14 March 2025
Navigating the tax changes in 2025
The tax landscape has been shifting dramatically, and 2025 promises no respite. While the upcoming Spring forecast on 26 March could unveil new consultations and outcomes from previous ones, tax professionals are already navigating a multitude of changes this year. Our Deloitte TaxScape article summarises some of the currently known UK tax changes coming into force throughout 2025.
Industrial Strategy consultation – interim analysis and update
On 11 March 2025, the Department for Business and Trade (DBT) provided an update on the Industrial Strategy Green Paper consultation. The update includes a four-page interim summary of the key themes from the consultation responses and an overview of the process and timelines for the development of the Industrial Strategy. A full analysis of the consultation responses will be published with the multi-year spending review in Spring 2025 alongside the Industrial Strategy and its eight sector plans.
Exchequer Secretary to the Treasury sets out the government’s vision for the future of the UK tax authority
On 11 March 2025, in a speech at a joint ICAEW and CIOT conference marking the 20th anniversary of HMRC, Exchequer Secretary to the Treasury, James Murray MP, set out the government’s vision for the future of the UK tax authority. The speech included a number of announcements including a new digital pilot with the United States to test ways to speed up trade processes for UK and US businesses, simplification and improvements to the Temporary Admission customs procedure, improvements to HMRC customer service and measures to tackle non-compliance.
Hastings Insurance Services Limited: Broking services supplied to a Gibraltar insurer
The First Tier Tribunal (FTT) has found in favour of Hastings Insurance Services Limited (Hastings) in a case involving the supply of insurance broking services to Advantage Insurance Company Limited (Advantage), a Gibraltar (non-EU) provider of insurance to UK policyholders. Although under EU and UK law, insurance transactions, including broking services, are VAT exempt, Article 169(c) of the EU Principal VAT Directive (PVD) allows input tax recovery if the services are provided to a customer outside the EU. This is implemented in the UK by way of the Value Added Tax (Input Tax) (Specified Supplies) Order 1999, but the order was amended in 2019 so that UK insurance intermediaries were entitled to recover VAT only where the party insured was based outside the UK. Hastings submitted a claim to HMRC for the recovery of input tax attributable to supplies made to Advantage relating to both pre- and post-Brexit periods, on the basis that the 2019 amendment was incompatible with the PVD. The claim was disallowed by HMRC.
The FTT held that “customer” in Article 169(c) should be understood as referring to Hastings’ customer, Advantage, and not the final customer, the UK policyholder (as was argued by HMRC). The FTT also found that Article 169(c) is unconditional and sufficiently precise so as to have direct effect, and therefore for the pre-Brexit period, Article 169(c) can be relied on to allow input tax recovery. With respect to the post-Brexit period, under Section 4 of the EU (Withdrawal) Act 2018, directly effective rights arising under an EU Directive and recognised and enforced before 31 December 2020 continued to be recognised and enforced in UK law, if they are “of a kind” recognised by the European Court or any UK court or tribunal in a case decided before 31 December 2020. The FTT held that EU case law provided that Article 169 had direct effect, or alternatively, that Article 169 was “of a kind” and/or had a “close relationship” with Article 168, which had previously been held to have direct effect.
EMEA Dbriefs webcasts
The next EMEA Dbriefs tax webcast is on Thursday 20 March 2025 at 12.00 GMT/13.00 CET. In Taking Action on Tax Evasion: Corporate Criminal Offence and the Failure to Prevent Fraud, our panel and guest speakers from HMRC will discuss the latest position on CCO investigations, HMRC’s expectations of businesses, and how businesses can prepare for the Economic Crime and Corporate Transparency Act.