No election break for ICAS tax team
While waiting for the electorate to make up its mind, Donald Drysdale considers how the inevitable uncertainties affect tax specialists – and particularly the tax team at ICAS.
Both Houses of Parliament at Westminster are deserted in the period running up to Thursday’s General Election. HM Treasury, HM Revenue & Customs and the rest of the civil service are ‘in purdah’ until after the result is known. One might be forgiven for thinking that tax specialists are enjoying an unaccustomed spell of peace and quiet, but in fact the reverse is true.
At times like this the likelihood of changes to tax law and policy weighs heavily on the minds of all who work in tax. Plans made by businesses, and tax advice given to taxpayers large and small, might have seemed sound and proportionate under the outgoing administration. But will they withstand scrutiny under a new Government, where tax statute and policies may change?
The annual tax cycle for practitioners
Tax practitioners are governed by an annual cycle of events which can vary according to the nature of their practice and the type of clients they serve.
A majority of UK companies prepare their financial statements to 31 December or 31 March, creating pressures to submit company tax returns to HMRC nine months later – and thus a concentration of work in late summer and autumn.
UK personal tax returns submitted online must be lodged by 31 January – although a deadline of 31 October still applies to those delivered on paper. The January cut-off date imposes huge pressures on many practitioners over the Christmas period and throughout January. The same time limits apply to trust returns.
As compliance work has become progressively more streamlined through the use of digital tools, many tax agents are able to focus greater time and resources on giving practical tax advice. This may be required at any time during the year, but with a particular focus required in the month or two running up to a company’s year-end or, for individuals and trusts, in the period before 5 April. And, of course, at times of uncertainty such as this while we await the election results.
What does the ICAS tax team do?
For the ICAS Tax Board and Charlotte Barbour, Director of Tax, key objectives include the delivery of tax support and representation to members, and policy work and liaising with the tax authorities.
Fundamental components of this include influencing the technical (as distinct from the party political) content of tax legislation through proactive submissions in advance of each annual Budget and each intermediate Autumn or Spring Statement at Westminster, and in a variety of other ways.
Charlotte and her team respond to technical consultations from Treasury and HMRC, based on the views of ICAS committees and individual members. They review draft tax legislation, tracking changes to it during its passage through Parliament. They hold meetings with appropriate Treasury officials and the tax authorities on policy and operational matters, and submit written and oral evidence to Parliamentary inquiries.
Devolution has added a new element to UK tax law and practice in recent years. With Scotland ahead of Wales and Northern Ireland in having fiscal and welfare powers devolved from Westminster, ICAS is uniquely placed to participate in the new processes and works closely in Edinburgh with the Scottish Parliament’s Finance and Constitution Committee and with Revenue Scotland.
While ICAS represents members of all political persuasions and therefore avoids taking any party political stance, the team seeks to engage with politicians of all parties where this is likely to facilitate technical improvements in tax law and practice.
The annual tax cycle for ICAS
While working closely with practitioners and other ICAS members, the tax team at ICAS are governed by a different annual cycle – one that is familiar to representative professional bodies.
One of the key tax events at Westminster is the annual Budget, which has been delivered in March in recent years but will be moved to the autumn if Philip Hammond has his way. Another is the Chancellor’s ‘Autumn Statement’, which Hammond wants to shift to the spring.
At Holyrood the Scottish Finance Secretary’s draft Scottish Budget for each fiscal year is unveiled the previous autumn and enacted in the spring, with devolved income tax rates and thresholds being set before the new tax year begins.
These crucial occasions determine the timing of much of the tax work at ICAS. In future years the pattern will be determined largely by the decision of the incoming Chancellor – perhaps Hammond, perhaps someone else – on the times of year at which the Budget and the intermediate autumn or spring Statement is to be delivered.
Hitherto, fundamental stages in the annual cycle for ICAS have included:
- Tax policy representations to Treasury and HMRC before the annual Budget
- Responding to formal and informal Treasury and HMRC consultations
- Reviewing draft Finance Bill provisions and submitting representations on these
- Responding to formal and informal Scottish Government and Revenue Scotland consultations
- Responding to calls for evidence from Parliamentary committees at Westminster and Holyrood
- Presenting the ICAS Tax Conference
- Presenting annual spring tax updates at multiple venues across the UK
- Providing relevant technical coverage to ICAS members through icas.com, the online tax magazine CA Tax, and The CA magazine.
Strength of the team
ICAS has an exceptionally strong tax team with diverse skills and experience, dispersed around the UK to provide optimum access to ICAS members and tax authorities.
Susan Cattell, Head of Tax (England and Wales), runs the International and Large Business Committee and the Private Client Committee and deals with a wide range of complex technical work. Based in the south east, she is ideally located to meet with Treasury and HMRC officials in London.
Philip McNeill, Head of Tax (Tax Practice and Small Business Taxes), is based in rural Dumfriesshire. Among his other duties he has been spearheading the ICAS responses to HMRC’s controversial proposals for Making Tax Digital, which was omitted from the Finance Act 2017 but is widely expected to re-appear soon after the election.
Justine Riccomini, Head of Tax (Scottish Taxes, Employment and ICAS Tax Community), leads on all matters relating to devolution and employment law. Based in West Yorkshire, she also heads the development of the ICAS online community and publishes the new monthly online tax magazine, CA Tax.
Charlotte herself is based at CA House but travels extensively – attending key meetings in London and elsewhere in the UK, and representing ICAS from time to time in Brussels and at other locations overseas. Working alongside her in Edinburgh are the team’s two personal assistants, Carol Ferguson and Jennie Shields, who play an essential role interfacing with the ICAS tax committees and with members.
Whatever the outcome of Thursday’s vote, you can be sure that tax will remain just as taxing as before. Whoever forms the next Government, an early Budget and Finance Bill may be expected. And the ICAS tax team will be working as hard as ever to improve the system.
Article supplied by Taxing Words Ltd