Women in Tax set tone for better UK policy decisions

The Brexit vote has presented U.K. lawmakers with a “once in a generation” opportunity to improve the tax system, a leading tax expert told participants at a debate held by the Women in Tax network in London two days before Donald Trump’s election victory added further uncertainty to the tax landscape.

Panellists shared their personal views on how a better tax system can be achieved. U.K. tax policy measures often have very vague goals, said Jill Rutter, program director for the Institute for Government think tank.

Read more: My news story for Tax Analysts, 10 November (paywall).

MPs to vote on Office of Tax Simplification appointments

Senior appointments to the Office of Tax Simplification are to be put to a vote of members of Parliament, the UK government announced as it rejected a proposal to give the cross-party House of Commons Treasury Committee a power of veto.

During a Finance Bill debate on September 6, MPs considered an amendment, proposed by Labour MPs, that would have prevented the chancellor from appointing the OTS chair or tax director without the committee’s consent …

Financial Secretary to the Treasury Jane Ellison told the debate that the government will ensure that the Treasury Committee can hold hearings with future OTS chair candidates before their appointments are formalized, and that appointments are put to a vote in the House of Commons.

Read more: My news story for Tax Notes 8 September (paywall) published by Tax Analysts.

 

UK paves the way for public country-by-country reporting but stresses multilateral approach

Tax transparency campaigners have welcomed the UK government’s decision to accept a Finance Bill amendment that will enable HM Treasury to make regulations requiring large multinationals to publish country-by-country reports of their profits and taxes. The government, however, stressed that it intends to seek international agreement on a reporting model before using the new power.

Customers and taxpayers expect big companies to “play fair by them and by the country in which they operate,” Labour member of Parliament Caroline Flint said during a House of Commons debate on September 5. “It sometimes seems as though we are trying to catch jelly.”

Read more: My news story at Tax Notes 7 September (paywall) published by Tax Analysts.

Office of Tax Simplification calls for clearer strategy and better public debate

The increased use of roadmaps setting out the direction of U.K. tax policy would increase confidence and trust in the tax system and help to reduce uncertainty arising from the Brexit vote, the Office of Tax Simplification has said in response to a joint project to improve tax policymaking.

The experience from the Business Tax Roadmap first published in 2010 and updated in March 2016 was positive, but the government’s intentions in other areas are unclear, according to a July 2016 paper setting out the initial findings of the project, conducted by the Chartered Institute of Taxation, the Institute for Fiscal Studies, and the Institute for Government.

Read more: My news story for Tax Notes, 3 September (paywall) published by Tax Analysts.

Chancellor strengthens tax simplification team ahead of independence debate

Leading tax commentators have welcomed the appointment of three new non-executive directors to the board of the UK’s Office of Tax Simplification (OTS). The appointments were announced as MPs were set to debate a finance bill amendment intended to ensure that the OTS is seen to be independent of the government.

OTS Chair Angela Knight said the new directors’ skills and experience will increase the office’s ability to provide “excellent advice on how to take forward the strategy and simplify the tax system for business and for individuals”.

Read more: My news story for Tax Notes 29 August (paywall) published by Tax Analysts.

HMRC proposes new penalties for tax avoidance scheme ‘enablers’

A “persistent minority” of professional advisers who seek to exploit tax laws in a way that the UK Parliament never intended will face new penalties, but some tax professionals have expressed concern about the likely scope of reforms announced by the government.

“People who peddle tax avoidance schemes deny the country of vital tax revenue, and this government is determined to make sure they pay. The vast majority of their schemes don’t work and can land their users in court, facing large tax bills and other costs,” Financial Secretary to the Treasury Jane Ellison said. Tough new sanctions will make would-be enablers of tax avoidance think twice, she added …

Tax professionals expressed concern over some aspects of the proposals while emphasising their support for the government’s efforts in tackling aggressive avoidance.

Read more: My news story for Tax Notes 18 August (paywall) published by Tax Analysts.

BEPS: Priorities and concerns (Tax Journal)

The G20/OECD project on measures to tackle base erosion and profit-shifting (BEPS) appears to be on track despite a very ambitious timetable. But the project is still in its early stages, and there are signs that expectations may be running a little too high.

New Zealand revenue minister Todd McClay declared on 3 July that the OECD Committee on Fiscal Affairs (CFA) had “approved the final recommendations for the first set of actions”. G20 finance ministers are to consider a report of the CFA, following its meeting last month to vote on a series of “deliverables” representing the outputs of several discussion drafts, public consultations and working groups. But the OECD is not expected to release any details before finance ministers meet in the Australian city of Cairns in September 2014.

Read more at Tax Journal.

The PAC and the merits of tax reliefs (Accountancy Age)

On Monday the Commons public accounts committee began its inquiry into “the variety of tax reliefs used in the UK and how they are administered” by questioning HMRC chief executive Lin Homer and Sir Nicholas Macpherson, permanent secretary at the Treasury.

The committee says on the Parliament website that it does not consider the formulation or merits of policy. Margaret Hodge, its chairman, said its role was to “test the effectiveness” of policies. She began by asking Homer: “How many tax expenditures are there?”

The National Audit Office had noted that tax expenditures provided “behavioural incentives to achieve economic and social objectives”. They were often an alternative to public expenditure and had similar effects.

But the number of tax expenditures – among the 1,128 reliefs identified by the NAO – was not a headline figure in the NAO report. The authors had highlighted instead the cost of tax expenditures, and that was estimated at £101bn.

Read more at Accountancy Age.

Tax-free childcare: the basics (Taxation)

Taxation100414MPs debated childcare provision last night. A new clause to the Finance Bill, tabled by Labour, would have required the government to review before April 2015 “ways in which changes to the tax and childcare systems could be used to increase the affordability of childcare”. The clause was defeated but what I saw of the debate was interesting. It’s a pity that only a dozen or so MPs attended.

This week’s issue of Taxation includes my article setting out the basics of tax-free childcare, as announced the day before last month’s Budget. It reads:

Parents welcome tax-free childcare and want it to be rolled out as quickly as possible, according to the response document to the August 2013 consultation on the new arrangement.

Respondents said the scheme, announced in the 2013 budget, must be simple to operate and responsive to changing childcare needs. The government promised continued engagement with “all interested parties” to ensure that it gets the design right.

HM Treasury said that self-employed parents and those working for firms that do not offer the existing employer-supported childcare will have access to support with childcare costs for the first time as will all working families in which no parent is an additional rate taxpayer.

Read more at Taxation (subscription only).

Budget 2014: The detail and the summaries

HM Treasury and HMRC have posted hundreds of pages of information on yesterday’s Budget, and this page is a useful starting point. HMRC’s short overview of the key announcements is here.

A longer HMT/HMRC overview of tax legislation and rates etc has more than 170 pages but it deals with more than the Budget. It sets out

(a) measures to be included in next week’s Finance Bill (most of which had already been announced) and

(b) measures to be legislated in next year’s Finance Bill (or, in the case of the class 2 NICs simplification measure for example, “when parliamentary time allows”).

There is a lot to digest for tax professionals, and some of yesterday’s announcements will affect clients either immediately or very soon.

Some professional firms and tax publishers have already posted summaries, but much of the detail will not be known until the Finance Bill appears on 27 March. The summaries focus, naturally, on the practical impact of a tax policy announcement rather than the policy itself, and they include this one from LexisNexis*:

Budget 2014: Lexis PSL Tax Analysis

Budget 2014: Tolley Guidance and Tolley Library

There is also useful commentary elsewhere, including:

Financial Times (£)

ICAEW Tax Faculty

KPMG

Macfarlanes

Pinsent Masons

Fair Tax Mark: Westminster Hall debate and ‘inequality of opportunity to avoid tax’

Caroline Lucas MP and David Gauke, the exchequer secretary, debated the Fair Tax Mark in Westminster Hall yesterday. The debate was sparsely attended but that is not necessarily a sign of a lack of interest. MPs as well as everyone else can now watch debates live – or later, on demand – on the Parliament TV website. Yesterday’s first transcript was published within three hours.

Here is the Hansard transcript of the short debate, which gave us the first indication of the government’s stance on the FTM initiative. Continue reading Fair Tax Mark: Westminster Hall debate and ‘inequality of opportunity to avoid tax’