4 July 2025
‘L-Day’ will be 21 July 2025
The Exchequer Secretary to the Treasury, James Murray MP, has announced that a number of draft clauses intended for the next finance bill will be published on 21 July 2025 for technical consultation. The draft clauses, which will cover pre-announced policy changes, will be published on GOV.UK along with accompanying explanatory notes, tax information and impact notes, government responses to earlier consultations, and other supporting documents.
G7 statement on Pillar Two “shared understanding” regarding the US tax system
On 28 June 2025, the G7 released a statement on global minimum taxes, confirming that a “shared understanding” had been reached on the treatment of US-parented multinational groups under the OECD/G20 Inclusive Framework’s Pillar Two global minimum tax rules. The statement followed the US announcement that proposed section 899 (a provision targeting foreign taxes deemed to be discriminatory or extra-territorial) would be removed from the US reconciliation tax and spending package previously referred to as the One Big Beautiful Bill Act (OBBBA).
According to the G7 statement, US parented groups would be excluded from the income inclusion rule (IIR) and undertaxed profits rule (UTPR) in respect of their US and non-US profits under a proposed “‘side-by-side’ solution”. The side-by-side system would “include a commitment to ensure any substantial risks that may be identified with respect to the level playing field, or risks of base erosion and profit shifting, are addressed”. The G7 shared understanding will now be discussed and developed with other OECD/G20 Inclusive Framework countries. HM Treasury and Rachel Reeves have issued a press release in relation to the announcement.
Crypto-Asset Reporting Framework and Common Reporting Standard regulations
HM Treasury has made regulations in relation to the UK’s implementation of the OECD’s Crypto-Asset Reporting Framework (CARF), which come into force on 1 January 2026. The regulations set out due diligence requirements for businesses, as well as the information they will need to collect and report, and the associated penalties for non-compliance.
Further regulations have been made to implement changes to the scope of the Common Reporting Standard (CRS). Electronic money institutions and certain e-money products will be brought into scope, while most charities will be excluded. Other changes include additional reporting requirements, reforms to the penalty framework, and a new mandatory registration requirement for financial institutions. The CRS regulations come into force on 16 July 2025, although many of the changes do not take effect until calendar year 2026.
H Ripley & Co Limited: export evidence
In 2016, H Ripley & Co Limited (HR) sold scrap metal to Recylink International, which it treated as zero-rated supplies on the basis that the goods were removed to Belgium. In 2017, HMRC assessed HR for VAT on the basis that evidence put forward to show the scrap metal was removed from the UK was insufficient to meet the conditions and time limits regarding proof of evidence of removal as set out in VAT Notice 725. The documents held by HR included sale invoices, bank statements, weighbridge tickets, international consignment notes (CMRs), e-mails, and WhatsApp messages. HR also obtained P&O boarding cards, albeit more than 18 months after the transactions took place. The First-tier Tribunal (FTT) refused HR’s appeal against HMRC’s assessment, and the Upper Tribunal (UT) has upheld the FTT’s decision.
The UT agreed with HMRC and the FTT that the issue in point was whether HR held sufficient evidence of removal within the requirements of Notice 725, and not whether the goods were actually removed. Whilst it was common ground that there was no single document that in itself proved that the goods were removed from the UK, HR argued that the FTT failed to consider whether the documents, when considered together, established its case. The UT upheld the FTT’s conclusion that, due to various deficiencies, the documents, when considered in combination, did not evidence the scrap metal’s removal from the UK. The UT also upheld the FTT’s decision to exclude evidence obtained after the three-month time limit set out in VAT Notice 725, in particular the P&O boarding cards, whilst noting that the FTT had concluded that this evidence would not have made any difference to its findings. HR failed to satisfy the conditions for zero-rating, and the UT dismissed HR’s appeal. (Contact: Andrew Clarke)
Customs rules amended
The Customs (Miscellaneous Amendments) Regulations 2025, published with an accompanying tax information and impact note, amend a number of customs rules. Amendments include simplification of temporary admission and transit procedure declarations, and extending the period in which goods can be kept under temporary admission procedures. The regulations establish an authorisation scheme for certain foreign postal operators allowing them to access simplified declaration arrangements when they carry postal items out of the UK, and reduce the customs information requirements for correspondence entering into and leaving the UK. The regulations also amend customs rules in relation to the application of HMRC’s powers in Northern Ireland and to penalty provisions. The regulations will come into force on 16 July 2025. (Contact: Jeffrie Mann)
HMRC webinar on Pillar Two transitional country-by-country reporting safe harbour
On 10 July 2025 at 15.45 BST, HMRC will be hosting a webinar titled Pillar 2 Transitional Safe Harbour. The webinar will cover the transitional country-by-country reporting safe harbour, which is intended to simplify compliance for groups within the scope of Pillar Two. HMRC will discuss, amongst other things, requirements for the safe harbour, country-by-country reports and qualification tests.
EMEA Dbriefs webcasts
The next EMEA Dbriefs tax webcast is on Tuesday 8 July 2025 at 12.00 BST/13.00 CEST. In UK Tax Update - July, we will discuss topical tax developments of relevance to UK businesses in relation to corporate taxes, employment taxes and indirect taxes.
On Thursday 10 July 2025, at 12.00 BST/13.00 CEST, Rumi Das will be hosting a Dbriefs tax webcast titled Business leadership insights to deliver global talent agility. Our panel will discuss key insights from Deloitte's GlobalForce2025 research, where we asked senior business leaders across the globe how they build agile, future-proof global workforces.