not be available where alternative methods proportion of value growth arising Valuation of payment are adopted. after the funding (as the benefit of How will the value of a shareholder’s An individual seeking to defer their the additional funds is realised) and shareholding be determined on this chargeable gain under the second election culminating in a peak at the point of notional disposal? The draft legislation must also grapple with the question of sale or other exit. The new legislation requires the value to be apportioned whether ER will be available at the point will not protect that gain. on a pro rata basis, assuming that the of an actual disposal. Footing the bill for whole of the issued share capital of the a dry tax charge on a notional disposal For that reason, it would be prudent company is to be sold immediately before at the outset may be worth the risk to for the share rights for companies to the relevant share issue for consideration the individual when balanced against the include anti-dilution wording from equal to its market value at that time. prospect of ER being reduced or abolished inception rather than relying on the A number of issues arise with this. in the interim. Finance Bill protection. First, the need for a valuation contributes Finally, a simpler approach would be cost and complexity to this ER preservation to have the second election to defer their DOTAS mechanism. In particular, respondents to gain as the default. We suspect that few This is particularly pertinent when the the consultation noted that ‘the personal individuals will be clamouring to pay a dry impact of the Disclosure of Tax Avoidance cost of obtaining a valuation of their tax charge on a notional disposal when Schemes (DOTAS) regime is considered. shareholding may outweigh any benefit of they could defer it to a point where they Since their introduction in 2004, the securing the tax relief on the gain from the will have proceeds of sale to foot the bill. scope of DOTAS rules has broadened individual’. considerably and, following the Second, the influence of hindsight Conclusion introduction of Hallmark 9 in February could leave the valuation open to future Whether a company’s decision to seek 2016, they cover arrangements involving challenge in light of HMRC’s withdrawal external funding is dictated by an specified financial products including of post-transaction valuation checks in individual’s personal tax position remains shares. Where one of the main benefits 2016. While both HMRC and taxpayers to be seen but, in so far as the loss of ER of including shares is to give rise to a tax are prevented by case law from applying on dilution acts as a barrier to growth, advantage, and either the shares include hindsight to determining share values, the draft Finance Bill 2019 makes some a term which is unlikely to have been this has limitations. First, hindsight headway towards remedying this outcome included by the persons were it not for can be applied to assess the validity of of the tax system. In this respect, the the tax advantage, or the arrangements circumstances at the time of the valuation government should be praised for its involve at least one contrived or abnormal – e.g. company forecasts. Second, it pragmatic proposals. www.taxadvisermagazine.com | December 2018 33 VAT RETURN
VAT RETURN
KEY POINTS zz What is the issue? The first VAT return submitted by a business often includes a number of technical challenges, such as how An impressive much input tax can be claimed on pre-registration expenses and what VAT schemes should be adopted. An understanding of these issues is important in order to submit an accurate return to HMRC. start zz What does it mean to me? It can sometimes be a grey area whether an expense comes into Neil Warren gives practical tips about the category of goods or services, making sure the first VAT return where different time periods apply for pre-registration expenses. It is submitted by a business is accurate also important to be sure that an ‘intending trader’ has a genuine intention to make taxable supplies before input tax is claimed. zz What can I take away? The evolution of Making Tax Digital will hopefully mean that voluntary updates and supplementary data can eventually be submitted online to support the figures in the nine boxes of the return, hopefully speeding up the processing of repayment returns and avoiding an HMRC enquiry.
s a great fan of cricket, it is fair to say that most international players Adream of a successful debut when they first play for their country. A good start is important in any activity, including the submission of the first VAT return to HMRC by a newly registered business. In many cases, these returns will be for a repayment, which could attract interest from one of © Getty images/iStockphoto/OSTILL HMRC’s compliance teams. BOX 1: GETTING THE VAT REGISTRATION DATE RIGHT Tom and Jerry are both sole trader decorators working for private households ie Intending trader registrations customers who cannot claim input tax. They both purchased a new van on 1 June I know that some advisers are a bit 2015 for £20,000 plus VAT. Tom’s accountant registered him for VAT voluntarily on 1 apprehensive getting a VAT number for a June 2015 so that he could claim input tax on the van. Jerry’s accountant delayed the client when the first day of trading is a long registration date until he had exceeded the compulsory threshold of £85,000, which way off (a voluntary registration). It can be a was 1 June 2018. bit of a worry claiming input tax on expenses As long as he still owns his van on 1 June 2018, Jerry can claim input tax of connected with the intended business but £4,000 on his first VAT return. This is three years later than Tom’s claim (a cash flow then entering zeros in both the output tax disadvantage) but Jerry has benefitted from not paying output tax on his sales, an and outputs boxes. I often get asked whether important issue because his customers cannot claim input tax. there is a time limit before supplies must start – the answer being ‘no’ – although the intention to start trading at some point in the there was even a sniff of output tax. when a business has asked for a VAT future must always be clear. The challenge is to be able to provide number too early (on a voluntary basis) in To share a tale, I used to act for a family to HMRC (if requested) a bundle of order to claim input tax on its stock and in Devon and the partners purchased the documents that clearly show an intention assets. But the same input tax would still freehold of a run-down old pub that was to trade and make taxable supplies – be claimable in most cases if the business in a total state of disrepair: ‘We can even business plans, cash flow forecasts, orders delayed its registration date and used the see the stars through the holes in the roof with potential customers, supplier details, opportunity to claim input tax on pre- when we’re in bed,’ the wife proudly told adverts to recruit staff, rental agreements registration expenses. Seebox 1. me. They spent 15 months repairing and with landlords etc. The basic rules for claiming pre- improving the property before the doors registration input tax depend on whether opened for business, which meant five Pre-registration input tax goods or services are involved: quarters of repayment VAT returns were The timing of the VAT registration date zz Goods – which have been purchased submitted (all repaid by HMRC) before is very important. I have seen situations within the four-year period before the
34 December 2018 | www.taxadvisermagazine.com VAT RETURN
PROFILE Name Neil Warren Position Independent VAT consultant Company Warren Accounting Services Ltd Profile Neil Warren is an independent VAT author and consultant, and is a past winner of the Taxation Awards Tax Writer of the Year. Neil worked at HMRC for 13 years until 1997.
ago when HMRC discretely amended their credit for input tax, meaning that many users guidance and stated that an input tax claim have either left the scheme or deregistered on capital goods, such as Jerry’s van, had in the case of voluntary registrations. But as to adjust for wear and tear i.e. an input a reminder, any business can join if it expects tax claim would be based on the market its taxable sales to be less than £150,000 value of the goods at the time of VAT excluding VAT in the next 12 months, registration and not the original cost price. and there is a 1% discount on the chosen The good news is that HMRC U-turned on category for the first 12 months of VAT this approach, and we are now back to cost registration. price – definitely good news for Jerry. (see Revenue and Customs Brief 16(2016) – 4 Partial exemption? November 2016). There are definite benefits in clients asking their adviser to review the first VAT return Goods vs services before the submit button is pressed. It is BOX 2: CAR MECHANIC - The six-month time window for claiming important to extend this check beyond the pre-registration input tax on services is much basic figures and also review the client’s SERVICES CONSUMED BEFORE less than for goods, so getting the ‘goods trading activities. I know that many advisers REGISTRATION or services’ decision wrong on the first VAT have overlooked situations where a client Bill registered his car repair business return could attract HMRC interest. Care is has generated exempt income and should for VAT on 1 July 2018 and is also needed on the issue of a service being therefore restrict input tax claims under completing his first return to 30 consumed before registration. Seebox 2. partial exemption or, equally importantly, to September 2018. He uses the services A common source of dispute relates to check if input tax can still be claimed because of a VAT registered subcontractor building work and the split between goods of the partial exemption de minimis limits called Ben and has included six months and services. Think of a hairdressing salon (beyond the scope of this article – see VAT of purchase invoices in his input tax which became VAT registered in October Notice 706, section 11). I enjoy recalling the claim i.e. for invoices dated 1 January 2018 but spent a lot of money improving tale of an accountant who told me that one to 30 June 2018. This is not correct the salon 12 months earlier. The owner of his clients bought a house to renovate and because most of the work done by might claim that because the expenditure is sell and had managed to persuade HMRC to Ben relates to jobs that will have been capitalised to her balance sheet that it relates let him have a VAT number so that he could invoiced by Bill before he registered, to capital goods rather than services. But this claim input tax on the building repairs, even so input tax cannot be claimed. This is not correct. There is no problem with input though the house sale was obviously exempt is reasonable: HMRC is not getting tax recovery using the four-year window from VAT and the client was making no output tax on these jobs, so it would on items such as hairdryers and chairs but taxable sales! be unfair if he could claim input tax on definitely an issue with spending on e.g. the related costs. Making Tax Digital (MTD) Note – a planning tip for Bill, decorating, electrical and plumbing works, however, would be to carry out a which is capped at six months. As we all know, MTD for VAT will take effect detailed stocktake on his date of for most businesses that trade above the registration so that he can claim VAT schemes £85,000 threshold in April next year but input tax (where VAT was charged Some business owners wrongly think that the there is one aspect of the process that by the supplier) on the items he still cash accounting scheme only applies to sales will eventually give clients the chance to owns. The pre-registration input tax and not purchases. They are happy to delay hopefully be ahead of the game if they opportunity for goods relates to stock accounting for output tax until a debtor pays submit a repayment return which might be as well as assets. his dues but don’t realise that the payment queried by HMRC. Section 4 of VAT Notice date also counts for input tax claims. There 700/22 is headed ‘voluntary updates’ and might be benefits in a newly registered section 5 is titled ‘supplementary data’. date of registration, which have been business delaying its entry to the scheme if Both sections are limited about detail and used in the business during that time, there is a lot of input tax to claim on creditors refer to the future but supplementary date and are still owned by the business in the early days, and not much output tax to is defined as ‘information that supports the on its first day of registration. The declare on debtors. 9 Box VAT return’. As I understand it, the definition of ‘goods’ includes both stock The flat rate scheme (FRS) is a little bit like eventual outcome (which is very positive) and fixed assets. a footballer aged over 35 – it has performed will be that a business making, say, a large zz Services – the time window is capped well in the past but is now past its best days. VAT repayment claim on a return will be able at six months before registration, and This is because of the introduction of the to digitally provide supplementary data to the service cannot relate to a sale that ‘limited cost trader’ category in April 2017, HMRC to support the figures e.g. the digital has been invoiced or consumed before which wiped out many of the tax gains made record of purchase invoices that makes up registration. by scheme users, although it still offers the input tax total but not copies of purchase important time-saving benefits. The 16.5% or sales invoices. But as the old saying goes… There was a period a couple of years rate for limited cost traders gives minimal don’t quote me on that one! www.taxadvisermagazine.com | December 2018 35 HOLDOVER RELIEF
HOLDOVER RELIEF
KEY POINTS zz What is the issue? There are a number of conditions and exclusions that limit the availability of the holdover relief rules in TCGA 1992, particularly if it is going to involve the transfer to a person who would not The bright be subject to capital gains tax on a subsequent disposal. zz What does it mean to me? At the heart of this case is the exclusion in TCGA s 167. Section 167 disapplies section 165 if the transferee red line is a company controlled by a non- resident who is connected with the person making the disposal. (Section Keith Gordon looks at 167 effectively operates in tandem with s 166 which disapplies s 165 in a case which identified cases where the transferee is non- resident.) an absurdity in the zz What can I take away? holdover relief rules Consider any of your clients who might have considered a holdover relief claim but were put off by the literal interpretation of section 167. Similarly, the case should give you Facts of the case 286(2)). Section 288 then imported hope if you have another situation On 1 April 2010, Mr Reeves the definition of control then in the where the literal consequence of a disposed of his interest in a Income and Corporation Taxes Act 1988 statutory provision gives rise to a limited liability partnership ss 416 and 417. Under those provisions, Mr totally impractical and absurd result. to a UK-resident company and Mrs Reeves are treated as associates of of which Mr Reeves was the each other. Accordingly, from Mrs Reeves’s sole shareholder. Ignoring the question perspective, her husband is one of her ax advisers will be aware of of holdover relief, that disposal would be associates (section 417(3)). Furthermore, any the usefulness of the holdover subject to capital gains tax. rights held by Mr Reeves are also attributed Trelief rules (in the Taxation of Mr Reeves was in fact not resident in the to Mrs Reeves (section 416(6)). Therefore, Chargeable Gains Act 1992 (TCGA) ss UK which might ordinarily have exempted through Mr Reeves’s sole shareholding, 165 and 260). The former apply to gifts him from capital gains tax (TCGA s 2). Mrs Reeves is deemed to control the UK of qualifying ‘business assets’ and the However, the transaction fell within s 10 company. As Mrs Reeves is undoubtedly latter to transactions which give rise which extends the scope of capital gains a person connected with Mr Reeves and to an inheritance tax charge (including tax to non-residents to the extent that they deemed to control the UK company, the one taxed at 0%). When the relief is dispose of the assets used in a trade which situation is caught squarely by section 167 available, the person making the disposal is carried on through a branch or agency in if, as was indeed the case, Mrs Reeves was can defer any capital gains tax arising on the UK. similarly non-resident. the disposal by effectively transferring As the disposal was therefore within HMRC therefore concluded that holdover the potential liability to the recipient the scope of the capital gains tax rules, Mr relief was not available to Mr Reeves. Mr of the gift (for such later time as the Reeves duly made a holdover relief claim Reeves appealed against their decision to the recipient might dispose of the asset), by under s 165 (which was jointly entered into First-tier Tribunal which agreed with HMRC. reducing the recipient’s own base cost by by the UK company to which his interest in Mr Reeves therefore appealed against the reference to the gain held over. the LLP was transferred). decision to the Upper Tribunal. Unsurprisingly, there are a number However, HMRC argued that s 167 of conditions and exclusions that limit precluded the holdover relief claim. Section The competing arguments the availability of the relief, particularly 167 contains two conditions so far as the Neither side was happy with the present if it is going to involve the transfer to transferee is concerned: first that it is wording of s 167. HMRC contended that a person who would not be subject controlled by a non-resident; secondly, section 167 was incorrectly drafted to capital gains tax on a subsequent that that controlling person be connected inasmuch as the condition that the person disposal. One of these exclusions was the with the person making the disposal. Mr controlling the company be connected subject matter of a recent appeal to the Reeves was undoubtedly the person who with the person making the disposal Upper Tribunal in the case of Reeves v controlled the transferee company. He was, should be treated as also encompassing HMRC [2018] UKUT 293 (TCC). of course, not connected with the person the situation where the person making the At the heart of this case is the making the disposal (because he was in fact disposal actually controlled the company. exclusion in TCGA s 167. Section 167 the actual person making the disposal). Mr Reeves would, on that interpretation, disapplies s 165 if the transferee is a HMRC accepted that, on the literal have fallen foul of the condition on company controlled by a non-resident wording of s 167 (read on its own), Mr the basis of his own situation, without who is connected with the person Reeves was not caught by the section. reference to his wife. Accordingly, if that making the disposal. (Section 167 However, they pointed to the wider represented the proper reading of section effectively operates in tandem with s 166 definitions of connection and control. In 167, there could be little complaint that which disapplies s 165 in cases where the particular, Mr Reeves’s wife is undoubtedly he was also caught by virtue of his wife’s transferee is non-resident.) a person connected with Mr Reeves (TCGA s deemed control of the company.
36 December 2018 | www.taxadvisermagazine.com www.taxadvisermagazine.com Reeves). Mr by forward which underlay the second approach put s167(3) in adopted is as and approach same the being fact (this in company transferee the of shares the of all or some owns person connected the that requirement additional an to subject were they if as ICTA in rules control the treated it Ultimately, second). the with disagreeing expressly not (whilst contentions two Mr Reeves’sof first ofkind oversight. some was disposal the making person the of inclusion express any of lack the that imagine to hard was it s167 in and wording the of simplicity relative the by reinforced was view This transferee. indirect the also was transferor the where situations include to meant s167 was that suppose to reason no had Upper the Tribunal person), adifferent to (i.e. transferred being ownership beneficial prevent to designed was s166 166). Since s with relationship (and its provision the of history the of basis the on rejected Reeves’s Mr appeal. allowed s167, to approaches Tribunal the eventually Sinfield). Greg Tribunal (Judge First-tier Tax the of the of Chamber President the with Rose) sitting Tribunal Justice (Mrs Upper the of Chamber Taxthe Chancery and of President then the before came case The Tribunal’sThe decision 167(3). s within provision additional an reflected approach This share. asingle even owned Reeves Mrs had succeeded have not would it company; the in shares no owned Reeves Mrs because Reeves’s Mr in case succeeded have would argument This company. the in shares holding by so do must company) the company (or deemed to control the requirement that the controlling person require. did otherwise context the that clear was it result, absurd an gave definition ICTA the of importation the proceeded, Reeves’s Mr as argument requires’. otherwise the context Given, ‘unless control of definition ICTA the applies which s288 TCGA, in words the on rely to s was 167. first The ‘rectifying’ at strategies The Tribunal ultimately favoured the the favoured Tribunal ultimately The was interpretation HMRC’s preferred competing various the considered Having The alternative was to insert a insert to was alternative The however,alternative Reeves, two Mr had December 2018 |December
© IStockphoto/pagadesign impact in reality. impact any has interest share aminority not or whether to as question vaguer rather the over line’ red ‘a of bright certainty the favours often law tax that Tribunal noted However, the available. being from relief holdover preclude to sufficient be would daughter) the example, my hypothetical (or, Reeves Mrs by held in share a single that even Tribunal uncomfortable feel did any. owned The member family no therefore, and, shares the of all owned Reeves Mr because only wording literal the overcome to Tribunal able the was that transferee. the in shares more or one own to happened daughter the if follow would aresult such Tribunal’s the Even on interpretation, year. agap during Australia in teaching daughter adult an had if, say, taxpayer the relief holdover claim to unable be would company awholly-owned to a business transferring ataxpayer that mean would legislation the of reading absurd an such Tribunal noted, Upper the As result. absurd an such to rise give can it application, aliteral on that, just is it understand: to simple is It incarnation. current its to form similar very in a rewritten been statute. the to layer geological own their added each have which Acts Finance various the through excavation archaeological an as described –often process rewrite the of rigours the to subjected TCGA were unearthed be would skeletons what afraid were who HMRC in people were there because stopped was rewrite the whether wonder Ido moments, cynical my more In obscurity. complete than better is clarity surely, some and, code tax the of parts arcane more the of some on shone be to light some enable did it Acts, in Financelegislation through subsequent ill-thought- of effect the by lost been have rewrite the of benefits the of many Even though rules. tax gains capital the to extend to able not was project the that disappointed Iremain Project, Rewrite Law Tax the in involved heavily been Having Commentary tax advisers and lawyers. accountants, to matters related and tax on advises and support litigation provides He the of 2013 awards. awarded the at Year also Tax Writer was He Taxation awards. PROFILE It should be remembered, however, remembered, be should It have well s167 might again, There
Chartered Tax Adviser of the Year category at the 2009 Tolley 2009 the at Year the of Tax category Adviser Chartered the in winner the was and adviser tax and accountant chartered Profile Email 020 7884 7353 Tel Company Position Name [email protected] Keith Gordon Keith M Gordon MA (Oxon), FCA CTA (Fellow) is a barrister, CTA (Fellow) abarrister, is (Oxon), MA FCA MGordon Keith Barrister, chartered accountant and tax adviser tax and accountant chartered Barrister, Temple Tax Chambers word on the subject. the on word last the be to unlikely is Tribunal’s decision Upper the that remembered be also should It twist). aslight Tribunal with (albeit Upper the by upheld recently was which and Taxof (tinyurl.com/y8h34nqa) Adviser issue 2015 October the in published twice’ claim only ‘You my article in to I referred Ames Robert of case the example, for see, example: extreme an quite being case –this intervene always not will Courts the that remembered be should it However, provision). adeeming involves or and/ relationships family wider to applies it where (particularly result absurd and impractical atotally to rise gives provision astatutory of consequence literal the where situation another have you if hope you give s167.of should case the Similarly, interpretation literal the by off put were but claim relief aholdover considered have might who clients your of any Consider to next What do good news for Mr Reeves. Mr for news good is it meantime, the In Appeal. of Court the to proceed case this see to surprised be not Iwould uncertainty, inherent the and stake at is that sum considerable the Given result. ajust Tribunal achieve to the of attempts the criticise cannot one if even outcome, same the reach would judges of panel another that guaranteed means no by is it and statute the in gaps in fill to trying Tribunal effectively the was well. as cases other in available be would result fairer and asensible that possible is it and precise less inherently is law rights human However, legislation, unlike shareholder. sole the being Reeves Mr on dependent was point rights human the of s on 167, decision their interpretation their with as that, suggests This asset’. the in interest no have children and wife his ‘where unfair was situation the that noted Tribunal the Again, family. his of status residence the of virtue by him against discriminating by rights Reeves’s human Mr breached have would legislation the that considered have would it did, it way s167 the in interpret to able been not it In either case, it should be realised that that realised be should it case, either In had that, considered Tribunal also The HOLDOVER RELIEF HOLDOVER , which , which 37 TECHNICAL
T eCHNICAL
Financial guidance and advice Financial guidance and advice Welcome to the Technical Team December Technical
Newsdesk Articles Author(s) Newsdesk Welcome to Technical Newsdesk Richard Wild, p 38 The single fiscal event and new Budget timetable now mean that the latter months Spotlight on the Property Taxes Kate Willis, of the calendar year are busy times for the CIOT, ATT and LITRG Sub-committee p 38 technical teams. We were asked to send our analysis of the GENERAL FEATURE Autumn Budget to the House of Commons Treasury Committee CIOT meeting with the Financial George Crozier, just two days after the Budget, so by 31 October – a deadline Secretary to the Treasury p 39 which we met thanks to the input of the team and a number of our GENERAL FEATURE volunteers. I report on our submission below. In the same short timescale, LITRG produced its analysis of the Budget as it affects CIOT sends its analysis of the Autumn Richard Wild, those on low to modest incomes. This is also reported below. Take Budget 2018 to the Treasury Committee p 39 a look on our websites for our various Budget activities. GENERAL FEATURE Following publication of the Finance Bill on 7 November, the technical teams (again, assisted by our volunteers) have been LITRG Budget summary: is austerity Joanne Walker, reviewing the Bill to understand the legislative measures and really coming to an end? p 40 identify any problem areas or unintended consequences, so that GENERAL FEATURE PERSONAL TAX we can raise them with HMRC. We also provide briefings to assist Voluntary tax returns Margaret Curran, MPs scrutinising the Bill (you may recall George Crozier’s article on why we do these – https://tinyurl.com/yd3fac9t). It would p 42 MANAGEMENT OF TAXES seem that, this year, we will have a condensed period of scrutiny, Making Tax Digital: an update Jayne Simpson/ meaning that by the time this issue of Tax Adviser is published we INDIRECT TAX MANAGEMENT OF TAXES Margaret Curran, will be most of the way through the committee debates. The Bill p 42 is also likely to receive Royal Assent before Christmas, meaning GENERAL FEATURE one thing crossed off the technical teams’ lists before the festive Carried forward corporation tax losses: Emma Rawson/ break, but it does question the level of scrutiny that the Bill can compliance requirements Sacha Dalton, reasonably receive during such a limited timeframe. OMB LARGE CORPORATE TAX p 43 But the aforementioned ‘to do’ lists are still lengthy! High on MANAGEMENT OF TAXES them is Making Tax Digital, and we are seeing rapidly increasing amounts of software, HMRC communications and testing, now HMRC’s Employment Taxes Forums Matthew Brown that the pilot has been opened up to many more businesses. It is EMPLOYMENT TAX p 44 also great to hear queries and comments from members as I do my ‘tour’ of branches speaking about MTD – and we have another list: Agents road test HMRC digital forms Helen Thornley, this one being queries we have raised with HMRC about MTD. Keep GENERAL FEATURE p 44 an eye on our websites for more information. Although I would recommend reading all this month’s articles, I Welsh rates of income tax Claire would just like to highlight one more – our meeting with the minister. PERSONAL TAX Thackaberry/ Kate Willis, p 45 We see the minister periodically and focus on what we consider to be particularly key issues. Reflecting the feedback we have received (and Costs in the Upper Tribunal Margaret Curran, continue to receive) from our members, we raised three main topics: MANAGEMENT OF TAXES p 45 MTD, Working Together and HMRC conduct. On the latter two issues in particular, we are responding to concerns raised by members. We LITRG support NHS personal budget Meredith had constructive discussions on all three topics and will keep working holders to use CEST tool McCammond on them as areas of priority. EMPLOYMENT TAX p 46
Professional Standards updates Charlotte Ali/ PROFESSIONAL’ STANDARDS Jane Mellor p 46 Spotlight on the Property Taxes Sub-committee
GENERAL FEATURE
This month, in our series of articles about the CIOT’s technical sub-committees, CIOT Technical Officer Kate Willis outlines the To contact the technical team work of the Property Taxes Sub-Committee. about these pages, The CIOT’s Property Taxes technical sub-committee was please email: established in 2007 under the then chairmanship of Lakshmi Sacha Dalton, Narain who remains an active member of the sub-committee. Technical Newsdesk editor Under the current chairmanship of Brian Slater, the sub-committee [email protected] considers many aspects of real estate taxation, both commercial and residential property. There is of course considerable overlap
38 December 2018 | www.taxadvisermagazine.com Tchcale ni
with the remit of other sub-committees particularly the Indirect it is shown to be working well for VAT, and we probed how HMRC Taxes Sub-committee in relation to VAT on property, and the would be evaluating the success (or otherwise) of MTD – including Capital Gains Tax and Corporate Taxes Sub-committees. the accuracy of records and returns. In common with most of the other CIOT sub-committees, the We stressed the importance of effective liaison between HMRC Property Taxes Sub-committee meets quarterly, with intervening and the tax profession at a number of levels. In light of this we conference calls on specific matters if the need arises. A look back expressed disappointment that the Working Together initiative at the last quarterly meeting notes provides some indication of has declined and is now seemingly limited to a poorly functioning the Sub-committee’s wide remit. The Sub-committee considered online Agent Forum. We and HMRC agreed to think further about landlord’s contributions to tenant’s works for the purposes of how agent-HMRC engagement can be improved. the Construction Industry Scheme (CIS), the tax treatment of In the discussion around HMRC conduct, we emphasised the enablement schemes (that is, the provision of private residential experiences of our members that suggest HMRC is taking an and/or affordable housing as a pre-requisite to the grant of increasingly confrontational approach, across all areas of tax and planning permission for a commercial development), the recent with all types of taxpayer. Although we expect HMRC to take a consultation on ‘Taxing gains made by non-residents on UK robust approach to avoidance issues, where the issue is one of immovable property’, the complex tax position around land interpretation or judgement we suggested that a different tack pooling, certain current issues for SDLT matters and aspects of VAT was called for. HMRC suggested that an open discussion is picked on property including the new reverse charge in the construction up within the Compliance Reform Forum as a good starting point sector and rights to light. This list illustrates the interaction with to addressing this. CIOT seeks to promote high standard across its other sub-committees, for example the Employment Taxes Sub- membership, and it is important that we can respond effectively to committee generally leads on CIS matters. The Property Taxes Sub- situations where HMRC standards fall below what we are entitled committee’s particular property focus is on working with HMRC to expect. to clarify the extent to which CIS extends to landlords making payments to tenants where tenants have contracted to carry out George Crozier construction works. [email protected] Members of the Sub-committee represent the CIOT at HMRC consultative forums including the SDLT Working Together Steering Group. The Sub-committee engages with other specialist property- focused teams in HMRC such as the HMRC’s Offshore Property CIOT sends its analysis of the Developers Taskforce. Much of the work of the Sub-committee is taken up in Autumn Budget 2018 to the responding to HMRC and HM Treasury consultations and reviewing draft legislation implementing property tax related measures. Treasury Committee The Sub-committee is also notable for its proactive engagement with HMRC on tax issues that adversely impact on aspects of GENERAL FEATURE the property industry. We are fortunate in that our membership includes senior members in both private practice and in industry. The Treasury Committee has opened its inquiry in the Budget, If you are interested in becoming involved in the technical work and the CIOT has scored various Budget announcements against of the CIOT, have a look at the website for details of how to join the Treasury Committee’s principles of tax policy. How well did it the Property Taxes Sub-committee or one of the other sub- score? Read on to find out. committees. After each major fiscal event the House of Commons Treasury Feedback from members on property taxes issues is always very Committee opens an inquiry to determine the extent to which welcome, to [email protected]. it meets the Committee’s tax policy principles, as expressed in its 2011 report Principles of Tax Policy (see https://tinyurl. Kate Willis com/69rtgrq). Those principles are that tax policy should: [email protected] 1. Be fair. The Committee accepts that not all commentators will agree on the detail of what constitutes a fair tax, but a tax system which is considered to be fundamentally unfair will ultimately fail to command consent. CIOT meeting with the 2. Support growth and encourage competition. 3. Provide certainty. In virtually all circumstances the application Financial Secretary to of the tax rules should be certain. It should not normally be necessary for anyone to resort to the courts in order to resolve the Treasury how the rules operate in relation to his or her tax affairs. Certainty about tax requires GENERAL FEATURE i. Legal clarity: Tax legislation should be based on statute and subject to proper democratic scrutiny by Parliament. CIOT representatives met with the Financial Secretary to the ii. Simplicity: The tax rules should aim to be simple, Treasury, Mel Stride, in October to discuss a number of issues understandable and clear in their objectives. of concern to the Institute, primarily Making Tax Digital (MTD), iii. Targeting: It should be clear to taxpayers whether or not Working Together and HMRC conduct. they are liable for particular types of charges to tax. When On MTD, we again expressed our concerns over the timescales anti-avoidance legislation is passed, due regard should be and stated benefits of the project. We told the minister that we had to maintaining the simplicity and certainty of the tax are keen to make sure there is a ‘soft landing’ on penalties and for system. there to be guidance on how it will be applied. With the minister’s 4. Provide stability. Changes to the underlying rules should be encouragement, CIOT and HMRC agreed to liaise over how HMRC’s kept to a minimum and policy shocks should both be avoided. ‘soft landing’ on penalties can be applied in practice. We also asked There should be a justifiable economic and / or social basis for for assurance that MTD will not be extended to income tax until any change to the tax rules and this justification should be made www.taxadvisermagazine.com | December 2018 39 T eCHNICAL
public and the underlying policy made clear. 5. The Committee also considers that it is important that LITRG Budget summary: is a person’s tax liability should be easy to calculate and straightforward and cheap to collect. To this end, tax policy austerity really coming to an should be practicable. 6. The tax system as a whole must be coherent. New provisions end? should complement the existing tax system, not conflict with it. GENERAL FEATURE PERSONAL TAX We focused our submission on announcements which have the greatest fiscal impact, as well as those which particularly meet or LITRG published a summary of the Budget announcements that contravene the Committee’s principles. Our analysis comprised affect those on low to modest incomes, explaining the effects of two elements. First, written commentary on the announcements some of them. within the scope of our submission. Second, a visual ‘traffic lights’ Following Budget 2018, the LITRG technical team examined analysis, where green is a pass (it generally meets the principles), the announcements in relation to tax and benefits, to work out amber is a cautious approval (but with some reservations), and red how they might affect those on low to modest incomes. The key is a fail (it generally fails to meet the principles). theme of the Budget was that the hard work of the British people Budget 2018 contains fewer tax changes than in most recent is paying off, and that as a result austerity is drawing to an end. Budgets; perhaps a consequence of its timing and the status of The Chancellor said that he wanted to ensure a positive future for our negotiations on leaving the EU. The Chancellor did not rule the UK by investing in public services, supporting business and out upgrading the 2019 Spring Statement to a full fiscal event if improving living standards. necessary. The summary covers many changes, but looks at the increases Disappointingly, there continue to be measures being to the personal allowance, universal credit announcements, announced as ‘done deals’, or for immediate implementation, with minimum wage increases and the capital gains tax changes in either no or inadequate consultation (for example, the changes particular detail. to private residence relief and enterprise reliefs such as the For example, the summary notes that the increase in the Structures and Buildings Allowance (SBA)). Such announcements personal allowance means that the government will meet its hence score poorly in terms of certainty and stability. Interestingly, manifesto commitment one year earlier than planned. For many, this Budget then goes on to demonstrate the detrimental this was a welcome announcement as it will mean they have more consequences such an approach can have, by appearing to cash in their pockets, however LITRG noted that it does little to correct, restrict or withdraw previous surprise announcements help those on the lowest incomes. Those already earning under (for example, limiting Employment Allowance to those with an the current personal allowance of £11,850 will gain nothing from employer National Insurance contributions (NICs) bill below this change. Those earning above £11,850 may benefit, but by how £100,000 in their previous tax year, or not pursuing the changes much depends on whether they receive tax credits or other means- to Rent a Room relief which were included in the draft Finance Bill tested benefits such as universal credit or housing benefit. Those immediately following a call for evidence (a pre-consultation step)). with incomes above £11,850 who are receiving universal credit A number of measures compound the problems of inadequate will most likely see a reduction in their benefit. This is because consultation by having immediate effect. Whilst this is normally universal credit, like other means-tested benefits, is based on net understandable when they are for the prevention of avoidance, income, so as the amount of tax they pay reduces, their universal the SBA is not such a measure, and the fact that it also has not credit award also reduces. been consulted upon may lead to confusion as to its scope and In order to help those on the very lowest incomes, another application. Whilst a technical note was published alongside the option would be to increase work allowances in universal credit. announcement, a number of elements are subject to consultation, This is the amount that claimants can earn before their benefits meaning the precise scope of the allowance will be unclear for start to be withdrawn. Increasing work allowances helps those on some time. Again, these measures score poorly. the lowest incomes who currently see no benefit from any increase The Budget also contains a lot of ‘tinkering’ – many of which in the personal allowance and provides a valuable work incentive. have relatively modest financial impacts. We recognise that The announcement that the work allowance for households with some tinkering is necessary to ensure that measures operate as children and some people with disabilities will be increased by intended; but we questioned whether so much tinkering would be £1,000 per annum from April 2019 was therefore very welcome. necessary if there had been adequate consultation and a higher However, the measure fell short of reversing the previous cuts to standard of legislative drafting in the first place? work allowances and means not all working claimants benefit from Perhaps not surprising, there were many amber lights across the change. the various announcements scored against the Committee’s In addition, LITRG used the summary to draw attention to their principles. Those containing the most green lights included the Budget representation on the net pay arrangements for pensions shared occupancy test for rent-a-room relief (whilst something of problem which affects lower earners. It was disappointing that a u-turn, a positive decision to do so), proposals to put voluntary the government chose not to address this issue, in particular as tax returns on a statutory footing (formalising rights, safeguards the LITRG representation had provided a possible solution to this and enquiry powers), and around Universal Credit. Red lights were problem. In summary, there is an inconsistency in the tax rules, prevalent around the capital allowances special rate reduction which means that many people who earn below (or just above) the from 8% to 6% (as it has a hint of retroaction, and reduces the personal allowance and who are in net pay arrangement pension period of time over which tax relief is given), the Digital Services schemes are losing out on tax relief on their pension contributions, Tax (complexity, international competitiveness, longevity etc), and in contrast to those who use relief at source schemes. The the penalties reform (or lack thereof, with the new penalty regime increase in the personal allowance, coupled with the increase in being deferred beyond 2020). contributions required under auto enrolment from April 2019, Our full submission can be viewed at www.tax.org.uk/ref515. means this problem is likely to affect more people in 2019/20 and by a bigger amount. Richard Wild Overall, while LITRG welcomed a number of the announcements [email protected] in the Budget, for example the changes to universal credit, we
40 December 2018 | www.taxadvisermagazine.com T eCHNICAL
thought many of these could have gone further. Moreover, LITRG sent to HMRC each year. According to figures quoted in the Patel considered there were several missed opportunities, not least the case, over 450,000 taxpayers a year submit income tax returns on failure to take note of LITRG’s Budget representation on net pay a voluntary basis. These will largely be from taxpayers who have arrangements for pensions noted above. not registered for self-assessment before sending their tax return Some of the interactions pointed out in the article, to HMRC and from PAYE taxpayers who do not need to complete particularly in relation to the personal allowance, highlight a self-assessment but who are seeking a repayment. Simple the complexity faced by low income individuals in trying to Assessment is meant to take the latter category of taxpayers out understand whether they are better off and, if so, by how of self-assessment, so the number of voluntary returns should much, as a result of Budget 2018. fall significantly once Simple Assessment is fully up and running The LITRG summary can be found on the LITRG website at: (although readers will recall that delays to its roll-out were www.litrg.org.uk/Budget18. announced earlier this year by HMRC so we do not know when it will become ‘business as usual’). Joanne Walker Although First-tier Tribunal decisions do not set binding [email protected] precedents, HMRC have clearly decided in the circumstances that the risk to the tax system of doing nothing in response to these judgements is too great. Putting voluntary returns onto a statutory footing since the advent of self-assessment therefore ensures that Voluntary tax returns the uncertainty these cases have created is removed, and that MANAGEMENT OF TAXES taxpayers can be confident that tax returns submitted voluntarily will continue to be accepted as valid returns by HMRC. Voluntary tax returns are to be put on a statutory footing following several recent First-tier Tribunal cases which have Margaret Curran concluded that where the taxpayer had submitted a tax return to [email protected] HMRC voluntarily, the return was not a valid return. It was announced in the Budget that legislation would be introduced in Finance Bill 2018-19 to confirm HMRC’s existing policy of treating income and corporation tax self-assessment Making Tax Digital: an update returns sent to them voluntarily as legally valid returns. The INDIRECT TAX MANAGEMENT OF TAXES GENERAL FEATURE measure was duly included as clause 86 of the Finance Bill published on 7 November and is retrospective; it will apply from 1 HMRC has been running a private pilot for Making Tax Digital April 1996, the year self-assessment was introduced. It will apply (MTD) for VAT since April 2018 with privately invited clients of to individuals, partnerships, trusts and companies. See https:// software developers that were going through testing. Once the tinyurl.com/y82kad42. private pilot interface was tested thoroughly and further By ‘voluntary’ we mean that the taxpayer did not file their functionality delivered, HMRC were able to open the pilot return in response to a statutory Notice to File from HMRC. publicly, although they have taken decisions to limit entry Given that self-assessment has been with us for more than 20 initially as well as delay MTD for VAT mandation for certain years, and during that time HMRC’s acknowledged policy has been complex businesses. HMRC have also started writing directly to to accept voluntary individual and partnership returns on the businesses to tell them about MTD. same basis as returns received in response to a Taxes Management Act 1970 (TMA) s 8 notice to file, it is perhaps surprising that the The VAT pilot is live status of voluntary returns has only recently been considered by The pilot for MTD for VAT was opened on 16 October to sole the Tribunal. proprietors and limited companies on standard VAT return periods See Bloomsbury Verlag GmbH v HMRC [2015] UKFTT 660, Revell and up to date with VAT payments, except for those who: v HMRC [2016] UKFTT 97 and most recently Patel & Patel v HMRC zz are a trust or charity [2018] UKFTT 0185. zz are part of a VAT group or VAT Division The conclusion reached by the Tribunal in each case was that, zz currently trade with, or have traded with the EU because a voluntary tax return had not been filed in response to a zz are based overseas Notice to File, it was not a valid return. zz are a partnership This meant that none of the statutory consequences attaching zz submit annual returns to returns filed pursuant to a Notice to File would follow, such as zz make VAT payments on account the taxpayer’s right to make amendments to their return under zz use the VAT Flat Rate Scheme TMA s 9ZA, HMRC’s power to enquire into the return under TMA zz are a business that is newly registered for VAT and you have s9A and the power to issue a closure notice under TMA s 29A. not previously used your VAT online account to submit your Similarly, important taxpayer safeguards would not apply either, VAT Return such as protections in respect of a discovery assessment under TMA s 29 and protections in relation to information notices under Other than for businesses subject to deferred mandation, the FA 2008 Sch 36. The corporation tax regime in FA 1998 Sch 18 VAT pilot is expected to open over the remaining months of 2018 contains similar provisions. and mandation for MTD is still effective for VAT return periods Interestingly, in Bloomsbury it was HMRC not the taxpayer who commencing from 1 April 2019 or later. had successfully argued that a voluntary return was not a valid Deferral to 1 October 2019 for more complex businesses return, so as to deny the company’s loss relief claim. The decision HMRC announced that they would defer the mandation date was cited with approval by the judge in Patel, where the taxpayer to 1 October 2019 (see https://tinyurl.com/y7ttb3mm) for VAT contended successfully that HMRC could not open an enquiry into for certain businesses with more complex VAT positions. These a return that had not been filed in response to a statutory Notice businesses account for approximately 3.5% of the mandated VAT to File. registered business population. Deferral applies to: The problem caused by these Tribunal decisions becomes zz trusts apparent when one realises just how many voluntary returns are zz not for profit organisations not set up as a company, www.taxadvisermagazine.com | December 2018 41 Te cHNICAL
zz VAT groups or VAT divisions penalty regime. However, as with any reform, it is more important zz public sector entities required to provide additional information to do it right than to do it quickly, so we trust that HMRC will make on their VAT return (Government departments, NHS Trusts) the best use of the extra time to work on the details of the new zz local authorities regimes and publicity around their introduction. The delay also zz public corporations provides the opportunity to bring the new penalty regimes in at zz businesses based overseas the same time for all taxes given that MTD for Income Tax is not zz payments on account businesses coming in before April 2020 at the earliest. This would make sense. zz annual accounting scheme users The government has said that, despite the delay, it remains committed to the reform and intends to legislate in a future The MTD pilot should be available for these taxpayers from Finance Bill. No further details have been provided about when the spring 2019. Please note that the initial 12 month ‘soft landing’ reforms will eventually be introduced, although the government period for digital links that applies to VAT return periods has said that notice will be provided before the measures are commencing from 1 April 2019, will not be further extended to implemented. taxpayers subject to deferred mandation. The soft landing period We continue our engagement with HMRC around MTD, and ends for all taxpayers for periods commencing from 1 April 2020 keep an eye on developments via our websites, branch events, and or later. our weekly technical newsletters.
Mailshot to taxpayers Jayne Simpson Margaret Curran HMRC wrote to an initial group of 20,000 taxpayers in early [email protected] [email protected] November to inform them about Making Tax Digital and how to find out more. At the time of writing, HMRC were also going to write to a further 180,000 taxpayers in mid- November, after they had considered feedback from the first tranche of the mailshot, Carried forward corporation and then to the remaining 300,000 businesses entitled to join the first phase of the pilot by late November/early December. tax losses: compliance Reform of penalties requirements It was announced in the Budget small print (see paragraph 2.54 of the Overview of Tax Legislation and Rates published on 29 October OMB LARGE CORPORATE TAX MANAGEMENT OF TAXES 2018) that reforms to the penalty regimes for both late submission of tax returns and late payment of taxes are to be delayed. This is HMRC have responded to requests by the ATT and CIOT for more to allow HMRC ‘more time to consider the communications needed guidance on compliance obligations which apply to all companies for successful implementation’. (regardless of size) looking to set off carried forward losses from HMRC had already confirmed that the VAT default surcharge April 2017. regime would remain in place for 2019/20, the first year of New restrictions on the amount of brought forward corporation MTD for VAT, and we had expected the new penalty regimes tax losses which can be offset in any one year took effect from for late payments of tax and late submissions of tax returns to 1 April 2017. The availability of a £5m per annum deductions commence from April 2020. Draft legislation for the changes allowance before losses are restricted means that only the largest appeared in the draft Finance Bill clauses published in summer companies and groups should suffer a restriction in practice. 2018 but was dropped from the Finance Bill which was However, as set out in November’s Technical Newsdesk (see published on 7 November. https://tinyurl.com/yb7v2qlp) the restriction rules introduce new The Budget announcement means that the new regimes will compliance obligations for companies and groups of all sizes. now not be in place until April 2021 at the earliest, two years after These requirements apply regardless of the size of the company MTD becomes mandatory for businesses compulsorily registered and must be complied with even if the company will not suffer any for VAT. restriction (for example because its brought forward losses are Both regimes are intended to replace the current late payment well below £5m). and late filing regimes for Corporation Tax, Income Tax Self- Until recently, limited guidance had been issued to highlight the Assessment and VAT. requirements and identify how the required information should The new late submission regime is a points-based system be supplied to HMRC. In particular, the CT600 does not have a which will apply to returns with a regular filing frequency dedicated box or white space area to state the required deduction (including monthly, quarterly and annual returns under MTD). allowances or submit the information required in the group Broadly it means that a taxpayer will automatically receive a allowance allocation statement. point every time they fail to make a return on time. Once a The ATT and CIOT were therefore concerned that, given the threshold has been reached (which will depend on how often a perception that the restriction rules are only an issue for the taxpayer is required to file the particular return) a penalty will largest companies and groups, many companies could unwittingly be charged for every subsequent failure, but their points total fail to comply with these compliance requirements which could will not increase. Points will either expire over time or after a lead to their ability to offset losses being restricted. period of good compliance, depending on whether the penalty Both bodies therefore wrote to HMRC to ask for more guidance threshold has been reached or not. for affected companies. The ATT letter can be found on the ATT The new late payment regime is intended to harmonise website (www.att.org.uk/ref320) and the CIOT letter on the CIOT penalties across taxes. It will consist of two penalty charges; the website (www.tax.org.uk/ref503). first based on payments and agreements to pay in the first 30 days In their response to the ATT and CIOT, HMRC confirm that the after the payment due date and the second based on how long the requirements will be met provided companies include a clear debt remains outstanding after the initial 30 days. summary of the required information in the corporation tax This delay in introducing the new regimes is disappointing since computation accompanying their return form. For groups, HMRC the penalty point model being proposed for late submissions also confirm that the nominated company can submit the group will work better with the MTD reporting system than the current allowance allocation statement in PDF format alongside their return.
42 December 2018 | www.taxadvisermagazine.com T eCHNICAL
As requested, HMRC have taken steps to publicise the Collection of Student Loans Consultation Group (CSL) compliance requirements and make it absolutely clear how these The CSL met in mid-September (and will also meet again in early can be met. Draft guidance has been published on GOV.UK setting December) and matters discussed included postgraduate loans and out the administrative requirements for the deductions allowance the Student Loans Company’s (SLC) digital initiatives. (https://tinyurl.com/yb87229k). This draft guidance includes a The collection of postgraduate loans (PGL) through the tax template for the group allowance allocation statement. We hope system commences in April 2019 and HMRC provided an update on that in due course this template will be available to download from proposed communications to employers and agents plus changes the Company Taxation manual. to be made to the starter checklist (but no changes proposed to In addition, HMRC have implemented the CIOT and ATT’s the P45) and publication of software specifications (for example suggestion that the Company Losses toolkit be updated – this now start/stop notices, reporting through RTI, etc). PGL start notices has specific questions which prompt companies to check that they will be issued to employers at the same time as the normal have stated the necessary deductions allowances and, if they are graduate loan repayment start notices are issued (February/March a member of a group, that a group allocation statement has been 2019). The SLC’s change of contact details online system has gone submitted. live on GOV.UK (following testing and a phased rollout). The SLC is HMRC have said that they will also update the CT600 notes and also transitioning its repayment portal for students not in work or the main loss relief guidance (currently in draft form on GOV.UK) now living overseas to GOV.UK. when it is transferred to the Company Taxation manual later in 2018. IR35 forum The IR35 forum met at the end of August and the main agenda Emma Rawson Sacha Dalton item was the proposals on off-payroll working in the private [email protected] [email protected] sector. At the time of the meeting HMRC was still sifting through responses to the consultation, although as we now know, the government has decided that the public sector rules will be rolled out to the private sector from April 2020 but with HMRC’s Employment Taxes an exception for small businesses. At the meeting discussions concentrated on issues with the accuracy of HMRC’s Check Forums Employment Status for Tax (CEST) online tool and HMRC’s disputed views on the meaning of mutuality of obligations. EMPLOYMENT TAX There were also concerns around the processes (or lack thereof) where the status of an ‘off-payroll’ worker is disputed, with Round up of HMRC employment taxes related consultative forum this issue and CEST issues needing to be resolved before any meetings, including the Employment and Payroll Group, Student extension to the private sector. Loan Consultation Group, IR35 Forum and Expatriate Tax Forum. We round up the activities of HMRC’s employment taxes Joint Forum on Expatriate Tax & NICs (ETF) forums, which are attended by CIOT volunteers, in the previous The scheduled September meeting of the ETF was unfortunately quarter: (i) Employment and Payroll Group, (ii) Collection of cancelled by HMRC. They did however provide an update on Student Loans Consultation Group, (iii) IR35 Forum, and (iv) Joint the short-term business visitors (STBV) from overseas branches forum on Expatriate Tax and NICs. consultation, where the government is to widen eligibility for the STBV Pay as You Earn special arrangement and extend its Employment and Payroll Group (EPG) deadlines for reporting and paying tax but is not taking forward The EPG is HMRC’s main employment taxes forum and generally the UK headquarters and overseas branches exemption which focuses on high-level policy issues. It met in late September (and is is very disappointing. HMRC has also established an EU-Exit scheduled to meet again in early December) and the main agenda question and answer log (for example, to deal with social items were Tax-Free Childcare, Disguised Remuneration, High security issues for inpatriates/expatriates from/to the EU Volume Repayment Agents and Termination Payments. following the UK’s exit from the EU). HMRC outlined the transition to Tax-Free Childcare (TFC) from employer-provided childcare vouchers and while Matthew Brown acknowledging there had previously been difficulties in terms of [email protected] the online accounts they emphasised that TFC was now running much more smoothly. The April 2019 loan charge further to the disguised remuneration rules was then discussed and HMRC estimated Agents road test HMRC digital that 50,000 people would be impacted, 10,000 of which were self-employed (where parallel legislation applies). HMRC were forms aware that individuals having to pay the tax due all in one go (and therefore at a relatively high tax rate) could lead to bankruptcy GENERAL FEATURE and they were therefore prepared to agree extended time-to- pay arrangements. Where the liability fell to the employer HMRC In October, a number of ATT members took part in research advised the reporting would be via RTI but by way of an Earlier Year sessions to help HMRC design digital forms that meet the needs Update rather than in real time and while the reporting deadline of agents. would be relaxed the tax due date would remain 22 April 2019. In October, a number of ATT members took part in individual In response to form P87 (Claim for tax relief for expenses research sessions looking at how agents complete and submit of employment) claims from high volume repayment agents, digital HMRC forms online. The volunteers were asked about HMRC were launching a campaign to encourage people to their current use of HMRC forms and then shown a mock form make their own claims. Finally, HMRC confirmed that the new online. The purpose of the session was to give HMRC a better employer-only NIC charge on termination payments would not understanding of the needs of agents to help inform their be implemented for 2019/20. design process. www.taxadvisermagazine.com | December 2018 43 T eCHNICAL
The testing focused on the design and layout of the form and be accessible via the Welsh Revenue Authority (WRA) website. whether the completion process was clear and easy to follow. Although the WRA will not be administrating the WRIT, Volunteers commented on a number of aspects including: experience in Scotland indicates that a number of taxpayers zz The need to make it clear at the start of the process that an with questions or concerns about the WRIT will contact the Agent Services Account (ASA) is required for access to these WRA in preference to HMRC. digital forms. It was suggested that users should be advised to zz This guidance should cover the appeal process on the income establish whether an ASA has already been created by their tax status of a taxpayer. agency, rather than automatically being invited to set one up. zz More complex tax situations need to be covered, for example zz The importance of being able to move forwards and backwards claiming tax relief for charitable donations for a higher rate or through the whole form and return to uncompleted parts of the additional rate Welsh taxpayer, trust income received by Welsh form at a later stage, rather than being constrained to complete beneficiaries which will be subject to the WRIT, understanding the form in a fixed order. the tax position where a personal service company is used (that zz Help links within the form should open in a new window so that is, when IR35 applies), and understanding the order of set-off of after they are closed down, the user is returned to the same allowances against different sources of income. point on the form. zz Online software, used particularly by many unrepresented zz The duration of the temporary access code required to return taxpayers, must operate correctly with the changes. to a partially completed form. The current proposal is that a zz The interactions between WRIT and tax credits and benefits form must be completed within 28 days of commencement, or should not be overlooked given the significant impact on the it must be restarted from scratch. living standards of low income individuals. zz The proposed wording of the declaration on submission. For the purposes of forms submitted by agents, declarations of accurate Claire Thackaberry Kate Willis completion need to be caveated by statements such as ‘to the [email protected] [email protected] best of our knowledge and belief’.
If you would be interested in road-testing any future developments in digital forms from the comfort of your own office, Costs in the Upper Tribunal please contact [email protected]. MANAGEMENT OF TAXES
Helen Thornley The CIOT has written to the President of the Upper Tax Tribunal [email protected] and Chancery Chamber setting out some concerns we have about the costs regime in the Upper Tribunal. We think there is still an appetite to explore further the recommendation by the Costs Review Group in its Report to the Welsh rates of income tax Senior President of Tribunals in December 2011 (see https:// PERSONAL TAX tinyurl.com/ybqca47l) that where the taxpayer has succeeded at the First-tier Tribunal (FTT) and the case is not complex, they The Welsh Government has confirmed its intention to set Welsh should be able to choose whether to be inside or outside the income tax rates from April 2019. HMRC will continue to collect costs-shifting regime. the tax and has issued a short consultation on draft statutory The CIOT had written to the then Senior President of the instruments alongside a technical note to which LITRG and the Tribunals, Sir Robert Carnwath, in January 2012 (see https:// CIOT have responded, highlighting some of the issues around tinyurl.com/ydfrzv7c) to express our support for this and other implementation. conclusions of the Report by the Costs Review Group. In particular: From April 2019, the UK government will reduce each of the a) The recommendation at paragraphs 75 and 76 that the Rees three rates of income tax – basic, higher and additional rate – paid Practice (under which HMRC agree in certain circumstances not by Welsh taxpayers by 10p. Each year, the Welsh Government will to pursue costs if successful) be formalised; then decide the three Welsh rates of income tax (WRIT), which will b) The recommendation at the start of paragraph 123 and in be added to the reduced UK rates. The combination of reduced UK paragraph 132(a) that in non-complex cases a taxpayer who rates plus the Welsh rates will determine the overall rate of income is successful before the FTT should be able to opt for the tax paid by Welsh taxpayers. continuance of the no-costs regime; and The Welsh Government has committed not to increase income c) The other conclusions at paragraph 132 regarding complex tax rates in Wales for the duration of the current Assembly, which is cases. due to continue until May 2021. This means that the first Welsh rates of income tax will be set at 10p. Therefore, the rates of income tax We heard at the time that our letter was well received by the paid by Welsh taxpayers will continue to be the same as those paid by Tribunals Service. However, we note that despite the reforms English and Northern Irish taxpayers. However, the mechanisms for to costs discussed in the above report, nothing appears to have implementing the WRIT will need to be in place for April 2019. changed as a result in the meantime. The LITRG and CIOT joint response emphasises the need for In our latest letter we give some examples illustrating that a communication and publicity in advance of April 2019 as essential taxpayer who has won in a no-costs regime such as the FTT (and for both Welsh taxpayers and their employers. Publicity for the who therefore must have, by definition, at least a good arguable introduction of the WRIT has, in our view, yet to start in earnest. In case) may well be deterred from defending their case in the Upper addition, it is starting from a low base of understanding; a recent Tribunal (UT) by concerns about the costs of the appeal. This is survey looking at the experience of Scottish taxpayers amply why, in our view, the recommendation at paragraph 123 of the demonstrates the poor awareness and understanding of the Scottish report should be adopted. Income Tax two years after it was introduced, underlining the need to We are also concerned about the risks of an adverse costs order raise awareness. in the UT acting as a deterrent to some taxpayers even appealing Our recommendations include: adverse HMRC decisions to the FTT in the first place: although they zz The recently issued Welsh taxpayer technical guidance should are confident of success in the FTT, they are worried about the
44 December 2018 | www.taxadvisermagazine.com T eCHNICAL
costs risks in the event that the case goes further. We note that choice. We have shared a draft with HMRC, so that they can see the Rees Practice is rarely applied by HMRC and the UT considers what we are trying to achieve and how it differs from their own itself unable to order HMRC to apply it. Accordingly, we question guidance provision. whether the current costs rules give the UT sufficient flexibility to It is worth mentioning that while the factsheet has NHS PHB ensure that justice is served in all cases. holders in mind, it may be useful more widely: for example for Our recent letter can be found at www.tax.org.uk/ref511 other potential domestic employers. If you are struggling to get a client to understand employment status or need to help Margaret Curran them use the CEST tool, our factsheet may be useful. Please do [email protected] not hesitate to get in touch and, once finalised, we will happily email you a copy.
Meredith McCammond LITRG support NHS [email protected] personal budget holders to use CEST tool Professional Standards updates PROFESSIONAL’ STANDARDS EMPLOYMENT TAX Updates have been made to the to the Anti-Money Laundering New employment status help for disabled people who take on (AML) scheme rules and Professional Rules and Practice a carer. Guidelines (PRPG) The government are giving people more choice on how their health and wellbeing needs are met. One way they have done Important Anti-Money Laundering (AML) Updates this is by allowing the NHS to give some people money – called Members and their firms supervised for AML by the CIOT and a personal health budget (PHB) – so that they can pay a carer to ATT should be aware of the update to the scheme rules and the provide them with the help and support they need. additional information published by both bodies to assist them HMRC’s view is that a carer providing care in a person’s home to comply with The Money Laundering, Terrorist Financing and is likely to be an employee. However, there is an unfortunate Transfer of Funds (Information on the Payer) Regulations 2017 lack of understanding of this by recipients of PHBs. The result is (MLR 2017) (https://tinyurl.com/yclwbfbp). that carers can often be treated as ‘self-employed’ incorrectly, exposing the PHB holder to penalties for PAYE failures, amongst Supervision scheme rules other things. The CIOT and ATT scheme rules have required amendment as a The situation is compounded because understanding and result of MLR 2017 changes. The updated rules came into force answering HMRC’s Check Employment Status for Tax (CEST) for supervised members and firms in November 2018 and can tool questions with the accuracy that HMRC might expect, be accessed on the CIOT website (https://tinyurl.com/ya5caywl) currently requires a reasonable degree of sophistication and and ATT website (https://tinyurl.com/yaprr62q). an understanding of the underlying case law tests. Yet even Where members are carrying on a business in the tax and the initial questions present difficulties in the PHB holder/carer accountancy sector they or their firm must be supervised. context, for example: Members already registered with the CIOT and ATT need take The first question asks ‘Which of these describes you best?’ no new action as a result of the amendments to the scheme Options include ‘Worker’, End‘ client’, ‘Agency’. The correct rules. For more on what a supervisory visit entails, see page 10 answer for a PHB holder to enter would be ‘End client’. But the for an article by Jane Mellor. explanation on the tool says that ‘The end client is the public body, corporation or business that the worker is providing services to’. Supervisory risk assessment This would make no sense to a PHB holder who would not consider The CIOT and ATT have published a supervisory risk assessment themselves a business. for money laundering and terrorist financing (ML/TF). This The third question asks ‘How does the worker provide their provides information to members on areas of high ML/TF risk. services to the end client?’ – a PHB holder should choose ‘As a It should assist firms in preparing the written practice risk sole trader’ to access the part of the tool that they need (that assessment which is mandatory under MLR 2017. The practice is, the bit that deals with ‘general’ status enquiries). But how risk assessment is required for all firms – even for sole traders would they know to pick that if they do not know what a sole with small levels of income. The risk assessment is available on trader is? And, indeed, their carer is not technically a sole trader the AML guidance sections of both the CIOT website (https:// (given its technical meaning is someone who is the exclusive tinyurl.com/y8kz3ggm) and the ATT website (https://tinyurl. owner of a business). com/ycu35bm8). Furthermore, when it comes to some of the substantive questions on control, substitution etc, often you are asked Frequently Asked Questions (FAQ) to click on ‘statement’ answers. However, these can be too The AML FAQ have recently been updated and they provide mechanical to apply to ‘care’ situations where naturally the useful information for members in relation to a number of lives of both parties tend to be more closely intertwined than areas including: in other sectors where the boundaries between employer/ zz Registration for AML supervision employee or engager/contractor are more clearly demarcated. zz What steps to take to meet the requirements of MLR 2017 In light of all this, LITRG are developing a factsheet to zz Guidance on written practice risk assessments and policies explain the complex and difficult rules around employment and procedures status to PHB holders in a way that they can understand, and zz Suspicious activity reporting to give them some pointers on how to use HMRC’s tool. The zz Whistleblowing where members or non-members are not key message is that the employment status of a carer is not a meeting their requirements under the regulations. www.taxadvisermagazine.com | December 2018 45 T eCHNICAL
The FAQ are available on the AML guidance sections of both Avoidance Schemes (POTAS) legislation (see 2.14); the CIOT website (https://tinyurl.com/y8kz3ggm) and the ATT zz The updated rules on bankruptcy and IVA which align the website (https://tinyurl.com/y7dsh6b9). CIOT and ATT positions (see 2.15); zz A table of suggested responses to a ‘professional Updated Professional Rules and Practice Guidelines clearance’ letter according to the various different The latest edition of Professional Rules and Practice Guidelines circumstances of the former client (see 10.1.4); (PRPG) was issued on 9 November 2018. It can be found in the zz Enhanced guidance on the retention of records (see Professional Standards areas of both the CIOT (tinyurl.com/ 11.2.6); and y9vgo524) and ATT (tinyurl.com/y7sqmage) websites. zz New chapters for members in Commerce and Industry PRPG sets out the Fundamental Principles in Chapter 2 which and members employed in professional practice or other apply to all members, students and international tax affiliates of sectors (see Chapters 13-15). the CIOT (collectively referred to as members in PRPG) as well as guidance aimed at helping the member in their working life. If members have any queries in relation to these updates Key changes include: or more generally in relation to AML or PRPG they should zz Clarification of the rule on professional behaviour and how it contact the Professional Standards Team by email (aml@ciot. extends to conduct in a member‘s private life (see 2.6); org.uk or [email protected]). zz A new obligation to notify the CIOT and ATT if a member receives a dishonest tax agent conduct notice or a Charlotte Ali Jane Mellor monitoring notice from HMRC under the Promoters of Tax [email protected] [email protected]
Recent submissions Further information Date sent CIOT Exemptions relating to emergency vehicles www.tax.org.uk/ref508 22/10/2018 Exemption for benefit in form of vehicle-battery charging www.tax.org.uk/ref509 22/10/2018 Changes to Optional Remuneration Arrangements for taxable cars and vans www.tax.org.uk/ref510 22/10/2018 Clarifying the scope of the Welsh rates of Income Tax www.tax.org.uk/ref512 02/11/2018 Treasury Committee Inquiry into the 2018 Autumn Budget www.tax.org.uk/ref515 02/11/2018 LITRG Clarifying the scope of the Welsh rates of Income Tax www.litrg.org.uk/ref341 07/11/2018
Chair of the CIOT/ATT Audit Committee
46 December 2018 | www.taxadvisermagazine.com BRIEFINGS
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CIOT/ATT East Midlands Branch joins with Leicester Professionals for charity event
Sophie Dale-Black (ICAEW), Ozzy O’Shea (Chair, Leicestershire County Council), Bushra Ali (Leicestershire Law Society), Stephen Foulkes (Chair, East Midlands Branch, CIOT) and Mrs O’Shea
EVENT for the fundraising evening Although the event President of the Leicestershire were the ‘Zinthiya Trust’ was aimed at lawyers, Law Society said: Following the success of and ‘After 18’, being the accountants and tax ‘The Leicestershire Law the charity drinks reception Leicestershire Law Society’s advisers, representation Society was delighted to jointly in February 2018 with the nominated charities for 2018. from other professions host the networking/drinks Nottinghamshire Law Society, These charities provide help came to the event such as charity event with Stephen Notts, Derby & Lincoln and support for vulnerable insolvency practitioners, from the East Midlands CIOT ICAEW and the CIOT/ATT East women, children and young bankers, surveyors, wealth & ATT and Sophie Dale-Black Midlands Branch, a cross- people in Leicester. managers and academics of the ICAEW. The LLS is profession charity networking East Midlands Branch from DeMontfort University. committed to building strong event was held on 17 October Chair, Stephen Foulkes, said We were also honoured to relationships across the at the stylish and newly- ‘Following on the heels welcome the Chairman of professions, and one of the refurbished Queen Victoria of such a fabulous charity Leicestershire County Council, most valued relationships the Arts Club in Leicester. event in Nottingham earlier in Ozzy O’Shea, and his wife for LLS has is with accountants The evening was the year between ourselves the evening! and tax specialists. organised to encourage and other professions, I was A big thank-you goes to We wish to thank all closer networking with keen to try and replicate that Bushra and her team at the that attended, the venue, lawyers, accountants, tax success in Leicester. It was a Leicestershire Law Society for our sponsors and also to advisers and other likeminded pleasure to join Bushra Ali, putting the event together Stephen and his Committee. professionals within the President of the Leicestershire for us – and I sincerely hope Our charities were very Leicestershire area who all Law Society and Sophie this is the start of a new appreciative of our donation share common aims and Dale-Black, Regional Director special relationship across the and they extend their thanks to foster new links and of the East Midlands ICAEW professions which benefits to all for their generous relationships with each other for what was an unmissable all our members across the contributions. Here’s to the for working together in charity event – and with a Leicestershire region.’ next joint event between us the future. great turn-out too in splendid Responding to Stephen’s which I’m sure will be bigger The nominated charities surroundings! comments, Bushra Ali, and better than ever!’.
48 December 2018 | www.taxadvisermagazine.com BRIEFINGS
CIOT/ATT Merseyside Branch: An Italian Job
EVENT
You are probably some kind of hopeless tax geek if, upon hearing the words ‘Pizza Express,’ your mind immediately turns to thoughts of appeals against default surcharges or to goodwill valuation (presumably this depends upon whether you are an Indirect Tax Geek or a Direct Tax Geek). The Merseyside Branch thought it politic not to even begin to delve into that particular Pizza making with Merseyside Branch question at our most recent networking event, an evening knowledge of tax was hardly hat. Still, the finished product hardly have been said to of pizza making at that famous necessary on that evening in was basically presentable have hit our eyes, one might establishment which has September 2018. The ability and edible and the night was question whether the pizza featured in not one, but two, to flatten your dough without greatly enjoyed by all. Our pies were truly big and it tax cases (Pizza Express v tearing it, toss it in the air thanks are due to Michael was not necessarily a case of Commissioners of Customs & without dropping it (all in the Page for their sponsorship. amore. But it was networking. Excise and Balloon Promotions wrist action, they say) and the To misquote a song. Since Merseyside style. v Wilson if you have tax resilience to make calzone it was cloudy, the moon can Çiao for now. geekdom aspirations but against the clock were far cannot immediately recall the more useful. Not to mention ATT proceedings in question). knowing how to look good Truth be told, even a slight in a plastic apron and paper Another successful ATT ATT Foundation year of Sharpen Your Qualifications Tax Skills COURSES attending the events for QUALIFICATIONS Certificate of completion. the past four years and tells The Foundation It has been another successful us what she enjoys about Do you have employees that Qualifications are ideal for: year for the annual joint AAT them: ‘I really like attending would benefit from studying a zz Bookkeepers and / ATT Sharpen Your Tax Skills the Sharpen Your Tax Series short online course in Personal other professional one-day courses presented events each year as I find the Tax, Business Tax or VAT staff providing tax by Michael Steed, Head of information is always up-to- Compliance? services. Tax for BPP Professional date and very topical issues If you do, the ATT zz Junior members of Development, and co-chair of are covered. I own a small Foundation Qualifications staff to extend their ATT’s Technical Steering Group. business and I find the areas could be the answer. The knowledge and broaden This year’s series consisted of covered are really useful for Foundation Qualifications can the work they can do. seven events across London, day-to-day business. Meeting open up the door to a future zz Anyone looking for the Bristol, York, Birmingham and other attendees at the event career in tax or just broaden first step to the full ATT Manchester following the is also valuable as we are able an employee’s knowledge of Qualification. popular interactive, case-study to share common experiences tax in a specific area. zz Accountants who wish to based format. with one another. I would Each qualification is enable cross-department Topics covered ranged from highly recommend the events split into four modules of secondments. capital allowances, employee to others working in the tax learning and testing. Once benefits, VAT and where profession.’ the four modules and Final For more information, to draw the line between a The 2018 series saw over Certificate Examination have please visit www.att.org. hobby and trading, property 300 attendees across all seven been successfully passed, uk/foundation or call 020 tax issues. sessions and we look forward employees will receive a 7340 0550. ATT and CIOT Member to welcoming them and many Joanna Wright has been more in 2019. www.taxadvisermagazine.com | December 2018 49 BRIEFINGS
CIOT
about how taxes were decided CIOT/IFS Debate: Tax in Scotland. The same survey had also found a widespread lack of understanding over devolution in the spotlight which tax powers were the responsibility of Westminster and which of Holyrood, despite the growing importance of devolved taxes to the Scottish budget. Walker noted that the forum had considered a range of issues relating to the operation and performance of the devolved taxes, their interactions with the wider UK system and the attitude of the Scottish public towards tax devolution. Julia Goldsworthy, director of strategy for the West Midlands Combined Authority, said that combined authorities, established on a Dr Neil Lee, Helen Miller, regional scale, were prime for Joanne Walker, Julia empowering tax devolution. Goldsworthy and David Phillips That said, the current focus in the Midlands was less on EVENT capacity existed at a sub- support for tax devolution to the devolution of existing national level to support its be effective. He suggested that tax powers and more on the In October, a panel of experts implementation. He noted the quality of local government generation of new revenue gathered at 10-11 Carlton that while devolution can in the UK had declined in recent streams. Tax devolution, she House Terrace in London for the empower, it can also incentivise years, with administrations argued, needed to be viewed latest CIOT/Institute for Fiscal tax competition and a ‘race to in many areas simply not up as a process and not an Studies (IFS) debate on tax the bottom’. Authorities may to the task. event. Consideration needed devolution in the UK. Chaired seek to lower taxes to attract Joanne Walker of the CIOT to be given to the impact by Helen Miller, Associate inward investment, to the considered the impact of tax of tax devolution on other Director and head of tax at detriment of local tax bases devolution in Scotland and sources of revenue and the IFS, the evening’s discussion and public spending. Phillips the powers devolved through ability to attract both public considered that the devolution noted that property taxes were the Scotland Acts of 2012 and and private investment. of tax-setting powers across the most attractive type of tax 2016 (Scottish Income Tax, Goldsworthy, a former MP the UK is a transformative issue to devolve. But the inequities Land and Buildings Transaction and Treasury adviser, also meriting wider debate than in property prices across the Tax, Scottish Landfill Tax and suggested that a longer-term at present. UK (and thus a hugely differing (the yet to be implemented) approach to revenue planning A piecemeal approach to tax yield) posed a problem, Air Departure Tax). Together was necessary to remove day- tax devolution has, over the with his research noting that with the Institute of Chartered to-day political expediency last two decades, seen a myriad these receipts were heavily Accountants of Scotland (ICAS), from the process. of tax powers devolved to the concentrated in the south east the CIOT had established the During a Q&A session, the UK’s constituent nations. That of England. Personal income Scottish Taxes Policy Forum to panel were asked whether tax said, Miller noted in opening taxes had the benefit of being review Scotland’s tax powers devolution was a distraction remarks that England remains easily identifiable, but diverging in the 21 years since Scottish from the day-to-day business something of an outlier, with rates within jurisdictions had voters backed the creation of of running local government. a more centralised tax system the potential to encourage a Parliament with tax raising They were also asked if than other parts of the UK avoidance, especially among powers. Its report – published the constraints on Scottish that fails to take into account higher earners, said Phillips. at the start of October – had income tax devolution had regional priorities. David Dr Neil Lee of the London concluded that there needed increased the scope for tax Phillips of the IFS set out the School of Economics said to be a more logical and planning and avoidance and rationale for tax devolution, that despite a global trend consistent framework for the whether a wider debate noting that it has the ability towards devolution since devolution of tax powers across across the UK on the to empower communities, the 1970s, there was little the UK, with a greater emphasis devolution of extra powers incentivise economic growth clear guidance in the theory on improving public awareness other than revenue-raising and be more responsive to local behind the costs and benefits and understanding. The CIOT was needed to empower local investment priorities. Phillips of fiscal decentralisation. Lee had commissioned an opinion democracy. then considered the risks warned that the UK’s regions poll that had found that 84 per To listen to an audio of and challenges of devolution, and nations needed to have cent of Scots believed they the event, please visit https:// questioning whether significant strong leadership and public needed better information tinyurl.com/ycfw56ps.
50 December 2018 | www.taxadvisermagazine.com BRIEFINGS
ADIT New ADIT module on the international taxation of banking EXAMS said: ‘The new Banking module are required to pass any two continued growth and will benefit tax professionals, option modules in addition to development of ADIT to The CIOT is pleased to their firms and clients by the compulsory Principles of serve an ever-increasing announce the launch of a new distilling essential and cutting- International Taxation module community of international module on international tax and edge knowledge of the tax in order to achieve the full ADIT tax practitioners and their the banking industry, as part of issues concerning banks and qualification. The first exam for employers speaks volumes its ADIT qualification. financial institutions into a the Banking module will take to ADIT’s value as a mark The new module will cover syllabus and exam that can place in June 2019. of quality in international topics such as investment be studied and sat around the The Banking module is tax. ADIT continues to banking, capital and global world. Successful students the newest addition to an be a versatile way of markets, asset financing and will have demonstrated their expanding range of optional demonstrating technical management, private banking expertise in international bank ADIT modules, which now cover knowledge and practical skills and wealth management, related taxation to the very industries from banking to oil in the study and application and will be of interest to tax high standard demanded by and gas, along with 12 national of international tax across a professionals working for, the exam.’ and supra-national jurisdictions range of subjects.’ or advising, financial service The Banking module is representing approximately 70 For further information institutions around the world. one of 17 option modules per cent of the world economy. about the Banking module, CIOT President Ray McCann available to ADIT students, who Ray McCann said: ‘The visit www.adit.org.uk/banking
WCOTA News from the WCOTA EVENTS projects, which included the anyone with an interest in the new Guildhall, the wharf at City of London. Alison Lovejoy brings us news Billingsgate and the restoration The next History of Tax talk of the WCOTA of London Bridge, were funded will be on 26 February 2019, partly by benefactions and partly when Gottfried Schellmann will History of Tax Lecture by levies on either the 24 Wards talk about the taxation in the Caroline Turnbull-Hall writes or the City Companies. The levy Hapsburg Empire. On 15 October 2018, that was imposed during the Professor Caroline Barron gave siege of Rouen raised £94 18/- His Master’s Voice a talk entitled ‘Tax in Medieval from 22 of the City wards, with Our Master, Marcus City of London (1066-1500)’. the Aldermen contributing a Fincham, writes This was delivered in the similar amount. Following a most enjoyable magnificent surroundings of The The system of taxation in Installation Dinner my year as Skinners’ Hall. Professor Barron, London was founded on the basis Master commenced in earnest Driving sheep across London Bridge herself a Liveryman of the that the rich had a duty to help with the annual reception for Skinners’ Company, is Emeritus the poor, which was a motivating Livery Companies at the National north towards the City, reflecting Professor of History at Royal factor for paying the tax levied. Army Museum. This totally how much more relieving this Holloway, University of London, Few disputes were recorded, renovated museum has changed historic end of the journey would and President of the British possibly due to the social beyond recognition in the 25 have been to those who had had Association for Local History. control inherent in the system of years since I last visited – gone to drive them in from Kent. Professor Barron set collection, as those charged with are many of the glass cases to be The new Lord Mayor was the scene by considering the collecting the tax were often the replaced by interactive exhibits elected at Common Hall on system of taxation in force neighbours of those contributing. which want you to pick out Monday 1 October and I very in England during the period, The tax system that evolved camouflaged snipers or consider much look forward to seeing which developed from feudal in medieval London supported how you would react in different and supporting him in many extractions in 1066, to a system both national and local demands combat situations. events over the year ahead. of fractional taxes on moveable for money in a manner that Then on a topic close to The spectacle of Common property from the late thirteenth appears to have been both my heart – the driving of sheep Hall, where no livery Master is century. London claimed special efficient and non-contentious. across London Bridge. I was told knowingly under-dressed is a treatment and exemptions Professor Barron also gave very firmly that the sheep would wonderful entree to the rich in relation to national taxes, those there the opportunity to be provided and participants feast that lies ahead. and developed systems to pay buy ‘A Map of Tudor London: could not bring their own! To learn more about all fractional taxes to the Crown England’s Greatest City in Undeterred the Mistress Tax the varied activities of the as well as for raising funds for 1520 (ISBN 978-0-9934698-3-1 Adviser, my two young boys and Company and to join, go to www. specific civic projects. These £8.99) which is a must-have for I enthusiastically drove the sheep taxadvisers.org.uk. www.taxadvisermagazine.com | December 2018 51 BRIEFINGS
CIOT
The Two Ethels: First Ladies in Accountancy and Tax
Katie Broomfield, Postgraduate research student at Royal Holloway and Bedford New College; Ruth Livesey (Chair), Professor in 19th Century Literature & Thought at Royal Holloway and Bedford New College; Dr Anne Logan, Reader in Social History, University of Kent; Carrie De Silva, Principal Lecturer - Law and Taxation, Harper Adams University; Dame Rosemary Spencer, Civil servant and diplomat, former HM Ambassador to the Netherlands; Helen Thornley, ATT Technical Officer; Dr John Prebble, Honorary Fellow, former Vice-Principal and Senior Lecturer in Biochemistry at RHBNC; Professor Paul Layzell, Principal, Royal Holloway and Bedford New College.
HISTORY different organisations (the After the celebrations in ICAEW looked down on the LAA 2018 of the centenary of as a lesser body), Helen was the Representation of the able to compare their differing People Act 1918 which gave experiences of the accountancy voting rights for (some) profession. women, 2019 marks 100 Both women went on to years since the professions set up their own practices and were opened to women use their accounting and tax following the passing of the skills to campaign for wider Sex Disqualification (Removal) women’s rights. Ayres Purdie Act 1919. To celebrate both was a founder member of the Acts, ATT Technical Officer Women’s Tax Resistance League Helen Thornley spoke at a who campaigned for the vote, ‘First Ladies’ event in October while Watts campaigned on about two of the first ladies equal pay. Both lobbied for the in accountancy and tax: Ethel separate taxation of husbands Watts and Ethel Ayres Purdie. and wives. Until the 1919 Act was The number of women passed, the ICAEW’s Charter in the profession increased did not permit the admission slowly following the 1919 of women. The first woman to Act. By 1948, more than 20 Helen Thornley complete her training following years after Watts joined the the Act was Ethel Watts, who ICAEW, she was one of only Other speakers included research student at Royal was admitted to the ICAEW in 114 female members. Today, fellow ATT member Carrie Holloway, talked about the 1924. Prior to 1919, it was Ethel the ICAEW has over 42,000 de Silva, Principal Lecturer in experiences of the first Ayres Purdie who blazed a trail female members, although they Law and Taxation at Harper ladies in law. as the first woman admitted to only make up 28% of the total Adams University, who spoke With the centenary of the any professional accountancy membership. By contrast, 51% about Irene Barclay, the 1919 Act next year, Helen is body in the UK when she joined of ATT members and 49% of first woman to qualify as a happy to talk about the two the London Association of CIOT members are female. chartered surveyor. Dame Ethels, their work in tax and Accountants (LAA) in 1909. The First Ladies event Rosemary Spencer, Former the admission of women to Since Ayres Purdie and was organised by the Bedford British Ambassador to the the accountancy profession to Watts not only started their Society, a society for alumni Netherlands, spoke about the any interested groups. She can careers either side of the 1919 of Bedford College which now first ladies in diplomacy and be contacted at hthornley@ Act but also joined two very forms part of Royal Holloway. Katie Broomfield, postgraduate att.org.uk.
52 December 2018 | www.taxadvisermagazine.com To place an advertisement contact: [email protected] Recruitment
SKILLS SHORTAGES THREATEN HIRING PLANS
Hiring plans are at their highest, with over three-quarters of employers planning to hire over the next year. However, with 92% of employers experiencing skills shortages last year, hiring challenges to find the right candidates are set to continue. The Hays Salary & Recruiting Trends 2019 guide provides employers insight into what tax professionals value when considering a new role and how to tailor hiring strategies to attract them. Use the guide to benchmark your pay and that of your team against a range of job titles across the tax industry. Request your copy at hays.co.uk/salary-guide or contact Alex Stirling on 020 3465 0138
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Are you a Chartered Tax Adviser looking for a new challenge in the charity sector?
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For detailed job descriptions, working hours and salary guideline plus details on how to apply, please contact [email protected]. The closing date for applications is noon on 2 January 2019.
www.taxadvisermagazine.com | December 2018 53 RECRUITMENT To place an advertisement [email protected]
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Intertrust Guernsey is a leading provider of private client, corporate and fund administration services in the island. Due to our continued growth, we’re looking to recruit the following in our private client team:- • Private Client Services Director, Tax • Private Client Services Manager, Tax These two senior tax specialists would have experience in dealing with high net worth individuals, trusts and companies and their UK tax compliance and international structures. Further details on these vacancies can be found on the Intertrust Group website www.intertrustgroup.com/careers
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54 December 2018 | www.taxadvisermagazine.com OPPORTUNITY TO BE AN EXAMINER FOR THE CIOT
With the introduction of our new exam structure in 2019, we want to strengthen our examining teams and are seeking specialists in the following areas who would like to join us: • Indirect Taxation • Taxation of Owner-Managed Businesses • Taxation of Individuals • Human Capital Taxes • Inheritance Tax, Trust and Estates • Corporation Tax
Applications are invited from those with at least three years’ post qualification experience who can offer the skills required to help to maintain and enhance the standard of our examinations. The key requirements for the role are:
• The ability to keep to the tight timetable for the preparation and review of the exam questions and for the marking of scripts • Strong technical skills • Good written communications skills • The ability to work as a member of a team
You would be part of a team responsible for drafting, reviewing and marking one of the Advisory examination papers and for ensuring that the examinations are of the highest possible quality. The time commitment varies from paper to paper, but most examiners continue to work full-time and carry out CIOT work at weekends and in the evenings. Typically, an examiner in an Advisory team will be part of a team of four and will write and review half of a paper once a year and will mark questions they have set. If appointed you will be required to attend training on the afternoon of 19 March 2019 and an Examiners’ Day on 20 March 2019.
The draft 2019 syllabus and recent exam papers can be found here:
Past exam papers: https://www.tax.org.uk/students-qualifications/studying/past-exam-papers
Draft 2019 syllabus: https://www.tax.org.uk/draft2019syllabus
Remuneration is commensurate with the strong skill set demanded for examiners.
If you are interested then please email Jude Maidment a copy of your CV in the first instance ([email protected]). This will be passed to the Chief Examiner. If you would like to discuss the examiner role then please contact Jude on 020 7340 0577. MEET YOUR ADVISERS
GEORGIANA HEAD ALISON TAIT
Director Director
Tel: 0113 280 6766 Tel: 0113 280 6764 Mob: 07957 842 402 Mob: 07971627 304
[email protected] [email protected]
In-house Expatriate Tax In-house Tax Manager Aberdeen – £35,000 to £50,000 + bens Salford Quays – To £48,000 + bens In-house expatriate tax roles outside of London are really Our client is an in-house finance team, and they seek a qualified rare, yet our client is looking for 2 hires both to be based in Tax Manager (ACA, CTA or equivalent) to help manage the Aberdeen. Would suit an Assistant Manager or Manager from compliance and tax reporting requirements for the Group. a large accountancy firm or currently working in-house. You In this key role, you will also be involved in advisory projects will need strong communication and organisational skills such as TP work, process improvement and SAO reporting. and the ability to build rapport with business colleagues Could suit someone looking to move in-house, and is a in a range of locations. In these roles, you will help the chance to broaden your experience and deal with both direct business on maximising the efficiency of their employment and indirect taxes. Our client would consider either full time structuring by reviewing costs and modelling mobilisations. or a 4 day week. Excellent benefits including onsite gym and Call Georgiana Ref: 2723 fully expensed bar and restaurant. Call Georgiana Ref: 2726
Senior Tax Manager Corporate Tax Manager Manchester – £50,000 to £60,000 + bens Manchester – £42,000 to £52,000 + bens Top 20 accountancy firm based in central Manchester seeks a A new role has arisen in a Top 20 firm in Manchester. This key Senior Tax Manager to work on large corporates and dynamic position is for a corporate tax manager to work directly to a OMBs. Could suit someone from the Big 4 or industry who is tax partner. In this role, you will deal with an interesting mix of looking for more of a work-life balance. Of particular interest compliance management and advisory work. Clients tend to would be some experience of tax audit and tax risk work or be dynamic owner managed businesses. This role would suit international tax . Full, part time or flexible working considered. a qualified tax professional (ACA, CTA, ICAS or equivalent) who Friendly team and an excellent client base make this a great likes variety and who enjoys dealing with clients directly. This is place to work. Would consider a Manager looking for a step a growing team and part of a well run and profitable firm where up to Senior Manager. Call Georgiana Ref; 2717 there is opportunity to progress. Call Georgiana Ref: 2722
Indirect Tax Advisor – In-house Assistant Managers Manchester – £37,000 to £48,000 + bens Harrogate – £excellent Our client is the in-house finance team of a large international Great roles for recently qualified (ACA, ICAS or CTA) tax group. This team seeks a tax specialist to manage the VAT professionals to join a rapidly growing, extremely successful compliance and reporting processes for the UK. There is also practice in Harrogate. Our client is looking for both personal the opportunity to work on some direct tax work and to be tax and corporate tax specialists. You will become involved in involved in process improvement work for tax and a range of a wide range of compliance and advisory work. Plenty of scope advisory projects. This business considers either a full or part for progression and a great mentoring programme make these time appointment. A relevant qualification (ICAS, ACA, ATT or great roles for candidates looking to develop their career in tax. CTA) would be an advantage, but our client will also consider Would also consider someone more experienced who is looking those qualified by experience. Call Georgiana Ref: 2725 for a 4 day week. Lovely location too. Call Georgiana Ref: 2264
www.georgianaheadrecruitment.com Indirect Tax Manager Private Markets Consultant Leeds – to £50,000 + bens Leeds – to £52,000 + bens This international firm has a thriving indirect tax practice. As part This team has a large number of family owned businesses and of their plans for growth, they are looking for an ambitious indirect private equity clients of all sizes up to FTSE 250 companies. tax manager to manage a portfolio of advisory work on UK, You will manage a portfolio of clients, with responsibility international and listed clients. You should be CTA/ACA/ACCA for both the corporate tax compliance and advisory work, qualified, with a commercial edge and the enthusiasm to grow a working alongside specialist teams such as international business. You will have man management responsibilities and will tax, R&D and M&A tax. This is a fantastic opportunity for an be expected to delegate work to and review work undertaken by ACA/CTA/ICAS qualified corporate or mixed tax professional junior team members. A fantastic opportunity to join a successful looking to specialise in this client sector. With the opportunity team at an exciting stage in their growth. Call Alison Ref: 2707 for flexible working. Call Alison Ref: 2626
Personal Tax Senior Tax Planning Manager Leeds – to £26,000 + bens Preston – £excellent + bens Our client is a well regarded independent firm based in Leeds. A fantastic opportunity for an experienced tax planning specialist to They seek a tax specialist with circa 3 years’ personal tax join a large firm in Preston. This is a varied role and you will be expected experience. In this role, you will deal with the self assessment to advise on technical issues including company restructuring, compliance work and also assist more senior staff with research employee share schemes, dividend planning, management buy for tax planning. Study support may be available for the right outs, corporate tax planning, e.g. loan relationships and derivatives candidate. You will need experience of the preparation of and year-end tax planning. You should be ATT, CTA, ACA or ACCA self assessment tax returns and dealing directly with clients. qualified, with knowledge of both corporation tax and personal tax. Experience of dealing with the tax affairs for the medical You must have excellent communication skills and enjoy working sector would also be advantageous. Call Alison Ref: 2596 as part of a team. Call Alison Ref: 2724
Tax Advisory Consultant N. Leeds – £excellent + partnership potential The work at this tax planning consultancy is varied, and projects undertaken include transactional tax, succession planning for businesses, sale/exit planning, property tax planning and advising directors and HNW individuals on tax efficient ways of managing their income and business tax affairs. There is the very genuine opportunity for the right candidate to take over the business in the future. You will ideally be CTA/ACA/ICAS/ACCA qualified, with experience of working in a tax advisory role in a practice environment. Part time or full time considered. Call Alison Ref: 2639
Expatriate & Employment Taxes Senior Assoc. Manchester – to £38,000 + benefits An unusual opportunity for an expatriate tax specialist to deal with broader employment tax work. You will undertake expatriate tax compliance and planning work, manage a portfolio of smaller programmes and HNW resident and domicile cases, advise on issues including employment contracts, social security, benefits in kind, termination payments, PAYE and NIC planning and the tax treatment of share options. You will ideally be ATT or CTA qualified, ideally with some experience of both expatriate and employment tax issues. Call Alison Ref: 2718
YOUR TAXATION RECRUITMENT SPECIALISTS MAGNETIC NORTH GUIDING YOU TO THE BEST TAX JOBS IN THE NORTH OF ENGLAND SENIOR VAT MANAGER PRIVATE CLIENT SENIOR MANAGER YORKSHIRE Circa £75,000 plus benefits MANCHESTER To £70,000 plus bens Your chance to shape the VAT strategy of this highly respected firm. As an experienced, Take your career to the next level by joining this market leading team with a truly VAT specialist, you will play a pivotal and visible role in driving the VAT advisory service impressive, entrepreneurial client base. The role will focus on the delivery of private and supporting future growth through strategic business development. An exciting client advisory work as well as staff management and business development. Would opportunity for an energetic, committed individual to join this progressive business. suit either an experienced manager looking to achieve promotion or a well-established Excellent prospects. REF: S2857 senior manager. REF: A2858 TAX MANAGER (PART TIME) IN-HOUSE TAX MANAGER MANCHESTER To £50,000 FTE WAKEFIELD To £65,000 plus bens This long-standing independent firm is looking to recruit a part time tax manager in Opportunity for a Tax Manager with sound corporate tax skills to join a manufacturing a role that will focus on providing support to the tax partner on wide ranging OMB firm in a varied, in-house role. You will be involved with group restructuring, acquisitions advisory work across both corporate and personal tax. A great opportunity for someone and R&D. This offers an informal, modern working environment where colleagues are looking for interesting tax work in a friendly and supportive environment. trusted and relied upon to demonstrate technical competency. Occasional UK and REF: A2887 European travel. REF: S2842 CORPORATE TAX MANAGER PRIVATE CLIENT CONSULTANT LIVERPOOL £Competitive LEEDS To £45,000 dep on exp Great opportunity for an ambitious Assistant Manager or experienced Manager. You will join This firm enjoys an excellent reputation and offers the chance to work as part of its a high calibre tax team in a role that will involve both corporate tax compliance and large and dynamic tax team, with prospects for future progression if desired. It’s a great advisory work on an impressive client base ranging from large corporates through to local opportunity for a tax qualified professional with previous tax advisory experience, including OMBs. Fantastic progression and development opportunities on offer. private client tax issues such as IHT, trusts, partnerships and international individuals. REF: A2885 REF: S2883
GROUP TAX MANAGER IN HOUSE VAT ACCOUNTANT MANCHESTER £ Commensurate with experience NORTH MANCHESTER circa £45,000 Reporting directly to the CFO, you will be the responsible for leading, developing and the Working within the finance team of this large global group you will focus predominantly on VAT execution of the group’s tax strategy and management of tax risk. This is a crucial role for the issues. This will include preparation and submission of the group’s VAT return, providing technical group carrying as it does overall responsibility for tax reporting and corporate tax compliance advice, and identifying VAT risks and opportunities. In addition, you will assist with the transition for all operations in Europe, Asia and Latin America (involving both US GAAP and IFRS). A to digital reporting and provide ad hoc support to business units across the group. fantastic senior in-house role with significant autonomy. REF: R2881 REF: R2882
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]