Talking tax
By Charlotte Barbour and Michael Steed
3 June 2020
Our Current Tax 2020 events will bring CAs up to speed with the latest changes and help you tackle the challenges ahead
At the time of writing, it may seem that the Covid-19 crisis is consuming all our thoughts and energies.
But we are still making plans for the future. The ICAS flagship course Current Tax 2020 is a one-day seminar for CAs and their staff, presented by tax experts, offering technical and practical insight into areas of change in tax law.
The events are scheduled for September and, this year more than ever, we hope to see as many members there as possible.
Preparing for Brexit
There has been considerable uncertainty in recent years, for businesses and individuals, following the outcome of the EU referendum and the prolonged Brexit process.
The Conservatives’ December election victory has ended one phase of Brexit, with the UK formally leaving the EU at the end of January.
However, the absence of an agreement on the precise nature of the UK’s future relationship with the EU means no end yet to the uncertainty, although we hope for some further clarity by the autumn.
One of the key topics in Current Tax 2020 will be a session on how practitioners can prepare and offer advice to their clients for Brexit, including the relevant VAT rules and postponed accounting rules for VAT.
Attend Current Tax 2020
An excellent opportunity for accountants and staff involved in tax work to bring their technical knowledge up to date.
It covers the changes introduced both UK-wide and in Scotland. Charlotte Barbour CA, who is chairing the course, notes: “This course offers everything that is best about ICAS: an opportunity to learn from fellow CAs, a concentrated day focusing on current changes to tax law and practice that affect practitioners, and the chance to catch up with friends and colleagues. I look forward to seeing members and their staff at Current Tax 2020.”
When and where
14 September – Glasgow
15 September – Edinburgh
22 September – Aberdeen
23 September – Inverness
Please note: courses may move online if the Covid-19 pandemic prevents meeting in person
Changes to tax legislation - unpicking the finance bill
The Conservative election manifesto contained a commitment not to increase the main revenue-raising taxes.
But spending promises, and the emergency measures to assist businesses through the Covid-19 pandemic, need to be paid for.
The result will be tax changes at the edges that lack transparency – and increasingly complex and lengthy tax legislation, which makes it harder for taxpayers to understand and comply with their obligations.
While some honesty and transparency from our political leaders around the need to pay for public services would be helpful, at Current Tax 2020 we’ll set out to explain the key tax changes and their relevance to the OMB sector and members in practice.
This year’s Finance Bill also has a number of measures that have been long heralded and will need future actioning, such as the IR35 off-payroll working rules in the private sector.
Originally intended for April 2020 but now postponed until April 2021, these rules are designed to stop contractors artificially working off-payroll.
The changes are expected to bring in significant amounts of NIC and income tax to the government.
On the other hand, it will add to labour costs and bring uncertainty over who will bear the economic burden.
Such uncertainty will require clarity in contracts and status determinations.
Existing legislation that comes into effect in 2020
New CGT reporting and payment requirements for residential property disposals commenced in April.
This is not a new measure, but in spite of the numerous practical issues raised in consultation responses (by ICAS and other professional bodies), the government is implementing it.
There have been very limited advance communications from HMRC regarding the change and our experience with tax agents and their clients is that there is little awareness of the new requirements.
Taxpayers who are generally compliant, and would want to comply with the rules if they were aware of them, may well suffer unexpected penalties due to the failure to communicate the new rules in a timely and effective way.
Current Tax 2020 will examine how to manage the risks attaching to lack of awareness among clients and which may cause practical problems for tax advisers.
Entrepreneurs' relief
The Conservative manifesto promised to review and reform entrepreneurs’ relief (ER).
A recent National Audit Office report highlighted the £2.2bn cost of the relief in 2018-19, coupled with its limited impact on decision making, adding further likelihood to the idea that reform was waiting in the wings.
The measure announced in the Budget, and effective from Budget day, reduces the ER lifetime limit from £10m to £1m.
This is billed as leaving 80% of businesses unaffected, but for those who are it will have a major impact on the tax cost of business disposal.
This article first appeared in the June 2020 issue of CA magazine.