Autumn Budget next week

A reminder that the Chancellor of the Exchequer, Rachel Reeves MP, will present her first Budget next week 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 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, during which our panel of experts will provide an update on the Budget’s tax announcements.

Tax sites in Celtic Freeport in Wales formally designated

HM Treasury has made the Designation of Special Tax Sites (Celtic Freeport) Regulations 2024 (SI 2024/1035), which formally designates six areas in the Celtic Freeport in Milford Haven and Port Talbot in Wales as special tax sites for the purposes of Freeports tax reliefs. The designations take effect from 26 November 2024. HMRC have published detailed maps of each of the six Freeport tax sites.

Boehringer Ingelheim: VAT on pharma rebates – First-tier Tribunal

Boehringer Ingelheim Limited (BIL) supplied branded pharmaceutical products in the UK to the NHS at the standard rate of VAT. Between 2014 and 2020, BIL made payments to the Department of Health and Social Care (DHSC) under two voluntary schemes, the purpose of which was ultimately to control the NHS’s spend on branded medicines. The payments were calculated as a percentage of net sales and were made after the supplies had been made. BIL submitted claims for over-declared VAT, on the basis that the payments should have been treated as reducing the consideration for its products. HMRC rejected the claim. The First-tier Tribunal (FTT) has agreed with BIL, and held that the payments made by BIL to the DHSC reduced the value of the consideration received by BIL for its supplies of pharmaceutical products, and thus also reduced the taxable amount of such supplies.

The FTT considered that the relevant legislation was clear: where the price of a supply is reduced after it has taken place, the taxable amount must be reduced. The FTT disagreed with HMRC’s submissions that there was an insufficient link between the payments to the DHSC and the supplies of the pharmaceutical products to NHS bodies. The FTT also rejected HMRC’s submission that any repayments of VAT would unjustly enrich BIL. Accordingly, BIL’s appeal was allowed. (Contact: Chris Cherrill)

EMEA Dbriefs

On 5 November 2024 at 12.00 GMT/13.00 CET there will be a further webcast from our Sustainability and Climate Dbriefs webcast series Sustainability reporting: defining the role of tax. Hosted by James Wright, our presenters will discuss recent developments in the sustainability reporting landscape, including the EU’s Corporate Sustainability Directive (CSRD) and, as businesses develop their responses to such legislative changes and wider stakeholder expectations, how tax could be reflected.