Business Tax Briefing

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


Tinkler: validity of enquiry notice: Supreme Court allows HMRC's appeal

The Supreme Court has allowed HMRC's appeal in Tinkler v  HMRC which concerns an appeal against a closure notice. The issue is whether HMRC had ever validly opened an enquiry into the taxpayer's tax return for 2003-04 because, the taxpayer maintained, HMRC had failed to give notice of their intention to enquire into the return to the taxpayer within the time allowed. The Court of Appeal held inter alia that the taxpayer was not precluded under 'estoppel by convention' from denying that the enquiry had been properly opened, as neither the agent nor the taxpayer ever assumed the requisite 'element of responsibility for the assumption made'. HMRC appealed to the Supreme Court on the 'estoppel by convention' point.

The Supreme Court held that the taxpayer was estopped from denying that a valid enquiry had been opened into his return. It held that an estoppel by convention will arise when the parties have acted upon a common assumption that a given state of facts or law is true. Each will then be estopped against the other from denying the truth of their common assumption. The Court went on to set out and explain the five principles governing estoppel by convention. Applying them to the facts of this case, it concluded that HMRC satisfied all the requirements for establishing an estoppel by convention. 

UK consultation: Reporting rules for digital platforms

Following the announcement at Spring Budget 2021, the government is consulting on the implementation of the OECD’s Model Reporting Rules for Digital Platforms. From January 2023, at the earliest, these rules will require platforms to report information about the income of sellers providing goods and services to help sellers get their tax right and to enable HMRC to detect and tackle non-compliance.

The consultation seeks views on the government’s implementation, including on optional elements of the rules. Comments are invited by 22 October 2021. 

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

A further Treasury Direction has been made in relation to the Self-Employment Income Support Scheme (SEISS). Its purpose is to modify the financial impact declaration test in relation to certain partners in partnerships.  HMRC have updated their guidance for the SEISS to reflect the Treasury Direction and that the online service for the fifth grant is now available:

Work out your turnover so you can claim the fifth SEISS grant – updates on working out turnover for a member of a partnership

Tell HMRC and pay back an SEISS grant – updates for claimants who have amended their tax returns

Claim a grant through the SEISS

Check if you can claim a grant through the SEISS 

HMRC CJRS guidance updated

HMRC have updated their guidance on the Coronavirus Job Retention Scheme (CJRS) for details of when an employer’s claim will be publicly available:

Check if your employer can use the CJRS

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

National Security and Investment Act: guidance; draft statutory instrument

The National Security and Investment Act, which received Royal Assent on 29 April 2021, and which will come into force on 4 January 2022, gives the government wide-ranging powers to intervene in transactions on national security grounds. A significant number of industry sectors will fall within its scope, including artificial intelligence, energy and transport. Acquisitions of entities within the scope of the regime will require mandatory notification to a newly-formed government entity before they can be completed. The mandatory regime will operate alongside a voluntary notification system, under which parties will be encouraged to notify ‘trigger events’. To give teeth to the voluntary system, the government will have powers to ‘call in’, or review, transactions potentially up to five years post-completion (including those that have completed on or after 12 November 2020). Guidance, and draft regulations on notifiable investments, have been published:

National Security and Investment Act: draft notifiable acquisition statutory instrument

National Security and Investment Act: guidance for the higher education and research-intensive sectors

The National Security and Investment Act alongside regulatory requirements

Check if an acquisition outside the UK will be in scope of the National Security and Investment Act

National Security and Investment Act: prepare for new rules about acquisitions 

OECD publishes third edition of its Corporate Tax Statistics

The OECD has released the third edition of its annual Corporate Tax Statistics publication, with the accompanying dataset. The report provides internationally comparable statistics designed to inform the tax policy debate and support the analysis of corporate taxation, in general, and of base erosion and profit shifting (BEPS), in particular. Some FAQs on Country-by-Country reports (CbCRs) have been published with the report. 

Dbriefs webcasts

Our programme of Dbriefs webcasts is taking a break over the summer. The programme will recommence in September. You can catch up on any titles you may have missed, including:  Demystifying The New UK Patent Box Regime; G20/OECD The Digitalised Economy - Political Agreement On Taxation Of Digital Economy (Pillar One) And Global Minimum Rate (Pillar Two); Taking Action On Tax Evasion: Corporate Criminal Offence And Beyond; HMRC Review Of Transfer Pricing Documentation and many more. For further details of our webcasts available to view on demand see here.   

VAT payment deferral: penalties

HMRC have updated their guidance on VAT deferred due to coronavirus to confirm the penalty regime that applies if the VAT deferred on payments due between March and June 2020 was not paid in full or a payment arrangement was not made by 30 June 2021. An arrangement to pay could include either joining the VAT Deferral New Payment Scheme (to make instalment payments) or entering into an agreement to pay with HMRC. The penalty will be charged at 5% of the deferred VAT unpaid when the assessment is made, and the penalty must be paid within 30 days of the date of the assessment.  

Plastic Packaging Tax: guidance updated

The Plastic Packaging Tax (PPT) is due to come into effect from 1 April 2022 and is likely to affect a wide range of businesses in supply chains involving the manufacture or importation of plastic packaging materials. On ‘L day’ on 20 July 2021, when draft clauses for the next Finance Bill were published, HMRC also updated the guidance on how businesses can start preparing for the introduction of PPT to include details of packaging components that are not subject to PPT, and issued a technical consultation (open until 17 August 2021) on draft statutory instruments necessary for the implementation of PPT. HMRC have indicated that further guidance will be issued before the introduction of the tax. Nevertheless, based on the information already available, businesses can use the lead time to the implementation of the tax to determine their PPT registration and reporting requirements (including access to the information necessary to comply with the rules) and to consider the implications of the tax and associated costs for their supply chains.