Business Tax Briefing

A weekly round-up of corporate, employment and indirect tax news  


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Taxation (Post-transition Period) Bill

The Taxation (Post-transition Period) Bill was published on 8 December 2020, together with explanatory notes. The Bill will introduce changes to VATA 1994 and Taxation (Cross-border Trade) Act 2018 to reflect the operation of indirect taxes under the Northern Ireland Protocol. It therefore sets out (for example) how Northern Ireland (NI) businesses will account for acquisition VAT on supplies of goods from the EU, and introduces a customs duty charge where goods moved from Great Britain (GB) to NI are at risk of being moved into the EU, or where goods which are not Qualifying Northern Ireland Goods are moved from NI to GB. HM Treasury has published supporting documents which include tax information and impact notes for VAT and customs.

There are also measures not related to NI, including on the VAT treatment of online sales by overseas persons and low value importations, insurance premium tax anti-avoidance, and powers enabling HMRC to issue charging notices for the purposes of recovering State aid amounts. The State aid measure relates to the European Commission's Decision of 2 April 2019 that the group financing exemption within the UK's controlled foreign company (CFC) rules constituted unlawful State aid received by some UK companies for periods from 1 January 2013 to 31 December 2018. The UK is challenging the Commission’s decision via the European courts.

The Bill will also introduce a new model for the VAT treatment of goods arriving into the UK from 1 January. This will include the abolition of low value consignment relief (LVCR) for goods arriving in GB (LVCR will continue to apply to an extent in NI), moving VAT collection away from the border for consignments not exceeding £135, placing the responsibility to pay VAT onto either an overseas seller or an online marketplace, and making online marketplaces liable for VAT on goods which are in GB at the point of sale. A tax information and impact note is also available.

The House of Commons Library has published a research briefing on the Bill. The Bill had its second reading and Committee stage in the Commons on 9 December 2020. It will have its final stages in the Commons on 15 December 2020.

Updated HMRC Coronavirus Job Retention Scheme guidance

HMRC have updated their guidance on the Coronavirus Job Retention Scheme (CJRS) as follows:

Find examples to help you calculate your employees' wages

Claim for wages through the CJRS

Calculate how much you can claim using the CJRS

Steps to take before calculating your claim using the CJRS

Check which employees you can put on furlough to use the CJRS

Check if you can claim for your employees' wages through the CJRS.

Company governance; transparency: consultations

The government has published three consultations on the governance of companies, on which comments are invited by 3 February 2021: Improving the quality and value of financial information on the UK companies register; Powers of the registrar; Implementing the ban on corporate directors. The key proposals are:

Querying power consultation: Companies House would have new powers to query information received, to be exercised on a risk-based approach. The consultation also explores strengthening powers to close various loopholes and remove information from the companies register.

Accounts filing consultation: Views are invited on how companies might in future be able to file accounts once with the government, instead of providing separate filings to Companies House, HMRC and other agencies. It is also proposed to require all companies to file accounts at Companies House in digital format, and to give Companies House more powers to check information in those accounts.

Corporate directors’ consultation: It is proposed that corporate directors will be prohibited unless their own boards comprise all natural persons, and those natural persons have their identities verified.

Greenhouse gas removals: call for evidence

The Department for Business, Energy & Industrial Strategy and HM Treasury have published Greenhouse gas removals: call for evidence. The government is seeking evidence on greenhouse gas removal methods, and views on policy mechanisms, including tax incentives, that could incentivise and facilitate their development and deployment. The consultation closes on 26 February 2021.

OECD: 2020 Review/Public Consultation on BEPS Action 14 (Dispute Resolution)

As previously reported, on 18 November 2020, the OECD published a public consultation document covering a review of BEPS Action 14: Making Dispute Resolution Mechanisms More Effective. Interested parties were invited to comment no later than Friday 18 December 2020. The public consultation deadline has now been extended from Friday 18 December to Monday 11 January 2021.

Global Forum: Automatic Exchange of Financial Account Information: peer review

The Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) has published the first peer review report on the Automatic Exchange of Financial Account Information. This shows that 88% of jurisdictions engaged in automatic exchange since 2017-18 (including the UK) were deemed to have satisfactory legal frameworks in place. A second stage of the monitoring process, now under way, will assess the effectiveness of automatic exchange in more than 100 jurisdictions. The Global Forum notes that, in 2019, countries automatically exchanged information on 84 million financial accounts worldwide, covering total assets of USD 10 trillion.

Forthcoming Dbrief

The next Dbriefs webcast is on Tuesday 15 December 2020, 12.00 GMT/13.00 CET. The title is UK Tax Monthly Update from our UK Tax Focus series, hosted by David Walters. Our panel will discuss the latest updates on corporate tax, employment tax, and indirect tax. To register for the webcast, click here.

Northern Ireland Protocol: Joint Committee

A Command Paper provides further details of the agreement in principle reached by the Withdrawal Agreement Joint Committee over the operation of the Northern Ireland Protocol from 1 January. It confirms that, as a general rule, export or exit declarations will not be required for NI to GB movements of goods. Movements into NI will be ‘at risk’ of entering the EU (and therefore subject to EU tariffs) if they are subject to commercial processing, unless they are moved directly by businesses in the food, construction, healthcare or non-profit sectors (or by small businesses). If goods from GB are not being processed, then they will not be ‘at risk’ if they are duty-free in the UK, or if a business with a good compliance record is authorised to undertake that they are to be sold to end-consumers. The paper also refers to a UK Trader Scheme which will allow goods to be routed from GB to NI through ports in the Republic of Ireland under transit procedures, confirms that there will be no separate VAT registration for NI, and recognises concerns about margin scheme sales by GB businesses in GB to NI customers.

COVID-19: help and information

To help inform our clients and to enable them to understand how businesses can respond, recover and thrive in these times we are running a series of webinars focused on the economy, on particular sectors and on key roles within an organisation. You can register for future webcasts and view archived webcasts here. You can access more information here and also at our Deloitte global COVID-19 webpage. You can also sign up to our Deloitte Tax Atlas COVID-19 Tax and Fiscal Measures microsite, which provides a high-level summary of tax and fiscal coronavirus measures that have been announced by governments, and our COVID-19 Signal Topic email alerts, here.