ICAS response to Queen's Speech 2015

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By ICAS

27 May 2015

ICAS, the professional body of chartered accountants, has issued the following response to the Queen's Speech and the UK Government's planned legislative programme.

On Income Tax

ICAS supports tax simplification but this may not always go hand in hand with measures such as freezing tax rates. If further government revenues are required it should be clear where these will come from. Revenue from anti-avoidance measures has been suggested as one possible source. However, if further income is required and there is pressure around anti-avoidance measures, complicated and detailed anti-avoidance legislation is likely, based on recent experience.

It should be noted that there are a number of standalone Bills, including the proposals on Income Tax, which do not appear to take full account of devolved proposals. For example, freezing Income Tax rates across the UK does not seem to take account of the Smith proposals which are being adopted in Scotland and will involve the devolution of income tax rates.

Charlotte Barbour, ICAS Director of Taxation

On the EU Referendum

Now that the UK Government has set out its plans for a European Union Referendum Bill in the Queen's Speech, ICAS believes there is a need to ensure that the UK public are properly informed about the benefits and costs associated with UK membership of the EU. Often such debate appears to be lacking in balance and in factual information. ICAS recently published a paper intended to help the electorate make informed decisions which illustrates how EU policy impacts UK policy and legislation; and highlights the possible impact on business of any decision to stay in, or leave, the EU.

ICAS also recently published the results of a survey of ICAS members working in UK businesses which was undertaken in March 2015 – on how they saw the EU impacting on their business and therefore what impact the possible withdrawal from the EU might have.

James Barbour, ICAS  Director Technical Policy

On the Scotland Bill

The proposals in the Queen's Speech to devolve new powers must meet the aspirations of people, not incur excessive burdens for businesses, and need to be operationally efficient. ICAS tax practitioners have long contributed to the development and implementation of legislation and we look forward to continuing to do so.

There is great scope for confusion in public understanding and we call upon leaders north and south of the border to help promote understanding of these powers. ICAS notes that in public usage the phrases 'Scottish taxes' or 'devolved taxes' tend to encompass different types of devolution and varying amounts of responsibilities. The nature of the powers with, say, Income Tax are fundamentally different from those devolved with, for example, Land and Buildings Transaction Tax. 

ICAS also notes that issues remain and have not yet been fully resolved around related non-statutory material and processes, such as how the block grant adjustments may be calculated or the VAT assignment is calculated. Nor is it yet clear how 'no detriment' will be interpreted or calculated.  These points will have an impact on whether the devolved taxes achieve their aims of greater accountability between the Scottish parliamentarians and their electorate.

Charlotte Barbour, ICAS Director of Taxation

On devolution within the UK

ICAS has valued the opportunity for constructive engagement to date with the Scottish and UK governments and parliaments on the devolution of further powers to Scotland. We look forward to continuing to inform debate and policy on this across the UK.

Charlotte Barbour, ICAS Director of Taxation

On enterprise

ICAS welcomes the UK Government's stated intention to cut red tape and save businesses at least £10bn over the next five years. This is an ambitious target and we need to see the detail.

James Barbour, ICAS  Director Technical Policy

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