Budget 2023

In advance of the Budget due to take place on 15 March 2023, the Tax Faculty worked with fellow ICAEW colleagues to submit a detailed representation. Policy recommendations included suggesting a task force to tackle HMRC delays and backlogs, the need to address cliff edges in the tax system (which is being aggravated by the freezing of thresholds) and the need to consider further incentives to encourage work, as well as amendments to encourage adoption of apprenticeships.

HMRC service standards

HMRC service standards remain a major area of concern for members, with delays being reported across numerous areas. For example, we are regularly receiving reports from members that they are waiting for up to a year to receive written responses to technical queries. Our concerns were echoed in a report on HMRC’s performance published by the Public Accounts Committee (PAC) on 11 January 2023. On the back of the PAC report, we published a press release highlighting these concerns and reiterated our message that urgent action is needed to address them. The release was picked up in the media and was reported by the Daily Telegraph. 

Representational work

Following the closure of the Office of Tax Simplification at the end of 2022, a team from the Tax Faculty met with HMRC and HM Treasury senior policy staff responsible for leading on simplifying the tax system for business. In our high-level discussion, we provided illustrations of particular tax challenges faced by ordinary businesses with an emphasis on those that hinder growth. These included VAT registration and rates, employment taxes and also the need for certainty on tax relief for capital investment. The role played by HMRC service standards (see concerns mentioned above) was also considered. HMRC advised that it will be looking to take forward round tables to discuss simplifying the business tax system from Q2 2023, with one being taken forward by the Tax Faculty involving ICAEW members. If you would be interested in inputting to these discussions, please let us know. 

We also met with HMRC’s intermediaries team as part of a regular series of meetings. Key topics discussed included the next steps for Making Tax Digital following the December 2022 announcement, possible regulation of the tax profession, HMRC’s proposals for improving consumer protection for taxpayers using repayment agents (published on 11 January 2023), HMRC’s engagement with tax agents and, in particular, whether the processes for confirming anti-money laundering supervision can be improved, continued problems with service standards and an update on how the 2021/22 tax return season was progressing.

Other consultation forums and working groups

On 4 January 2023, the Tax Faculty team met with the National Audit Office to provide input to its value-for-money study on Making Tax Digital for VAT and income tax self assessment. As part of this discussion, the team highlighted the many concerns over the policy and its implementation. Caroline Miskin joined an Institute for Government (IfG) roundtable at which IfG gathered evidence for its report on HM Treasury’s response to the pandemic. 

Tax representations

During the period we submitted representations on Form P11D employer annual return of employee expenses and benefits and commented on proposed changes to HMRC’s statistics publications.

Presentations

Anita Monteith and Mei Lim Cooper presented ICAEW Tax Faculty’s insights into what makes good tax policymaking to 110 delegates from HMRC and HM Treasury’s tax policymaking teams. Their focus was on existing fault lines in the tax system, identifying specific problem areas and recommendations about how they might be resolved. Topics included tax simplification, the tax gap, digitalisation of the tax system and international constraints. Feedback from HMRC/HM Treasury delegates was excellent and many new relationships were developed. 

Tax Faculty Committee meetings

During the period there were meetings of the Tax Faculty Board, the Tax Policy and Reputation Committee and the VAT and Duties Committee. We also held our first official meeting of the new ICAEW Tax Faculty Customs sub-group. The meeting was a success and we look forward to participating actively in the areas of Customs duties and international trade. If members would like to participate in this growing area of ICAEW’s work, please contact our Technical Manager for VAT and Customs, Ed Saltmarsh, to discuss.

Media

Anita Monteith appeared on BBC Radio 4’s Moneybox to discuss the 31 January tax return deadline, providing listeners and callers with information on payments on account and dates relating to the 2022 tax return.