I am helping a number of clients who have concerns over the use of off-payroll workers both to understand their risks and introduce new arrangements which will be more tax compliant. I am also helping agencies and other engagers prepare for the IR35 changes which are to be introduced in April 2020. In addition to the above, I am assisting a number of clients who are the subject to HMRC review.
You’ve worked in tax for 50 years. How have things changed, and where is the tax profession heading?
There have been significant changes over the last 50 years; some are for the better, but not all. We are now far heavily tied to regulatory control, which means treading carefully over who we work for and undertaking the necessary ‘know your client’ checks and issuing engagement letters.
When I joined the profession, firms did not actually market their services; it was just expected that clients would come to us when they needed help.
Sadly, it is also the case that we have lost the relationship we had with HMRC. In the old days, we knew the local inspector, and we could ring him/her with our questions. Now we have to address those queries to a call centre that appears to be manned by people who simply refer to HMRC’s website.
I fear we are going to see further radical change going forward with the possible splitting up of the ‘big 4’ and the segregation of audit from consultancy services. I suspect the tax profession will look completely different in ten years' time than it does today.
Are there any new rules that are causing a particular problem?
I am seeing an element of confusion over the salary sacrifice changes which occurred at April 2017 and the further revisions at April 2019 relating to the OpRA rules, in particular concerning the calculations for the greater of the sums sacrificed. I believe the confusion (particularly in the public sector) is that the guidance does not appear to have been picked up. But it means that employees have entered into arrangements post-April 2017 which are going to have an unexpected tax impact.
If you could make one change to tax, what would it be?
I would adopt the changes to the national minimum wage laws which catch employers for what I would consider is a technical failure. The rules should be simplified, so that they clamp down on those who abuse the employee by paying below the permitted level, rather than catching only technical breaches. This is not a new idea – we had a consultation earlier in the year – so let us hope that a change is announced soon.
What is your view on the proposed IR35 revisions?
There is a need for some revision to the rules because there is clear evidence it is being abused. However, I am concerned at the likely impact of these changes on end clients who are likely to make a ruling whether the worker is inside or outside of IR35 and now under the latest proposals must share that ruling (and their reasoning) with everybody in the supply chain. I suspect that the end client is going to be ambushed by agencies and the client who feel the ruling is wrong. This all boils down to there being so much ignorance over IR35. HMRC needs to be involved in the chain when there are disputes; it cannot just walk away and leave it to the client to resolve.
Finally, you might not know this about me but…
I am a keen sports person who competed in 15 marathons and six triathlons. I also competed in the London 100 bike ride six times and I am currently training for the Serpentine two-mile open water swim.
I am helping a number of clients who have concerns over the use of off-payroll workers both to understand their risks and introduce new arrangements which will be more tax compliant. I am also helping agencies and other engagers prepare for the IR35 changes which are to be introduced in April 2020. In addition to the above, I am assisting a number of clients who are the subject to HMRC review.
You’ve worked in tax for 50 years. How have things changed, and where is the tax profession heading?
There have been significant changes over the last 50 years; some are for the better, but not all. We are now far heavily tied to regulatory control, which means treading carefully over who we work for and undertaking the necessary ‘know your client’ checks and issuing engagement letters.
When I joined the profession, firms did not actually market their services; it was just expected that clients would come to us when they needed help.
Sadly, it is also the case that we have lost the relationship we had with HMRC. In the old days, we knew the local inspector, and we could ring him/her with our questions. Now we have to address those queries to a call centre that appears to be manned by people who simply refer to HMRC’s website.
I fear we are going to see further radical change going forward with the possible splitting up of the ‘big 4’ and the segregation of audit from consultancy services. I suspect the tax profession will look completely different in ten years' time than it does today.
Are there any new rules that are causing a particular problem?
I am seeing an element of confusion over the salary sacrifice changes which occurred at April 2017 and the further revisions at April 2019 relating to the OpRA rules, in particular concerning the calculations for the greater of the sums sacrificed. I believe the confusion (particularly in the public sector) is that the guidance does not appear to have been picked up. But it means that employees have entered into arrangements post-April 2017 which are going to have an unexpected tax impact.
If you could make one change to tax, what would it be?
I would adopt the changes to the national minimum wage laws which catch employers for what I would consider is a technical failure. The rules should be simplified, so that they clamp down on those who abuse the employee by paying below the permitted level, rather than catching only technical breaches. This is not a new idea – we had a consultation earlier in the year – so let us hope that a change is announced soon.
What is your view on the proposed IR35 revisions?
There is a need for some revision to the rules because there is clear evidence it is being abused. However, I am concerned at the likely impact of these changes on end clients who are likely to make a ruling whether the worker is inside or outside of IR35 and now under the latest proposals must share that ruling (and their reasoning) with everybody in the supply chain. I suspect that the end client is going to be ambushed by agencies and the client who feel the ruling is wrong. This all boils down to there being so much ignorance over IR35. HMRC needs to be involved in the chain when there are disputes; it cannot just walk away and leave it to the client to resolve.
Finally, you might not know this about me but…
I am a keen sports person who competed in 15 marathons and six triathlons. I also competed in the London 100 bike ride six times and I am currently training for the Serpentine two-mile open water swim.
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