As ever, a whole variety of things. Advising on corporate M&A always makes up a significant part of my workload. I like the challenge of navigating a tricky technical issue while also finding commercial solutions between the affected parties, and M&A transactions have that in spades.
Probably my most out of the ordinary project at the moment is helping a trade organisation formulate proposals to government on a change in the law which would significantly help their industry. Having never worked within HMRC or the Treasury, it is a new puzzle to work out how I would draft law and guidance to achieve a sensible outcome.
If you could make one change to a tax law or practice, what would it be?
Fewer legislative surprises please. The current chancellor has done a lot to increase the lead time for introduction of new tax legislation. However, the debacle of the changes to entrepreneurs’ relief, brought in with immediate effect in the last Budget, was disappointing. The fact that the government went on to correct the legislation just before Christmas didn’t help those who had to make decisions in November and December. There were a couple of months where people were forced through commercial pressures to enter into major, often life-changing, transactions without any certainty as to their tax position.
If you will allow me one more, I think the Office for Tax Simplification made a number of extremely good recommendations in relation to reforming unapproved employee share schemes and, in particular, it was a great shame that the proposal for a new employee shareholding vehicle – with a simplified tax regime subject to operating within controlled boundaries – wasn’t taken up. There is a whole offshore industry that could and should be brought onshore if the UK system was just a little simpler and more benign.
Are there any new rules that are causing a particular problem?
I’m monitoring developments in relation to the digital services tax with interest as it will potentially affect a lot of my clients. If one were to find a silver lining in these turbulent political times, it is that radical new ideas for how the tax system might work suddenly seem less radical (it’s all relative, after all). There are areas of the tax system that clearly need overhaul to reflect how modern businesses work. However, I’m unconvinced that this is part of the solution. A tax on revenues is bound to affect some businesses disproportionately. A new 2% revenue tax may be manageable if your profit margins are 20%. Not so much though if your profit margin is 3%.
What should we be on the look out for this year?
Our larger employer clients should be preparing for the changes to the IR35 rules, which could have a big impact on some of the sectors I work with most closely – tech, advertising and creative businesses. I think the business community was grateful that we were given a bit of breathing space to prepare for the new rules in April 2020, but there’s a risk that all that time is squandered. Employers need to conduct a review of their freelance roster and factor in the time that might be needed to have difficult conversations with affected freelancers. They will also need to check that their systems are capable of complying with the new rules.
Finally, you might not know this about me but ….
I recently joined a choir (we’re called Chaps Choir, look us up on all the usual social media!) which has been a fantastic way to take my mind off things at the end of a busy day. Having a project like that away from work is great for my mental health and wellbeing. We sound pretty good too!
As ever, a whole variety of things. Advising on corporate M&A always makes up a significant part of my workload. I like the challenge of navigating a tricky technical issue while also finding commercial solutions between the affected parties, and M&A transactions have that in spades.
Probably my most out of the ordinary project at the moment is helping a trade organisation formulate proposals to government on a change in the law which would significantly help their industry. Having never worked within HMRC or the Treasury, it is a new puzzle to work out how I would draft law and guidance to achieve a sensible outcome.
If you could make one change to a tax law or practice, what would it be?
Fewer legislative surprises please. The current chancellor has done a lot to increase the lead time for introduction of new tax legislation. However, the debacle of the changes to entrepreneurs’ relief, brought in with immediate effect in the last Budget, was disappointing. The fact that the government went on to correct the legislation just before Christmas didn’t help those who had to make decisions in November and December. There were a couple of months where people were forced through commercial pressures to enter into major, often life-changing, transactions without any certainty as to their tax position.
If you will allow me one more, I think the Office for Tax Simplification made a number of extremely good recommendations in relation to reforming unapproved employee share schemes and, in particular, it was a great shame that the proposal for a new employee shareholding vehicle – with a simplified tax regime subject to operating within controlled boundaries – wasn’t taken up. There is a whole offshore industry that could and should be brought onshore if the UK system was just a little simpler and more benign.
Are there any new rules that are causing a particular problem?
I’m monitoring developments in relation to the digital services tax with interest as it will potentially affect a lot of my clients. If one were to find a silver lining in these turbulent political times, it is that radical new ideas for how the tax system might work suddenly seem less radical (it’s all relative, after all). There are areas of the tax system that clearly need overhaul to reflect how modern businesses work. However, I’m unconvinced that this is part of the solution. A tax on revenues is bound to affect some businesses disproportionately. A new 2% revenue tax may be manageable if your profit margins are 20%. Not so much though if your profit margin is 3%.
What should we be on the look out for this year?
Our larger employer clients should be preparing for the changes to the IR35 rules, which could have a big impact on some of the sectors I work with most closely – tech, advertising and creative businesses. I think the business community was grateful that we were given a bit of breathing space to prepare for the new rules in April 2020, but there’s a risk that all that time is squandered. Employers need to conduct a review of their freelance roster and factor in the time that might be needed to have difficult conversations with affected freelancers. They will also need to check that their systems are capable of complying with the new rules.
Finally, you might not know this about me but ….
I recently joined a choir (we’re called Chaps Choir, look us up on all the usual social media!) which has been a fantastic way to take my mind off things at the end of a busy day. Having a project like that away from work is great for my mental health and wellbeing. We sound pretty good too!
