Spring Budget 2024 

The Tax Faculty team were all very busy with the Spring Budget 2024 and its aftermath. We posted nine news items on the day, had various calls with the press and others and published a press statement in conjunction with the media team.

In the wake of the Budget, Tax Faculty staff assisted in compiling a list of questions that the Treasury Committee might wish to ask the Chancellor (and others) in its Budget evidence session. Areas raised included the extra complexity caused by moving the high income child benefit charge onto a household basis; the continued concerns regarding HMRC’s service standards and its ability to cope with the further measures announced in the Budget; and the need for adequate safeguards for proposals to engage more third-party debt collection agencies.

The Tax Faculty’s Budget webinar (see below) received more than 2,500 registrations and more than 1,700 people attended on the day – a new record for the faculty.

HMRC service standards

No faculty news would be complete without discussing HMRC’s service standards, which remain the number one problem for ICAEW members. 

Every month seems to bring a new low point and March was no exception. HMRC’s announcement of the summer closure of its helplines provoked a furious backlash in the media and press, resulting in the Chancellor ordering it to be reversed the following day. The whole episode was deeply concerning on many fronts and the faculty made a number of comments that were picked up in the press. The faculty is anxious to try and support HMRC and help chart a path to improvements, but this is not likely to happen in the short term. There also needs to be a change in approach from HMRC on the need to improve its digital services before it cuts frontline staff, coupled with the adoption of a more collaborative approach to working with professional bodies and a far more conciliatory approach to its communications.

The online survey into HMRC’s service standards prepared by the Charter Stakeholder Group has now ended and the results are being analysed. A full report will appear at the time of the publication of HMRC’s annual report and accounts in June 2024, but preliminary comments show that the position hasn’t changed much from last year. Feedback from faculty committee members reveals that HMRC service standards remain very poor, with no improvements noted in terms of timeliness of response and quality of the reply. Although some improvements in the VAT services had been reported in previous months, recent reports suggest a further deterioration. The faculty values member input and experiences, so continue to send comments to Senior Technical Manager Caroline Miskin. 

Regulation of the tax profession 

On Budget Day, we highlighted the government’s consultation document on raising standards in the tax advice market, which aims to strengthen the regulatory framework and improve registration. As noted last month, the faculty remains concerned about the need for better data to underpin any decisions, and whether any regulation would actually address bad practices rather than merely increase costs for the majority of professional advisers, most of whom are providing a good service to taxpayers. Please send comments to me at Frank.Haskew@icaew.com. The deadline for comments is 29 May and the faculty would welcome them by 2 May.

Following publication of the consultation document, the faculty has started to discuss the issues raised within ICAEW and more widely, including with the pan-professional Professional Conduct in Relation to Taxation group, to assess its implications and what it could mean for the profession. 

Representational work

ICAEW members continue to see serious problems in the area of R&D tax relief, with numerous reports of delays and inconsistencies in HMRC’s approach. The faculty is working closely with colleagues from the Chartered Institute of Taxation on how to help support better compliance in the sector, including how the existing topical guidance on R&D might be updated to reflect developments since it was first published in June 2020.

As reported last month, a number of Tax Faculty staff attended HMRC’s annual stakeholder conference. The conference included several workshops that provided an opportunity for HMRC to gain stakeholder input on emerging issues and obtain feedback on how it might better engage with stakeholders on issues such as tax policy design and simplification. HMRC also provided an update on its service performance and plans for the coming year. 

The MTD private beta testing is due to start this month and we continue to provide input and support to help improve the MTD product. Faculty staff also attended a number of other meetings with HMRC staff, including further meetings on MTD design. 

Tax Faculty committee and other meetings 

It was a busy month for Tax Faculty meetings. There were meetings of the Tax Faculty Board, the Tax Policy and Reputation Committee, the Business Tax Committee, the Technical and Oversight Committee, the Practitioner Tax Committee, the Compliance and Investigations Committee and the Employment Taxes and NIC Committee.

Webinars, events and podcasts

As noted above, the faculty held its Budget webinar on 8 March 2024. Topics covered included changes to the rules for non-domiciled taxpayers, furnished holiday lettings, NIC, property taxation and regulation of the tax profession. My thanks to Tax Faculty Senior Technical Manager Lindsey Wicks, Technical Manager Stephen Relf and Ed Saltmarsh, ICAEW’s VAT and Duties Manager, for their support and enabling us to deliver the webinar successfully and seamlessly at short notice.

On 13 March, the faculty held a webinar on the Carbon Border Adjustment Model. Many thanks to George Riddell, Trade Strategy Director at EY, for the presentation and to Ed for moderating it. We had good attendance and excellent feedback for what is likely to be an important topic in the future. 

As reported last month, our new monthly podcast series The Tax Track is now well under way and receiving good feedback. The latest episode considers some of the key announcements from the Budget and the new merged regime for R&D tax relief, and is presented by Lindsey and Stephen, along with Tax Faculty Senior Manager Richard Jones. Many thanks to Lindsey for creating the programme and to the rest of the faculty team for their support. The podcast series is available on various podcast channels including Apple, Google and Spotify. Do listen to them, subscribe if you don’t want to miss the next one and tell us what you think. 

Richard also moderated two webinars presented by other parts of ICAEW, one on Business Rates for the Real Estate and Construction Community and the other on Basis Period Reform in collaboration with Sage. 

Tax representations and TAXguides

ICAEW REP 23/24 R&D tax reliefs guidance on contracting out and overseas restrictions.

TAXguide 01/2024: Taxation of cryptoassets for individuals

TAXguide 02/2024: Taxation of cryptoassets for businesses 

Media activity 

In addition to a number of Budget Day comments, there was considerable media interest in HMRC’s service performance. Caroline Miskin was quoted in The Daily Telegraph and she also did an interview on radio station LBC News – on the evening of the day of HMRC’s announcement regarding the closure of its phone lines. Well done Caroline for helping to secure the U-turn on that decision!