AAT Public Affairs & Public Policy activities (October 2018)

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 October 2018.

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 Victory – Overseas residential property investors 

In 2017, AAT members were asked, “Should an additional tax be paid on property purchases by overseas investors?” 78% said “Yes” compared to just 14% who said “No”.   AAT subsequently campaigned for overseas residential property investors to face additional taxation; providing a briefing note for all MPs, including the Prime Minister and Housing Minister, on the subject last year and again as recently as June 2018.

AAT is therefore pleased that on the eve of the Conservative Party Conference, the Prime Minister confirmed the Government’s intention to levy an additional Stamp Duty charge on overseas residential investors.

AAT worked very hard to gain cross party support for an idea that has myriad benefits and is naturally pleased with the result. The additional Stamp Duty charge on overseas residential property investors isn’t going to solve the housing supply shortage but it’s a sensible and measured response to an increasing problem that will also raise £40-£120m to fund action on homelessness and adds a degree of previously absent fairness to the system.

For full details please see our recent AAT Comment article on the subject. 

AAT Campaign Victory – Bank of England takes note of AAT 

In May 2018, the Government proposed scrapping the £50 note on the grounds it was perceived to be used for money laundering and tax evasion purposes.

AAT strongly argued it be retained and that any decision be based on evidence rather than perception. AAT also surveyed its members and found that 73% wanted to retain the £50 note.

AAT’s full response to the May 2018 consultation can be found here.

On 13 October the Bank of England confirmed they would keep the £50 note and that it would join other bank notes in being produced in polymer.

Another great victory for AAT and following this news our views were highlighted in the personal finance media as well as the accountancy and business press.

AAT Campaign Victory – Government scraps shared occupancy test

This summer, HM Treasury proposed a new “shared occupancy test” for those renting their spare rooms to continue to qualify for the annual £7,500 rent-a-room tax relief.

This was due to be included in the 2018-2019 Finance Bill and would have brought an end to rent-a-room relief for those who rented out a single room whilst they were absent or from renting out entire properties whilst away from home.

AAT launched a lone campaign against the change because it would have added unnecessary complexity to the tax system, had a negligible impact on tax receipts, would draw thousands of people into the tax self-assessment system and would be a nightmare to enforce.

Hidden deep in the 281-page review documentation accompanying this week’s Budget was a single sentence confirming a Treasury U-turn. It simply states, that the measure has been scrapped, “…to maintain the simplicity of the system.”  

A great result for AAT as well as the tens of thousands of people who use platforms such as Airbnb and the spareroom website.

The AAT prompted U-turn was covered in the financial media as well as the property and accountancy press.

Parliamentary engagement

Parliament returned to a Brexit frenzy in October but hard work in other policy areas continues with AAT engaging with a record number of politicians (40) to discuss our Alternatives to tax rises report, our ISA report, apprenticeships, future of work and technology, Stamp Duty, prompt payment for SMEs and various other issues.

AAT urges reform of Prompt Payment Code

AAT has made three key recommendations as part of our response to the Department for Business, Energy & Industrial Strategy call for evident on payment terms. These are that:

1. the Prompt Payment Code should be made compulsory for companies with more than 250 staff
2. payment terms should be halved from a maximum of 60 days to a maximum of 30 days
3. a clear, simple financial penalty regime for non-compliance should be introduced and enforced by the Small Business Commissioner

Cross-party support from MPs, Peers and members of the Welsh Assembly has been secured, as has the public support of numerous SMEs, recruiters and Enterprise Nation. The recommendations are also being given serious consideration by the trade association for the self-employed (IPSE) and business body, the CBI.

In addition, AAT’s Prompt Payment recommendations have been covered in The Times as well as regional, local and trade media publications.

AAT has also held discussions with the Small Business Commissioner and the Chief Executive of the Chartered Institute of Credit Management (who operate the existing Prompt Payment Code) about our recommendations. AAT’s full response is available here.

Budget 2018

The Budget took place on Monday 29 October 2018 and included a wealth of changes of relevance to AAT.

A reduction in costs for SMEs wanting to hire an apprentice (from 10% to 5% of the total costs) was welcome given we had suggested this on a number of occasions, as was the business rates relief for small businesses with a rateable value below £50,000 (although it’s clearly a sticking plaster for a much bigger problem) and confirmation that more SMEs will be able to access the Financial Ombudsman Service as AAT had recommended back in February this year.

Other announcements of relevance to AAT included a one-year delay to the implementation of IR35 in the private sector – AAT had called for this measure to be abandoned or at the very least delayed for a year instead of being introduced in April 2019, so this would best be described as a partial victory.

There was disappointment too. AAT had strongly pushed for tax relief for work-related training to be considered (as already exists in most other OECD countries) but the Government confirmed it would not be pursuing the idea.

We were able to speedily yet comprehensively put together a “traffic light” response to the Budget on behalf of the Treasury Select Committee to ensure they had reliable industry views ahead of their subsequent evidence session with  the Chancellor as well as penning an article for the next edition of AT Magazine, providing business rates content for the CBI and discussing some of the Budget changes with members of both the Treasury Select Committee and Business Select Committee.

We also secured a wide range of press coverage on issues including the £200m extra for broadband, shared occupancy test, business rates and hypothecated tax. Our full response to Budget 2018 is available on request.

AAT views discussed at Treasury Select Committee on Economic Crime

Senior members of the Treasury, HMRC and Financial Conduct Authority (FCA) gave evidence about money laundering to the Treasury Select Committee on 10 October.

The Chair of the Select Committee, Nicky Morgan MP, mentioned AAT, our concerns about the OPBAS fee structure and the likely impact on our members. The FCA said they were “alive to these concerns” and would be working hard to ensure professional bodies recognise the benefits that OPBAS could bring.

We shall see …

Robot questioned by MPs

Parliament's Education Select Committee held an evidence session with 'Pepper' the robot in what is believed to be the first time a robot has appeared before a panel of MPs in a Parliament. The Committee is broadly looking at how robots can support the learning and skills needed to adapt to the growth in artificial intelligence and automation. AAT responded to the same inquiry some months ago and our response can be read in full here.

Conservative Party Conference

Attending over 20 fringe events in Birmingham on topics including tax, austerity, growth & productivity, apprenticeships, Artificial Intelligence and the future of the British high street proved beneficial both for gaining insight and promoting AAT member views.

As in Liverpool the week before (Labour Party Conference) Mark was also in attendance to raise awareness of AAT as well as to pick up some insight from the wide array of speakers, policymakers and stakeholders.

Further information about our activities in Liverpool and Birmingham is available by getting in touch.

AAT Consultations, Calls for Evidence & Inquiry responses

AAT responded to consultations on Prompt Payment and Anti-Money Laundering in October.

These, and more, can be read in full here: AAT Public Policy responses

Other events, meetings and engagement

• AAT has joined the CBI working group on Artificial Intelligence, a forum to discuss and develop AI policy, explore business adoption and engage directly with senior government officials.
• AAT held a joint Focus Group with the OTS to discuss business challenges.
• An Industry Forum lunch with Bill Esterson MP (Shadow Small Business Minister) proved a good opportunity to highlight AAT views on prompt payment, access to finance and Informi.
• AAT attended the APPG on Apprenticeships.
• The CIPR & CBI Government Affairs Network met to discuss likely Budget outcomes and again presented a good opportunity to highlight AAT’s Prompt Payment views to a significant audience.
• A Resolution Foundation event on austerity meant AAT was able to again highlight our excellent “Alternatives to Tax Rises” report to policymakers, the media and various other stakeholders.
• A Deloitte sponsored discussion event featuring broadcaster Fiona Bruce and Chair of the Business Select Committee Rachel Reeves provided an opportunity to listen to industry views on the future of audit, our views on the future of the FRC can be found here.
• Attendance at the new APPG on Business Engagement helped to further establish AAT as a reliable and constructive representative body for business, especially SMEs.