AAT public affairs and public policy activities: March 2020

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

Below you will find some highlights for March 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.

Coronavirus

The tax implications of working from home were explored in this AAT Comment piece which proved hugely popular with a very diverse audience from HR professionals and finance experts, to small business owners, freelancers and large corporates.

Less than 48 hours later the Chancellor announced a historic package of additional help for businesses, totalling well over £350bn. More was to follow.

For businesses large and small, including the self-employed, financial assistance during the Coronavirus outbreak could be crucial. However, knowing what's available, where to go and what the eligibility criteria are, can be quite daunting. So, the following blog was written to try and provide a helpful starting point.

Budget 2020

Within 48 hours of the Budget, a comprehensive AAT response to the 180 page Budget document published by government, was provided to the Treasury Select Committee ahead of their evidence session with the new Chancellor. This was very well received and subsequently formed the basis for much of our briefing material for MPs and Peers.

• The main rate of Corporation Tax stays at 19%, saving £6bn a year that the originally planned reduction to 17% would have cost. 19% remains the lowest of all G20 countries.
• AAT understands the rationale for the Digital Services Tax and whilst, like most others, it would prefer an internationally agreed tax on such activities, accepts that international agreement has been incredibly hard to achieve, repeatedly delayed and has therefore resulted in a number of individual countries deciding to take unilateral action.
• Research and Development Expenditure Credit (RDEC) rate -AAT supports any measures that support small businesses to invest in research and development and therefore backs the decision to increase the rate of RDEC from 12% to 13% from 1 April 2020.
• AAT welcomes the decision to introduce a National Insurance holiday for employers of veterans in their first year of civilian employment and believes that exempting employers from any NICs liability on the veteran’s salary up to the Upper Earnings Limit is a sensible measure.
• The government confirmed the government will increase the threshold for paying NICs from £8,632 to £9,500, honouring their 2019 manifesto commitment to doing so.
• Ensuring that a zero rate of VAT is applied to e-publications, to make it clear that e-books, e-newspapers, e-magazines and academic e-journals are entitled to the same VAT treatment as their physical counterparts, represents a long overdue ending of an illogical anomaly.
• Introducing a zero rate of VAT for women’s sanitary products on 1 January 2021, when the UK has left the EU, had long been expected but is welcome nevertheless.
• The new Chancellor acknowledged many of AAT’s concerns with Entrepreneurs Relief but then failed to scrap it. Instead, he restricted the £10m lifetime allowance to £1m – in other words, all the problems remain but on a smaller scale.
• The government performed a second U-turn on a Stamp Duty surcharge on overseas property investors, promising a 2% charge from April 2021. The government previously promised a 3% surcharge (September 2018) then a 1% surcharge (February 2019) and a 3% surcharge again (November 2019) before making this latest announcement. Hopefully a third U-turn back to 3% isn’t yet out of the question.
• On the plastic packaging tax, the Chancellor confirmed this would apply to plastic packaging with less than 30% recycled content, well short of AAT’s recommendation of 40% rising to 50% by 2030.

VAT fraud campaign rolls on

More Conservative MPs, Labour’s Shadow Financial Secretary to the Treasury and a range of organisations backed AAT’s campaign to tackle online VAT fraud by making online marketplaces like Amazon and eBay liable for the collection and remittance of VAT.

This builds on the support already secured during February 2020.

AAT was also able to include these views in its response to the Budget and will seek to raise the issue at every available opportunity.

Parliamentary engagement

In March, AAT engaged with almost 20 Parliamentarians on subjects including the Budget, Plastic Packaging Tax, unregulated accountants, VAT fraud, the apprenticeship levy and more.

AAT consultations calls for evidence and inquiry responses

AAT provided a short response to an HMRC consultation on its Charter and a Department for Digital, Culture, Media & Sport call for evidence on the annual Cyber Security Breaches Survey.

These responses can be viewed on the AAT Policy page.

Other events, meetings and engagement

• Attended Parliamentary launch of “England's Skills Puzzle: piecing together further education, training, and employment” from FETL and Policy Connect.
• Attended Global Policy Institute book launch on Climate Change & the Nation State: the realist case.
• Attended IFS and Legal & General event on the major pension’s reforms of the past decade
• Attended MemCom shortlisting ceremony where AAT was shortlisted for several awards.
• In light of the new normal, participated in a webinar with the CBI Government Affairs Network and a Skype version of the CBI Business Rates Working Group of which AAT is a member.
• Regrettably a number of meetings with key Parliamentarians were cancelled but all are likely to take place when the Coronavirus outbreak has passed.