Business Tax Briefing

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

09/10/2020

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COVID-19: help and information

To help inform our clients and to enable them to understand how businesses can respond, recover and thrive in these times we are running a series of webinars focused on the economy, on particular sectors and on key roles within an organisation. You can register for future webcasts and view archived webcasts here. You can access more information here and also at our Deloitte global COVID-19 webpage. You can also sign up to our Deloitte Tax Atlas COVID-19 Tax and Fiscal Measures microsite, which provides a high-level summary of tax and fiscal coronavirus measures that have been announced by governments, and our COVID-19 Signal Topic email alerts, here.

Coronavirus Job Support Scheme expanded

The Chancellor announced on 9 October that the government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restriction.

Job Retention Bonus: Treasury Direction; HMRC guidance

HM Treasury has published a Treasury Direction in relation to the Job Retention Bonus (JRB), the £1,000 one-off taxable payment to employers for each eligible employee furloughed and then kept employed until 31 January 2021, together with a press release explaining the JRB. HMRC have published the following guidance on the JRB, which can be claimed between 15 February 2021 and 31 March 2021:

Check if you can claim the JRB from 15 February 2021.

Find an example of employees and the minimum income threshold for the JRB.

Coronavirus Job Retention Scheme: updated HMRC guidance

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

CJRS: step by step guide for employers.

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

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

Steps to take before calculating your claim using the CJRS.

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

Calculate how much you can claim using the CJRS.

Claim for wages through the CJRS.

The information has been updated with the changes to the scheme. 30 November 2020 is the last day employers can submit or change claims for periods ending on or before 31 October 2020.

EU non-cooperative list: Anguilla, Barbados added, Cayman, Oman removed

The Council of the European Union has added Anguilla and Barbados to the EU list of non-cooperative jurisdictions for tax purposes. Cayman Islands and Oman were removed from the list after having implemented reforms to improve their tax policy framework. In total, there are now twelve jurisdictions on the list of non-cooperative jurisdictions: American Samoa, Anguilla, Barbados, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu. The Council’s conclusions also contain a document (Annex II) identifying non-EU jurisdictions which do not yet comply with all international tax standards, but have provided sufficient undertakings to reform their tax policies. As regards Annex II, due to the COVID-19 pandemic, the Council decided to extend several deadlines for these commitments. It has also decided to remove Bosnia and Herzegovina and Mongolia from Annex II after those countries deposited the instruments of ratification of the OECD Convention on Mutual Administrative Assistance in Tax Matters.

Treasury Committee chair letter to Chancellor on delayed Budget

HM Treasury recently confirmed that the next Budget will be deferred to spring 2021. The Chair of the Commons Treasury Committee Mel Stride has written to the Chancellor asking him to set out the actions that he will take to mitigate the effects of the delayed Budget on the devolved administrations, including details of any consultation that may have taken place before the decision was made.

Update on freeports proposals

The government has published an update on its plans to create a number of freeports across the UK. A freeport is a secured area inside a country’s land border, but where different customs rules apply. Additional elements such as tax reliefs and regulatory relaxations may be included. Sea, air and rail ports in England will be invited to bid for freeport status before the end of the year. The aim is for the first of these to be open for business in 2021. Benefits will include: streamlined planning processes; reliefs for business rates, stamp duty land tax, and employers’ NIC; and simplified customs procedures and duty suspensions on goods. The House of Commons Library has published a briefing on the proposals.

Forthcoming Dbriefs

The next Dbriefs webcast is on Tuesday 13 October 2020, 12.00 BST/13.00 CEST. The title is UK Tax Monthly Update from our UK Tax Focus series, hosted by Martin Walker. Our panel will discuss updates on corporate tax, employment tax, and indirect tax. To register for the webcast, click here. On Wednesday 14 October 2020, 12.00 BST/13.00 CEST there is a webcast Notification Of Uncertain Tax Positions: What Does The Future Hold? hosted by Matt Batham. Our panel will discuss HMRC’s proposal to introduce a requirement to report uncertain tax positions, and what this could mean for your organisation. To register for the webcast, click here.

OECD update on international tax negotiations, Tax Talk Monday 12 October 2020

The OECD will publish an update on the negotiations to reach a solution to the tax challenges arising from the digitalisation of the economy on Monday 12 October 2020 at 10:00 BST/11:00 CEST. It will be webcast live here. There is no need to register.

The OECD will also hold the next in its series of Tax Talks webcasts on Monday 12 October 2020 at 14:00 BST/15:00 CEST. Experts from the OECD's Centre for Tax Policy and Administration will deliver an update on the OECD's tax work.  

Revenue and Customs Brief 15(2020): import VAT recovery by non-owners

HMRC have issued Revenue and Customs Brief 15(2020) confirming their policy (as previously announced in Revenue and Customs Brief 2(2019) in April 2019) that import VAT can only be recovered by owners of imported goods. The new Revenue and Customs Brief acknowledges some of the practical points that were raised in response to this change in policy. For example, finance houses rather than their customers are, in HMRC’s view, responsible for VAT when leased assets are imported. Retailers should not use their own duty deferment account if goods belong to their suppliers when they leave a customs warehouse. Affected businesses should consider whether customs special procedures could soften the impact of this policy change, but neither they, nor postponed VAT accounting, (which HMRC also mention) are likely to provide a complete solution. With the end of the transition period fast approaching, and the number of imports set to markedly increase, any business involved in overseas trade should review its supply chains to establish whether it is accounting for VAT in line with HMRC’s policy. (Contact: Andrew Clarke).

VAT: United Biscuits: no insurance exemption for pension fund management

In an insurance contract the insurer, in return for a premium, undertakes to indemnify the insured in the event of a particular risk occurring. The CJEU has previously noted that there is no particular reason for defining insurance differently for VAT and for insurance law purposes. UK pension funds have therefore been arguing that pension fund management should have been exempt from VAT, as HMRC accepted (until April 2019) that such services were exempt when provided by insurers whose services were treated as a regulated insurance activity in the UK. In United Biscuits the CJEU has rejected this argument. The fund managers did not indemnify the pension fund against any risk, and the Insurance Directives could not be applied to override this fundamental requirement for VAT exemption. In any event, the First Life Assurance Directive never intended pension fund management (an ‘operation’ which is ancillary to insurance, rather than ‘insurance’ in its own right) to be regarded as insurance. Based on the CJEU’s judgment, there is no scope for exempting the management of defined benefit pension schemes. (Contact: Judith Lesar).