5 April 2024
Reserved Investor Funds – consultation on tax regulations
Following consultations in 2022 and 2023, at the Spring Budget the government confirmed its intention to legislate for a new type of closed-ended investment fund vehicle for non-retail investors: the Reserved Investor Fund (RIF). On 14 May 2024, HM Treasury and HMRC published for technical consultation draft regulations setting out in detail the proposed tax rules for RIFs and their investors. The draft regulations also propose amendments to the existing tax rules for Co-ownership Authorised Contractual Schemes (CoACS) to ensure that these work as intended, and to address points raised through the RIF policy consultation. The consultation is open until 14 May 2024.
HMRC publish guidance on overseas and contracted-out research and development expenditure
Finance Act 2024 introduced major changes to corporation tax research and development (R&D) reliefs, generally applicable for accounting periods beginning on or after 1 April 2024. These changes include restrictions to the extent to which contractor payments for R&D and payments for externally-provided workers can qualify for relief where R&D activity takes place overseas, and new rules for contracted-out R&D. Further to a consultation on draft guidance in February 2024, on 27 March 2024 HMRC published updated draft guidance on these specific changes. This guidance will be incorporated into HMRC’s Corporate Intangibles Research and Development (CIRD) Manual in due course.
VAT Notice 700/1: Who should register for VAT – updated
HMRC have amended their VAT Notice Who should register for VAT to, inter alia, update information for non-established taxable persons (NETPs). Section 4.2 of the notice now includes further guidance on when NETPs are liable to register for UK VAT. In section 9, a NETP is now defined as “any person who does not have a UK establishment”. The guidance explains that HMRC “…would normally consider a company which is incorporated in the UK to have an establishment in the UK as long as it is also able to make [emphasis added] or receive business supplies at its registered business address”, and a statement has been added that “A registered, serviced or virtual office alone is not enough to create a business establishment.” Information has been added on when overseas businesses may not need to register for VAT in the UK, including if their sales are to consumers through an online marketplace. The information for overseas sellers has also been expanded at section 12. In addition to these changes, which were noted by HMRC in the page’s update section, there have also been other amendments including the following: section 3.7 explains that although the exception from registration may be granted, the application to register forms still need to be completed, and HMRC will then make a decision on the application for exception from registration; and section 3.9 explains that if HMRC agree to a voluntary registration from an earlier date, that date cannot be changed. (Contact: Andrew Clarke)
EMEA Dbriefs webcasts
The next EMEA Dbriefs Tax webcast is on Tuesday 16 April 2024 at 12.00 BST/13.00 CEST. UK Tax Monthly Update – April is from our UK Tax Focus series and will be hosted by Daria Adepegba. During this webcast our panel will discuss what your organisation needs to know to keep up to date with the latest UK tax developments, with updates on news in corporate tax, employment tax, and indirect tax.
Insights blog – the UK CBAM and carbon-intensive imports
Nearly three years after the EU first announced the introduction of its new Carbon Border Adjustment Mechanism (CBAM), the UK government is launching its very own CBAM from 1 January 2027. The new tax will apply to specific carbon-intensive goods within the aluminium, iron and steel, cement, ceramics, fertiliser, glass and hydrogen product groups, and is one of the ways that the UK intends to meet its legally binding net zero 2050 target. In a new insights blog, we explore what the UK’s new tax will look like, who should be thinking about it, and how will it affect businesses.