18 October 2024
Ahead of the International Investment Summit on 14 October 2024, the government published a green paper, Invest 2035: the UK's modern industrial strategy. The green paper sets out the government’s aim to create long-term, inclusive, secure and sustainable growth. It includes a section that confirms the government’s commitment to publishing a ‘Corporate Tax Roadmap’ at the Autumn Budget. The public consultation on the paper will be open until 24 November 2024 and the government intends to publish the final industrial strategy in spring 2025 alongside the multi-year Spending Review.
In the written ministerial statement on the industrial strategy, the government also provided an update on certain company law reforms. The government has published a report by the Independent Expert Panel on corporate re-domiciliation and will consult in due course on the design of a UK re-domiciliation regime. The government will also legislate by the end of the year to remove redundant reporting requirements and uplift the monetary thresholds for micro-entities and small and medium-sized companies, as well as making technical fixes to the UK’s audit framework, and will consult next year on broader simplification and modernisation of the UK’s non-financial reporting framework. The government also announced its commitment to make changes to speed up the process for raising share capital.
The Budget Responsibility Act 2024 (Commencement) Regulations 2024 (SI 2024/1026) were made on 14 October 2024, bringing the Act into force with effect from 15 October 2024. The Act ensures that all ‘fiscally significant’ permanent tax or spending change announcements made by governments will be subject to an independent assessment by the Office for Budget Responsibility (OBR).
On 16 October 2024, the government confirmed in a written ministerial statement that the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will enter into force on 15 December 2024. The CPTPP will account for almost 15% of global GDP when the UK accedes, making it one of the largest free trade areas in the world. The government is preparing resources and support to help businesses get the most out of the agreement.
On 10 October 2024, the government announced significant reforms to employment law, with the publication of the Employments Rights Bill and ‘next steps’ document. Key changes include abolishing the two-year qualifying period for unfair dismissal, ending most zero-hour contracts, strengthening employee rights in relation to flexible working and simplifying trade union recognition processes. A new Fair Work Agency will be established to oversee the changes. For more information on the announcements and their possible implications, see Deloitte Legal’s blog post.
On 14 October 2024, the Individual Savings Account (Amendment) (No. 2) Regulations 2024 (SI 2024/1022) and the Child Trust Funds (Amendment) (No. 2) Regulations 2024 (SI 2024/1023) were made. The regulations come into force on 4 November 2024 and enable certain fractional interests in shares to be held in Individual Savings Accounts (ISAs) and Child Trust Funds (CTFs). HMRC previously stated that any fractional interests acquired prior to these changes may be retained, but once the amended regulations come into force, all such fractional interests must meet the relevant requirements.
A new penalties regime has applied from 1 January 2023 to the late submission and late payment of VAT returns. Under this regime, a taxpayer may not be liable to a penalty if they can establish a reasonable excuse for lateness, which was remedied without unreasonable delay. Reasonable excuse does not generally include lack of funds, or reliance on another person unless the taxpayer took reasonable care. In this case, the FTT held that the taxpayer had a reasonable excuse: she had taken reasonable care to avoid the failings of her bookkeepers, and HMRC, and had rectified the failings without unreasonable delay when the excuse ceased. The FTT also considered that there were ‘special circumstances’, in particular HMRC’s incorrect advice, that would enable HMRC to reduce the amount of the late payment penalties. The FTT accordingly held that HMRC’s decision not to reduce the penalties to zero by virtue of the special circumstances was flawed “in the judicial review sense”, and reduced them to zero.
The next EMEA Dbriefs tax webcast will be on Tuesday 22 October 2024 at 12:00 BST/13:00 CEST. Unleashing the value of employee benefits, hosted by Michael Nicolaides, is the fourth in our Global Employer Services A world of talent series, exploring the world of managing, attracting and retaining global talent. Our presenters will discuss the increased pressure on employers to provide employee benefits that support and align with wider corporate strategy and philosophy, and how better defining a benefits strategy, improving communications, and maximising the employee value proposition, whilst balancing budget constraints, can assist with employee retention and well-being.
The Chancellor of the Exchequer Rachel Reeves will present her first Budget on Wednesday 30 October 2024 following the summer's general election, which saw the Labour party win a landslide majority. The Budget will bring to life the new Labour government’s key manifesto pledges and there will also be an update from the Office for Budget Responsibility on the latest state of the country’s finances. For insights on the Budget announcements, visit our Autumn Budget 2024 page. There will be an EMEA Dbriefs webcast on Thursday 31 October 2024 at 12.00 GMT/13.00 CET, hosted by Amanda Tickel, Deloitte’s Global Head of Tax and Trade Policy, during which our panel of experts will provide an update on the previous day’s announcements and their implications for businesses and individuals.