Staff news

We regret to report that Peter Bickley retired from the Tax Faculty staff on 4 June. Peter has been one of ICAEW’s longest serving staff members, having started in June 1991 at the time when the Tax Faculty was being established. Peter has played a huge role in the growth and development of the Tax Faculty, and we will miss him greatly, both as a true tax professional and a much trusted and loved work colleague. We wish him well in his retirement.

Representational work

Following TUSAR (Tax update, simplification, administration and reform) day on 28 April, Tax Faculty staff had a follow-up meeting with HMRC’s Director General of Customer Strategy and Tax Design. We discussed whether, in relation to the various consultation proposals to extend the issue of HMRC clearances, there is a new trend to make a charge for issuing them, but were assured that this isn’t the case. 

May was a busy month in terms of responding to consultation documents, with a number of important consultations closing during the period. In particular, the Tax Faculty expressed major concerns about the proposed enhanced powers for tackling tax advisers facilitating non-compliance. In our view, the behaviours of tax agents at which the proposed new powers are aimed are not those that would be expected of a professional tax adviser operating under Professional Conduct in Relation to Taxation (PCRT). However, as currently proposed, the powers could be applied to all reputable tax advisers seeking to ensure that tax returns are correct but who nevertheless might have made mistakes. 

One comment made that resonated with other members was that, if these powers were enacted, they would amount to de facto regulation of the tax profession by HMRC, but with none of the attendant safeguards that would be expected from an independent regulator. Our conclusion was that the proposed powers would be disproportionate and would increase costs and burdens on all reputable advisers, potentially restricting the tax advice market and increasing non-compliance. The Tax Faculty is also working on a separate response to the Closing in on promoters of tax avoidance schemes consultation, where similar concerns arise to those set out above.

The Tax Faculty also led ICAEW’s response to the joint HMRC and Department for Business and Trade’s consultation on promoting e-invoicing. In our response, we were strongly in favour of e-invoicing and made several recommendations. In particular, the Faculty proposed that the government should prioritise voluntary adoption, with mandatory rollout only after careful evaluation. Members expressed concerns about mandation due to current economic pressures, inflationary burdens, and the resource implications (particularly for SMEs). If the government decided to proceed with mandation, it should not be before 2030, and only provided certain conditions have been met. 

Faculty staff had a meeting with HMRC to better understand how the figures behind the tax gap are calculated and, in particular, the growth in the SME tax gap. Faculty staff were keen to understand the main areas that give rise to the tax gap and how agents may be able to assist in reducing it. The Faculty will continue discussions with HMRC about how these concerns might be addressed, for example through more CPD and member support. 

Tax Faculty staff attended two workshops held by HMRC on the proposals outlined in the consultation document Reform of behavioural penalties, which sets out proposals to simplify and make more effective the existing system of inaccuracy and failure to notify penalties. Members welcomed in principle the proposals to simplify the rules and agreed that HMRC’s proposals were a step in the right direction, although members were not convinced that publication of the names of those subject to penalties was proving effective and questioned whether it should be continued. 

On employment taxes, we submitted a letter to HMRC regarding issues with locked payments on HMRC’s enterprise tax management platform and requesting that the visibility of these is extended to employers and agents so steps can be taken to get the payments unlocked and the issues resolved. We also provided feedback on the next section of HMRC’s new international national insurance contributions manual (rest of the world pages).

HMRC service performance

Despite some improvements at the beginning of the year, Tax Faculty members are once again starting to report lengthy delays arising, in particular long delays in receiving tax repayment claims. This is a matter we have taken up with HMRC through various forums and we understand that HMRC has put in place an improvement plan, although it does not yet appear to have improved the situation. 

On a brighter note, we have received good feedback in relation to HMRC’s new agent query resolution service. It appears that, once into the system, queries are being taken up in a timely fashion and resolution rates are much improved. We continue to liaise closely with the Chartered Institute of Taxation (CIOT) to follow up on recommendations from the ICAEW/CIOT joint report published in December 2024.

Professional conduct

We are continuing to work through the IESBA/PCRT reconciliation and hope to have a final agreed draft by the end of June 2025. The working party established to consider PCRT in the light of the introduction of Making Tax Digital has now published interim guidance. The guidance is subject to further review and adoption procedures among the seven PCRT bodies. Work continues in the PCRT working group looking at the ethical implications of the adoption of AI in tax matters. It is hoped that a discussion draft will be published for comments shortly. 

Representations and TAXguides

We submitted the following representations: 

• Representation 34/25: Electronic invoicing: promoting e-invoicing across UK businesses and the public sector
• Representation: 35/25: Enhancing HMRC's powers: tackling tax advisers facilitating non-compliance
• Representation 39/25: Better use of new and improved third party data
• Representation 40/25: R&D tax relief advance assurance

Meetings with HMRC

During the month we attended a number of meetings with HMRC, some in conjunction with other representative bodies. These included: the Compliance Reform Forum; the Agent Digital Design Advisory Group; and the Wealthy External Forum. 

Tax Faculty and other meetings

Meetings held during the month included the Tax Policy and Reputation Committee, the Private Client Committee; the Employment Taxes and National Insurance Contributions Committee and the Digital Assets Working Group. 

On 12 May, ICAEW Tax Faculty held a working lunch with opposite numbers at the CIOT. In addition to Tax Faculty staff and officeholders, attendees included ICAEW’s Chief Executive, Alan Vallance and President, Malcolm Bacchus. The discussion focused on opportunities for joint working and how the professional bodies might work more closely with HMRC on the raising standards and regulation agenda. 

Faculty webinars, events and podcasts

Our monthly podcast series, The Tax Track, continues to gather new listeners and get good feedback and engagement. In the latest episode, we look at the abolition of the ‘non-dom’ rules, the introduction of the foreign income and gains regime and the changes made to overseas workday relief.

The podcast was hosted by Stephen Relf, Technical Manager, with contributions from Katherine Ford, Technical Manager, Personal Taxes, and Adelle Greenwood, Technical Manager, Employment Taxes and National Insurance Contributions.