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.