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Tolley® Autumn Statement 2016

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SIMON GROOM Director of Tax Content Creation

During a 31 year career, mainly spent in training students for the ATT and CTA examinations, Simon has played a small role in starting the careers of many a tax professional, and during the last 10 years at Tolley he has spent most of that time leading the Tax Examinations business. He is now responsible for all of the tax content within Tolley, a role which means his appearances in the classroom are few and far between, but are probably more enjoyable for it.

During his career he spent time as a student at Arthur Young (now part of EY) where he qualified as a Chartered Accountant, and Financial Training (now Kaplan) where he discovered a love of all things tax, which made studying and passing the ATII (now CTA) exams that little bit easier. He returned to EY in 2000, to work in their National Tax Training Team, and whilst there became a member of Council of the Association of Taxation Technicians (ATT), following many years of lecturing for them on student conferences, and as a volunteer on various committees. Re-reading this paragraph and seeing all the name changes makes the 31 year career seem even longer!

Whilst at the ATT he played a role in developing the examination structure and is now a member of their Members Steering Group, and Business Steering Group.

He joined Tolley in 2006 and is now Director of Tax Content Creation.

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Autumn Statement 2016

A new Chancellor, a new Prime Minister, but would we get a new approach?

The tone of Philip Hammond’s first Autumn Statement was certainly less triumphal, less celebratory, and it felt lighter on the statistics front than we had come to expect from George Osborne.

The run through the borrowing and growth forecasts was more subdued than previous set-piece events although Mr Hammond did manage to have the now customary dig at the opposition when he mentioned restoration funding for Wentworth Woodhouse, but having to link it back to the actions of the Labour government in 1947 did seem to be a bit tenuous.

It was reported in the press that when Philip Hammond (apparently known ironically as “Box Office” Phil for being the complete antithesis of George Osborne when it comes to courting publicity) gave his Cabinet colleagues a preview of his Autumn Statement, the immediate reaction was “where is the rabbit?”

For those of us eagerly watching this lunchtime, if there was a “rabbit” it was very much the announcement that this was to be the last Autumn Statement (although to be fair, this had been signaled in some quarters so was more of a kitten (look it up!)). In future the budget would be in November with the Autumn Statement being abolished. If this seemed like good news, there was a short-term sting in the tail in the fact that in 2017 there will therefore be two budgets, one in the spring and one in the autumn. Going forward, Mr Hammond announced that as well as the autumn Budget, there would be a Spring “Statement”. The opposition apparently thought that sounded a bit like an Autumn Statement (only a bit warmer) but the Chancellor pointed out to them that the Office for Budget Responsibility was required to produce forecasts twice a year and the Spring Statement would be responding to that. I suspect that we weren’t alone in thinking that we’d still get a plethora of tax announcements in the spring, but the Chancellor did helpfully indicate that he does not intend to use the Spring Statement to make tax changes “just for the sake of it”.

For those of us with long memories, this is a return to the Conservative government of the mid-nineties when Kenneth Clarke delivered his budgets in November, before Gordon Brown reverted to the traditional March date, and inflated the status of the Autumn Statement as a set-piece tax event.

Some had suggested that an autumn Budget would give more time for debate, but with royal assent for the resulting Finance Bill expected to be before the start of the tax year, the length of debating time will be similar to the current system, albeit we’ll now have Christmas in the way. Looking back at previous autumn budgets, royal assent was normally around the end of April/start of May so this will be an acceleration.

That said, having certainty on the rules before the start of the tax year will be of considerable benefit for taxpayers.

From a purely selfish publishing point of view, this moves our busy time of year away from the summer and is much preferred by the writers in my team. In fact, a plea was made by David Smailes, one of our writers, in a chapter he wrote for the Tolley Centenary book “Plucking the Goose – a History of Taxation from the Great War to the Digital Age” to return to the autumn Budget timetable, I don’t think he realised that he had such influence!

As always, I am extremely grateful for the hard work and dedication of not only my direct team, who have worked tirelessly into the evening and night to bring you a touch of insight on what the announcements are, and what they mean to you and your clients, but also the people behind the scenes who have supported us and made it possible. We hope you find the commentary useful.

Simon Groom

Director of Tax Content Creation

LYNNE POYSER Personal Tax Manager Tolley

Lynne is an expert in personal taxation with over 15 years' experience. Lynne joined Tolley from BDO, where she worked in the private client team and the national tax training department, having previously worked for Grant Thornton and Arthur Andersen.

As well as being the in-house writer for the Personal Tax module of Tolley®Guidance, Lynne has written for Taxation, Tax Adviser and Taxwise I and is a tutor for Tolley®Exam Training. She is the current Chairman of the CIOT/ATT London branch.

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Autumn Statement 2016 — overview for individualsIn a break from recent tradition, few new tax changes were announced in Autumn Statement 2016.

Indeed, perhaps the biggest announcement was that the Chancellor’s first Autumn Statement will also be his last, as the Government is changing the timetable for its set piece fiscal events.

After the Budget in spring 2017, the Budget will move to a new slot in the autumn, with Royal Assent to the resulting Finance Bill expected before the start of the tax year. This means that the time for debate will be much the same as it is now, but hopefully taxpayers will appreciate the greater certainty this will bring.

A much lower key event will take place in the spring when the Government will respond to the twice yearly reports presented by the Office of Budget Responsibility (OBR). The Chancellor indicated he does not intend to use the ‘Spring Statement’ to make tax changes “just for the sake of it”.

This news item is a summary of the personal tax announcements in Autumn Statement 2016. More information on the tax proposals scheduled for inclusion in Finance Bill 2017 will be detailed in the Overview of Legislation in Draft, due for publication on 5 December 2016.

Employees

Employee shareholder status

After only being in effect for just over three years, the income tax and capital gains tax reliefs in relation to employee shareholder shares are being scrapped, as a precursor to the whole concept of employee shareholder status being abolished at some future point. This is in response to HMRC’s findings that these reliefs are being used primarily for tax planning purposes by wealthier employees.

Employee shareholder shares are shares given to an employee (or prospective employee) in exchange for giving up certain employment rights. The tax advantages associated with the award for the employee are that no income tax is charged on the first £2,000 worth of shares awarded and, when the employee comes to sell those shares, there is a limited capital gains tax exemption on up to £100,000 of gains. If the employee sells the shares back to the employer, special rules ensure that the payment for them is not treated as a distribution. See the Employee shareholder shares guidance note.

ITEPA 2003, ss 226A–226B; TCGA 1992, ss 236B–236C

The Chancellor announced that these tax advantages will be repealed for agreements entered into on or after 1 December 2016 (2 December in cases where the potential employee shareholder receives professional advice in relation to the share offer on Autumn Statement day before 1.30pm).

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Autumn Statement 2016, para 4.31; TIIN: Income tax and capital gains tax: employee shareholder status

Termination payments

Further to the 2015 consultation, the following changes were expected to be made to the income tax and NIC treatment of termination payments from 6 April 2018:

> removal of the distinction between the taxation of contractual and non-contractual payments in lieu of notice (PILONs) and make all PILONs both taxable and subject to Class 1 NIC (primary and secondary contributions)

> retention of the £30,000 threshold for termination payments but amounts above that would be subject to secondary Class 1 NIC (no primary Class 1 contributions will be payable by the employee) as well as income tax

> removal of foreign service relief (except in the case of seafarers)

> inclusion in the computation of any PILON an estimate of bonuses that might have accrued during the foregone notice period, computed by reference to a statutory formula

Summary of responses (August 2016), Part 1, para 4

The Chancellor refined these proposals today, dropping the requirement to include bonus estimates in the computation of the PILON. This means that PILONs will be calculated by reference to basic pay alone. This is a welcome development as it removes a significant complication from legislation which was badged as a simplification measure.

Autumn Statement 2016, para 4.10

Salary sacrifice

As expected from the August 2016 consultation, the Chancellor confirmed that, from April 2017, salary sacrifice arrangements may only be used to achieve tax and NIC savings in the case of:

> employer pension contributions and advice

> employer-provided childcare

> cycle to work schemes

> ultra-low emission company cars

For any other tax-exempt benefits, the exempt status will be lost if they are provided in exchange for a salary sacrifice.

Although the law will be changed as from 6 April 2017, any arrangements in place before that date can continue unaffected until 2018 (with a further extension until 2021 for existing longer term agreements covering cars, living

accommodation and school fees). This means that employers should have sufficient time to renegotiate remuneration packages for affected employees.

Autumn Statement 2016, para 4.13

Tax relief for legal support

From April 2017, all employees called to give evidence in court will no longer need to pay tax on the cash equivalent of the legal support provided by the employer. Currently the exemption only applies to an employee facing allegations made against him as holder of the employment.

Autumn Statement 2016, para 4.12; ITEPA 2003, s 346

‘Making good’ by employees

Further to the August 2016 consultation, the Government will press ahead with the alignment of the dates for the employee to ‘make good’ (ie reimburse the employer) in relation to non-payrolled benefits in kind. However, it was announced today that the deadline for ‘making good’ will be 6 July following the end of the tax year (rather than the earlier dates suggested in the consultation document).

Autumn Statement 2016 tax updates and technical changes , para 1.2

Valuation of benefits in kind

At Budget 2017, the Government will:

> consult on the valuation of living accommodation (following the responses to the December 2015 call for evidence, see the Accommodation provided by the employer guidance note)

> publish a call for evidence on the valuation of all other benefits in kind

Autumn Statement 2016, para 4.13

Relief for business expenses

A call for evidence will be published at Budget 2017 on the use of income tax relief for employees’ business expenses, including those not reimbursed by the employer.

Autumn Statement 2016, para 4.13

Business owners

Disguised remuneration for the self employed

The Chancellor announced that the disguised remuneration rules are to be extended to tackle schemes used by the self-employed. Disguised remuneration schemes are artificial arrangements that usually involve an individual’s income being funnelled through a third party, with the money often being

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paid to the individual as a ‘loan’ that is never repaid.

Autumn Statement 2016, para 4.46

There is no further detail provided and indeed no clarification as to whether the new rules will follow those set out in the August 2016 consultation. However, it would be prudent for the self-employed to review their contracts and documentation to ensure that any genuine commercial transactions are not caught by these rules inadvertently.

Employers will also be denied tax relief for their contributions to such schemes, unless tax and NICs are paid within a specified period (which is yet to be confirmed), to deter the use of disguised remuneration schemes.

Autumn Statement 2016, para 4.47

Partnerships

Following the August 2016 consultation, draft legislation will be published which aims to clarify some aspects of partnership taxation, particularly in relation to profit allocations. The Government is aware that some of the existing rules are unclear or produce an inappropriate outcome and wishes to make both the calculation and reporting of profits simpler. This could result in a welcome reduction in compliance time and costs.

Autumn Statement 2016 tax updates and technical changes, para 2.7

National insurance

As previously announced, Class 2 national insurance contributions (NIC) are to be abolished from April 2018. However, this requires reform of Class 4 contributions to build in entitlement to state benefits, such as the state pension.

Further to the proposals in the December 2015 consultation, the self-employed will build up entitlement to contributory benefits as follows:

> those with trading income above the lower annual profits limit will pay Class 4 NIC at the normal rates

> those with trading income above the small profits limit (the Class 2 limit will be notionally retained for these purposes) and below the lower annual profits limit will have a notional liability to Class 4 NIC but the rate will be 0%

> those with trading income below the small profits limit can pay Class 3 NIC on a voluntary basis

Autumn Statement 2016, para 4.8

The weekly rate of Class 3 NIC (current rate £14.10) is much higher than the weekly rate of Class 2 NIC (current rate £2.80), so this will represent a significant extra cost to those

with low trading profits who currently maintain their benefit entitlements via Class 2 contributions.

Investments

Pensions

The pensions reforms introduced in 2014 opened up some additional opportunities to recycle pension investment. It is possible for members of defined contribution schemes to withdraw income from a flexi-access drawdown fund and re-invest it, thus obtaining tax relief a second time.

Recognising this unintended advantage of pensions flexibility, an annual allowance of £10,000 was introduced, known as the money purchase annual allowance (MPAA). If the taxpayer invests more than £10,000 per year, tax relief on the excess will be clawed back via a income tax charge.

FA 2004, s 227ZA

It is expected that the MPAA will be reduced to £4,000 from April 2017, although the detail is subject to consultation.

Autumn Statement 2016, para 4.20

Note that the MPAA is only triggered when a pension scheme member draws income from a flexi-access drawdown fund. It is not triggered if:

> the member uses the tax-free lump sum only and does not draw income from the taxable portion of the fund

> the member’s fund is still held under the former ‘capped drawdown’ arrangement and the withdrawals of income do not exceed the capped amount (if the cap is exceeded, the drawdown fund automatically converts to flexi-access in any case)

Provided members can keep their withdrawals within these limits, the standard annual allowance of £40,000 applies.

Preventing pension fraud

The increased freedom to draw on pension savings, whilst welcomed by many, has inevitably led to an increase in people being defrauded of their savings or being persuaded to make unwise investments. The Government will shortly launch a consultation inviting comments on options to tackle such pension scams.

It is anticipated that cold calling will be banned. However, respondents to the consultation will have the opportunity to consider whether such a ban would be effective. Other measures to be considered relate to giving pension scheme administrators greater powers to block suspicious transfers out of the fund. There is a danger though that the increased regulation will fuel pensioners’ frustration at dealing with the pension institutions, and indeed it could be seen as an excuse by the firms to limit pension freedom.

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Autumn Statement 2016, para 3.42

Foreign pensions

The tax treatment of foreign pensions is to be “more closely aligned” with the UK’s domestic pension tax regime, by bringing this income fully into tax for UK residents. No further detail is provided, but this could be interpreted as putting advisers on notice that the rule under which only 90% of foreign pension income is subject to UK income tax will be abolished.

ITEPA 2003, s 575

Specialist schemes for those employed abroad (known as ‘section 615’ schemes) will be closed to new saving. Sundry other measures will be adopted aimed at removing the advantages for a UK resident of investing in a qualifying recognised overseas pension scheme (QROPS). At the same time, the criteria for ‘recognising’ such schemes is to be reviewed, possibly resulting in the loss of favourable status of many overseas schemes.

Autumn Statement 2016, para 4.21

ISAs

As announced in Budget 2016, the ISA limit will increase from £15,420 in 2016/17 to £20,000 in 2017/18. The junior ISA limit and child trust fund limit will be £4,128 in 2017/18.

Autumn Statement 2016 tax updates and technical changes, para 1.6

Venture capital schemes

Further minor tweaks to the rules for enterprise investment schemes (EIS), venture capital trusts (VCTs) and seed enterprise investment schemes (SEIS) are expected in Finance Bill 2017:

> clarification to the rules for share conversion rights (for EIS and SEIS shares issued on or after 5 December 2016)

> aligning the VCT rules for follow-on funding to match the rules for EIS (see the Conditions to be met by the EIS issuing company guidance note for a discussion of the rules for EIS)

> a power to enable the rules on share-for-share exchanges for VCTs to be made via secondary legislation

The Government is to consult on ways of improving the advance assurance service for venture capital schemes. For the current procedure, see the GOV.UK website.

Autumn Statement 2016 tax updates and technical changes, para 2.8

Plans to allow flexibility via replacement capital within venture

capital schemes have been shelved, although may be revisited in the longer term.

Autumn Statement 2016 tax updates and technical changes, para 2.8

Social investments tax relief

Changes are expected to be made to social investments tax relief (SITR) with effect from 6 April 2017:

> the investment limit for qualifying social enterprises aged up to seven years old will increase to £1.5m

> nursing homes and residential care homes will be classed as excluded activities, although the Government intends to revisit these activities in future with the aim of introducing an accreditation system which will allow fundraising via SITR

> the limit on the number of full-time equivalent employees will be reduced from 500 to 250

The Autumn Statement also says, rather unhelpfully, that “other changes will be made to ensure the scheme is well targeted”.

Autumn Statement 2016, para 4.34

For details of the existing scheme, see Simon’s Taxes Division E3.9.

Life insurance policies

As expected following the April 2016 consultation, legislation will be introduced in Finance Bill 2017 to change the taxation of partial surrenders from life insurance policies in order to prevent excessive tax charges.

It is unclear which of the three options for calculating the chargeable event gains outlined in the consultation document will be taken forward, although the text refers to a charge calculated on a “just and reasonable” basis.

Autumn Statement 2016 tax updates and technical changes, para 1.4

Savings bonds

National Savings and Investments (NS&I) will launch a new three-year savings bond in 2017 offering an interest rate of 2.2% per annum. The bond will be open to those over 16 years of age and the maximum investment will be £3,000.

Autumn Statement 2016, para 5.10

This interest rate is significantly higher than the rates offered by banks and building societies for mainstream savings products and there is likely to be a high take-up amongst basic rate and higher rate taxpayers (who also benefit from the

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savings nil rate band introduced in 2016/17).

Rates and allowances

Personal allowance and income tax higher rate threshold

George Osborne announced in Summer Budget 2015 that, by the end of the Parliament, the Government would raise the personal allowance to £12,500 and the higher rate threshold (personal allowance plus the basic rate band) to £50,000. As a step towards this, in 2017/18 the personal allowance will be £11,500 and the higher rate threshold will be £45,000.

Autumn Statement 2016, para 4.5

Once the personal allowance reaches £12,500 it will be up-rated in line with CPI.

Autumn Statement 2016, para 4.6

Scottish taxpayers

When considering the personal allowance and higher rate threshold, it is worth bearing in mind that the Scottish Government has the right to set the tax rates and thresholds which apply to income which is not savings or dividends.

It is expected that it will begin exercising this power from April 2017 and it has said  that the “higher rate threshold...will be raised in line with inflation (and by no more than inflation) in the following years”.

Based on the Chancellor’s announcement today, this will mean that Scottish taxpayers will be subject to different thresholds depending on the type of income. There will be a Scottish higher rate threshold for income which is not savings or dividends and a different ‘rest of the UK’ higher rate threshold for savings and dividend income and for determining the rate of capital gains tax. This is an unwelcome complication and a potential trap for advisers dealing with Scottish clients.

For more details of the Scottish tax regime and the definition of a Scottish taxpayer, see the Devolved taxes in Scotland – the current position [updated] news item. Note that the Scottish Budget takes place on 15 December 2016 and should contain details of the income tax rates and thresholds which will apply to Scottish taxpayers from 2017/18.

Income tax allowances for property and trading income

As announced in Budget 2016, the new ‘allowances’ for property and trading income will apply from 2017/18.

Autumn Statement 2016, para 4.14

These are expected to work in a similar way to rent-a-room relief in that the first £1,000 of gross trading or property income will be exempt from income tax. If the income exceeds

£1,000 the taxpayer will have a choice of:

> deducting the £1,000 ‘allowance’ from their gross income and being taxable on the excess, or

> deducting allowable expenses in the normal way

The Chancellor announced today that the trading income ‘allowance’ will also apply to certain miscellaneous income from the provision of assets or services.

Autumn Statement 2016, para 4.14

Although not explicitly branded as a ‘Making Tax Digital’ measure, these allowances will remove reporting obligations for those with low levels of second income, which is a welcome simplification. It will also mean that those who are accidentally non-compliant will no longer face penalties. It may be that the outcome of the e-marketplaces campaign in 2012, which reportedly led to enquiries into traders who made as little as £100 in profit, played a part in the thinking behind these allowances.

Class 1 national insurance

On a minor point, from 5 April 2017 the primary and secondary thresholds for Class 1 NIC will be permanently aligned. The figure for 2017/18 will be £157 per week.

Autumn Statement 2016, para 4.7

Administration

Making Tax Digital

The Government will publish the summary of responses to the August 2016 consultations in January 2017. For a summary of the key points in the six consultation documents, see the Making Tax Digital – toolkit for responding to August 2016 consultation documents news item.

Autumn Statement 2016, para 4.42

Tax enquiries – closure rules

The Government is to “legislate to provide HMRC and [taxpayers] earlier certainty on individual matters in large, high risk and complex tax enquiries”.

Autumn Statement 2016, para 4.44

No further detail is given, but it would appear that this is the power to close areas of an enquiry whilst leaving other areas open. This was previously announced at Autumn Statement 2014 and was subject to consultation in December 2014. Given the time lag, advisers could be forgiven for thinking this policy had been quietly dropped.

As noted at the time, this proposal has several advantages for

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HMRC, including:

> reducing the tax under enquiry for the purposes of the departmental figures

> allowing HMRC to collect some of the tax, penalties and interest due earlier

For commentary on the detail of the 2014 consultation, including the limited taxpayer safeguards, see the Proposed changes to the rules governing the closure of enquiries news item.

National insurance – collection of arrears

Following a recommendation from the Office of Tax Simplification (OTS), from April 2018 NIC will no longer be covered by the Limitation Act 1980.

Autumn Statement 2016, para 4.9; OTS report on alignment of tax and NIC (November 2016), Appendix B, recommendation h

Currently if HMRC wants to recover NIC debt it must raise a protective assessment within six years of the end of the tax year in question. The collection of arrears of tax is not covered by the Limitation Act so this leads to a mismatch in dealing with historic tax investigations where there is an associated national insurance liability.

Limitations Act 1980, s 9(1); DMBM527120

This is an interesting measure as it will enable HMRC to collect more NIC arrears, but by aligning the treatment for tax and NIC it means it can be badged as a simplification measure and a step towards income tax and NIC alignment.

Requirement to register offshore structures

The Government is to consult on proposals to require intermediaries arranging complex offshore structures for their clients to disclose the structures and details of the client to HMRC.

Autumn Statement 2016, para 4.54

No further detail is available at present, but there is no suggestion that the trigger for disclosure will be avoidance of tax so this may be a new disclosure regime rather than forming part of the existing disclosure of tax avoidance scheme (DOTAS) rules.

Data-gathering powers

Further to the August 2016 consultation, the Chancellor confirmed that the data-gathering powers will be extended to money service businesses (MSBs). Based on the details in the consultation document, the definition of an MSB is expected to be wide enough to cover high street money transmitters

(and their agents), foreign exchange currency traders, peer-to-peer money transmitters and any other enterprise that offers these services in addition to their main line of business. For more details, see the HMRC power to request data guidance note.

Autumn Statement 2016, para 4.55

Avoidance and evasion

Requirement to correct – offshore matters

First announced in Autumn Statement 2015, and subject to consultation in August 2016, this is the new penalty regime to encourage individuals to correct any historic UK non-compliance in relation to offshore matters.

Autumn Statement 2016, para 4.53

Taxpayers with liabilities to UK income tax, capital gains tax and / or inheritance tax on offshore income, gains or assets will need to correct their tax affairs by 30 September 2018 or face higher civil penalties (to be known as ‘failure to correct’ penalties). The consultation document proposed two penalty models, however until the draft legislation is published it is unclear which of the models will be adopted.

Consultation document, para 4.12, Chapter 5

Taxpayers who come forward to correct their affairs by 30 September 2018 will be subject to penalties under the existing rules. There is a good summary of these rules on page 18 of the consultation document , with commentary in the Penalties for offshore matters guidance note.

The deadline of September 2018 is driven by the adoption of the common reporting standard , under which revenue authorities in over 100 jurisdictions will automatically exchange information with one another.

An interesting point from the consultation document which has not received much coverage is the proposal by HMRC to increase the normal time limits for raising an assessment (four years where the error occurred despite reasonable care, six years where the error is careless and 20 years where the error is deliberate) by five years. This is borne out of the concern that HMRC may not have sufficient time to analyse the information received from other jurisdictions in time and that years may fall out of assessment if the time limits are not extended. The professional bodies came out against this in their responses but it remains to be seen whether this will be included in the draft legislation.

Consultation document, para 4.23; TMA 1970, s 36; CIOT response , para 12.1; ICAEW Tax Faculty response, para 19

As noted by the professional bodies, a big publicity campaign aimed at the general public will be required if HMRC is to make its target group of taxpayers aware of the requirement to

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correct. It is important to remember that these are taxpayers who could have made disclosures under the previous offshore disclosure facilities which have operated in one shape or another since 2007 but have not done so (whether deliberately or in ignorance).

CIOT response, para 2.3; ICAEW Tax Faculty response, para 4

Penalties for enablers of tax avoidance schemes

As discussed in the August 2016 consultation, anyone who ‘enables’ a taxpayer to avoid tax where the arrangements are later defeated by HMRC will be subject to tax-geared penalties and may be named and shamed.

Autumn Statement 2016, para 4.48

It is expected that the definition of ‘enabler’ will be widely drafted, covering more than just the promoter of the scheme, but will not include anyone who does no more than prepare the tax return for submission. See case studies 2.1 and 2.2 in the consultation document for an example of the enablers in a given scheme.

Consultation document, paras 2.8, 2.9

Tax avoidance is ‘defeated’ where the courts find that the arrangements do not achieve the purported tax advantage or, if the case is not litigated, there is agreement between HMRC and the taxpayer that the arrangements do not work as intended.

Consultation document, para 4.4–4.5

There are concerns that the proposed scope of the regime is too wide and could catch those working on commercial transactions which are not ‘avoidance schemes’, which could make the UK a less attractive place to do business. Whether these responses have been taken on board and will be reflected in the draft legislation remains to be seen. Either way, advisers will need to review their risk procedures to ensure they are not opening up their firm to civil penalties and adverse publicity.

CIOT response, para 2.1–2.3; ICAEW Tax Faculty response, para 3

It is worth noting that the professional bodies have already taken steps to address the driver behind these measures. The recently announced changes to Professional Conduct in Relation to Taxation (PCRT), adopted by all the major tax and accountancy bodies (including CIOT, ATT, ICAEW, ICAS and STEP), incorporates new standards for tax planning, which will

apply from 1 March 2017. These make it clear that members should not encourage or promote tax planning arrangements that:

> are contrary to the clear intention of Parliament

> are highly artificial or contrived

> seek to exploit shortcomings in the legislation

See the CIOT website for a list of frequently asked questions on the changes to PCRT.

Definition of reasonable care in tax avoidance cases

Further to the August 2016 consultation, the definition of reasonable care will be legislated in tax avoidance cases where the arrangements have been defeated. The taxpayer will no longer be able to use the defence that he relied on non-independent advice (eg advice commissioned by the scheme promoter) to show he took reasonable care.

Autumn Statement 2016, para 4.48

By tightening the definition HMRC hopes to collect more tax-geared penalties when settling tax avoidance cases.

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TolleyGuidanceTolleyGuidance is written by tax experts, who use their knowledge and experience to explain how tax really works. Expand your understanding, refresh your knowledge and explore new areas of specialism.

The tax industry is renowned for its complexity and its speed of change. TolleyGuidance provides answers that are straightforward and up-to-date.

Find practical, technical commentary on unfamiliar areas, with easy-to-apply examples based on real-life cases. Get step-by-step help to tackle the issue, with simple to understand “how-to” guides and easy to complete template documents. For many of our clients, TolleyGuidance reduces their need to use external specialists, and that can only reduce your costs.

We’ve worked with tax practitioners to create a modular service so you can choose the subject areas that are right for your business. Whatever your question, on whatever aspect of tax, you can find guidance, tools and associated information quickly, easily and with an eye on controlling your costs.

For more information on practical guidance visit tolley.co.uk/practicalguidance

PRACTICAL GUIDANCE

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Passing your tax exams is just a part of your learning. Continuing professional development is important because it ensures you continue to be competent in your profession.

You can achieve a certain amount of learning ‘on the job’, but you need to bolster that with regular formal education and training. It’s certainly worth the time investment. Professionals who plan their skills development tend to make faster progress in their careers, in the direction they choose. Tolley’s professional development products and services make it easier, with a wide choice of subject matter and delivery routes.

OnlineDesigned to help tax and accountancy professionals quickly and easily expand their knowledge and keep up-to-date with the latest insights. Tolley®CPD is your essential e-learning tool.

Get our leading lecturers’ view of what’s going on in tax, accountancy and audit with our monthly Tolley®Seminars Online, on your desktop, laptop or mobile. Need a refresher or keen to expand your knowledge, access our annual 15-minute interactive Tolley®Tax Tutor tutorials. Or if you want to stay on top of what’s going on with VAT, access lectures from VAT experts with Tolley®VAT Update.

Our online tax law Webinars also let you pose questions to tax barristers and discuss the latest issues with other attendees in the live sessions, as well as watching again how and when you like.

Magazines and JournalsFor the ultimate in flexible learning, it’s hard to beat our magazines – Taxation, Tax Journal or Tax Adviser. Browse and learn, in print or online, across everything that’s going on. They’re the simplest way to make sure you’re always right up to date with what matters in your areas of tax.

For more information on CPD visit tolley.co.uk/cpd

CPD / DEVELOPMENT

Whether you’re just starting out in tax or accountancy, or already have years of experience, its hard work gaining the qualifications you need to progress in your career. Tolley Exam Training can help you succeed in gaining those vital tax qualifications. We are experts in tax and our exam pass rates are the best in the industry. And we can help you right from the start, when you’re choosing the qualification that’s right for your experience and your interest.

Association of Taxation Technicians (ATT) qualificationOnce you’re working in tax compliance, you can demonstrate your competence with The Association of Taxation Technicians (ATT) exam. Tolley Exam Training gives you the choice of mixing traditional correspondence courses with live lectures and online training, so you can design your learning to fit your location and your work.

Chartered Tax Advisor (CTA) qualificationIf you want to widen your possible career routes then you also need to be able give advice to clients. The Chartered Tax Advisor (CTA) qualification from the Chartered Institute of Taxation is the highest level tax qualification in the UK. Our experts are on hand with practical advice on exam choices that can save you hours of study as well as helping you to succeed.

Advanced Diploma in International Taxation (ADIT)The Advanced Diploma in International Taxation (ADIT) meets the demand, both in and outside the UK, for a specialist qualification for international tax practitioners in the corporate area. It recognises that international tax advisers need to understand more than one tax system. So talk to us, we’re one of the very few bodies in the UK who can prepare you for the Advanced Diploma in International Taxation (ADIT).

For more information on qualifications visit tolley.co.uk/qualifications

QUALIFICATIONS

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Accountancy intelligencefrom LexisNexis®

The Front Line is where you stand face to face with HMRC and agree tax. It’s not a place to be alone. Not a place to go to unprepared.

As the UK’s only provider of critical tax information, in-depth reference, ground-breaking training and learning resources and unique market insight, Tolley is there by your side with four product families designed for tax professionals working on The Front Line.

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Visit tolley.co.uk or call us on 0331 161 1234

Research | Practical Guidance | CPD/Development | Qualifications