“We’ll be right back after this constitutional break.” That’s the current message from the government – from HM Treasury and HMRC, who are cancelling meetings on a daily basis, denuding diaries of engagement opportunities – and from the current administration, which sees the 3rd general election in 5 years as a chance to resume with a renewed mandate.
The consensus is this election really is too close to call, so expect no predictions of that kind here. But we can safely make a couple:
- the consultation on the draft regulations for DAC6 (implementation of disclosable arrangements) will see no HMRC response before Christmas, despite the implementation date of July 2020 (ABI response here);
- equally, an outcome to the consultation on the simplification of partial exemption and the Capital Goods Scheme (ABI response here) will not appear in anyone’s stocking come 25 December;
alas, my turf accountant is not feeling festive and has ceased to take bets on the above.
So, with everything this side of Christmas (or at least December 12) cancelled, what is going on? The ABI is calling for the (next) government to cut the Insurance Premium Tax standard rate, after several years of increases. Meanwhile, members may be aware that on 9 October the OECD Secretariat published a proposal to advance international negotiations to ensure large and highly profitable multinational enterprises, including digital companies, pay tax wherever they have significant consumer-facing activities and generate their profits. This was ‘Pillar One’, the allocation of taxing rights between jurisdictions.
The ABI have led the insurance industry response to the OECD digital tax proposals. A white paper drafted by Mervyn Skeet with member input setting out the ABI position was recently submitted to the OECD. The paper argues that Pillar 1 (additional attribution of profit to countries where consumers were based) would be both unnecessary for a number of reasons and that the attribution methods proposed were impractical for insurance. The nature of insurance regulation, the role of capital and reinsurance in facilitating writing business and the insurance value chain obviously feature prominently.
And on 8 November, the OECD published its Pillar Two (Global Anti Base Erosion) proposal for consultation.
This issue is not going away: OECD and EU members have determined that something needs to be done. The industry hope is that what emerges will be strictly focused.
At the time of my last blog in September, we were preparing to leave the EU. We have been here before: this is not a quick getaway, indeed as business knows leaving will set the scene for more protracted negotiations. The manifestos of the parties contesting the election will promise a range of very different options when it comes to Brexit. The more engaged will have noticed that they likely promise a range of very different options when it comes to Tax, also. Who knows what the future will bring? Not even Santa, it seems.
In the words of ‘Merry Xmas, Everybody’ – look to the future now, it’s only just begun….