12/01/2024
Finance Bill update
The Finance Bill, published in November 2023 to enact several of the Autumn Statement’s tax announcements, completed its ‘Committee of the Whole House’ proceedings in the House of Commons on 10 January 2024. MPs considered a number of the Bill’s key clauses and schedules, including those on the merging of the research and development tax relief schemes, and making capital allowances full expensing permanent. The clauses were approved by MPs with no amendments made.
A Public Bill Committee will now consider the Bill’s other clauses and schedules. Its first sittings will take place on 16 and 18 January 2024 and the committee is scheduled to complete its scrutiny by 30 January 2024 at the latest.
Legislation for electricity generator levy investment exemption published
Enacted in 2023, and in effect until 31 March 2028, the electricity generator levy is a temporary 45% charge on exceptional amounts of generation receipts of businesses that generate electricity in the UK. In order to strengthen incentives for new investment in renewable energy generation, at Autumn Statement 2023 the government announced its intention to introduce an exemption from the levy for new or expanded renewable generation projects where the substantive decision to proceed is made on or after 22 November 2023. Shortly before Christmas, HMRC published draft legislation for the measure, together with an accompanying policy paper and explanatory note.
Scottish building safety levy consultation launched
The UK and Scottish governments have opened a joint consultation on devolving taxation powers to enable a building safety levy to be introduced in Scotland. In 2021, the UK government announced its plans to introduce a building safety levy, payable by property developers applying for building control approval for new residential property developments in England. The revenue raised is intended to help fund the repair of buildings across England with historical safety defects. In its Programme for Government in September 2023, the Scottish government announced its intention to seek a specific transfer of tax legislating powers under the Scotland Act 1998 in order to introduce a new equivalent tax in Scotland. Evidence submitted to the new consultation, which is open until 19 February 2024, will be used to inform the decision by UK ministers on whether consent should be provided. The Scottish government intends to consult on the design of a devolved levy once an agreement on powers has been reached.
HMRC consulting on draft UK Pillar Two guidance
Multinational top-up tax and domestic top-up tax, the UK’s implementation of an income inclusion rule and a qualified domestic minimum top-up tax under the OECD Inclusive Framework’s Pillar Two global minimum tax rules, have entered into effect and apply to periods beginning on or after 31 December 2023. Further to an initial tranche of draft guidance issued in June 2023, HMRC have published further draft manual guidance on these new Pillar Two taxes and are inviting feedback by 7 February 2024.
Movement of goods into the UK from Ireland and other EU member states
As set out in the final version of the government’s Border Target Operating Model published in August 2023, from 31 January 2024 goods will face full customs controls when moved directly from Ireland via Irish ports to Great Britain. The Taxation (Cross-border Trade) (Miscellaneous Amendments) Regulations 2024 (SI 2024/12) implement this measure. Most ‘qualifying Northern Ireland goods’ (essentially goods in free circulation) moving from Northern Ireland to Great Britain through Irish ports will not be subject to import customs processes. Also from 31 January 2024, health certification will be introduced for imports from the EU of medium-risk animal products, plants, and plant products, and high-risk food and feed of non-animal origin. (Contact: Sam Kiely)
VAT on energy-saving materials – Statutory Instrument
As announced in Autumn Statement 2023, the scope of the VAT zero rate is being extended to include the installation of electrical battery storage, water-source heat pumps, and diverters that enable excess electricity from certain energy-saving materials to be used on site rather than exported to the grid. Specific groundworks necessary for the installation of certain types of heat pumps will also be brought within scope. The scope of the zero rate will also be extended to include the installation of qualifying energy-saving materials in buildings used solely for a relevant charitable purpose. The Value Added Tax (Installation of Energy-Saving Materials) Order 2024 (SI 2024/24), with an accompanying tax information and impact note, implements this measure. The changes will apply from 1 February 2024. The zero rate will apply until 31 March 2027, at which time the reduced VAT rate will apply.
EMEA Dbriefs webcasts
The next EMEA Dbriefs Tax webcast – Transfer Pricing - Effective Use Of Mutual Agreement Procedures – will be held on Tuesday 16 January 2024 at 13.00 GMT/14.00 CET. Transfer pricing controversy continues to be a challenge for many businesses, resulting in an increasing need to access Mutual Agreement Procedures (MAPs) to resolve double tax arising as a result of adjustments. Our panel will discuss what organisations should be thinking about in regards to transfer pricing and MAP.
Then on Wednesday 17 January 2024 at 12.00 GMT/13.00 CET, Accessing Global Talent: The Future Of Global Mobility is the final instalment from our Global Employer Services series Seizing the future. Our panel of specialists will examine Deloitte research, including the most recent Deloitte CEO survey, which continues to highlight that hiring and retention of talent remains one of the biggest challenges organisations face today. The panel will discuss key considerations in this area for Global Mobility teams and the roles such teams can play in the global talent sourcing transformation.