AAT public affairs and public policy activities: December 2019

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 December 2019.

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.

General Election 2019

Following the steady trickle of media coverage for AAT’s views on political commitments during the General Election campaign, early December saw more of the same with AAT’s views on corporate tax reliefs and prompt payment gaining further coverage in publications such as Startups.

After the election result, AAT highlighted that the large Conservative Party majority represents a good opportunity for the Conservatives to take bold action on a range of domestic policy issues that AAT has been recommending – from reforming Stamp Duty and Inheritance Tax to introducing meaningful measures on prompt payment and improving proposals for a Plastic Packaging Tax.

These views were covered by accountancy firms and the accountancy trade press including Taxation, Accounting Web and The Accountant as well as the property press and others.

Entrepreneur’s Relief

AAT has long recommended this relief be replaced with something that helps small businesses to start-up and/or scale-up and so the election focus on the relief was welcome.

The Labour Party had promised to scrap it, the Conservatives promised to “review and reform it” and the Liberal Democrats promised to “look at it”.

Still, some continued to trumpet its value, many of which used arguments based on perception rather than evidence – especially in the financial advice community, hence a defence of our position in the Financial Times Adviser

In light of the election result, many are starting to realise the likelihood of change is increasingly strong as demonstrated by articles in Growth Business and the like.

Many happy returns?

HMRC confirmed that over 3,000 people (3,003) submitted their self-assessment tax return on Christmas Day and more than three times as many did so on Boxing Day (9,254).

This made for a good headline, but AAT highlighted this equates to only a little over 0.10% of the 11 million people who are required to submit a return by the 31 January 2020.

More than 700,000 people failed to submit their tax return before the January 2019 deadline. AAT highlighted that reducing the number of people who miss the January 2020 deadline should be a key area of focus for HMRC - and the accountancy profession - to help the self-employed and others who are required to submit a return avoid an automatic £100 fine by ensuring they pay the right amount of tax at the right time.

This received a range of coverage in local media across the country including the Lancashire Post, Blackpool Gazette and Wigan Today.

IR35

This off-payrolling legislation will impact most employers - including AAT - given it will apply to the private sector as well as public sector from April 2020.

The Chancellor announced he would review IR35 when pressurised during the election campaign, as recently covered by David Nunn in AAT Comment.

IR35 was originally supposed to come into force in April 2019, AAT pressed Government to wait until April 2021. The Government compromised and delayed the change until April 2020. It is therefore unlikely to further delay the change for another year having already done so once, especially as the Government now has a majority of 80 and IR35 will bring in much needed revenue to help towards their various spending commitments.

AAT Digital Advisory Panel

The AAT Digital Advisory Panel met in December. The Digital Advisory Panel consists of professionals from a range of different organisations including Sage, Microsoft, academia, cyber security firms and digitally engaged AAT licensed accountants.

Last month topics of discussion included;

• Net Zero: Huge amounts of server space and energy are required by cloud computing. MacAfee report that the electricity needed to transmit the trillions of spam e-mails sent every year is equivalent to the same amount of greenhouse gas emissions as that produced by 3 million cars. These emissions are rising not falling. Failing to understand how technology and digital approaches can impact carbon footprints in a negative rather than positive way was widely agreed as being a concern
• Significant concerns were raised about the security of Voice but on a more positive note, Voice might help accountants become more productive, reduce administration and create a deeper relationship with their clients e.g. “Alexa, which clients haven’t submitted their tax return this year?” Intuit QuickBooks Assistant, which offers a conversational chat experience, that solves common problems for the self-employed and small businesses, has answered almost 2 million tax/accountancy questions since launched in 2017 so demonstrates the direction of travel
• Reinventing the professions: Professional bodies need to provide practical assistance in helping accountants make the change to more advisory led business, recognising that evolution rather than revolution is probably the best approach. Bodies such as AAT should provide help, information, advice and guidance through better targeted qualifications, more relevant CPD, the provision of case studies and best practice examples in communications and events that help members gain the necessary skills to provide advisory rather than compliance services

If you would like further information about the Digital Advisory panel’s work, please don’t hesitate to get in touch.

AAT Tax Panel

The AAT Tax Panel met in December. The Tax Panel consists of tax professionals from a range of different organisations including the FSB, Tolley’s, OTS, NFU, Equity and of course some of our own AAT licensed accountants.

Last month topics of discussion included;

• Net Zero: a raft of information and advice in this area is being given by AAT licensed accountants i.e. advice on tax reliefs and incentives relating to electric vehicles, cycle to work schemes and renewables etc. However, the primary driver is often financial. The output is the same whether undertaken for financial or environmental reasons, which suggests that packaging up such advice in an appropriate way is crucial to success
• Anne Stark from the Treasury Select Committee gave a presentation to the Panel on the work of the Committee. Anne started by thanking AAT for its valuable contribution to the work of the Committee and then spoke about its composition, legal basis, areas of activity, the role of the media and the evidence giving process
• The US, Australia and last month New Zealand, have all made online marketplaces such as eBay and Amazon responsible for VAT/Goods & Services Tax collection and remittance, primarily to reduce VAT fraud and abuse. AAT supports the same in the UK and this was discussed at some length
• The “politics of tax” was the final item on the agenda and enabled us to discuss future areas of potential lobbying activity from tax and small business policy to regional development

If you would like further information about the Tax panel’s work, please don’t hesitate to get in touch.

Parliamentary engagement

All 140 new MPs have been contacted by AAT, and additionally the 15 “returners” who were previously MPs, lost their seats but won them back last month.

AAT has provided details as to who we are and what we do and will seek to build successful working relationships with many of these MPs on a cross-party basis next year.

In December, AAT also engaged with half a dozen Parliamentarians on subjects including adult education, the Budget and tax reliefs.

AAT consultations calls for evidence & inquiry responses

The last 2019 consultation response was submitted to the Department for Digital, Culture, Media & Sport (DCMS) just before Christmas. This was in relation to their Call for Evidence on Cyber Security and regulation.

The AAT consultation response page can be viewed here.

Other events, meetings and engagement

• Phil Hall attended the CBI Christmas Reception, listening to speeches from the CBI Director General and the new head of the BVCA, former MP Michael Moore, as well as meeting various captains of industry
• Met with the Entrepreneur’s Network to discuss small business issues from tax to education
• Worked with Common Vision and the Chartered Institute of Tax (CIOT) to help design and create a public conversation toolkit on taxation to help achieve a better understanding of the tax system, and rebuild public trust and accountability in the ways in which taxes are designed, collected and spent
• Met with the Green Alliance to discuss the tax implications of net zero carbon emissions
• Attended the annual MemCom lecture, given by the Chief Executive of the Chartered Institute of Environmental Health, to hear her views on the challenges faced by professional bodies
• Represented AAT at the FETL Winter Symposium in Parliament – discussing the future of Further Education
• Discussed the issue of unregulated accountants (a third of the accountancy sector is unregulated) with Higginson Strategy & GK Strategy and will meet both again later this month to discuss further
• Engaged with the PRCA (the world’s largest PR professional body) to discuss mutual working opportunities for AAT
• Discussed automated monitoring of policymaker’s social media activities with the Chief Executive and Founder of PoliMonitor