Business Tax Briefing

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

27/08/2021

Self-Employment Income Support Scheme: updated HMRC guidance

HMRC have updated their guidance on the Self-Employment Income Support Scheme (SEISS) Work out your turnover so you can claim the fifth SEISS grant. The changes include new guidance for subcontractors under the Construction Industry Scheme which has been added to the sections 'How to work out your April 2020 to April 2021 turnover' and 'Find a previous year’s turnover to use as a reference year.' 

HMRC organisation chart updated

HMRC have updated the chart showing their senior management to reflect HMRC’s latest structure as of August 2021. 

Scottish government agreement with Scottish Green Party: tax issues

The Scottish government and the Scottish Green Party Parliamentary Group (the Green Group) have announced a draft agreement  which commits them to working together in a collaborative way, without entering into coalition, throughout the current  Parliamentary session, and to delivering a shared policy programme. The Scottish National Party won 64 seats in the 2021 Scottish Parliamentary elections, one short of the number needed for a majority, and thus formed a minority government; the Scottish Greens have eight seats. The new agreement commits the Scottish government to consult and collaborate with the Green Group throughout the development and scrutiny of all stages of the annual Budget process. The Green Group has agreed to support the Scottish government in matters of supply, including all matters relating to the Scottish Budget and on Scottish Rate Resolutions. The parties will explore the use of Scotland’s devolved tax powers in respect of Landfill Tax to ensure these are consistent with net zero ambitions and will consider the role of incineration and fiscal incentives, such as a waste tax. 

How government handles public funds: HMT guidance

HM Treasury has published guidance which sets out how the government handles public funds and how public spending is accountable to Parliament. Each organisation in central government has an accounting officer, who has personal responsibility for the propriety, regularity, value for money and feasibility of spending. The accounting officer for HMRC is Jim Harra. Each accounting officer must make sure that the actions of the organisation they lead meet the four standards of regularity, propriety, value for money and feasibility set out in Managing Public Money and should personally approve, in advance, all significant initiatives, policies, programmes and projects. Where accounting officers do not think that a proposal meets these standards, they can seek a direction from the relevant minister. Recent ministerial directions are listed here. 

Dbriefs webcasts

On Wednesday 8 September 2021 at 12.00 BST/13.00 CEST there is a Dbriefs webcast on the topic Bringing The Daily Work Of A VAT Manager Alive In SAP S/4HANA®. During the call our panel will discuss how SAP S/4HANA® can help organisations respond to recent EU VAT regulations and transform the role of VAT managers. The presenters are Ann Jackson and Susanne de Nooijer with guest speaker Ralf Nietupski from Vertex. You can register for the webcast here

Our next UK Tax Monthly Update Dbriefs webcast is on Tuesday 14 September 2021 at 12.00 BST/13.00 CEST.  The presenters are Tim Waterhouse, Daria Adepegba and David Walters. Our panel will provide an update on corporate tax, employment tax, and indirect tax. You can register for the webcast here

APPG report: HMRC settlements with large corporate taxpayers

The All Party Parliamentary Group (APPG) on Anti-Corruption & Responsible Tax has published a report ‘Restoring public trust in HMRC: settlements with large corporate taxpayers’. It proposes (1) a statutory pathway for disclosure of taxpayer information for the purposes of parliamentary scrutiny of HMRC settlements with large corporate taxpayers, and (2) an amendment to the legislation governing HMRC’s relationship with the Treasury which would  prioritise HMRC’s duties in respect of revenue collection over their obligation to pursue Treasury policy priorities. The APPG suggests that, with appropriate procedural safeguards, confidential information about large corporate taxpayers could be made public for the purposes of scrutiny by a parliamentary committee convened for that purpose. It acknowledges that that there is likely to be significant resistance to such a proposal on the basis of the principle of taxpayer confidentiality, but  argues that the principle of taxpayer confidentiality is not absolute. 

New advisory fuel rates from 1 September 2021

HMRC have announced new advisory fuel rates from 1 September 2021. The previous rates from 1 June 2021 can be used for up to one month from the date the new rates apply. Compared to the previous rates, some of the rates have increased by one or two pence and some have decreased by one or two pence. 

HMRC Research Report 624: self-assessment Campaign Tracking

HMRC have published Research Report 624, which examines the 2020- 2021 self-assessment advertising campaign and measures its effectiveness. Unprompted responses highlight the filing deadline as the most salient message. For most respondents, the priority of completing their self-assessment tax return remained consistent with how they prioritised this in previous years. However, for a minority, the impact of COVID-19 resulted in them prioritising it differently this year, with most submitting earlier than usual. 

Revenue and Customs Brief 11(2021): is COVID testing subject to VAT?

In the UK, over 260 million COVID-19 tests have been carried out in the last twelve months. In Revenue and Customs Brief (RCB) 11(2021), HMRC have provided guidance on how to treat the tests for VAT purposes. Testing can be exempt from VAT if a medical professional administers the tests and provides the results. There is some complexity around this – for example, a pharmacist would have to carry out the test themselves for it to be exempt, whereas a GP only has to supervise the test. Tests which are self-administered but later analysed by a medical professional do not qualify for exemption. The RCB accepts that tests for people travelling abroad have a therapeutic purpose and can in theory qualify for exemption as medical care (the tests help protect fellow travellers from infection), but VAT must be charged if the tests are self-administered. Tests are exempt (even if self-administered) if they take place in a state-regulated institution such as a hospital. The RCB points out that businesses are not state-regulated just because they are accredited by UK Accreditation Services or are regulated in some respects by the Care Quality Commission or equivalent in Northern Ireland, Scotland and Wales (i.e. the regulation must be in respect of COVID-19 testing). 

Revenue and Customs Brief 12(2021): VAT treatment of gaming machines 2005-2013

In Revenue and Customs Brief (RCB) 12(2021), HMRC have confirmed that they are not appealing the First-tier Tribunal (FTT) decision in Rank Group and 2016 G1. The FTT ruled that (applying fiscal neutrality) the operation of certain gaming machines in venues such as casinos, bingo clubs, arcades and pubs should have been exempt from VAT between 6 December 2005 and 31 January 2013. This decision is the final strand of litigation relating to gaming machines, and follows on from the Upper Tribunal’s decision in favour of Rank and Done Brothers last year. The RCB invites businesses that submitted claims at the relevant time (and appealed any rejection to the FTT) to contact HMRC, providing documentary evidence in support of their claim and details of any input tax that would not have been recovered if the gaming machines had been recognised as exempt. HMRC will now pay valid claims that are supported by adequate evidence.