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  • Hello and welcome to June's addition off tax talk.

  • My name is Sarah Ghaffari, and I'm a technical manager in the tax faculty.

  • On with Me Today I have Frank ask you drink head of tax on.

  • We are joined by Jill Spring.

  • Bet.

  • Hi, Jill.

  • Jill is chairman of our Partition of Tax Committee on She's also tax partner actor MGR.

  • Weston K, which is a firm of chartered accountants based in London.

  • So it's lovely to have you Thank you for coming in to see a pleasure.

  • We've got lots of things to talk about today.

  • It's been a busy month for tax, but also been quite busy for the tax faculty itself.

  • Had a little bit of a relaunch.

  • Definitely.

  • Frank.

  • Well, we've got some new office holders.

  • We had our A GM in May.

  • So what?

  • We now have a new channel.

  • The tax back to Mary Mom.

  • Freeze on.

  • We have from wrong shark who's a decorative chairman who's of three.

  • Partner firm up in North London.

  • Thing I do.

  • I'm also Rebecca.

  • Benny Worth has come back as a vice chairman.

  • Toe particular member service is So that's how you tax on dhe.

  • I'm sure everybody knows this, but we also have a tax.

  • Former chairman of the tax man Lachlan has got the top job off the ice.

  • CW president from last week.

  • Twitter profiles last Actually, Andi Yes, he said, it's the biggest day of my professional career.

  • Sick of things did seem to think this morning.

  • No todo Yeah, So it's all change.

  • Well deserved change.

  • Okay, with a little bit more on the tax taxi later Because we've also got a new website to tell you about.

  • But aunt attacks, we thought First of all, we just touch on the sort of long awaited consultation off payroll working in the private sector which was published on the 18th of May Onda.

  • We are looking for comments from members which are given on the 10th of August.

  • But obviously the sooner the better.

  • That would be great, eh?

  • So the government's looking at how to tackle non compliance in the private sector, something that they have, I suppose, struggled to really get a grip off in the last few years or so.

  • We know that they've been reformed in the public sector and so that's one of the options is to extend those rules.

  • But there's a couple of other options as well in the consultation additional record keeping for engages and also more due diligence work before the work starts and ensuring that you've secured your supply chain Your labor supply chain, both of which, to me, seems quite a lot of extra administration and practically maybe unlikely.

  • Say what?

  • You think the chances although they might go down those because they almost like afterthoughts.

  • Yeah, and in the consultation document, it does say government preferred option is to extend it.

  • I think we would agree that you can't have separate rules for public sector and private sector, but we really need the public sector rules to be working.

  • General, you've had a few e mails and inquiries on this.

  • Yes, Yes, I've bean helping a client who is a TV presenter.

  • Um, on DDE, he is covered by the, uh well, the revenue, trying to say that he's coming by our 35.

  • And so I've bean heavily engaged in some discussions with the revenue which the three immense resources out.

  • Two guys flew down from Glasgow for an interview with the kind They then flew down a different day to interview one of the TV companies he works for on.

  • I think they came down to another TV company as well.

  • On DDE.

  • It was just ridiculous.

  • And they the guys who came down it down, didn't see not au fait with the nuances of status rules.

  • And so we've been talking a little bit about the tool on the website check Employment Status Tool.

  • Yes, you go through a series of questions.

  • Don't Unit spits out whether you are employed yourself employment and finding well, I've never actually used it.

  • I've talked to people because they say the BBC are covered.

  • And so I have a chapped with people from BBC about how they're finding.

  • I know they're really struggling with it because they know tax on.

  • They know that it's not accurate.

  • And so I had a look at it myself.

  • On DDE.

  • It's It looks like it's been designed by committee on.

  • People have shoehorned in things, but they, you know, you might be able to say yes or no to a question.

  • But then they add a little bit text, which means it actually really on.

  • You don't have the option of saying none of these apply.

  • So you're Dragoon, your led down a pathway which may not be right.

  • So if they try and force you to use that tool and that is, well, it's just roam.

  • I tried putting in some examples of cunts who I know are definitely self employed, and it just came out at the end with We can't determine your status contractors.

  • So I don't think the revenue will have the resources.

  • If they wheel it out to everybody, they won't have the resources to look at this.

  • So what's gonna happen in good time?

  • Quite interesting.

  • I have been a few round tables with very professional bodies or business groups on DSO one already.

  • It seems as though HMRC aren't aware of the issues with the tool and they are asking for evidence, evidence, evidence.

  • So really, you know, we we need to get evidence in, and that's when you know our listeners and our members are really valuable because they will have that practical evidence.

  • But the thing is that I was admittedly looking at it on my iPad, but you can't print off all of your answers to review all in one go, you seem to be able to do it just by page, which isn't what they normally do anyway.

  • But, you know, that way you can say yes and you can't print off the answer.

  • You know the questions so you can't see well, whether you want Susie.

  • Yeah.

  • Yeah.

  • Frank were writing a letter with drafting a letter.

  • At the moment, aren't we about all of the public sector nuances?

  • Do you want to just touch on a couple of the others?

  • We've had the accounting, the accounting for the I.

  • R.

  • 35 which I know I've been working on a lot with you, but we've that's got a little bit further now, hasn't it?

  • The parenting up, it's been ready.

  • What we've raised it with how financial reporting faculty and also without you.

  • Marcie, there's obviously been concerned about If, actually should you do it, that's all gross And the compass accounts and hmrc guidance at the moment is saying the net approach.

  • So I think we clearly need to resolve that with the Farsi so that those conversations owns, as I understand it to still ongoing, Yes, but hopefully that guidance will be that effectively, I think consistency of approach potentially gross or net either Could do.

  • But you gotta be consistent.

  • Think is where we want t get to on.

  • I think that, you know, we'll see what support support that.

  • Okay.

  • And then just linking this back because we're talking about a specific part of the employment issues.

  • I suppose we're just looking at the i r 35 PFCs and that sort of thing.

  • But we've got the wider issue.

  • Haven't we have the whole employment rights and on tape, I mean, the tailor review, of course, was published July last year on the government responded to it in February on, then launched four consultations of their own.

  • So employment status and enforcement of employment rights, agency workers and transparency on Goes will close now.

  • So with absolute submitted comments, all those But the big news this morning.

  • Yeah, looks like the Supreme Court have given that judgment in the Pimlico plumbers, which is an employment law case.

  • But it looks like Pimlico plumbers, the people who was arguing that they were workers of one unanimously, apparently not.

  • They're not self employed.

  • So another sort of brick in seemingly that's just that's just the employment element, not tax law.

  • Side of things.

  • Well, there's be no underemployment.

  • The employment law infection.

  • You could have three status is, of course, a tax on.

  • It's up for debate ist where we take one was in the future.

  • But Supreme Court has just said that these people were not self employed for employment law purposes.

  • Okay, well, we got lots of work to do on that one.

  • I think starting with our letter that we are writing to government outline again issues that we've got in public Sector One consultation that we have responded to the V A T registration threshold, which came off the back of the O.

  • T s report that must have been last year Now looking at whether it's at the right level or it should be lowered or increase.

  • We did a short survey.

  • Didn't say yes, we did.

  • Well, the government issued a call for evidence on it on.

  • We did do some medical survey ourselves.

  • I mean, it's not statistically past, but actually it was pretty consistent with what we've said in our response to the OT ESAs well, which on statistics as I remember were that half of the respondents thought that actually, the fact my shoulder be increase about 1/3 thought it was fine as it is, about six thought it should be lowered, and that was actually quite consistent with what we said last year.

  • So I think overall, you know the message coming out of it is that the V a t the registration fresher is actually a major simplification for small businesses and started 5 5000 It was 1973 73 Wait today, fat indexed up.

  • It would be about 50,000.

  • But back in the 1992 93 the government decided T actually increases significantly.

  • A simplification for you have our members, by and large, is that it really?

  • Still, in fact, in many ways it holds more than I did them because of get more increases in the legislation.

  • And I think we were talking Joe well, me about this kind of fear that if it isn't lowered the locations elsewhere, yes, the making tax digital it's linked to the V A.

  • T is linked to about threshold.

  • So if it's lowered, presumably that means they would need to extend that to more people.

  • So then or that would undo all the good we did getting them to delay it.

  • I think that's entirely right.

  • Of course.

  • You know, double whammy of then I think not only making touched digital, but potentially keeping digital records.

  • So for small businesses hitting you in the face, financial implications for the businesses that may be, at the moment are managing the trade.

  • You know, that's a comfort level without having to register.

  • Okay.

  • All right.

  • Thank you for that.

  • Moving on.

  • Let's cover the next big one, If that's okay.

  • I think Frank employee benefit trusts have been sort of simmering away in the background.

  • I did actually see une mail come around from hmrc about their talking points webinars about the settlements and paying them paying the loan charge.

  • Do you want to just remind us How do you feel drawn the short straw on this one, Sarah Kiss.

  • I would probably have Mr Bickley here talking about it, but yes, I mean, it's been kicking around for a long time, isn't as an issue.

  • I mean, I think it's first really started us in the eighties and then clearly in the nineties, we started to sort of see it happening in a big way.

  • So on that we've had various tax cases on it.

  • In particular, we had the landmark Rangers decision Supreme Court decision last year back in July, where effectively they came up with them, almost bowled a googly, so to speak that they thought that these payments when they even put into the trust, were in respect of employment and shit about p a y deducted, which wasn't feel like where the cases were starting from.

  • But I think you know, the real problem coming up against here is that we've got the finance number two act night 2017 last year.

  • So we could now get this employee laden charge up, which is potentially really draconian.

  • So what if you fact, we have a loan outstanding at the sixth of April 2019 then effectually.

  • The benefit of that is going to be bought into tax.

  • But the real sting in the tail is that it's going to apply in relation to any loan you've had.

  • Outstanding post six of April 1999.

  • So 20 years is potentially going to be born into tax comes six of April 2019.

  • I mean, that is a major.

  • There's been a lot of fuel Roary about Is it a retrospective?

  • So But the fact is, you know, we've got the rules, so it's going to be a major problem for a lot of people.

  • So, as you said, sir, I mean, what a team to get out of it on dhe the options.

  • Firstly, I think our that h.

  • Marcie are trying to encourage people to settle.

  • So a CE you mentioned, you know, that there's a settlement effects the opportunity out there, which has at last week I mean, the deadline of Richard was the third most of mine, but they've actually extended to the charity of September.

  • But I'm not sure quite what one reason to that.

  • But hopefully maybe this is major for a lot of people on.

  • I think people are just waking up to it.

  • So I think h.

  • Marcie it came to try and get settlements thing, and I think they want to get closure on leave on.

  • So people do need to look at the settlement opportunity on and see what they can do.

  • Well, I was.

  • The other thing is, you know you can repay the lane before the six of April 2 2019.

  • If you do that, then I think we think you should be okay.

  • But I think there's still question marks about, particularly after Rangers about where they do get finality on.

  • So I think there's question marks still there, and I was.

  • The other thing is, if you know, if you got the loan, then comes six of April.

  • Potentially, you need Thio.

  • So we're already seeing a lot of member concerns can through about this.

  • So I think we'll probably do need toe, have a very close look at it.

  • But I think people are really going to need to look very carefully at the various options because each case will be different and doing nothing is just not an option.

  • Well, I mean, everywhere you look, you can't just do nothing.

  • I mean, you've got step.

  • The government have now made it abundantly clear that these sorts of arrangements are beyond the pale, and you can't just ignore it.

  • So we might be looking to do thinking in that space again.

  • We did a lot of work on the consultations, and the draft legislation didn't way, but we might be we might revisit and see what we've got on our on our new website way did.

  • But I think we're now wants to move to the problems of implementation.

  • And I would just say I think hmrc are very keen to try and settle, and I have talked a lot about time to pay on particularly it's a whole range of people went into these, I think, from the people who knew exactly what they were doing to people who were almost forced into the war, didn't realize eso think hmrc alive two different categories of people.

  • But I think that's probably gonna be a lot to do before the sixth of April 2019.

  • So I think we will be reviewing it, quite what we might.

  • Significant data is an MTV judges Brexit.

  • Why well, onto happier new.

  • But we just mentioned one of them.

  • Should we talk about making tax digital way?

  • Do you love it?

  • Don't wait.

  • I think we should probably mention it.

  • So in terms of where we are, the pilots are ongoing for income tax and theeighty.

  • There's about 20 software developers in the income tax pilot, so you might say that's not as many as we might have thought.

  • But we have got well, you know that's not coming in until 2020 the earliest there are or software products listed now on golf dot UK, so people can start looking at what's out there.

  • That's absolute for Iris on Dhe Rhino.

  • And the pilot has also just been extended to those who have property income.

  • So mammals can now join the pilot as well as a self employed.

  • So that's where we are with income tax on the V, A t side of things that one is not in public beater testing just yet.

  • I know as a more number off developers are in the private testing with HMRC, but I suppose we know that spreadsheets are unacceptable.

  • Link.

  • We're expecting to see this in the back.

  • Notice the undated that notice when we get a bit more on that.

  • But we know that spreadsheets will be okay.

  • Um, and we know that some bridging software to take the data almost make it cloud based and send it directly to HMRC will be made available by software developers.

  • So for V a.

  • T.

  • I think the thinking is that the majority who are on.

  • The spreadsheets will continue to do that, but obviously the messages to get on board, to try and be digital and to think about how your practice operates on your client's operate.

  • But in the time frame we have spreadsheets could be a useful, short term, medium term solution.

  • That sounds one thing we actually did learn last week when we met with our software advisory group, which is the professional body software developers and HMRC.

  • There's a bit of a revelation about the business tax account because, as I understand, agents can have access.