It occurred to me recently that the runway base among the clouds in Boomer favourite ‘Captain Scarlet’ (apologies to our Millennial readers) might solve the issue of Heathrow expansion or even the renovation of Parliament, though some might argue the government lives there already.
In late March HMRC’s chief executive explained to the Public Accounts Committee that decisions are being made about priorities for its 267 ongoing projects, with some variously stopped, put on hold or spread over a longer timespan as while the permutations and administration of leaving the EU occupy government and HM Treasury. It is unclear which category the Making Tax Digital programme falls into, although a softer landing is in prospect with VAT being the only tax affected before 2020 and starting with minimal requirements.
The ambition of HMRC’s aspirations (and the speed of their delivery) provide many issues of topical and impending relevance to occupy the sharpest minds of the industry, which will consequently be the talk of the ever-popular ABI Insurance Tax Convention held once again at the Hilton Metropole, Brighton on 10-11 September – registration now available for this peerless industry networking and technical event.
HMRC’s new £157m Customs Declaration Service (CDS) will handle all customs declarations from early 2019 - fingers crossed - so the announcement of a transitional period in the UK’s EU departure was welcomed. A Treasury Minister recently revealed that HMRC has lost 2000 staff since the EU referendum, and its chief executive told MPs last month that in the context of leaving the EU, VAT is something “which hasn’t really ever been a conversation with anyone” - the ‘silent Brexit border problem’, as an FT special report put it.
Elsewhere the prospect of possible US-EU trade wars, a new Italian government, perhaps a new Spanish government, various formulae for a customs union-lite for the UK (tastes just like the real thing but costs £20bn more, says HMRC) – or else the status quo until 2023 - mean that uncertainty is still writ large across the current political and business environment generally. While everyone agrees things cannot go on as they are, it seems few in charge can agree on what should happen instead.
Some developments in tax nonetheless continue to emerge. HMRC is in the process of finalising its guidance on the VAT treatment of pension fund management services provided by insurers, further to the sudden appearance (and unexpected schedules) of HMRC’s Revenue & Customs Brief 3/17 in November – planned changes now to be effective from April 2019 (probably a quiet period otherwise). The ABI will circulate final form guidance once it is agreed, having provided comment on it in draft.
US tax proposals include international plans which will have significant cost implications for the UK insurance and reinsurance industry – the ABI and others continue to seek to make representations, but here also the politics determine the direction of travel.
The IFS has suggested that the government must bite the bullet on tax increases for NHS funding, though income tax rate catchments are still planned to expand – will this leave IPT as the Chancellor’s favourite income stream come the Budget in November? We hope to see the public guidance on transitional measures for IPT rate changes arrive on Gov.UK very soon, but in the interim the ABI will be stepping up the argument that – as a Social Market Foundation report made clear – penalising those who do the right thing with IPT is unfair.