Business Tax Briefing

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


Finance (No 2) Bill: progress

The Finance (No 2) Bill had its Second Reading in the Commons on 13 April 2021. Topics highlighted in the debate included the extension of the reduced rate for VAT for hospitality and tourism, the extension of the SDLT nil rate band, deferred VAT payments, freeports, the new plastic packaging tax, the capital allowances super-deduction, and the need for economic stimulus to boost the recovery from the COVID-19 pandemic. The debate is here.

A Committee of the Whole House will consider selected parts of the Bill on 19 and 20 April. Amendments handed in as at 15 April 2021 are here. These include extensive government amendments relating to Clause 36 and Schedule 7 on hybrid and other mismatches (see amendments 17 to 42). The explanatory note for the changes to Clause 36 and Schedule 7 is here. There are also government amendments to Clause 111 and Schedule 22 on relief from stamp duty land tax (SDLT) for freeport tax sites designed to ensure that SDLT relief applies to purchases made through alternative finance structures (see amendments 43 to 52). The explanatory note for the changes to Clause 111 and Schedule 22 is here.

Self-Employment Income Support Scheme: Treasury Direction, updated guidance

A Treasury Direction has been made under Sections 71 and 76 of the Coronavirus Act 2020 in relation to the Self-Employment Income Support Scheme (SEISS). The Direction sets out the rules for the fourth SEISS grant. The fourth grant covers the period from 1 February 2021 to 30 April 2021 and must be claimed on or before 1 June 2021. Unlike the previous grants, the fourth grant takes into account the 2019/20 profits, both in the eligibility criteria and the average profit calculations (i.e. it is now normally a four-year average rather than three, taking 2019/20 into account along with the original three). Another difference between the fourth grant and the previous three grants is that the fourth grant can be wholly or partly clawed back if there is an amendment to a tax return that would lower the grant amount, or make the claimant ineligible, subject to an exception where the clawback would be £100 or less.

HMRC have updated their guidance on the SEISS with information about the fourth grant:

Claim a grant through the SEISS

Check if you can claim a grant through the SEISS  

How your trading conditions affect your eligibility for the SEISS  

How your circumstances affect eligibility for the SEISS  

Return to your claim for the SEISS  

Tell HMRC and pay the SEISS grant back

Treasury Direction: CJRS extension

A Treasury Direction has been made covering the previously-announced extension of the Coronavirus Job Retention Scheme (CJRS) for the period 1 May 2021 to 30 September 2021 and providing for calculation of the support provided by the CJRS in July, August and September 2021.

Treasury Direction: support payments to Working Tax Credit recipients

A Treasury Direction has been made which sets out the legal framework for the scheme, announced at the Budget, to give a one-off, tax-free payment of £500 to  individuals who, on on 2 March 2021, were getting either Working Tax Credit or Child Tax Credit (where they were eligible for Working Tax Credit but did not get a payment because their income was too high). HMRC’s guidance on the scheme is here.

The UK’s Free Trade Agreements: Webinar with the Minister of State for Trade Policy & Senior UK Trade Officials:  21 April 2021, 16:00-17:00 BST

On Wednesday 21 April at 16:00 BST Amanda Tickel, Head of Tax Policy at Deloitte will join the Rt Hon Greg Hands MP, Minister of State for Trade Policy, Graham Floater, Director Trade Policy and David Phillips, Deputy Director UK Regions at the Department for International Trade to discuss the UK government’s Free Trade Agreement (FTA) negotiations programme. This webinar will provide you with the opportunity to hear directly from the Minister responsible for negotiating the UK’s priority free trade agreements and to deepen your understanding of the UK’s international trade agenda and the specific impact of individual trade deals on businesses. Click here to register.

Forthcoming Dbriefs

The next Dbriefs webcast is on Tuesday 20 April 2021. The title is Tax Controversy – Supporting M&A from our UK Tax Controversy series, hosted by Annis Lampard. During the webcast our panel will discuss how Deloitte’s tax controversy team can support your organisation's M&A processes and tax risk assessments. To register for the webcast, click here. Also next week on Wednesday 21 April 2021 is our IP, Tax And Transfer Pricing Strategy Within The Modern World webcast from our Transfer Pricing series, hosted by Kerry Lambrou. During the webcast our panel will discuss how new risks and opportunities are being created around the strategic management of IP and will provide an insight into the latest intangible trends. To register for the webcast, click here.

VAT on use or enjoyment of phones in Austria: CJEU

SK Telecom (SKT), a mobile phone provider based in South Korea, incurred Austrian VAT on fees charged by an Austrian network operator, which it passed on to its customers (i.e. South Koreans visiting Austria) as roaming charges. The Austrian tax authorities rejected SKT’s Directive claim on the basis that effective use and enjoyment of its services took place in Austria, and SKT should have accounted for Austrian VAT on the roaming charges. The CJEU has agreed. In considering the two questions referred to the CJEU together, it was held that roaming services, a distinct service in their own right, supplied by an operator established in a third country to its customers who also belong in that third country, of allowing them to use a network of the Member State in which they are temporarily staying, must be considered to be ‘effectively used and enjoyed’ within that Member State. Furthermore, the application of such use and enjoyment provisions is not dependent on any tax treatment adopted outside of the EU to the extent it prevents non-taxation in the EU.  

Car parking chargeable to VAT: First-tier Tribunal

NHS hospitals in England frequently charge for car parking, which subsidises the provision of healthcare and deters people from parking at the hospital for free and walking to nearby shops. In Northumbria Healthcare NHS Foundation Trust, the First-tier Tribunal has ruled that NHS car parking charges were subject to VAT. The Trust was supplying car parking for consideration in the course of an economic activity. Special rules for bodies governed by public law did not override this treatment, as the car parking was not provided under a special legal regime (notwithstanding NHS guidance on how to charge for car parking) and was potentially in competition with private car park operators. The First-tier Tribunal also ruled that the car parking was not exempt as ‘closely related’ to hospital or medical care as it was not an indispensable stage in diagnosing, treating, or curing disease. Even if it was an essential part of the therapeutic process, then it would be excluded from exemption as the car parking was in competition with commercial operators. The Trust’s appeal (relating to a claim for VAT of £267k for 2013-16) was dismissed.

COVID-19: help and information

A reminder that you can access a wide range of information, help and advice on responding to and recovering from COVID-19 here and also at our Deloitte global COVID-19 webpage.