AAT public affairs and public policy activities: February 2020

Every month AAT highlights some of the key Public Affairs & Public Policy activities undertaken on behalf of our 140,000 members.

Below you will find some key highlights for February 2020.

If you would like any further information about any of these issues, please contact Phil Hall, AAT Head of Public Affairs & Public Policy via twitter or via email.

Senior politicians back AAT on VAT fraud recommendation

Conservative MP Sir Graham Brady asked the Chancellor a series of Parliamentary Questions about AAT's proposals to compel online platforms such as Amazon and eBay to collect and remit VAT.

SNP Shadow Chancellor Alison Thewliss highlighted AAT's proposal during a debate in the House of Commons.

Other politicians have similarly backed our campaign by voicing their concerns directly to the Chancellor.

We await the 11 March Budget with interest.

Another AAT campaign victory – minimum wage enforcement

Last month, now former Small Business Minister Kelly Tolhurst MP made a welcome statement to the House of Commons, detailing changes to the way in which minimum wage rules are enforced. This follows a three-year long campaign from AAT who had repeatedly stated that those committing small "technical" breaches should not be treated in the same way as those who wilfully avoid their legal obligations.

A significant victory for AAT but more importantly for 1,000's of businesses and millions of employees.

Another AAT campaign victory – off-payroll workers (IR35)

While many organisations – including other accountancy and tax bodies - continued to call for a delay to the planned April 2020 implementation date, AAT recognised that further delays were very unlikely, so instead called for a 12 month soft landing period with no penalties or fines imposed on businesses who demonstrate they have taken reasonable steps to comply.

These views were expressed to several HMRC officials, the Chancellor and the House of Lords committee examining the off-payroll working rules.

The Chancellor agreed with our proposal and HMRC last week confirmed there will now be a 12 month "soft landing" period. This doesn't solve all the problems with IR35 but should provide some much-needed reassurance for both employers and contractors alike.

Late Payment

Last month, Planning, Building & Construction magazine's 250,000+ readers were treated to an article on late payments including AAT's recommendations for reform and progress to date.

Anyone wanting to find out more about the impact of late payment might be interested in the jailing of a rampaging driver who destroyed a new Travelodge over late payment.

Tourist Tax

AAT is neutral on whether cities should be allowed to introduce a tourist tax. However, if introduced we are opposed to the much-heralded idea of a flat rate, per person, per night fee and instead favour a percentage of the overall cost of accommodation. This is on the basis of fairness, simplicity and effectiveness as set out in our 2019 response to the Scottish Government on the issue.

Last month, AAT engaged with councillors from Bath, York and Birmingham on the subject as well as members of the House of Lords and stakeholders from organisations including Core Cities and the Local Government Association.

What a relief

AAT has long campaigned for the abolition of Entrepreneur's Relief, a tax relief that sees some business owners pay just 10% Capital Gains Tax when they sell their business instead of the usual 20%.

The Labour Party pledged to scrap the relief in their recent manifesto and the Conservatives promised to "review and reform" it.

AAT believes this £3bn per annum would be better invested in helping small businesses to start-up or scale-up rather than simply sell-up.

With just a few weeks to go until the Budget, one last chance to highlight the reasons why the relief should go, was taken in the form of an edited article published in Accountancy Daily.

Parliamentary engagement

In February, AAT engaged with almost 20 Parliamentarians on subjects including the Plastic Packaging Tax, unregulated accountants, VAT fraud, the apprenticeship levy and a tourist tax.

AAT consultations calls for evidence & inquiry responses

AAT provided a short response to a consultation from the Financial Conduct Authority (FCA) on a single interest rate for cash savings accounts. AAT also responded to the House of Lords Finance Bill Sub-Committee inquiry into IR35 (off-payroll working rules in the private sector).

Both responses can be viewed on the AAT Policy page here.

Other events, meetings and engagement

• Met with the CBI to discuss unregulated accountants and various tax issues.
• Attended a CBI Scotland reception, meeting the Secretary of State for Scotland and highlighting some of AAT's activities north of the border.
• Attended the APPG (All Party Parliamentary Group) on Apprenticeships and highlighted AAT views on the need for better careers advice.
• Attended an FE Week/AELP debate in Parliament with Emma Hardy MP (Shadow FE & Skills Minister) explained AAT's position on the apprenticeship levy and highlighted weaknesses in proposals to apply the levy to those with a £1m annual pay bill (it currently applies to those with a total pay bill of £3m per annum).
• Attended PICTOR (Parliamentary Internet Communications & Technology Forum) reception where MTD, cyber security, digital skills and gender equality were all discussed.
• Met the German Ambassador and various other dignitaries to discuss the policy impact of climate change and net zero at the German Embassy, this also provided an opportunity to expand on AAT's suggested policy reform for the use of telematics to replace fuel duty and VAT on fuel
• Attended GCHQ reception at the National Science Museum – primarily in relation to the work of the National Cyber Security Centre
• Represented AAT at Parliament's Apprenticeship Week reception – where a KPMG apprentice spoke glowingly about his experience of AAT, stating , "…taking AAT has been a massive help as its relevant to my everyday work. I'm sure if I'd done an accountancy degree, I wouldn't have a clue about how that that would actually help me in the workplace."