Taxing times

Tax Conference
Donald-Drysdale By Donald Drysdale for ICAS

8 April 2016

Donald Drysdale previews the key themes of the ICAS Tax Conference, taking place in May, and why this is so relevant to all ICAS members and tax professionals.

UK taxes ought to be simplified, but we seem to be moving in the opposite direction. The recent Finance Bill (with explanatory notes) runs to 1,002 pages – only six pages shorter than the latest paperback edition of Leo Tolstoy’s famously long War and Peace.

For those working in tax or needing a strategic understanding of the fiscal environment, continuing professional development is crucial in all its different forms. Whatever one’s involvement in tax, it is becoming seriously difficult to keep abreast of the plethora of changes taking place – and that is why the ICAS Tax Conference, taking place in Glasgow on 24 May, is an essential event for all those involved with tax.

To entice big businesses to come to the UK or stay here, corporation tax is being cut in a “race to the bottom”, described by some as misguided, because change in itself creates uncertainty, and is criticised by others as characteristic of a would-be tax haven. Furthermore, while nations amend their tax rules to comply with the OECD’s base erosion and profit shifting (BEPS) project, the UK has already demonstrated a willingness to break ranks, for example, by jumping the gun in its early implementation of diverted profits tax.

Massive change

Meanwhile, the smaller businesses that form the backbone of the UK economy are being threatened by massive change. They expect that by 2018 they’ll be required to maintain their accounting records digitally, and report quarterly to HMRC. This could impose heavy administrative burdens on some, especially on the smallest concerns.

Investors and those considering investing are faced with an ever-changing scenario. Capital gains tax rates were cut sharply from 6 April, with a notable exception for non-exempt residential properties. Those already invested in buy-to-let properties are hit by this and other developments, and many hitherto profitable rental businesses will soon become loss-making after tax. Changes have also been made to entrepreneurs’ relief, and a wider investors’ relief introduced.

Even for individuals with relatively straightforward affairs, personal tax has new complexities. The new dividend tax regime, introduced from 6 April, offers tax savings to some and imposes higher liabilities on others.

Indirect taxes remain a closed book to many direct tax specialists. VAT legislation continues to evolve, and the UK Government has recently announced changes aimed at tackling VAT evasion through online sales.

It always helps to understand tax policy from the perspective of the tax authorities. HMRC is reorganising and reducing headcount, gathering more extensive data, and using ever more sophisticated methods to discourage and investigate fraud.

Professionals who work in tax are bound by ethical standards and guidelines such as those set out in The Power of One, the business ethics initiative from ICAS.

Tax can never be viewed in isolation. Business taxes are closely allied to accounting standards, which have changed fundamentally in recent years and will continue to evolve. Also, professionals who work in tax are bound by ethical standards and guidelines such as those set out in The Power of One, the business ethics initiative from ICAS.

In the longstanding debate about tax avoidance by multinational enterprises, a prominent protagonist is the Rt Hon Dame Margaret Hodge MBE MP, who has enjoyed a high profile political career since becoming MP for Barking in 1994. As Chair of the House of Commons Public Accounts Committee from 2010 to 2015, she established a reputation for campaigning for greater transparency and fairness in the tax system.

There is a real need for UK tax policy to be addressed collectively by parliamentarians, businesses, accountants and the tax authorities. Taxing Times, the ICAS Tax Conference 2016, with Dame Margaret Hodge as the keynote speaker, provides just such an opportunity.

The ICAS Tax Conference takes place at the Radisson Blu, Glasgow on Tuesday 24 May. Cost: Members: £198.00 Non-members: £234.00 Student: £156.00 CAPS Firm: £156.00. All prices include VAT.

Article supplied by Taxing Words Ltd

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