Tax Advisory Group meeting: 17 July 2017

Tax Advisory Group

• Chair: Mark Drakeford AM, Cabinet Secretary for Finance and Local Government
• Andrew Evans, Geldards LLP
• Frank Haskew, Institute of Chartered Accountants in England & Wales
• Leighton Jenkins, CBI Cymru/Wales (representing Ian Price)
• Janet Jones, Federation of Small Businesses
• Robert Lloyd Griffiths, Institute of Directors Wales
• Ruth Marks, Wales Council for Voluntary Action David Phillips, Institute for Fiscal Studies
• Kay Powell, The Law Society
• Martin Warren, Institute of Chartered Accountants in England and Wales
• Dr Victoria Winckler, The Bevan Foundation

Other attendees

• Kathryn Bishop, Chairman-designate, Welsh Revenue Authority

Officials in attendance

• Andrew Jeffreys, Director, Welsh Treasury
• Dyfed Alsop, Director, Welsh Revenue Authority Implementation Programme
• Georgina Haarhoff, Head of Tax Policy, Strategy and Engagement, Welsh Treasury
• Ed Sherriff, Head of Public Spending Policy, Welsh Treasury
• Sarah Carter, Head of Welsh Treasury Development
• Claire McDonald, Programme Manager, Welsh Revenue Authority Implementation Programme
• Clare Blake, Local Government Finance Policy Division
• Lu Toscano-Davies, Policy and Operations Officer, Welsh Treasury (secretariat)

Apologies

• Martin Mansfield, General Secretary, Wales TUC
• Ian Price, CBI Cymru/Wales

1. The Cabinet Secretary for Finance and Local Government welcomed attendees to the 11th meeting of the Tax Advisory Group (TAG) for Wales. Apologies had been received from Martin Mansfield.

2. The Cabinet Secretary welcomed and introduced to the group Kathryn Bishop, the newly appointed chairman-designate of the Welsh Revenue Authority (WRA).

3. The note of the previous meeting (13 February) had been circulated to members prior to the meeting. All actions had been completed. The group confirmed the note was an accurate summary of the discussion.

4. Claire McDonald explained the legal basis for establishing the WRA, the first non departmental body created by the Welsh Government, which would be formally established in the autumn, ready to collect devolved taxes in April 2018.

5. Claire outlined the remit of the organisation and reported on the relocation of staff to the QED Centre, in Treforest Estate, and progress on digital services and recruitment.

6. The group was informed that the consultation on the WRA having access to criminal powers was published on 10 July. This was a 12 week consultation, due to end on 2 October 2017.

7. Discussion took place around data structure and data collection, communication and digital services. Dyfed Alsop reported to the group that these issues had been considered and staff with specialist expertise would be recruited in those areas. Digital services had received a very useful gateway review and the project was currently focusing on the delivery of the main 'day 1' priorities - registration, filing and payment.

8. Georgina Haarhoff outlined the progress being made towards developing the key elements of the framework and the work plan. She also provided an update on the new taxes debate.

9. Georgina reported the tax policy framework and work plan were published on 12 June. The framework set out the criteria for tax policy making in Wales and the five principles against which new taxes would be assessed.

10. Georgina provided an update on the Assembly debate on new taxes which took place on 4 July. She welcomed suggestions from the group on potential new taxes, in addition to those recommended in the report by the Bevan Foundation.

11. There was discussion on the scope for using taxation as a tool for delivering policy objectives: members were keen that the policy objective was placed at the front of the discussion, so that tax would be considered as one of a number of possible levers to achieve policy objectives, rather than an end in itself.

12. Emphasis was placed on the extent of the evidence and analysis that would be produced and assessed as part of the consideration of any potential new tax. Members asked that particular attention be paid to the possible impact of a new tax or a change in tax administration on small businesses. Members were invited to feedback individually following the meeting.

13. Sarah Carter updated the group on work to implement Welsh Rates of Income Tax (WRIT).

14. Sarah explained the rate setting capability available as a consequence of WRIT devolution and outlined the balance of funding (commencing in 2019-2020). She summarised the priorities for Welsh Ministers, the objectives and the desired outcomes from Wales.

15. Members highlighted that communication would be key: it would be important to make clear that this was not an additional tax. There was discussion about the experience in Scotland of administrative burden, particularly for small businesses - Members were asked to share any feedback they had received on emerging administrative challenges so the Welsh Government could learn from it in working with HMRC to implement WRIT.

16. The Cabinet Secretary suggested this was a topic that the group should return to.

17. Ed Sherriff provided an updated on the arrangements for the independent scrutiny and assurance of Welsh Government tax revenue forecasts for 2017-2018 and the independent production of tax revenue forecasts for future years. This followed the agreement reached in the fiscal framework. The Cabinet Secretary had recently issued a Written Statement updating Assembly Members on arrangements.

18. No items were raised under AOB.

19. The Cabinet Secretary thanked the attendees for their helpful and constructive contributions.

20. The next meeting would take place in October.