One minute with Philip Spencer, tax partner at BDO.
What are you working on at the moment?
I am developing tax apps – turning complex tax law into computer programs. At this stage, these are diagnostic tools that highlight potential issues depending on responses to a series of questions. I am starting an MSc in Computer Science at UCL in September to explore the harnessing of emerging technology, such as machine learning, speech recognition and chatbots, to augment the service provided by specialist teams.
I should add that there should still be a role for us humans for a few more years. Those computers still need us.
You are known for your work in the real estate sector. Can you share a practical tax tip for this sector?
Keep structures simple and avoid complicated tax arrangements. Apart from HMRC, prospective lenders and buyers will drive you mad if they don’t quite get what’s been put in place.
Is there a recent tax development that has caught your eye?
The government is keen to restrict situations where capital gains tax, as opposed to income tax, is in point. For example, there were rules that used to entitle entrepreneurs to a low tax capital exit when they extracted surplus cash on a company wind up. These rules now carry the proviso that income tax will be charged if the owner pursues a similar business within two years. Someone who wants to retire on the proceeds of a liquidation capital gain might be aggrieved if his or her modest ongoing involvement in a related activity results in 38.1% tax on that gain, instead of 20% or even 10%.
If you could make one change to a tax law or practice, what would it be?
The reversal of the progressive assault on the set-off of both finance costs and losses. I actually struggle with the complexity of some of the draft rules that were in the 2017 Finance Bill. It does bother me to think of the time and effort now required for businesses and their advisers to understand the tax position in the light of the proposed introduction of detailed restrictions in these areas. I can’t help thinking that there should be a straightforward offset for legitimate finance costs and losses.
What’s currently worrying your clients most?
There are too many potential areas to mention in answer to this question. My clients know that getting the timing or payment of their tax obligations wrong these days can be painful. That’s where we come in. It means they can focus on their main other ‘stay awake’ issues, such as keeping customers, investors, banks and staff happy, paying bills, cyber security, and the travails of the daily commute.
Is there anything you know now that you wish you’d known at the start of your career?
Perhaps apart from advance knowledge of a particular week’s lottery numbers, I am happy to have gone through my career with the same level of foresight as was available to my fellow mortals. It’s far more fun that way and, thankfully, after 44 years in the profession, nothing has ended in serious tears.
Finally, you might not know this about me but…
I used to make short films and, some years ago, received an award on the Richard and Judy Show on ITV for the best short family film. Currently, I am working with a team of scriptwriters on a TV sitcom. Of course, none of that stuff beats accountancy.
One minute with Philip Spencer, tax partner at BDO.
What are you working on at the moment?
I am developing tax apps – turning complex tax law into computer programs. At this stage, these are diagnostic tools that highlight potential issues depending on responses to a series of questions. I am starting an MSc in Computer Science at UCL in September to explore the harnessing of emerging technology, such as machine learning, speech recognition and chatbots, to augment the service provided by specialist teams.
I should add that there should still be a role for us humans for a few more years. Those computers still need us.
You are known for your work in the real estate sector. Can you share a practical tax tip for this sector?
Keep structures simple and avoid complicated tax arrangements. Apart from HMRC, prospective lenders and buyers will drive you mad if they don’t quite get what’s been put in place.
Is there a recent tax development that has caught your eye?
The government is keen to restrict situations where capital gains tax, as opposed to income tax, is in point. For example, there were rules that used to entitle entrepreneurs to a low tax capital exit when they extracted surplus cash on a company wind up. These rules now carry the proviso that income tax will be charged if the owner pursues a similar business within two years. Someone who wants to retire on the proceeds of a liquidation capital gain might be aggrieved if his or her modest ongoing involvement in a related activity results in 38.1% tax on that gain, instead of 20% or even 10%.
If you could make one change to a tax law or practice, what would it be?
The reversal of the progressive assault on the set-off of both finance costs and losses. I actually struggle with the complexity of some of the draft rules that were in the 2017 Finance Bill. It does bother me to think of the time and effort now required for businesses and their advisers to understand the tax position in the light of the proposed introduction of detailed restrictions in these areas. I can’t help thinking that there should be a straightforward offset for legitimate finance costs and losses.
What’s currently worrying your clients most?
There are too many potential areas to mention in answer to this question. My clients know that getting the timing or payment of their tax obligations wrong these days can be painful. That’s where we come in. It means they can focus on their main other ‘stay awake’ issues, such as keeping customers, investors, banks and staff happy, paying bills, cyber security, and the travails of the daily commute.
Is there anything you know now that you wish you’d known at the start of your career?
Perhaps apart from advance knowledge of a particular week’s lottery numbers, I am happy to have gone through my career with the same level of foresight as was available to my fellow mortals. It’s far more fun that way and, thankfully, after 44 years in the profession, nothing has ended in serious tears.
Finally, you might not know this about me but…
I used to make short films and, some years ago, received an award on the Richard and Judy Show on ITV for the best short family film. Currently, I am working with a team of scriptwriters on a TV sitcom. Of course, none of that stuff beats accountancy.
