Business Tax Briefing

A weekly round-up of corporate, employment and indirect tax news


Finance (No 2) Bill published

The Finance (No 2) Bill was published on 4 November 2021, together with explanatory notes, and a press release from HM Treasury. An accompanying Written Ministerial Statement draws attention to clause 10, which will increase the normal minimum pension age from age 55 to age 57 from 6 April 2028, and in particular to the window of time during which people could either join or transfer into a scheme which can offer a protected pension age. The increase in the normal minimum pension age was announced in 2014 in the response to the consultation on ‘Freedom and Choice in Pensions’ and the draft clause was published in July 2021. A Tax Information and Impact Note has been published on this change. Schedule 1 of the Bill includes the revised legislation for implementing the basis period reforms. The government has also published its response document following the consultation on the basis period changes launched on 20 July 2021.

The second reading of the Finance (No 2) Bill will be on Tuesday 16 November 2021. 

Budget resolutions approved

The Commons debate on the Budget concluded on Tuesday 2 November 2021. After the conclusion of the debate, the Budget Resolutions, apart from those already passed on Budget Day, were approved

Social Security (Up-rating of Benefits) Bill: Lords

The Social Security (Up-rating of Benefits) Bill had its report stage in the Lords on 2 November 2021. The Bill's purpose is to implement the government's decision to set aside the state pension triple lock earnings link for the purposes of calculating the next increase.  An amendment was made (amendment 3) which would see the earnings link in the triple lock retained. The amendment does not specify the figure to be used for calculating the next increase, but provides that the Secretary of State should use existing powers to set another earnings figure for the uprating next April. The amended Bill is here. The amendment may be reversed when the Bill return to the Commons. The third reading in the Lords will take place on 8 November The Commons will consider the Lords amendments to the Bill on Monday 15 November. 

Designation of Freeport Tax Sites Regulations: Humber, Teesside, Thames

In line with the statement and maps published at the Autumn Budget, the Treasury has laid three statutory instruments for the designation of Freeport Tax Sites under section 113 Finance Act 2021 before the House of Commons:

The regulations come into force on 19 November 2021, and the designations also take effect on 19 November 2021. Guidance on Freeports relief from stamp duty land tax (SDLT) has been published in HMRC’s Stamp Duty Land Tax Manual. 

G20 Leaders’ Declaration

Following their meeting in Rome on 30 and 31 October 2021, the leaders of the G20 issued a declaration which welcomes the final political agreement as set out in the Statement on a Two Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. The declaration calls on the G20/OECD Inclusive Framework on BEPS to swiftly develop the model rules and multilateral instruments as agreed in the detailed implementation plan released by the Inclusive Framework on 8 October, with a view to ensuring that the new rules will come into effect at a global level in 2023. 

Administrative Burdens Advisory Board: 2021 report

The Administrative Burdens Advisory Board (ABAB) has published its 2021 report. The ABAB is an independent board comprising members from a range of business backgrounds and professions who represent small businesses. It purpose is to work with and support HMRC in efforts to make tax simpler for such businesses.The report notes that, looking forward, besides concentrating on key areas such as UK transition after Brexit and Making Tax Digital, the ABAB will also need to catch up on topics paused or affected by the prioritisation of COVID-19 related work. These include:

  • Exploring with HMRC whether some of the easements put in place because of COVID-19 should become permanent, require further extensions, or be allowed to close as relevance wanes.
  • Payrolling benefits-in-kind. There was a pause in this work due to COVID-19 priorities but HMRC have advised they are putting renewed focus into this area.

 Forthcoming Dbriefs webcasts

The next UK Tax Monthly Update Dbriefs webcast is on Tuesday 9 November 2021 at 12.00 GMT/13.00 CET.  During the call our panel of experts will provide an update on corporate tax, employment tax, and indirect tax. The presenters are David Walters, Anne-Mari Davidson and Claire Simms. If you would like to register for the webcast you can do so here. 

There is another Dbriefs webcast on Thursday 11 November 2021 at 12.00 GMT/13.00 CET. Changes To UK Border Operating Model: Are You Ready For 2022? will be hosted by Caroline Barraclough. Our panel will discuss the forthcoming 2022 changes to HMRC's current Border Operating Model and customs declaration process and what your organisation needs to know to be prepared. If you would like to register, you can do so here.  

Plastic Packaging Tax: draft regulations and guidance

The government is consulting on draft regulations concerning the introduction of Plastic Packaging Tax (PPT) from 1 April 2022. The regulations set out how PPT will be administered and provide details on registration, returns and record keeping. The regulations also address methods for weighing plastic packaging components and calculating recycled material in plastic, and the definition of ‘substantial modification’, which determines when a plastic packaging component is finished and becomes chargeable for the tax. HMRC have published new guidance on PPT, including how to work out what packaging is subject to PPT; whether, when, and how to register companies or groups for PPT; and how to claim a credit or defer PPT if packaging is to be exported. 

No VAT exemption for temporary consultant haematologists: Upper Tribunal

Mainpay, an umbrella company, provided the services of temporary medical consultants and GPs to an employment business, that provided them to NHS Trusts. In Adecco, the Court of Appeal established the importance of who controls temporary staff in considering how VAT should be accounted for. In Mainpay, the Upper Tribunal has now ruled that ‘control’ does not necessarily mean control of the services being performed. Neither Mainpay, nor the employment business, nor the NHS Trust, was in a position to control the clinical decision-making of a specialist such as a consultant haematologist. The Upper Tribunal ruled that the First-tier Tribunal had been correct to consider the wider framework of control: although Mainpay employed the consultants, it had no contract with them as to medical matters, was not involved in any aspect of their day-to-day work, and was not involved in complaints against them. The Upper Tribunal  confirmed that Mainpay was providing the consultants rather than the medical services that they performed, and could not therefore exempt its services as supplies of healthcare.