I’m kept busy twice over at KPMG. As a value chain management partner, helping multinationals work out where and how to organise their international operating models, and as our UK head of tax policy guiding colleagues, clients and the occasional journalist though the murky waters of tax and politics.
If you could make one change to tax, what would it be?
Something we can absolutely do better here in the UK is granting binding certainty to large taxpayers across a much wider range of topics. Rulings and clearances rather fell out of fashion following the controversy over state aid in the EU and ‘sweetheart deals’ here a decade ago. But the result is that it’s practically impossible for a business to get certainty from HMRC on anything other than a few niche areas of (usually new) legislation, bits of the customs code, and transfer pricing.
This has real world impacts. Take incentives like the RDEC, or reliefs like capital allowances. When a company is planning a large capital project it will only model tax benefits in its project appraisal if it can be reasonably sure it will get them. Otherwise it will make prudent assumptions, with any successful claim being a windfall after the event. That’s not good if we want to encourage investment.
It’s time to refresh our ruling and clearance system and give it real breadth and teeth. I’d suggest it covers at least capex reliefs, R&D credits and patent box, permanent establishment status, and loss utilisation. Limit the burden on HMRC with materiality thresholds. This is about tilting the balance for those really large, important decisions that will drive the future of the UK economy.
What do you know now that you wish you’d known at the start of your career?
I started working in 1998. The start of my career was dead boring. I seemed to spend my first two years billing and photocopying. The message is that it gets better! And each stage of a tax career demands different skills. If it’s difficult or frustrating, know it that won’t always be that way.
What should the government do in the upcoming Budget? And what do you expect will happen?
They’ve been preparing the ground for a downbeat Budget with some tax rises. The question is, where do these actually come from? Most of the big revenue raisers, apart from good old fiscal drag, have been ruled out already. What’s left? Possibly employers’ NI. It’s not strictly speaking a ‘tax on working people’. They could break the habit of a decade and not freeze fuel duty, maybe even reversing the ‘temporary’ cut introduced during the crisis. But that would be brave to say the least. We know there will almost certainly be a change to the CGT rate – it’s been well trailed – and there will be reannouncements of policies already in train, like changes to North Sea investment allowances.
But what should Reeves do? Raise some tax, but also cheer up a bit.
I’d bite the bullet and meaningfully raise some of the more broad-based taxes to fund proper investment in health and social care, infrastructure and local government – even if it means breaking some restrictive manifesto commitments.
But don’t forget the imperative to get the economy growing again. Change the fiscal rules: the requirement for debt to be falling as a percentage of GDP in year 5 of the forecasts pushes government to drop long-term capital projects. Not distinguishing between current and investment spending is also unhelpful. Publish that CT road map, but make it meaningful by introducing the new rulings system I suggested. Finally, consider reintroducing a capex super-deduction for expenditure in certain categories of critical infrastructure and make it an above the line, refundable tax credit.
And finally, you might not know this about me but...
I have a few projects on the go, but the biggest is a small vineyard in East Kent (Little Bursted Vineyard), which should have its first full harvest next year and will be producing traditional method English Sparkling Wine from Pinot Noir and Pinot Meunier grapes.
I’m kept busy twice over at KPMG. As a value chain management partner, helping multinationals work out where and how to organise their international operating models, and as our UK head of tax policy guiding colleagues, clients and the occasional journalist though the murky waters of tax and politics.
If you could make one change to tax, what would it be?
Something we can absolutely do better here in the UK is granting binding certainty to large taxpayers across a much wider range of topics. Rulings and clearances rather fell out of fashion following the controversy over state aid in the EU and ‘sweetheart deals’ here a decade ago. But the result is that it’s practically impossible for a business to get certainty from HMRC on anything other than a few niche areas of (usually new) legislation, bits of the customs code, and transfer pricing.
This has real world impacts. Take incentives like the RDEC, or reliefs like capital allowances. When a company is planning a large capital project it will only model tax benefits in its project appraisal if it can be reasonably sure it will get them. Otherwise it will make prudent assumptions, with any successful claim being a windfall after the event. That’s not good if we want to encourage investment.
It’s time to refresh our ruling and clearance system and give it real breadth and teeth. I’d suggest it covers at least capex reliefs, R&D credits and patent box, permanent establishment status, and loss utilisation. Limit the burden on HMRC with materiality thresholds. This is about tilting the balance for those really large, important decisions that will drive the future of the UK economy.
What do you know now that you wish you’d known at the start of your career?
I started working in 1998. The start of my career was dead boring. I seemed to spend my first two years billing and photocopying. The message is that it gets better! And each stage of a tax career demands different skills. If it’s difficult or frustrating, know it that won’t always be that way.
What should the government do in the upcoming Budget? And what do you expect will happen?
They’ve been preparing the ground for a downbeat Budget with some tax rises. The question is, where do these actually come from? Most of the big revenue raisers, apart from good old fiscal drag, have been ruled out already. What’s left? Possibly employers’ NI. It’s not strictly speaking a ‘tax on working people’. They could break the habit of a decade and not freeze fuel duty, maybe even reversing the ‘temporary’ cut introduced during the crisis. But that would be brave to say the least. We know there will almost certainly be a change to the CGT rate – it’s been well trailed – and there will be reannouncements of policies already in train, like changes to North Sea investment allowances.
But what should Reeves do? Raise some tax, but also cheer up a bit.
I’d bite the bullet and meaningfully raise some of the more broad-based taxes to fund proper investment in health and social care, infrastructure and local government – even if it means breaking some restrictive manifesto commitments.
But don’t forget the imperative to get the economy growing again. Change the fiscal rules: the requirement for debt to be falling as a percentage of GDP in year 5 of the forecasts pushes government to drop long-term capital projects. Not distinguishing between current and investment spending is also unhelpful. Publish that CT road map, but make it meaningful by introducing the new rulings system I suggested. Finally, consider reintroducing a capex super-deduction for expenditure in certain categories of critical infrastructure and make it an above the line, refundable tax credit.
And finally, you might not know this about me but...
I have a few projects on the go, but the biggest is a small vineyard in East Kent (Little Bursted Vineyard), which should have its first full harvest next year and will be producing traditional method English Sparkling Wine from Pinot Noir and Pinot Meunier grapes.
