Aug 21, 2017 - ICAEW is a world-leading professional accountancy body. We operate under a Royal Charter, working in the
ICAEW REPRESENTATION 116/17 TAX REPRESENTATION
BUDGET AUTUMN 2017 Text of submission made on 22 September 2017 by ICAEW Tax Faculty in response to the invitation to submit representations as part of the policy-making process published on 21 August 2017 by HM Treasury
The Institute of Chartered Accountants in England and Wales Chartered Accountants’ Hall Moorgate Place London EC2R 6EA UK icaew.com/taxfac
T F E
+44 (0)20 7920 8646 +44 (0)20 7920 0547
[email protected]
Who we are ICAEW is a world-leading professional accountancy body. We operate under a Royal Charter, working in the public interest. ICAEW’s regulation of its members, in particular its responsibilities in respect of auditors, is overseen by the UK Financial Reporting Council. We provide leadership and practical support to over 147,000 member chartered accountants in more than 160 countries, working with governments, regulators and industry in order to ensure that the highest standards are maintained. ICAEW members operate across a wide range of areas in business, practice and the public sector. They provide financial expertise and guidance based on the highest professional, technical and ethical standards. They are trained to provide clarity and apply rigour, and so help create long-term sustainable economic value. Internationally recognised as a source of expertise, the Tax Faculty is a leading authority on taxation. It is responsible for making submissions to tax authorities on behalf of ICAEW and does this with support from over 130 volunteers, many of whom are well-known names in the tax world.
Copyright © ICAEW 2017 All rights reserved. This document may be reproduced without specific permission, in whole or part, free of charge and in any format or medium, subject to the conditions that: it is appropriately attributed, replicated accurately and is not used in a misleading context; the source of the extract or document is acknowledged and the title and ICAEW reference
number are quoted. Where third-party copyright material has been identified application for permission must be made to the copyright holder. For more information, please contact ICAEW Tax Faculty:
[email protected] icaew.com 2
ICAEW tax representation: Budget Autumn 2017
BUDGET AUTUMN 2017 TEXT OF SUBMISSION WHO WE ARE 1. Please see Appendix 1 [same as ‘Who we are’ above]. OUR RECOMMENDATIONS Introduction 2. Taxpayers and businesses are facing a period of uncertainty caused by the UK’s decision to leave the EU and the roll-out of Making Tax Digital. In all the surveys of businesses that we have undertaken, the overriding request is for certainty so as to enable them to plan their affairs properly, thereby encouraging growth. By themselves, each of these developments present considerable challenges and create a landscape of considerable uncertainty. Taken together they have the potential to do serious damage to the UK’s business environment. Keep changes to a minimum in the short term 3. Given the febrile environment caused by Brexit and MTD, we recommend that the overriding priority should be to provide as much certainty as possible for taxpayers, and that immediate tax changes be kept to a minimum to allow for a successful Brexit and rollout of MTD. Help and support for MTD 4. In relation to MTD, we support the move to a digital tax system and the announcement in July 2017 of a deferral of the MTD start date to April 2019. There is much detail that needs to be worked through and we have offered our help and support as it is essential that it works properly: we want to help make it a success. In terms of approach, we think MTD should not be regarded as ‘an end in itself’ but, instead, as one part of a much wider move to help make businesses more efficient through the use of digital technology. We would be happy to work with HMRC on supporting this wider approach and helping our members to support businesses as they move to digital systems. Longer term strategy 5. This is not the time to be making further changes to the UK tax system. However, we need to plan for the future post Brexit and when MTD has been rolled out. We would therefore like to start a dialogue with government about what tax changes need to be made to the tax system in the medium and longer term. The topics we would like to consider cover a number of areas, including:
an improved and more collaborative approach to policymaking; the need to reduce complexity and how we might achieve real tax simplification; the need to ensure that legislation is properly drafted and works as intended: recent court cases have shown that HMRC guidance, whilst helpful, is not a substitute for the law and taxpayers cannot rely on it; where problems arise, a power for HMRC to make reasonable amendments/concessions to allow for mistakes etc to be corrected and to allow for better management of the tax system; and the need to consolidate the taxes management provisions which are now scattered over various Finance Acts and the original TMA 1970 into a cohesive new Act.
3
ICAEW tax representation: Budget Autumn 2017
6. As a professional body helping to serve the public interest, we should be happy to assist in all of the above areas. Our members have considerable tax expertise both technically and practically and we believe we have much to offer government and HMRC. We would much prefer to work with government, HM Treasury and HMRC as trusted and valued partners. We have a shared desire to improve the tax system and ensure that the government’s policy objectives are met in the most efficient way. Other recommendations 7. Alongside Brexit we would like to see a smooth transition on social security agreements, in particular in respect of non-agreement countries and applicability to third country nationals, as well as on tax. 8. We hope that government will take forward the recommendations of the Taylor Modern Working Practices review. 9. Finally, although we have suggested that government should resist short-term changes, one potentially useful change would be for HMRC to provide advisory ‘fuel’ rates for electric cars. This would provide certainty to employers and employees where company cars are charged at home or cars owned personally are used for business. It would also complement the government’s drive to develop the market for electric vehicles.
4
