5 July 2024
General Election
The Labour Party won a majority of seats in yesterday’s UK general election and will thus form the next UK government. Labour’s leader, Sir Keir Starmer MP, has been appointed as the new Prime Minister and, at the time of writing, key cabinet and ministerial appointments are expected to be confirmed later today and tomorrow.
A summary of the tax pledges within the Labour Party’s manifesto is available on Deloitte TaxScape here.
The Commons will first meet on Tuesday 9 July 2024 for the election of the Speaker and the commencement of swearing-in of MPs. The new parliament will begin formally on Wednesday 17 July 2024 with the State Opening of Parliament. This will include a King’s Speech in which the new government will set out its general legislative agenda for the first parliamentary session.
CJEU issues judgment in Credidam on VAT and collective copyright management
The Centrul Român pentru Administrarea Drepturilor Artiștilor Interpreți (Credidam) is a collective copyright management association in Romania, which collects and distributes remuneration due to performing artists (rightholders) from users of their artistic services. Credidam charges a management fee to cover its operating costs, which is deducted from the remuneration paid to the rightholders. Under Romanian law, remuneration collected by collective management organisations on behalf of rightholders does not fall within the scope of VAT, but the management fees are subject to VAT. Credidam challenged this, on the basis that the fees were ancillary to the remuneration and should follow the same VAT treatment. Credidam also argued that even if the fees were not ancillary, they could not be regarded as consideration for a service, as there was no legal relationship between Credidam and the rightholders in which there was reciprocal performance, because the obligation to pay the fees, and the amount thereof, were imposed by law.
The CJEU has held that Credidam was supplying services to rightholders for consideration. There was a legal relationship between Credidam and the rightholders, in which there was reciprocal performance, and a direct link between the services supplied by Credidam and the management fee paid. This assessment was not altered by the fact that the provision of the services and the payment of the fee were regulated by statute. Also, the fact that the remuneration paid by users to rightholders was itself outside the scope of VAT did not change the taxable nature of the management services. (Contact: Donna Huggard)
HMRC publish statistics on illustrative tax changes
On 28 June 2024, HMRC updated their twice-annual statistical publication Direct effects of illustrative tax changes. The publication sets out HMRC’s latest ‘ready reckoner’ numerical estimates, subject to high level modelling and methodological assumptions, of what the effects would be on annual UK exchequer tax receipts of a range of hypothetical changes to a wide variety of UK tax rates and thresholds.
EMEA Dbriefs webcasts
The next EMEA Dbriefs tax webcast will be on Tuesday 9 July 2024 at 12:00 BST/13:00 CEST. Worker rights – what next following the general election?, hosted by Helen Kaye, will be from our Global Mobility and Employment Taxes series. Our panel will examine the potential impact the UK general election may have on worker rights, reflecting on the manifesto promises of the incoming new government and the timing of possible changes.