AAT public affairs and public policy activities: March 2021

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

Below you will find some key highlights for March 2021. 

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.  

AAT Campaign Success – loophole closed

AAT has long campaigned for the second homes loophole to be closed so was pleased to see the Government announce this as part of their “Tax Day” changes announced on 23 March 2021. AAT had recommended that to qualify for business rates relief, properties in England should have to be “actually let” rather than simply being made “available to let”. This is precisely what will now be required.

Budget surplus

The Budget contained a number of recommendations AAT has campaigned for, including:

• The Chancellor announced that the maximum limit for contactless card payments would more than double from £45 to £100 later this year. This was recommended by AAT and in line with the desire of a clear majority of members given 62.5% supported a rise to £100 when surveyed on the subject in February. 
• Freezing personal allowances – AAT recommended this back in 2018.
• In 2020, AAT welcomed the retention of the main rate of Corporation Tax at 19% as the planned reduction to 17% would have meant losing £6bn of much-needed revenue for no discernible gain. After a year of unprecedented economic shocks caused by Coronavirus, and to a lesser extent Brexit, the Chancellor is right to introduce an increase effective from 2023.
• Back in January 2021, AAT called for the replacement of a one-year carry-back of trading losses with a three-year carryback, as existed in the aftermath of the financial crisis, so naturally welcomed the Chancellor’s announcement that he will legislate for this.
• AAT strongly supports HMRC action against those who promote and market tax avoidance schemes, particularly plans to allow HMRC to stop promoters from marketing and selling avoidance schemes at an earlier stage, something AAT recommended in September last year.
• The Government has said it is minded to bring data and cloud computing costs within the definition of qualifying expenditure for R&D Tax Credits, something AAT recommended in its response to the Government consultation on the issue last year.

Budget deficit

There were a small number of concerns with issues announced in the Budget too:

• Introducing a new Financial Institution Notice, which can be used under certain circumstances to require financial institutions to provide information to HMRC about a specific taxpayer, without the need for approval from the independent tax tribunal, was opposed by AAT and most other consultation respondents back in 2018 but is still proceeding.
• An overseas residential property investor surcharge will be introduced this month, although the policy was recommended and campaigned for by AAT, it is being badly implemented – set at too low a rate and applying in too few circumstances.

More recognition for AAT Licensed Accountants

Invest Northern Ireland, Northern Ireland's regional economic development agency, has agreed to recognise AAT licensed accountants in relation to applications being made for emergency Covid-19 support. Good news for our members in Northern Ireland and even better news for their clients.

An ongoing issue relating to NatWest Bank was also resolved earlier this week with Group CEO Alison Rose kindly confirming AAT licensed accountants are recognised for verifying customer business profiles and that NatWest will be reviewing their process documentation to ensure this is clear to all of their employees carrying out associated activities in the future.

Time to regulate the unregulated?

In addition to the significant coverage given to this subject in the March/April edition of AT magazine, there were several articles on the topic in AAT Comment last month. This resulted in dozens of AAT members, and importantly, members of other accountancy and tax bodies getting in touch to express their support for our approach. The next step is to respond to Government plans for compulsory PII for the unregulated, a move AAT has already publicly described as completely inadequate.

Parliamentary engagement

Engagement with 11 Parliamentarians in March centred on subjects including the Budget, “Tax Day”,  R&D Tax reliefs and environmental taxes.

Non-Parliamentary engagement

Engagement with almost 50 external stakeholders took place in March. These included the likes of NatWest, Forrest Brown, CBI, Institute for Government, Companies House and ICSA on issues ranging from member recognition and tax credits to unregulated accountants and environmental taxes.

AAT consultations, calls for evidence & inquiry responses

AAT responses to inquiries, calls for evidence and consultations on VAT Shifting, VAT and the sharing economy and R&D Tax Reliefs were all made in March. AAT’s responses to the Budget on 3 March and “Tax Day” on 23 March were also submitted to the Treasury Select Committee.

These and other responses can be viewed on the AAT Policy page.