Finance Bill 2023-24

The Finance Bill was published as expected on 29 November 2023. At the time of writing, it appears that the Bill will come before a Committee of the Whole House on 10 January 2024. The remaining clauses will be considered in Standing Committee and it looks like this will consist of a maximum of three sessions and be concluded by 18 January 2024. 

This timetable will leave very little time to submit comments on the various measures in the Bill. It is not clear why the Bill will follow such a rushed procedure, but it leaves little time for proper scrutiny. 

In contrast to the drive for tax simplification, the Bill adds considerable complexity to the UK tax system. For example, the changes to the pensions lifetime allowance (see Sch 9) now take up nearly 100 pages of highly complicated legislation. This represents a considerable increase from the 40 or so pages that were originally released for comment in the summer. 

Spring Budget 2024

Spring Budget 2024 will be held on 6 March 2024. The portal for making representations will close on 24 January.

Making Tax Digital (MTD)

Caroline Miskin attended two workshops on HMRC’s MTD income tax self assessment (ITSA) plans: one in person with other professional bodies and the other an online meeting that also included software developers. This presented an opportunity to feed into HMRC’s detailed plans announced at the Autumn Statement and the draft regulations that were published for consultation on 7 December 2023 with a closing date of 12 January 2024. 

Our concerns over the policy and whether it can be delivered remain, but ICAEW will continue to comment on the detail of the proposals. This included the important question of supporting the role of agents in MTD. Caroline also attended a meeting of the Agent Digital Design Advisory Group, which undertook a deep dive into the problem of how MTD ITSA will cope with multiple agents. 

HMRC service standards

On 6 December, Caroline Miskin and Frank Haskew attended the latest meeting of the Representative Bodies Steering Group. Much of the meeting was taken up with HMRC’s performance and what is being done to improve it, as well as expressing further concerns about HMRC’s latest plans to deflect taxpayer calls to digital channels and whether that will work properly. Caroline was quoted in the Daily Telegraph commenting on HMRC’s plans after they had been announced publicly. ICAEW also issued a press release and news item. 

Further restrictions came into force on the agent dedicated line on 22 December. ICAEW received no prior warning of this announcement.

On 11 December, the Association of Revenue and Customs officers held a round table to obtain input to its forthcoming study (under the title Funding the Nation) into what could be done to improve HMRC. The round table was hosted by ICAEW and attendees were drawn from across the professional bodies, academics, think tanks and lawyers. Caroline, Frank and Alison Ring attended on behalf of ICAEW, and the event was chaired by former Executive Chair and First Permanent Secretary at HMRC, Sir Edward Troup. 

Finally, ICAEW’s evidence to the public accounts committee submitted on 11 October has been published – see ICAEW REP 104/23: Evidence to PAC inquiry.

R&D claims

R&D claims continue to be a major concern for members, with particular problems being reported in relation to HMRC’s risk-based volume approach enquiry programme into R&D tax relief claims. Faculty staff and colleagues from other professional bodies attended a roundtable meeting with HMRC. ICAEW continues to take issues up with HMRC directly.

Tax simplification

Tax Faculty staff attended a meeting of the professional bodies, HMRC and HM Treasury to discuss the latest tax simplification proposals post the 2023 Autumn Statement and what steps HMRC/HMT are taking to embed tax simplification in policy development. Concerns were expressed about whether the announced proposals (highlighted in Box 4.B of the 2023 Autumn Statement Green Book) would simplify the tax system and could cause problems in other areas. 

Tax representations

The Tax Faculty made informal representations on a range of employment tax and NIC matters, including payments by employees to employers for private use of a company car. The faculty has also asked HMRC to clarify what rate of primary NIC should be applied to directors who are appointed during 2023/24 (where the earnings period is less than a year).

Tax Faculty committee and other meetings 

During the month there were meetings of the Compliance and Investigations Committee, the Digital Assets Working Party, the Employment Taxes and NIC Committee, the Technical and Oversight Committee, the Business Tax Committee and the Tax Policy and Reputation Committee.

Webinars and events

On 5 December, Rebecca Benneyworth and Caroline Miskin presented the latest Tax in Practice webinar, where they discussed current developments in tax.

TAXguides

Updated: TAXguide 01/23: Payroll rates, allowances and thresholds in 2023/24