February 2017 Newsletter

Pete Miller of The Miller Partnership looks forward to another eventful 12 months for the business tax world

There is no doubt that 2016 was an eventful 12 months for the UK’s  corporate tax sector, with 2017 set to bring its own set of challenges for businesses and individual taxpayers.

In the year that brought us Brexit – not to mention new incumbents at Number 10 and Number 11 – we also witnessed the implementation of a number of far-reaching tax changes in the Finance Act 2016.

Although some of these rule changes could be accurately described as onerous, and in some instances a little too ‘one size fits all’, there have been some welcome developments.

One notable positive development for the tax sector – and, indeed, for common sense – has been HMRC’s s decision to roll back some of the worst excesses of the Finance Act 2015.

You may recall that HMRC made a number of amendments to Entrepreneurs’ relief in the 2015 Act, which, although intended to combat avoidance, were so poorly aimed that many commercial structures were unfairly affected.

Fortunately, tax professionals, myself included, sat down with HMRC to thrash out our concerns, resulting in amendments so that the rules were properly and accurately targeted – replacing the original blunderbuss approach with a sniper’s rifle – and also backdating the changes to the time when they were originally introduced.

This clearly demonstrates what can be achieved when the tax industry and HMRC come together in a spirt of co-operation and I’m proud to have played my part in achieving such a satisfactory outcome.

Looking forward to the year ahead, one  key change emerging from the Finance Act 2017 concerns the way in which ‘enablers’, such as tax advisers and accountants, are treated from a taxation perspective.  Until now tax avoidance penalties have only ever been targeted at tax-payers themselves – not the professionals who advise people on their tax affairs, so this is quite a significant step.  Once again, we are pleased to see that HMRC’s original and draconian proposals have been better targeted.  Under the new, revised proposals, enablers who assist their clients in gaining tax advantages that HMRC believes were never intended by Parliament, could be fined up to 100 per cent of their fees.  The new rules only apply to tax-saving arrangements that would be subject to the general anti-abuse rule. This is in contrast to HMRC’s original suggestion that these penalties might apply to tax advice on normal commercial transactions, such as the transactions in securities rules – an area in which we specialise.

In a related development, taxpayers will find it harder to avoid penalties if they have failed to take proper care when submitting their tax returns.  Until now businesses have only had to prove to HMRC that they sought general professional tax advice, but that is about to change.  Under the new rules business owners must be able to demonstrate that they took “appropriate” advice which is pertinent to their own business’s needs and circumstances.  So relying on generic advice, taken, for example from a scheme promoter, will no longer be adequate to prove that the taxpayer was not careless if the scheme fails and that they have therefore submitted an incorrect tax return.

Other measures which come into force courtesy of the Finance Act 2017 include the way business losses are treated for tax.  These welcome changes mean that companies will be able to use losses more flexibly, with carried forward losses being available to set against all future sources of income and also being available for group relief.   At the moment, carried forward losses can usually only be set against the same kind of income in future years and cannot be used for group relief.

Of course 2016 was not only a busy year for the UK tax sector – it was a memorable one for The Miller Partnership too.

It is now five and a half years since our tax consultancy was established in Leicester city centre, and in September we moved to more spacious premises in New Walk House, 108 New Walk; just a few hundred yards from our old office.

During 2016 I also had two technical tax books published – the Taxation of Partnerships published by CCH and Taxation of Company Reorganisations published by Bloomsbury – as well as continuing to lecture extensively on tax issues.

It was also gratifying to receive national recognition from the Chartered Institute of Taxation, (CIOT) the UK’s leading professional tax body.

In October the Institute presented me with the CIOT Award of Certificate of Merit for my contribution to education and conference lecturing.  It was a great honour – especially as this recognition came from my fellow tax professionals.

Nearer to home, The Miller Partnership is proud to play its part in Leicestershire’s thriving business community.

We continue to work closely with De Montfort University in offering mentoring to its business and finance students and graduates and in promoting the benefits of mentoring training to others.

Similarly we have forged a lasting relationship with our New Walk neighbours, Soft Touch Arts.

This award-winning local charity uses arts, media and music activities to engage with and change the lives of disadvantaged young people.

We have helped Soft Touch Arts to fund its ongoing mentoring programme as well as assisting financially by paying for table cloths and place mats at its pop-up café.  And we are linking together with the Leicester Comedy Festival to present Food, Glorious Food! At Soft Touch Arts, an evening of comedy and food, with amateur and professional comedians, a joke slam and a comedy quiz, and other excitements and surprises, all in aid of Soft Touch, on 21st February.

Although The Miller Partnership operates at a national as well as local level, it is great to be actively involved in the local business scene. We have a busy schedule planned for 2017 and look forward to taking a role in the Leicester Comedy Festival as one of its Platinum Business Partners.

 

L Factor: singers get set to raise the roof!

From the Leicester Mercury

 

15854381-large

Members of the business community are exercising their vocal chords in preparation for a big fund-raising celebration.

Accountants, lawyers and even plumbing merchants are getting ready to join the X Factor-style charity singing event – called the L-Factor – on March 31.

Up to 1,000 people are expected at the big night out which could raise up to £50,000 for charity. Tickets are £20 each.

Organisers have confirmed the event will be held at the Leicester Arena, home of the Riders basketball team, and a short walk from the city centre.

The night will see singing acts – made up of local business people – battle it out on stage in aid of the Lord’s Taverners.

The charity raises money for young people from disadvantaged backgrounds and those with disabilities to help them enjoy sport.

Some of the money will support the Leicester team at the Special Olympics in Sheffield this summer.

County business consultant Ian Guyler, who is chairman of the Lord’s Taverners for the East Midlands, said: “We’ve got £20,000 from our five main sponsors and from a band sponsor, and are hoping for a further £30,000 from ticket sales and contestant sponsorship.

“We have 12 contestants from the business community already signed up and we are looking for between 750 and 1,000 to attend on the night.

“We had 1,000 people the last time we did this in 2014 and tickets are on sale now and are already selling well.”

Main sponsors are Total Motion, Interserve Learning and Apprenticeships, Hastings Direct, Gateley and SME Capital.

The house band on the night – called the Y Fronts Band – is being sponsored by plumbing merchants Pochins.

The backing band is made up of well-known business faces – Gateley senior partner Gareth John, Mattioli Woods consultant John Kelly, Soft Touch Arts business development director Christina Wigmore, BDO audit manager Simon Cotton, and Maytree Group manager director Nigel Upton. This will be the third L-Factor Mr Guyler has arranged which – combined with an It’s a Knockout-style Gauntlet event at Leicester Tigers last summer and a light-hearted debate at Leicester Cathedral – have raised a total of £200,000.

The organisers have even recorded a pop video which sees business leaders singing their version of Dancing in the Street. It can be viewed on the business section of the Leicester Mercury website

Peter Bailey is local business development manager for Total Motion, a UK-wide leasing and fleet management business based in Meridian Business Park.

Mr Bailey, one of the stars of the video, said: “We supported it before and are delighted to be a headline sponsor.”

Leicester Riders chairman and arena director Kevin Routledge said: “We are absolutely delighted to be hosting the L Factor for the first time, and supporting the charitable work of the organizers from the Lords Tavenors.

“It is a great event and provides us with a superb opportunity to showcase the arena.”

To buy tickets, call 0116 326 9700 or visit:

www.leicestercommunity sportsarena.com/events/l-factor

Read more at the Leicester Mercury.