Now the final results of the General Election have trickled in, it is becoming clear that there will need to be an adjustment to the strategic direction of a number of high profile issues, not least of all taxation.
Not only do we have a hung Parliament, but we will have a new Financial Secretary to the Treasury. Given that Jane Ellison, who as the previous post-holder had embraced the role, has lost her parliamentary seat, we will no doubt have a period of uncertainty while a new Minister is appointed and gets up to speed in providing strategic oversight of the UK tax system.
Given the Conservatives have the largest number of seats in the House of Commons, we expect the previous policies on tax to continue for the moment. However, key votes are likely to require support of some members of other parties, so there may be some moderation in stances taken.
On Making Tax Digital, the almost complete reform of the tax system, I expect this to proceed, but the good news is that plans may need to be slightly moderated. I don’t expect any change in the time line for HMRC having the system up and running, but I do hope that HMRC will now be reined back slightly. This should effectively allow a longer pilot to allow software outside HMRC to be built, trialed and tested and for training of clients. This might not even require a change in start dates – but as in RTI have a longer lead in period of 2 to even 3 years without any penalties.
Of course Brexit will in due course have a significant impact on tax. While a hung Parliament is likely to lead to some interesting issues, it does perhaps offer the opportunity to reconsider the hard v soft direction, with a potential to seek to stay within the single market, the CJEU and retain freedom of movement, which are likely to help business.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.