13 June 2025
HM Treasury publishes Tax Policy Making Principles
On 12 June 2025, HM Treasury published a document titled Tax Policy Making Principles, which sets out the principles that “underpin the government’s approach to delivering tax policy changes through the single major fiscal event cycle, and how it will engage with stakeholders during tax policy development.” The first principle is predictability and sustainability and includes the government’s commitment to a single annual major fiscal event. Where possible, the government will indicate “a clear direction of travel for the tax system”, such as through the Corporate Tax Roadmap. The government will take a “smart and agile approach” to consultation, such as by taking a more flexible approach to the timing of publishing supporting documents and prioritising frequent engagement with tax professionals. Finally, the government will ensure that tax policy making is “open and transparent” and will explore options for the creation of a dedicated resource to track technical tax announcements.
Spending Review 2025
On 11 June 2025, the Chancellor of the Exchequer (Rachel Reeves MP) presented the results of the government’s Spending Review 2025 to Parliament. The document confirms a real terms growth in funding for HMRC over the 2025 Spending Review period, and provides details of what HMRC intend to do with the additional funding. The HMRC settlement provides funding of £6.4 billion in 2028-29 to put in place measures to close the tax gap, first announced at Autumn Budget 2024. From 2026-27 to 2028-29, the government will provide HMRC with an additional £500 million of funding “to make HMRC a digital-first organisation.” An additional £1.6 billion will be allocated to modernise and reform HMRC’s IT and data infrastructure.
Jersey filing obligations: certificates of residence
Revenue Jersey has issued revised guidance on reporting requirements for non-Jersey resident companies. All companies incorporated in Jersey, regardless of their tax residence, are required to file annual tax returns in Jersey. As previously announced, from the 2024 year of assessment, non-Jersey tax resident companies must submit a certificate of residence (for the UK this could take the form of a letter of confirmation of residence from HMRC) with their annual Jersey corporate income tax return. Returns may be rejected if this requirement is not met. The updated guidance states that Revenue Jersey will not ask companies to refresh their certificates of residence in future years after the 2024 year of assessment, unless there is a change of company residence, or the certificate provided is more than one year old.
BEPS MLI: Peru deposits instrument of ratification
On 11 June 2025, the OECD announced that Peru deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS MLI) on 9 June 2025. The BEPS MLI will first enter into force in Peru on 1 October 2025. The UK-Peru double tax treaty, which was signed by the UK and Peru in March 2025 and has not yet been ratified, is not included in Peru’s MLI position, and thus will not become a Covered Tax Agreement subject to the MLI. However, the agreed text already conforms to BEPS minimum standards. The OECD’s list of all countries’ provisional or ratified MLI positions is available here.
DHL Air (UK) Limited: Retroactive end-use relief authorisation
In 2016-17, DHL Air (UK) Limited imported seven civil aircraft from the United States. At the time of importation, the aircraft were eligible to be imported with end-use relief at a zero rate of duty. However, DHL Air’s authorisation for end-use relief had expired. DHL Air applied for retroactive authorisation in 2017; HMRC refused and assessed DHL Air for customs duty. DHL Air appealed the assessment, and the First-tier Tribunal (FTT) held that HMRC should review their decision, providing directions for that review. DHL Air appealed the FTT’s decision to the Upper Tribunal (UT) on the basis that it erred in its interpretation of the law regarding retroactive authorisations and in the directions. The UT has upheld the FTT’s decision. DHL Air considered that its authorisation application should have been considered as a renewal of its previous authorisation, which would mean that it could be made retroactive. The UT agreed with the FTT’s findings that an authorisation made under the Union Customs Code (which applied when the retroactive application was made) could not amount to a renewal of an authorisation made under the Community Customs Code (under which the previous authorisation was made). Also, the 2017 application had a different geographical scope from the original authorisation, and accordingly could not qualify as a renewal. The UT also upheld the FTT’s findings as to what could potentially constitute the ‘exceptional circumstances’ that would justify retroactive authorisation, which were included in the FTT’s directions to HMRC. Finally, the UT found that the FTT had not erred in law in not including in its directions a requirement for HMRC to treat DHL Air the same as it did other operators in 2017; there was no evidence that DHL Air had been treated differently. The UT dismissed DHL’s appeal. (Contact: Bob Jones)
EMEA Dbriefs webcasts
The next EMEA Dbriefs tax webcast is on Thursday 19 June 2025 at 12.00 BST/13.00 CEST. In Addressing the tax and legal impacts of sustainability in the supply chain, hosted by Gareth Pritchard, we will discuss the tax implications of sustainability driven changes to businesses’ supply chains. We will also consider international incentives and sustainability regulations announced to date, such as CBAM and EUDR, and what could follow. The webcast will also offer practical insights and examples.