One minute with Praveen Gupta, the national head of tax at Azets.
What’s keeping you busy at work?
Many things! I have to strike a balance between internal projects and client work. On internal projects, I am driving the firm’s tax agenda as part of our digital strategy. Our clients expect to receive more services digitally from us in the future, but without losing the personal touch from their trusted advisers. I am also preparing for our first national tax conference that is due to take place in July for more than 500 tax staff, as well as working on ideas to improve the tax training provided to our team.
In relation to client work, I am advising many families who are concerned about the potential tax changes that we could see announced towards the end of this year. Wealth and asset protection are the top priorities.
If you could make one change to tax law or practice, what would it be?
Simplification please. This is needed both to help HMRC achieve its digital tax strategy ambitions and also to reduce the tax complexity facing SMEs, in particular. Some of the recent Budget announcements, like the super-deduction, although positive, have made the tax rules more complex. At a time when businesses are emerging from various covid measures and are battling an economic recession, they will soon also face marginal rates of corporation tax, along with four rates of VAT.
Alongside simplification, we need tax policies that will continue to make the UK an attractive place to set up and run a business. The reduction in the business asset disposal relief from £10m to £1m was a significant blow to entrepreneurs in the UK. We need a tax system that encourages innovation by individuals who ultimately will employ more staff as their businesses grow and contribute more to UK Plc.
What do you know now that you wish you’d known at the start of your career?
The importance of role models. I was fortunate in having the opportunity to work with a great tax team early on in my tax career, who not only were technically strong, but also had the right balance of commerciality. That is the difference between a good tax adviser and an excellent one.
Has a recent tax case caught your eye?
The FTT case of Hadee Engineering Co Ltd v HMRC [2020] UKFTT 497 (TC) has important implications for all R&D tax relief claimants and particularly for companies that claim under the SME R&D regime. It demonstrated a number of key issues. First, that the burden of proof in demonstrating activities qualify for R&D tax relief are with the taxpayer. Second, to claim under the SME scheme, the R&D expenditure must not have been subsidised directly or indirectly by any other person. And third, the R&D must not relate to activities contracted out by another party. It is clear from HMRC’s arguments that it considers that many contractual arrangements may be caught by the subsidy point, and this may exclude companies making SME claims where the R&D is to fulfill contractual obligations.
R&D tax relief is one of the most valuable tax incentives available to SMEs, but HMRC is aware of a number of advisers making incorrect claims. This case highlights that HMRC is continuing to focus on R&D claims to ensure that the R&D tax relief is claimed only by eligible companies.
What are you looking out for later this year?
In the Autumn, we can expect to see a number of tax changes and potentially tax increases. The chancellor adopted a measured approach in his March Budget, and the recent ‘tax day’ was absent on key ‘cash tax generating’ announcements. But I expect to see changes on CGT, potentially on IHT reform and digital sales tax, and we could even see the chancellor tackle the disparities between the income tax and NICs paid by a self-employed individual, a personal service company owner and an employee.
You might not know this about me but...
I once appeared on the TV show Tiswas, along with guest David Soul of Starsky and Hutch fame, and presenter Sally James asked me a question – an amazing day!
One minute with Praveen Gupta, the national head of tax at Azets.
What’s keeping you busy at work?
Many things! I have to strike a balance between internal projects and client work. On internal projects, I am driving the firm’s tax agenda as part of our digital strategy. Our clients expect to receive more services digitally from us in the future, but without losing the personal touch from their trusted advisers. I am also preparing for our first national tax conference that is due to take place in July for more than 500 tax staff, as well as working on ideas to improve the tax training provided to our team.
In relation to client work, I am advising many families who are concerned about the potential tax changes that we could see announced towards the end of this year. Wealth and asset protection are the top priorities.
If you could make one change to tax law or practice, what would it be?
Simplification please. This is needed both to help HMRC achieve its digital tax strategy ambitions and also to reduce the tax complexity facing SMEs, in particular. Some of the recent Budget announcements, like the super-deduction, although positive, have made the tax rules more complex. At a time when businesses are emerging from various covid measures and are battling an economic recession, they will soon also face marginal rates of corporation tax, along with four rates of VAT.
Alongside simplification, we need tax policies that will continue to make the UK an attractive place to set up and run a business. The reduction in the business asset disposal relief from £10m to £1m was a significant blow to entrepreneurs in the UK. We need a tax system that encourages innovation by individuals who ultimately will employ more staff as their businesses grow and contribute more to UK Plc.
What do you know now that you wish you’d known at the start of your career?
The importance of role models. I was fortunate in having the opportunity to work with a great tax team early on in my tax career, who not only were technically strong, but also had the right balance of commerciality. That is the difference between a good tax adviser and an excellent one.
Has a recent tax case caught your eye?
The FTT case of Hadee Engineering Co Ltd v HMRC [2020] UKFTT 497 (TC) has important implications for all R&D tax relief claimants and particularly for companies that claim under the SME R&D regime. It demonstrated a number of key issues. First, that the burden of proof in demonstrating activities qualify for R&D tax relief are with the taxpayer. Second, to claim under the SME scheme, the R&D expenditure must not have been subsidised directly or indirectly by any other person. And third, the R&D must not relate to activities contracted out by another party. It is clear from HMRC’s arguments that it considers that many contractual arrangements may be caught by the subsidy point, and this may exclude companies making SME claims where the R&D is to fulfill contractual obligations.
R&D tax relief is one of the most valuable tax incentives available to SMEs, but HMRC is aware of a number of advisers making incorrect claims. This case highlights that HMRC is continuing to focus on R&D claims to ensure that the R&D tax relief is claimed only by eligible companies.
What are you looking out for later this year?
In the Autumn, we can expect to see a number of tax changes and potentially tax increases. The chancellor adopted a measured approach in his March Budget, and the recent ‘tax day’ was absent on key ‘cash tax generating’ announcements. But I expect to see changes on CGT, potentially on IHT reform and digital sales tax, and we could even see the chancellor tackle the disparities between the income tax and NICs paid by a self-employed individual, a personal service company owner and an employee.
You might not know this about me but...
I once appeared on the TV show Tiswas, along with guest David Soul of Starsky and Hutch fame, and presenter Sally James asked me a question – an amazing day!
