AAT public affairs and public policy activities: February 2023

Business and taxation policy

Treasury consulting on new regulatory regime for cryptoassets

At the beginning of February, the Treasury announced plans to regulate a broad suite of cryptoasset activities, consistent with its approach to traditional finance. Under the plans, crypto trading venues will be responsible for defining the detailed content requirements for admission and disclosure documents. The proposals will also strengthen the rules around financial intermediaries and custodians which have responsibility for facilitating transactions and safely storing customer assets.

The consultation also seeks views on improving market integrity and consumer protection by setting out a proposed crypto market abuse regime. The Treasury also wants to introduce a time limited exemption to that cryptoasset businesses that are registered with the FCA for anti-money laundering purposes will be allowed to issue their own promotions, while the broader cryptoasset regulatory regime is being introduced.

The deadline for responses is 30 April and you can read the consultation on GOV.UK.

Government considers launching a “digital pound”

The Treasury and the Bank of England have launched a joint consultation seeking views on introducing a UK central bank digital currency or “digital pound”. The idea is for a central bank digital currency using similar technology to cryptocurrencies but issued by the Bank of England instead of private companies. It would sit alongside cash and offer a new form of digital money for households and businesses. The consultation is clear there is no decision or commitment to a digital pound and that if it did proceed, the infrastructure would not be built until at least 2025.

The consultation The digital pound: A new form of money for households and businesses? is on GOV.UK and the deadline for responses is 7 June.

Highest self-assessed income tax receipts since records began

The Office for National Statistics (ONS) has revealed that self-assessed income tax receipts were £21.9 billion in January 2023, the highest January figure since monthly records began in April 1999.

While it was partly offset by spending on energy support schemes and EU payments, this meant that public sector net borrowing was in surplus by £5.4 billion in January 2023, which is £5 billion larger than what the Office for Budget Responsibility (OBR) forecast.

Public borrowing in the financial year to date was also £30.6 billion less than the OBR predicted. However, the government has been quick to downplay hopes that the surplus could be used for tax cuts or public sector wage increases.

You can read this in full in the ONS Public sector finances, UK: January 2023 release.

Public affairs update

Political update

The major political development in February was the news that Rishi Sunak’s government has reached an agreement with the EU on changing the Northern Ireland Protocol, which was considered by all parties not fit for purpose. The resulting outcome of the "Windsor Framework" will arguably be the defining factor of Sunak’s premiership and whether he can overcome opposition from DUP and Conservative politicians (notably Boris Johnson).

The other major political news in the past month came from the surprise resignation of Nicola Sturgeon MSP as First Minster of Scotland and Leader of the Scottish National Party (SNP), after spending eight years in the role. The SNP member ballot to appoint her successor will open on 13 March and close on 27 March, with results announced soon after. Humza Yousaf MSP, the Cabinet Secretary for Health and Social Care, is the current frontrunner against two other candidates, Ash Regan MSP and Kate Forbes MSP.

On the Labour front, Keir Starmer MP announced five “missions” which will be Labour’s central pledges in the next general election. These missions focus on economic growth, the NHS, raising education standards, reforming the justice system, and making Britain a “clean energy superpower”. While there is no detail behind these pledges, Labour has promised more will be revealed later this year on how they'll deliver these goals.

IfATE consultation response

AAT has submitted a response to a consultation run by the Institute for Apprenticeships and Technical Education (IfATE) proposing changes to mandatory qualifications criteria in apprenticeships. AAT’s response argued that there is not enough detail on the criteria to be able to accurately assess their impact and urged IfATE to demonstrate the evidence behind the rationale for the proposals are why the solutions are required.

We also warned that the proposal to align the mandatory qualifications to KSBs (knowledge, skills and behaviours) would create significant administrative burden for little benefit and could have the counterproductive effect of leaving apprentices disadvantaged in the workplace.

You can download and read our Response to IfATE’s consultation on proposed updates for mandatory qualifications criteria (PDF).

HMRC external stakeholder conference

AAT attended HMRC’s External Stakeholder Conference on 16 February in London. The conference heard from leaders of HMRC as well as the Financial Secretary to the Treasury, Victoria Atkins MP, on the government’s priorities for tax policy in the future. Main topics of discussion at the conference focused on Making Tax Digital, simplification, SME compliance and collaboration with intermediaries.

If you would like to learn more about what was discussed at the conference, please contact AAT’s Head of Public Policy and Affairs: jack.withrington@aat.org.uk.

Stakeholder engagement

AAT engaged with a variety of political and policy stakeholders over the month, including officials at the Department for Education and HM Treasury as well as external organisations like the Federation for Small Businesses.

Upcoming consultations we're responding to

We intend to respond to the following consultations. If you are an AAT member and would like to contribute your thoughts and expertise to these responses, please contact jack.withrington@aat.org.uk.

• Research and development tax reliefs review (Treasury, closes 13 March 2023).
• Statutory review of the Small Business Commissioner (Department for Business and Trade, closes 28 April 2023).