ICAS Briefing Paper for MPs on the Finance Bill Committee
Susan Cattell outlines the key points covered in the briefing paper.
The paper, sent to the MPs on the Finance Bill Committee, sets out the key concerns of the ICAS Tax Committee in relation to the Finance Bill 2016 and related tax policy matters.
ICAS regularly raises concerns through the normal tax consultative process but the briefing paper provided the opportunity to highlight a number of wider policy matters we believe should be addressed. It also noted that consideration needs to be given to the impact of devolution on tax policy.
The wider policy issues discussed in the briefing are:
- Complexity of tax legislation
- Distortions in the tax system
- Certainty and stability
- Administrative Burden of Taxation and HMRC resources
- Making Tax Digital
In addition to these concerns about wider policy issues the paper also makes comments on two specific clauses in the Finance Bill:
Clause 35: Distributions in a winding up
This targeted anti-avoidance rule is broadly drafted and could potentially catch a wider range of transactions than the abusive ones it was intended to address. Without a clearance mechanism the resulting uncertainty could inhibit some commercial transactions, including some commercially motivated company reconstructions.
Clause 149 and Schedule 19: Large Businesses - Publication of a Tax Strategy
HMRC’s original impact assessment indicated that only the largest 2000 businesses in the UK should be within the scope of this requirement to publish a tax strategy. However, the drafting of the legislation extends the requirement to small companies within large multinational groups – even though the UK presence is small. This is likely to present practical problems – and could be resolved by including a de minimis exemption for small entities.