Hardman Lecture

On 25 November 2024, the Tax Faculty hosted a very successful Hardman lecture. The Great Hall was full to hear Ray McCann, former president of the Chartered Institute of Tax (CIOT) talk about Regulation of tax profession: the wrong solution to the wrong problem. Members can read a report of the event here. On behalf of the Tax Faculty, I would like to thank Ray for a great presentation about a topic that is likely to come to the fore in 2025.

Autumn Budget 2024 and Finance Bill

The Tax Faculty’s Budget webinar had a record number of registrants at more than 4,000 and is proving to be very popular with members. Many thanks to my Tax Faculty colleagues for preparing and presenting the webinar, which was well received. The webinar also resulted in what was probably the longest list of questions we had ever received. For those we were not able to answer on the day, rest assured we are working through them and will be looking to follow them up with articles, guidance and further webinars.

Hard on the heels of the Budget, the Finance Bill was published on 7 December 2024. The Bill is 272 pages long, with more than 100 pages devoted to the changes to the non-dom regime. We are currently in detailed discussions with members and other professional bodies about the impacts of the non-dom changes and will be engaging in further discussions with the relevant team at HMRC. Please send any comments on the non-dom measures to Katherine.Ford@icaew.com. We would also welcome comments on other measures in the Finance Bill. Please send them to taxfac@icaew.com

Tax Faculty staff also held some post-Budget follow-up meetings with senior members of HMRC’s Policy and Intermediaries Directorates. Topics discussed included the non-domicile changes, changes to business and agricultural property reliefs, the proposed new agent registration system to be introduced from April 2026, and the proposals announced in relation to closing the tax gap. Further follow-up discussions are planned. 

HMRC service levels

At the time of writing, ICAEW and CIOT are finalising our joint report into HMRC’s performance, which is due to be published and launched on 11 December 2024. Many people have been working hard to bring the report to its conclusion, but I would like to offer my particular thanks to my colleague Ed Saltmarsh and to Lindsay Scott at CIOT for their sterling work in analysing the extensive data we obtained from the survey and for preparing the draft report. We will be reporting further on our findings next month.

Representational and policy work

Alison Ring attended the launch of the Centre for the Analysis of Taxation (CenTax), hosted at the House of Commons with a keynote speech from James Murray MP, Exchequer Secretary to the Treasury. CenTax has worked closely with the government on the non-dom tax policy – see above. 

On employment taxes and NIC, we met HMRC on 25 November 2024 at a one-to-one stakeholder engagement meeting to discuss payrolling of benefits in kind. We have also sought confirmation from HMRC that subsidy control does not apply to the employment allowance and that abolition of the employment allowance threshold from April 2025 renders redundant consideration of state aid / subsidy control.

On personal tax matters, Tax Faculty staff made informal written representations to HMRC on simple assessment payment reminder letters. We have also written to HMRC on a number of topics, including how HMRC might improve its existing R&D compliance processes and also commenting on proposed further guidelines for compliance. 

Making Tax Digital

The Budget confirmed the start date for Making Tax Digital (MTD) for income tax self assessment (ITSA) as April 2026 for trade and property income over £50,000 with that limit reducing to £30,000 from April 2027. In a new development, it is proposed to reduce this further to £20,000 before the end of the Parliament, which likely means either April 2028 or 2029. We are continuing to engage extensively with HMRC’s MTD team in the run-up to the MTD ITSA start date and to consider what more we need to do to help support members and their clients through the process. Further developments will be reported so please keep an eye on our weekly TAXwire for the latest news. 

Raising standards and regulation

The Budget included a summary of responses to the raising standards and regulation agenda and the government is keen to continue discussions about raising standards and what a regulatory model might look like. On 22 November 2024, Lindsey Wicks attended a roundtable meeting with the professional bodies and HMRC to explore the issues and possible options in more detail.

Professional conduct in relation to taxation

As reported in previous months, the pan-professional bodies that form the professional conduct in relation to taxation (PCRT) group are considering how the upcoming changes to the International Ethical Standards Board for Accountants (IESBA) code in relation to tax planning and related services might be reconciled with the existing PCRT. On 15 November 2024, we held a roundtable meeting with representatives from IESBA to consider the bodies’ work to reconcile the two documents and what further work might be needed to bring the two documents into line so that the PCRT remains the UK’s industry standard for tax. 

On 21 November 2024, I chaired the latest meeting of the PCRT group. Topics discussed included detailed discussions about the impact of artificial intelligence (AI) on tax and the extent to which AI should be reflected in the PCRT. The discussion was aided by expert insights from Esther Mallowah, ICAEW’s Head of Tech Policy, and Grant Wardell-Johnson from KPMG’s international team – our thanks to them. We agreed to form a group to examine the issues raised and that the best approach would be to publish some topical guidance on the subject. 

Tax Faculty meetings

During the month there were meetings of the Tax Faculty Board, the Tax Policy and Reputation Committee, the Business Tax Committee and the Private Client Committee. 

Tax Faculty staff also attended a meeting of the Agricultural Bodies Representative Bodies. 

Faculty webinars, events and podcasts

Our monthly podcast series The Tax Track continues to gather new listeners and get good feedback and engagement. In the latest episode, I joined faculty staff Lindsey Wicks and Stephen Relf to review 2024 – a year of two halves. In addition to the Budget, we discussed regulation of tax agents, HMRC service levels and HMRC’s compliance approach, looking back to developments in 2024 and what may be to come in 2025.