A lot! Covid-19 has had a significant impact on our sector, and it has put a huge focus on future profitability and cashflow – cash has become king! Lately, I have been very busy understanding all the new covid-related legislation, such as VAT payment deferrals and the furlough scheme. I’ve also been making sure we account for tax changes, including zero-rating on PPE purchases (as VAT is such a significant cost to our heavily exempt sector).
Being a private business means that we need to ensure that tax relief on interest costs are treated correctly under the corporate interest restriction legislation, including analysing the impact of the group ratio method versus the fixed ratio method.
I have also been busy with understanding the impact of the recent CGT changes for UK real estate.
What are the priorities and challenges facing the in-house tax team?
One of the main challenges is to keep abreast of all the new developments and legislative changes (CIR, IR35, MTD, anti-hybrid, CGT etc.), in addition to ensuring all the statutory deadlines are met and managing the risk governance framework on an ongoing basis. Most organisations have small in-house tax teams, so it is important that we keep ourselves up to date on forthcoming changes to the legislation.
Share a practical tip on life as an
in-house tax professional.
It is very important how you communicate. When you email a senior finance person (the CFO or FD), remember their time is limited. They’ll often want a yes or no answer: if it’s a ‘yes’, they’ll want to know what costs or savings are involved; and if it’s a ‘no’, whether there is an alternative solution. You should keep your communications simple, clear and to the point, if possible with details of the quantum, rather than giving chapter and verse on all the tax legislation.
Are there any new rules causing a particular problem?
IR35 has caused a lot of noise in the industry. The results from HMRC’s check employment status tool (CEST) can be flawed. CEST was built with the construction industry in mind, where the service provider is likely to bring heavy machinery. But service providers like health professionals, journalists and artists are engaged to provide their intellectual expertise: their services are not likely to be substituted, and they are unlikely to be required to bring heavy machinery. HMRC needs to appreciate this and recognise that its one size approach doesn’t fit all. It should take a pragmatic approach based on case law. It would be helpful if it we had a sector-based CEST tool and clearer guidance on which sector workers are inside IR35 and which are outside.
What do you know now that you wish you’d known at the start of your career?
As a head of tax, it is very important that you identify the issues, but you don’t have to do it all yourself. Outsourcing specialist areas, like transfer pricing and R&D, can result in a better use of resources within an organisation.
If you could make one change to a tax law or practice, what would it be?
I would make corporation tax compliance more real time – similar to VAT and PAYE reporting. By the time we submit our tax returns, 12 months after the year end, our finance colleagues are already preparing for current year audit and planning/forecasting of future years. The whole process seems a bit out of date.
Finally, you might not know this about me but…
On the birth of my second child, I only took two weeks of maternity leave. This might make me sound like I’m a bit of a workaholic, but I do really love what I do.
A lot! Covid-19 has had a significant impact on our sector, and it has put a huge focus on future profitability and cashflow – cash has become king! Lately, I have been very busy understanding all the new covid-related legislation, such as VAT payment deferrals and the furlough scheme. I’ve also been making sure we account for tax changes, including zero-rating on PPE purchases (as VAT is such a significant cost to our heavily exempt sector).
Being a private business means that we need to ensure that tax relief on interest costs are treated correctly under the corporate interest restriction legislation, including analysing the impact of the group ratio method versus the fixed ratio method.
I have also been busy with understanding the impact of the recent CGT changes for UK real estate.
What are the priorities and challenges facing the in-house tax team?
One of the main challenges is to keep abreast of all the new developments and legislative changes (CIR, IR35, MTD, anti-hybrid, CGT etc.), in addition to ensuring all the statutory deadlines are met and managing the risk governance framework on an ongoing basis. Most organisations have small in-house tax teams, so it is important that we keep ourselves up to date on forthcoming changes to the legislation.
Share a practical tip on life as an
in-house tax professional.
It is very important how you communicate. When you email a senior finance person (the CFO or FD), remember their time is limited. They’ll often want a yes or no answer: if it’s a ‘yes’, they’ll want to know what costs or savings are involved; and if it’s a ‘no’, whether there is an alternative solution. You should keep your communications simple, clear and to the point, if possible with details of the quantum, rather than giving chapter and verse on all the tax legislation.
Are there any new rules causing a particular problem?
IR35 has caused a lot of noise in the industry. The results from HMRC’s check employment status tool (CEST) can be flawed. CEST was built with the construction industry in mind, where the service provider is likely to bring heavy machinery. But service providers like health professionals, journalists and artists are engaged to provide their intellectual expertise: their services are not likely to be substituted, and they are unlikely to be required to bring heavy machinery. HMRC needs to appreciate this and recognise that its one size approach doesn’t fit all. It should take a pragmatic approach based on case law. It would be helpful if it we had a sector-based CEST tool and clearer guidance on which sector workers are inside IR35 and which are outside.
What do you know now that you wish you’d known at the start of your career?
As a head of tax, it is very important that you identify the issues, but you don’t have to do it all yourself. Outsourcing specialist areas, like transfer pricing and R&D, can result in a better use of resources within an organisation.
If you could make one change to a tax law or practice, what would it be?
I would make corporation tax compliance more real time – similar to VAT and PAYE reporting. By the time we submit our tax returns, 12 months after the year end, our finance colleagues are already preparing for current year audit and planning/forecasting of future years. The whole process seems a bit out of date.
Finally, you might not know this about me but…
On the birth of my second child, I only took two weeks of maternity leave. This might make me sound like I’m a bit of a workaholic, but I do really love what I do.
