A couple of UK professional bodies believe the government should
consult with them more often prior to issuing policy changes.
Institute of Chartered Accountants in England and Wales (ICAEW)
president Richard Dyson said the UK government should consult
properly with the professional bodies on policy proposals for
income shifting. Dyson warned that London’s position as home to one
of the world’s most successful capital markets will be threatened
if ill-thought-through policy undermines the UK’s
competitiveness.
“The problem is exacerbated by the increasing lack of genuine
consultation,” Dyson warned. “The taxing of trusts, changes to
self-assessment filing dates, the introduction of a single rate of
capital gains tax [CGT] and the proposed new regime for non-doms
are just four examples where the unintended consequences of policy
change could so easily have been avoided. My message to government
is that our members understand the needs of business and can help –
consult with us properly,” Dyson said.
Both the head of the ICAEW tax faculty, Frank Haskew, and the
Chartered Institute of Taxation (CIOT) management of taxes
committee chair John Whiting told TA the institutes
believe government consultation is a key part of their roles.
Haskew said there is a lack of consultation on some key issues,
which has caused problems that could have been avoided if the
government had consulted on methods for implementing recent changes
to tax law. Both he and Whiting agree that it is not so much the
principle, rather the implementation of policies that the
government should consult on.
“I think we would have said that the idea of a flat rate CGT is
difficult to argue with in principle,” Haskew said. “But in many
ways it’s the detail and the way you do things that is so
important. What was potentially a good idea effectively was
squandered by the poorly thought through approach to the change… I
think if they had announced the CGT changes and given a reasonable
transitional period, for instance, most people would have been
happy with that.”
Although accepting that government consultation has improved in
recent years, Whiting said: “It is far from perfect and what makes
things more frustrating is [while] there are some good
consultations such as the ongoing review on HMRC’s powers, the
wheels seem to fall off on some important areas such as capital
gains tax and residents and domicile.”
An anticipated change to income shifting regulations is an area the
institutes are keen to be consulted on. Haskew commented: “If you
don’t consult on the big ticket issues, it rather undermines
consulting on everything else, so I think we would like to see a
real commitment to consulting on pretty much everything unless it
is anti-avoidance rules, where they need to take action right from
today… but on issues that have a wide and key application to
taxpayers, there should be more a clear obligation to
consult.”
