Current Tax: A day not to be missed
Current Tax has always been a unique feature of the ICAS brand, and Donald Drysdale notes that the course is as valuable now as ever.
Tax specialists of my vintage, who’ve worked in the profession for more decades than we’d care to admit, may share my fond memories of ICAS Current Tax Courses that were among the best CPD events of the 1960s and 70s.
Fast-forward half a century and little has changed. If you couldn’t attend this year’s ICAS Spring Tax Update, or if you’d prefer to spend a whole day absorbing the latest developments in somewhat greater depth, Current Tax this September offers an opportunity not to be missed.
The speakers will choose their content from subjects they consider most topical when the course is held in September. I can’t predict what these will be, but the following are among likely candidates.
Taxation of property
The tax regime for buy-to-let landlords has fundamentally altered. Relief for finance costs incurred by landlords who are individuals has been reduced gradually, and from April 2020 will be allowed only as a basic rate tax reduction. The capital gains tax regime for non-exempt dwellings is being tightened.
The VAT registration and de-registration thresholds are being eroded. They’ve been frozen at £85,000 and £83,000 respectively for another two years to 31 March 2022.
From 1 October 2019 a new domestic reverse charge will apply for building and construction services. It will only affect supplies at the standard or reduced rates and it introduces a number of complications and cash flow implications for those in the Construction Industry Scheme (CIS).
Working with HMRC
All agents are expected to comply with the standards for qualified practitioners, set out in Professional Conduct in Relation to Taxation (PCRT). HMRC have been slow in developing their strategy for working with tax agents, and have only a limited number of digital services for agents.
This year’s biggest compliance change for most businesses is the start of Making Tax Digital (MTD). A common dilemma for agents is how to resolve difficulties for clients, whether on MTD or any other subject. The agent account managers service is available for client-specific issues that can’t be resolved through normal HMRC channels.
Technical amendments have been made to the corporate interest restriction rules, including changes consequent upon the introduction of IFRS 16, the new accounting standard for leases.
From 6 April 2020, non-UK resident companies conducting a UK property business or having other UK property income will subject to corporation tax, rather than income tax as at present.
The reform of loss relief has been modified to prevent excessive relief for carried-forward losses. Changes affect (among other things) the way restricted losses are calculated by all companies, the deductions allowance where a company is a member of more than one group, and the calculation of terminal relief.
The Controlled Foreign Company (CFC) definition of control and the treatment of certain profits generated by UK activity rules have been changed from 1 January 2019, to ensure compliance with the EU Anti-Tax Avoidance Directive (ATAD).
In the corporate intangibles regime, relief for acquired goodwill has been partly re-instated on acquisition of businesses with eligible intellectual property, and from 7 November 2018 no charge arises on a de-grouping that falls within the substantial shareholding exemption.
The off-payroll working rules, which reformed IR35 within the public sector from April 2017, are to be extended to the private sector from April 2020. Contractors and businesses engaging them need to prepare for this change – as do their tax advisers. 2019 may prove to be the lull before the storm.
In changes to capital gains tax entrepreneurs’ relief, two new tests were introduced from 29 October 2018 when defining a ‘personal company’, subject to a further alternative test. From 6 April 2019, the 12-month minimum holding period was increased to 24 months.
From April 2019 non-UK residents are subject to capital gains tax, or corporation tax on chargeable gains, on disposals of all forms of UK land. These include direct disposals of UK residential and non-residential property, and indirect disposals of entities predominantly deriving their value from UK land.
From April 2019 the pre-existing non-resident capital gains tax regime has been extended. And from April 2020, even UK residents disposing of non-exempt residential property will have to make a return and a payment on account within 30 days of completion.
A new structures and buildings allowance (SBA) applies to new non-residential structures and buildings (but not land) where all contracts for the physical construction are entered into on or after 29 October 2018. Costs eligible for SBA can’t qualify for plant and machinery allowances.
Following updates this year to the lists of energy-saving and water-efficient expenditure qualifying for enhanced capital allowances (ECAs), the ECA scheme will end on 31 March 2020 for companies and 5 April 2020 for unincorporated businesses. The associated first-year tax credits for companies will end on 31 March 2020.
First-year allowances for new and used electric vehicle charging-points have been extended for four years, until 31 March 2023 for companies and 5 April 2023 for unincorporated businesses.
The annual investment allowance (AIA) has been increased from £200,000 to £1m per annum for two years from 1 January 2019, with transitional rules applying to straddling periods. The special rate allowance has been cut from 8% to 6%. Careful planning of expenditure may be needed to maximise reliefs.
Scottish income tax bands have diverged further from those in the rest of the UK, perhaps encouraging some tax planning activity. Additional dwelling supplement (ADS) has increased to 4%, and technical changes to ADS have been made but more are called for.
The Scottish Budget faces new risks as Scotland becomes responsible for increased social security expenditure. However, assignment of VAT revenues is likely to be postponed.
The outcome of the Brexit debacle is still unknown at the time of writing. Given the current Brexit deadline of 31 October, the political progress towards it might well affect the eventual content of Current Tax.
The speakers at Current Tax will include:
- Charlotte Barbour, Director of Tax, ICAS (Chair)
- Philip McNeill, Head of Tax (Tax Practice and Owner Managed Business Taxes), ICAS
- Helen Thornley, Technical Officer, Association of Taxation Technicians
- Michael Steed, Head of Tax, BPP Professional Development
Current Tax will be held in the following locations:
- Glasgow, 10 September 2019, 9:30am – 5:00pm
- Aberdeen, 11 September 2019, 9:30am – 5:00pm
- Inverness, 12 September 2019, 9:30am – 5:00pm
- Edinburgh, 13 September 2019, 9:30am – 5:00pm
For those unable to attend one of the above locations, this course is also available as an Online Classroom Live (OCR Live) course on 16 September 2019, 9:30am – 5:00pm.
Article supplied by Taxing Words Ltd