Business Tax Briefing

Spring Budget next week

The Chancellor of the Exchequer, Jeremy Hunt, will deliver the government’s Spring Budget 2024 on Wednesday 6 March 2024. The Spring Budget will be accompanied by the latest forecasts from the Office for Budget Responsibility for the UK’s economy. Please visit our Spring Budget page on Budget day for our coverage of key tax announcements.

There will be an EMEA Dbriefs webcast on Thursday 7 March 2024 at 12.00 GMT/13.00 CET, during which our panel of speakers will analyse the Budget’s key tax announcements.

Finance Act 2024 published

As reported in last week’s Business Tax Briefing, Finance Act 2024 received Royal Assent on 22 February 2024. The text of the Act has now been published online by the National Archives. The PDF version of the Act is available here, and the HTML version of the Act is available here.

HMRC have published an updated version of the supporting Explanatory Notes to reflect the small number of government amendments made during the Commons Report Stage proceedings in early February.

Public Accounts Committee publishes report on HMRC performance

On 28 February 2024, the Public Accounts Committee (PAC) of the House of Commons (Chair: Dame Meg Hillier MP) released a report looking at HMRC’s performance in 2022-23. As highlighted in the PAC’s accompanying press release, much of the report is dedicated to concerns with HMRC’s customer service levels, particularly for telephony services. In 2022–23, 62.7% of callers waited more than 10 minutes to speak to an adviser, up from 46.3% in 2021–22. The report states that demand for HMRC’s phone and post services is increasing by more than 10% a year, driven by increases in the number of people paying tax due to fiscal drag, and the complexity of their tax affairs. HMRC have set a target to reduce incoming phone and post contact by 30% by 2024–25, compared to 2021–22, via a shift onto digital services. However, the Committee recommends improving customer service resourcing to ensure HMRC can meet their service standards until these digital services adequately address the needs of taxpayers and their agents. The government will formally respond to the report’s conclusions and recommendations in due course.

H Ripley & Co Limited: export evidence for scrap copper – First-tier Tribunal

In 2016, H Ripley & Co Limited (HR) exported scrap copper to Recylink in Belgium. In May 2017, HMRC assessed HR for VAT of £1.1m on the basis that it had provided insufficient evidence to justify zero-rating. HR tried to find additional evidence, and provided ferry boarding cards and emails in March 2018. However, HMRC declined the additional evidence as it has been obtained more than 18 months after the exports, far outside the three-month time limit prescribed by the relevant VAT Notice (which had force of law). HR argued that the time limit required the export and the creation of the documentary evidence to be contemporaneous. However, the First-tier Tribunal rejected this argument.

The Notice required HR to “obtain and keep valid commercial evidence” of the export within three months, and it was not enough that the evidence had come into existence, but had not yet been provided to HR. Even if the boarding cards had been considered, the FTT’s view was that they contained insufficient information to link a particular export to a specific sailing. The FTT also considered other evidence obtained by HR at the right time. In its judgment, sales invoices, bank statements, and weighbridge tickets contained no direct evidence of the movement of the scrap. International consignment notes (CMRs) had not been fully completed by the haulier or signed by the consignee. Annex VII documents (which accompany shipments) contained deliberate inaccuracies, as Recyclink did not want HR to know who its customer was. Given these deficiencies in the export evidence, HR had failed to satisfy the conditions for zero-rating its exports and its appeal was dismissed. (Contact: David Walters)