4 April 2025
Royal Assent granted to national insurance and business rates bills
Following approval by the House of Lords earlier this week, Royal Assent was granted yesterday to:
· The National Insurance Contributions (Secondary Class 1 Contributions) Act 2025 enacts, with effect from 6 April 2025, several NIC announcements made in the Autumn Budget, including the increase in the employer secondary Class 1 NICs rate from 13.8% to 15%, the decrease in the employer secondary Class 1 NICs threshold to £5,000 per year, and the increase in the annual Employment Allowance to £10,500.
· The Non-Domestic Rating (Multipliers and Private Schools) Act 2025 enacts certain business rates measures in England, including: powers for the Treasury to create from April 2026 new lower business rates multipliers for qualifying retail, hospitality and leisure properties and higher multipliers for high value properties; and the removal of the eligibility of private schools for charitable business rates relief from April 2025.
Lists of countries with qualified status for Pillar Two purposes updated
The OECD Inclusive Framework has updated its central record of Pillar Two legislation with transitional qualified status. The central record, first published in January 2025, sets out lists of jurisdictions whose local implementation of the Pillar Two global minimum tax rules have so far been assessed as ‘qualified’ in accordance with the Inclusive Framework’s simplified transitional qualification mechanism. (See our Alert from January for further details). The new version adds Spain and Guernsey to the lists of jurisdictions with a qualified income inclusion rule and a qualified domestic minimum top-up tax that meets safe harbour standards.
Before the above update, HM Treasury made regulations to give effect to the original January 2025 OECD lists for the purposes of recognising ‘qualified’ overseas countries and Pillar Two taxes in the UK’s Pillar Two legislation. The regulations also provide HMRC with the power to specify by notice additions to these lists.
HMRC update the form to support claims for creative industry tax reliefs
Since 1 April 2024, companies that claim corporation tax creative industries tax reliefs have been required to provide additional information and evidence in support of their claims. On 1 April 2025, HMRC updated their guidance page Support your claim for creative industry tax reliefs, indicating that the required online form has, or shortly will be, updated. This follows the publication of the Relief for Creative Industries (Additional Information Requirements and Miscellaneous Amendments) (Amendment) Regulations 2025 (SI 2025/383) last week, which update the original 2024 regulations that set out the form’s requirements. According to HMRC’s explanatory memorandum, in addition to correcting a small number of errors present in the 2024 regulations and removing some items that are no longer required, the amendments introduce some new additional information items, including information to help HMRC verify eligibility for the new enhanced relief rules for low-budget UK films and for visual effects costs introduced by Finance (No. 2) Act 2024 and Finance Act 2025 respectively.
Bolt Services UK: Application of VAT Tour Operators’ Margin Scheme to ride-hailing services
The Upper Tribunal has agreed with Bolt Services UK Limited (Bolt) that they should account for VAT under the Tour Operators’ Margin Scheme (TOMS) on the supply to passengers of private hire vehicle ride-hailing services, upholding the earlier decision of the First-tier Tribunal (FTT). The FTT had held that the supply was a service commonly provided by tour operators or travel agents.
On appeal, HMRC argued that the FTT’s ‘high-level’ approach when considering whether services are of a kind commonly provided by tour operators/travel agents was wrong. HMRC considered that the correct approach was to ask whether the supply by Bolt, in particular, was identical or comparable to services supplied by tour operators/travel agents. HMRC also contended that the supply was materially altered or an ‘in-house’ supply, combining bought-in services (drivers) with Bolt’s own resources (the app platform), and therefore outside the scope of TOMS. The Upper Tribunal acknowledged that while TOMS was designed for traditional tour operators, its scope is not limited to them, and that the key factor is the nature of the services provided, not the classification of the provider. The Upper Tribunal agreed with the FTT that a ‘high-level’ approach to comparing Bolt’s services with those of traditional operators was appropriate. Addressing HMRC’s argument that the supply was ‘in-house’, the Upper Tribunal considered that the drivers’ services directly benefited passengers, not Bolt, and were not materially altered or an in-house supply. Accordingly, the Upper Tribunal found that the supply was comparable to those of traditional tour operators/travel agents and was provided for the direct benefit of travellers, satisfying the key requirements of TOMS, and dismissed HMRC’s appeal. (Contact: Donna Huggard)
EMEA Dbriefs webcasts
The next EMEA Dbriefs tax webcast is on Thursday 10 April 2025 at 14.30 BST/15.30 CEST. In The impact of the new US administration on multinational companies in EMEA, hosted by Jonathan Traub, our presenters will discuss the tax policymaking agendas of the White House and the 119th Congress and what they may mean for multinational businesses.