May 2003 update on the work of the Technical Committee.
GENERAL Money laundering
Representatives of the Standards Committee working party on money laundering and representatives from the ICAEW attended a meeting with the Inland Revenue on 22 April 2003 to discuss the impact of the draft money laundering regulations. Charles Barcroft attended as an observer – something of a dry run for future discussions with Customs and Excise.
INDIRECT
Joint VAT Consultative Committee
The CIOT was represented at a meeting of the JVCC on 29 January 2003 (this was omitted from the February report).
The CIOT was represented at a meeting of the JVCC on 23 April 2003.
Motor trade
The CIOT was represented at a meeting between Customs and Excise and representatives of the motor trade held on 15 April 2003
Delayed accounting for VAT at import scheme
The CIOT continues to be represented on the Customs and Excise DAVIS working party. The next meeting is to be held on 2 May 2003.
Feedback on any of the above should be sent to Charles Barcroft, Technical Officer for Indirect Taxes, at the Institute, or by email to charlesbarcroft@aol.com.
PERSONAL
Finance Bill and Budget 2003
At the time of writing this report we are preparing our written response to the Finance Bill. Personal Taxes Sub-Committee particularly welcomes three changes for which we have recently campaigned. Firstly, an increase in the time limit under what was section 144A, now section 222 of ITEPA 2003. Second, an increase in the monetary limits for certain employment benefits (long service awards; annual parties; gifts from third parties; cyclists’ breakfasts). The first three of these were highlighted by the CIOT as being in need of updating in one of our “quick wins” papers. Third, changes to the rules on employee securities and share options mean the removal of the problematic legislation on dependent subsidiaries. The effects of the new legislation are still being analysed.
Self-assessment (SA)
We continue to take part in meetings looking at various aspects of ITSA. We welcome the piloting of the new Short Tax Return (4 pages) and would be glad to receive any feedback from members on its use and completion.
New Tax Credits
We continue to be involved in meetings and correspondence on new tax credits and are now working with the other professional bodies in this area through Working Together.
Tax Law Rewrite
The Income Tax (Earnings and Pensions) Act 2003 marks the culmination of much consultation through this forum. The next major piece of work is the rewriting of the PAYE regulations (see Revenue & Customs website). Connected with this, and as result of CIOT responses on this issue, the Revenue have issued a Technical Paper on proposals for rights of appeal under Regulations 42 and 49 (see Revenue & Customs website). Any feedback from members in both of these areas would be welcome and should be sent before 30 June 2003.
Electronic filing
The first of the regulations under the Carter proposals are now out for consultation. Any comments on the papers published by the Revenue at
Revenue & Customs website).
Employer supported childcare
The Revenue issued a consultation document in February and Personal Taxes is preparing a response. The document can be viewed at Revenue & Customs website). As the response has to be submitted by 31 May 2003 members are asked to submit any views before 16 May 2003.
Sundry
The Personal Taxes Sub-Committee has written to, or met with, the Revenue on various other matters in recent months, including IR 35 issues and section 660A. We also submitted a response to the Revenue paper on pensions simplification and the consultation on the Construction Industry Scheme. The correspondence on Mansworth v Jelley led to the publication of the Frequently Asked Questions on the Revenue website at Revenue & Customs website.
Feedback on any of the above should be sent to Liz Lathwood, Technical Officer at the Institute, or by email to lathwood8@aol.com.
CORPORATE AND INTERNATIONAL MATTERS
Loans for unallowable purposes
Following further discussions with the Revenue, we have published a note on the Revenue guidelines.
Use of IAS as a basis for consolidated tax base
We have produced a response paper in response to the EC Consultation Document issued in February 2003.
We have also set up a working group to consider the impact of IAS on tax computations generally.
Pilot study on home state taxation for SMEs
We have produced a response paper in response to the EC Consultation Document issued in January 2003.
Making the UK tax system EU-compliant
We have produced two draft discussion papers on EU compliance issues.
Taxation of UK branches of non-resident companies
We have produced an annotated discussion paper reflecting discussions with the Revenue on 26 March.
Feedback on any of the above should be sent to Colin Davis, Technical Officer for Corporate and International Tax matters, at the Institute, or by email to cdavis@ciot.org.uk.
CAPITAL TAXES
Finance Bill and Budget 2003
The committee met recently to discuss the Finance Bill and we have prepared our draft response. We are particularly critical of the amendments to Schedule 4C TCGA, this is a terrible piece of legislation. The substance of the other changes is more or less welcome (or inevitable!) although the way they have been enacted leaves a lot to be desired, mostly because they are needlessly complicated. The changes to taper relief, for example, will result in yet more apportionment calculations.
Residence and Domicile Review
The Institute as a whole is gathering its thoughts on residence and domicile and its response to the Revenue’s non-statement that accompanied the Budget. Four members of the Capital Taxes Sub-Committee are sitting on the special committee set up by the Institute to discuss residence and domicile. Input from anyone who has detailed knowledge of how the equivalent provisions apply in other jurisdictions is especially welcome.
Feedback on any of the above should be sent to Michael Thomas, Secretary to the Capital Taxes Sub-Committee, at the Institute, or by email to mt@taxbar.com.
Technical Department
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