Business Tax Briefing

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


Budget will be on 3 March 2021

It has been announced that the Budget will be on 3 March 2021. Guidance has been issued on making representations about the Budget 2021 via HM Treasury’s representations portal. Submissions will be accepted until 14 January 2021.


Coronavirus Job Retention Scheme extended

The Chancellor has announced that the Coronavirus Job Retention Scheme (CJRS) has been extended until the end of April 2021. The government will continue to pay 80% of the salary of employees for hours not worked until the end of April. Employers will only be required to pay wages, NICs and pensions for hours worked and NICs and pensions for hours not worked. Government-guaranteed COVID-19 business loan schemes will be extended until the end of March 2021. HMRC's guidance has been updated:

Reporting employees' wages to HMRC when you've claimed through the CJRS

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

Calculate how much you can claim using the CJRS

Pay CJRS grants back

Check if your employer can use the CJRS 

Steps to take before calculating your claim using the CJRS

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

Claim for wages through the CJRS

Taxation (Post-transition Period) Act: Royal Assent

The Taxation (Post-transition Period) Act 2020 received Royal Assent on 17 December 2020.

Digital services taxes: deadlines

A number of countries have introduced new unilateral digital services taxes (DSTs) during 2020. As a reminder, each of the DSTs has a different scope but taxes are typically applied to gross revenues arising from a range of digital activities. The first compliance obligations for many of the new DSTs are due in the coming months, including: Italy - payment deadline of 16 February 2021 for 2020 liability and filing deadline of 31 March 2021 for 2020 DST return; Kenya - deadline of 20 February 2021 for payment of January 2021 liability and filing associated return. In addition, further to earlier deferrals, payment of the 2020 French DST liability is due in full in line with the business’s November VAT payment deadline. Further information is available at or please contact Zubin Patel.

Corporation tax residence: HMRC win in Court of Appeal

The Court of Appeal has decided in favour of HMRC in Development Securities plc and others v HMRC on corporation tax residence, reversing the decision of the Upper Tribunal (UT). The taxpayer companies were incorporated as part of a tax planning scheme intended to further increase an underlying capital loss to reflect indexation. The Jersey-incorporated companies would acquire the capital assets standing at a loss from a UK group company for consideration equal to base cost plus indexation (i.e.  more than market value). The companies would then migrate tax residence to the UK, and then crystallise  capital losses through commercial sales to third parties. To succeed, the planning required that the Jersey companies were not UK tax resident on the date of acquisition of the assets. The First-tier Tribunal (FTT) held that the only acts of central management and control occurred in the UK (by the UK-resident parent company), and thus the companies were UK resident throughout. The UT held that the FTT’s grounds for concluding that central management and control was exercised in London and not in Jersey were untenable, given the facts the FTT had found, and that its decision was wrong in law. The Court of Appeal has held that the UT had mischaracterised the basis for the FTT’s conclusion. The UT was not justified in setting aside the FTT’s decision for the reasons it gave, and the FTT’s decision was restored.

Changes to penalties chargeable re Follower Notices: consultation

HMRC are consulting on proposed changes to penalties that may be charged to recipients of Follower Notices as a result of using avoidance schemes. The proposals would:

  • reduce the rate of Follower Notice penalty from 50% to 30% of the tax in dispute;
  • introduce a penalty of 20% for those who the Tribunal decides acted unreasonably by continuing their litigation against HMRC’s decision. Responses are invited by 27 January 2021.


Asset holding companies: further consultation

Following an initial consultation on the tax treatment of asset holding companies in alternative fund structures, which closed in August 2020, the government has concluded that there is a strong case for change in this area. It has therefore launched a second stage consultation on the detailed design of a new regime. The consultation will also consider targeted changes to the REIT regime, and will close on 23 February 2021. Draft legislation will be published during 2021, allowing for a period of technical consultation ahead of inclusion in the Finance Bill.

Customs duty legislation

Thirteen indirect tax statutory instruments have been laid before Parliament, mostly relating to the customs duty system that will need to be operative from 1 January. SI 2020/1430 establishes the UK Global Tariff, and there are other instruments dealing with reliefs (including four new reliefs), origin and preference, quotas, suspension, transit procedures, etc., as well as transitional rules. The instruments are expected largely to give effect to existing announcements and guidance about the UK customs system, but further analysis to check whether they (and associated reference documents published by HMRC, such as the tariff itself) contain any additional issues will be required for businesses that trade outside of the UK. Therefore given the volume of output, it is possible that some aspects of the new system will not come into focus until the New Year. (Contact: Caroline Barraclough).

UK Trader Service: businesses urged to sign up by 31 December

Further to the Withdrawal Agreement Joint Committee’s recent guidance, HMRC have published details of the UK Trader Scheme which will allow authorised businesses to self-declare that goods are not ‘at risk’ of moving on to the EU after moving from GB to Northern Ireland , and consequently should not be subject to EU duty. Businesses who do not sign up could have to pay tariffs on their goods. Affected businesses should therefore apply for authorisation before 31 December, as authorisation should be obtained before goods are moved. If applications are made next year, but before 28 February 2021, then a provisional authorisation may be granted for up to four months, but otherwise HMRC expect that it could take a month to process an application. (Contact: Andrew Clarke).

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.