Business Tax Briefing

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

03/09/2021

Tax Law Review Committee: report on the First-tier Tribunal's Tax Chamber

The Tax Law Review Committee (TLRC),  which was founded by the Institute for Fiscal Studies (IFS) to keep the operation of tax law in the UK under review, has published a report ‘The tax tribunals: the next 10 years’ which examines the Tax Chamber of the First-tier Tribunal (FTT). The main concern among users is delay, which existed before the COVID-19 pandemic. Many respondents attribute delays to the judges, both through a lack of robust case management and because of delays in writing up decisions, which can sometimes take over a year. There is also a perception that the FTT administration is responsible for delays, especially in listing cases and relating to the filing and dissemination of documents. Some users also reported an apparent lack of engagement by some judges during hearings and concerns that cases are sometimes allocated to judges without the appropriate knowledge. Perceived areas of strength include the readiness of judges to assist litigants in person by conducting hearings using an inquisitorial approach. The report suggests that using remote video hearings instead of determining cases on paper without a hearing, and the establishment of a pro-bono advocacy scheme, could improve access to justice by litigants in person. The President of the Chamber, Greg Sinfield, has welcomed the report and commented that, as the report states, the Chamber has already begun to address some of the issues raised. 

Coronavirus Job Retention Scheme: updated guidance

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

Claim for wages through the CJRS

The information in the section 'When the government ends the scheme' has been updated. 

Scottish Government consultation: Tax policy - a Framework for Tax

The Scottish Government has published a consultation document Tax policy and the Budget - a Framework for Tax. This seeks views on the Scottish government's overarching approach to tax policy, through Scotland’s first Framework for Tax, and on how the Scottish government should use its devolved and local tax powers. The Scottish government’s stated aims include being open and transparent about how it  approaches tax policy, including on the purposes for collecting taxes and the principles that underpin its approach. Other aims include ensuring that tax policy decisions are coherent, rooted in a defined set of principles and objectives and are rigorously appraised, and improving sequencing so that policy and Budget cycles are aligned as far as possible. Views are also sought  on how best to deploy devolved tax powers to support the economic recovery from COVID-19. Responses are invited by 26 October 2021. 

Togo joins G20/OECD Inclusive Framework

Togo has joined the G20/OECD Inclusive Framework on BEPS, becoming its 140th member. The jurisdictions of the BEPS Inclusive Framework are, amongst other things, committed to implementing/maintaining BEPS minimum standards in the areas of country-by-country reporting to tax authorities, dispute resolution, treaty abuse and harmful tax practices. The implementation of the minimum standards is subject to peer review. There is a full list of participating jurisdictions as at August 2021 here. Togo has also committed to addressing the tax challenges arising from the digitalisation of the economy by joining the two-pillar plan to reform the international taxation rules. This brings the total number of jurisdictions participating in the agreement to 134. Those jurisdictions are listed here

Updated HMRC guidance: SDLT relief for land or property transactions

HMRC have updated their guidance on Stamp Duty Land Tax relief for land or property transactions. A new section 'Seeding relief for Property Authorised Investment Funds for Co-Ownership Authorised Contractual Schemes' has been added. 

Institute for Government:  tax and spending choices facing the government

The Institute for Government has published a paper on the government’s tax and spending options. The paper assesses the public finance forecasts and what these might mean for the chancellor’s room for manoeuvre ahead of this autumn’s multi-year spending review, which will be the first in three years. The Institute observes that the economy has recovered more quickly than the Office for Budget Responsibility (OBR) expected in March. An upgrade of the OBR outlook so that it matches the Bank of England’s would reduce borrowing forecasts in 2025/26 by around £25 billion and give the chancellor an additional £12bn to spend above his March 2021 plans. However, as the March forecast was based on several tight spending assumptions, the Institute warns that further spending will be needed to deal with the demands facing the government. These include COVID-19 related costs beyond this year, the Prime Minister’s undertaking to ‘fix’ social care, pressure to maintain the temporary uplift in Universal Credit payments and extra spending which would be required if the government maintains the manifesto commitment to preserve the state pension triple lock.    

Forthcoming Dbriefs webcast

A reminder that our next Dbriefs webcast is on Wednesday 8 September 2021, 12.00 BST/13.00 CEST. The title is Bringing The Daily Work Of A VAT Manager Alive In SAP S/4HANA®, hosted by Ann Jackson. During this webcast our panel of experts will discuss how SAP S/4HANA® can help your organisation respond to recent EU VAT regulations, and transform the role of VAT managers. To register for this webcast, click here. You can view past webcasts on demand here.

Royal Mail Group Litigation: no obligation to issue VAT invoices: Court of Appeal

Until the CJEU’s judgment in TNT in 2009 it was commonly believed that Royal Mail should exempt its business services, whereas it should have charged VAT. One group of claimants is therefore trying to persuade the CJEU (in Zipvit) that they should be entitled to recover input tax even in the absence of VAT invoices. Another group is demanding that Royal Mail should issue VAT invoices now, but the Court of Appeal has rejected their claim. Applying the reasoning of AG Kokott in Zipvit, the Court of Appeal considered that the claimants could not demonstrate that VAT had been passed on to them. However, even if they had paid VAT, they could not demand VAT invoices from Royal Mail. Businesses which make taxable supplies should generally issue VAT invoices, and UK VAT legislation should be read in conformity with EU law at the time (i.e. Royal Mail’s business services should be viewed as taxable). However, on its own this did not mean that a claim existed. The Court of Appeal ruled that a private law claim in EU law would only arise if Parliament had intended it to, and listed several reasons why no such intention existed. For example, it considered that the primary purpose of VAT invoices was to allow HMRC to ensure VAT compliance, not to allow taxpayers input tax recovery. In the absence of any valid claim, the appeal was dismissed.  

Updated guidance: postponed import VAT accounting

For a few days at the start of each month, businesses which are authorised to use simplified declarations for imports can submit supplementary declarations for goods imported in the previous month. HMRC have identified that the postponed import VAT accounting (PIVA) system is not including these entries on the correct monthly PIVA statement. Updated guidance confirms that businesses can either use the figures shown on the statements to complete their VAT returns, or (if they can identify affected entries) reallocate import VAT to the correct month. The guidance also confirms that the duplication of import VAT on some statements in January and February was rectified on replacement statements issued in April, and recommends that businesses check that the correct amounts were included in their VAT returns.