News on three HMRC Forums
By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)
3 December 2020
Justine Riccomini explains ICAS’ involvement in three HMRC and BEIS Forums and the valuable policy work being done.
A solid base in policy
ICAS policy work is moving from strength to strength. The whole of the tax team is involved in high-level collaborations with the UK, Welsh and Scottish Governments and policy teams in HM Treasury, BEIS and HMRC as well as with Revenue Scotland and the Scottish Fiscal Commission. ICAS is well respected and considered to be a trusted stakeholder in these meetings, as we strive to represent ICAS members’ interests and balance these against new and existing policy frameworks.
Three Forums
Three of the employment tax related forums are:
- EPG (Employment and Payroll Group) which is hosted by HMRC and is attended by UK professional body and industry/business body expert representatives, as well as leading payroll and benefits software houses including ICAEW, CIOT, ATT,CIPP, FSB, and CBI. I co-chair this meeting quarterly with HMRC to facilitate discussions on the latest policy moves, and practical difficulties which the legislation is throwing up for employers across the UK. We aim to improve the legislation to make it as workable as possible and increase understanding and compliance.
- NMW Forum – this forum was created in 2019 with BEIS and HMRC policy and compliance leads with a view to meeting twice a year to iron out policy issues which are leading to practical application and compliance difficulties. The forum is much smaller than EPG with only a few professional body representatives attending from CIPP, ICAS, ATT, CIOT and ICAEW, and two software developers. Thus far, the meetings have been established on an informal basis, but we are hoping to place them on a more formal footing in 2021 so that the Terms of Reference, membership and minutes are also published on GOV.UK.
- Construction Forum – after the demise of the CIS Operational Forum in March 2019 (minutes ceased to be published on GOV.UK from April 2016), ICAS led the initiative for the formulation of a business case to re-convene a meeting and keep the channels of dialogue open between HMRC and the construction sector on not just CIS matters, but on any taxation issue which affects that particular sector. HMRC accepted the basis for the representations and the inaugural meeting of the new Construction Forum was held on 25 November 2020. It was attended by professional body experts, software experts and construction-industry bodies. The Forum is intended to take place once a quarter.
The latest discussions
The next EPG meeting is on 8 December 2020, and two of the main items on the agenda this time will be:
- A discussion on IR35 (ICAS also represents members at the main IR35 Forum) with a view to employers preparing for the new Off Payroll rules for the private sector in April 2021 – readers will be aware the start date was deferred for a year due to coronavirus.
- An update and discussion on the latest information on CJRS compliance and investigations – the HMRC standpoint. The EPG has worked extremely closely with HMRC policy teams in the production and rolling out of guidance and assistance programming.
Both topics are likely to lead to a lively debate.
The next NMW meeting is not until spring 2021, but at the last meeting, which was held in September 2020, discussions continued around the key flash points of naming and shaming, uniforms, Christmas clubs – covering off the Wagamama and Iceland cases in particular, and how NMW inspections have been taking place throughout Covid, with the Leicester operation being the most high profile. The Forum members have also had the opportunity to review and make suggestions on the latest iteration of NMW guidance, which really feels like getting a foot in the door on policy for the first time. The difficulty is that the policy is governed by BEIS whilst the compliance work has been contracted out to HMRC, who have placed their interpretation on the regulations and guidance.
Certain aspects of the legislation also clash with tax legislation in that different definitions are placed on words which is something the Forum is trying to highlight. The forum has asked BEIS and HMRC to consider cross-referencing the NMW guidance to relevant sections of ITEPA and other tax Acts so that unwary employers are not caught out. A classic example of this is that a “uniform” for tax purposes (and it is widely acknowledged this is the definition most employers are familiar with) is not the same as a “uniform” for NMW purposes.
The inaugural Construction Forum received extremely positive feedback. The meeting was convened for two hours to establish and agree Terms of Reference as well as membership, and discussions then turned to the latest consultation (issued on 19 March but which concluded on 28 August due to coronavirus-related delays) and HMRC response.
It was agreed that an additional short meeting will take place in January 2021 at which the new draft legislation and guidance which flows from the consultation will be discussed with a view to it being finalised as early as possible before April 2021, when it will be coming into force. Also discussed was the possible development of group registrations, landlord and tenant exemptions and problems with deregistration, which HMRC have agreed to take away and respond to the Forum on by January 2021.
Building better relations
The Forums, which form part of a wider network of Forums held with the UK Government, are increasingly seen as a constructive way forward and helpful to all. HMRC is welcoming debate and discussion on its policymaking and actively trying to find solutions. This makes for more transparent government and, hopefully, an increased understanding, awareness and compliance by the general public.
Things definitely appear to be moving in the right direction.
Contribute to the debate
ICAS Members are encouraged to share their views on how the policy is affecting practice. If you would like to contribute to the debate, please email tax@icas.com with your comments and suggestions.