Business Tax Briefing

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

09/04/2021

Coronavirus Job Retention Scheme: updated guidance

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

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

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

Steps to take before calculating your claim using the CJRS

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

Claim for wages through the CJRS

Find examples to help you calculate your employees' wages.

Penalties for not telling HMRC about CJRS grant overpayments (CC/FS48)

Low Pay Commission: National Living Wage, National Minimum Wage

New rates of the National Living Wage (NLW) and National Minimum Wage (NMW) came into force on 1 April 2021. These follow recommendations made in the autumn by the Low Pay Commission. The NLW now applies to all workers aged 23 and over. The previous age of eligibility was 25. The age of eligibility will come down to 21 by 2024.The Low Pay Commission has published a report which looks at the implications of the new rates and at its remit for the year ahead. This year’s increases mark the first step on the path to the government’s target of an NLW set at two-thirds of median earnings by 2024.

Upper Tribunal: HMRC win follower notice penalty appeal

The Upper Tribunal has allowed HMRC’s appeal in HMRC v Comtek Network Systems (UK) Limited which relates to follower notices. Finance Act 2014 permits HMRC to issue a follower notice where they consider that there is a final judicial ruling in another case that is determinative of a dispute between HMRC and the taxpayer. If the taxpayer then fails to take the ‘necessary corrective action’ (e.g. by telling HMRC that they have given up their claim to the tax advantage) the taxpayer can be charged a penalty of up to 50% of the tax in dispute. In this case, HMRC issued a notice in relation to a stamp duty land tax decision, and followed it up with a penalty. The penalty was overturned by the First-tier Tribunal, which held that it was reasonable in all the circumstances not to take corrective action. However, the Upper Tribunal found the First-tier Tribunal had misapplied the concept of ‘reasonable in all the circumstances’ in particular when considering actions occurring after the statutory deadline had passed. It reinstated the penalty, although in a reduced amount.

OECD international tax update to G20 Finance Ministers

OECD Secretary-General Angel Gurría has presented an international tax update to a virtual meeting of G20 Finance Ministers and Central Bank Governors held this week. This includes chapters on responding to the COVID-19 pandemic; addressing the tax challenges arising from digitalisation; tax and the environment; progress in tackling tax evasion and tax avoidance; and capacity building - supporting developing countries. Annex A provides an overview of tax and fiscal policy responses to the COVID-19 pandemic based on data from 66 countries. A communiqué issued following the meeting, inter alia, takes note of the update and confirms continued cooperation for a ‘globally fair, sustainable, and modern international tax system.’

BEPS Action 6: third annual peer review report on tax treaties

The OECD has published its third peer review report on Action 6 (prevention of tax treaty abuse) of the BEPS project. Action 6 is one of the four BEPS minimum standards that all members of the OECD/G20 Inclusive Framework on BEPS (the Inclusive Framework) have committed to implementing. The report includes the aggregate results of the peer review and data on tax treaties concluded by each of the 137 jurisdictions that were members of the Inclusive Framework on 30 June 2020. These show that the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the BEPS MLI) has been the tool used by the majority of jurisdictions that have begun implementing the Action 6 minimum standard.

Corporate Insolvency and Governance Act regulations

The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Change of Expiry Date) Regulations 2021 came into force on 1 April 2021. They extend the date on which the power in section 20 of the Corporate Insolvency and Governance Act 2020 to make temporary amendments to corporate insolvency and governance legislation expires by one year to 29 April 2022.

Dbriefs webcasts

The next Dbriefs webcast is on Tuesday 13 April 2021, 13.00 BST/14.00 CEST. The title is UK Tax Monthly Update from our UK Tax Focus series. During the webcast our panel will provide an update on corporate tax, employment tax, and indirect tax. To register for the webcast, click here.

There is another webcast on Wednesday 14 April 2021, 12.00 BST/13.00 CEST. The title is SAP S/4HANA®: Trade Compliance Opportunities For Tax from our SAP S/4HANA® series. Our panel will discuss how, in a world of disappearing borders, efficient global trade management and processes are increasingly important and explore how SAP S/4HANA® can be used to manage these challenges. To register, click here. To view past webcasts on demand visit www2.deloitte.com/emeadbriefs.

European Commission: Guide to the VAT One Stop Shop

The European Commission has published a Guide to the VAT One Stop Shop (OSS) which provides details concerning VAT registration, returns and payments for the three OSS schemes (union scheme, non-union scheme and import scheme) that will apply in the EU from 1 July 2021. Under these schemes, online sellers will be able to register in one EU Member State to declare and pay VAT on all distance sales of goods and cross-border supplies of services to EU customers. Existing thresholds for distance sales of goods will be abolished and replaced by an EU-wide €10,000 threshold for distance sales of goods and telecoms, broadcasting and electronic services. The introduction of the Import One Stop Shop (IOSS) for distance sales of low value goods imported from non-EU countries will accompany the removal of the low value consignment threshold. The new guide complements other extensive guidance that has been published by the Commission. Some EU Member States, including Belgium, the Netherlands, and Denmark, have launched portals allowing businesses to register under the schemes.

Customs duties: how to treat a teddy bear’s heart: Upper Tribunal

How can you tell if a plastic heart, which gives a cuddly toy a ‘realistic pitter-patter’ heartbeat, is designed for a bear (and therefore subject to duty at 4.7%) or a doll (duty free)? In Build-a-Bear, the Upper Tribunal has considered how to classify both hearts and other accessories (such as shoes, clothing, and wigs) which could be used with either. It decided that where accessories were designed principally for bears or for dolls, then Note 3 to Chapter 95 of the Combined Nomenclature classified them accordingly. Therefore, wigs which had slits and loops to fit over a bear’s ears were principally suitable for teddy bears and were subject to duty. However, bears and dolls both need hearts, and in that case Note 3 did not help. Classification of the hearts depended on the existence of a subheading in the Combined Nomenclature for ‘parts and accessories’ of dolls but the absence of any equivalent for bears, meaning that they should be classified as duty-free.

COVID-19: help and information

A reminder that you can access a wide range of information, help and advice on responding to and recovering from COVID-19 here and also at our Deloitte global COVID-19 webpage.