12 July 2024
Government updates
Further to the UK general election last week and the resulting change in government, the new cabinet and ministerial appointments at HM Treasury have been announced:
The new parliamentary session will begin formally on Wednesday 17 July 2024 with the State Opening of Parliament. This will include the King’s Speech in which the new government will set out its general legislative agenda for the year ahead. Meanwhile, the new Chancellor has confirmed that she will announce the date of the government’s first Budget, to be held this autumn, before the House of Commons rises for its summer recess on Tuesday 30 July 2024.
HMRC publish updated version of treaty claim form for REITs
On 5 July 2024, HMRC published an updated version of Form-REIT DT-Company. The form is used by companies to claim any treaty entitlement to repayment of UK income tax amounts withheld on property income dividends paid by UK Real Estate Investment Trusts (REITs). HMRC’s accompanying notes to the form have also been updated and are now published as a separate document.
OECD publishes consultation on draft Pillar Two return XML schema and user guide
On 10 July 2024, the OECD published a consultation document containing a draft XML schema and accompanying user guide for the Pillar Two global minimum tax information return (GIR). The schema is designed to facilitate electronic domestic information return filings, and to be the technical format for exchanging information return data between relevant tax authorities. Such exchanges will occur under a (yet-to-be-published) Multilateral Competent Authority Agreement on the Exchange of GloBE Information Returns (MCAA GIR) or another qualifying competent authority agreement. The user guide provides information on specific data elements and any ‘attributes’ that describe each data element. The OECD is inviting comments on the draft schema and user guide by 19 August 2024. For more details see Deloitte’s article here.
Pillar Two and Belgium – mandatory registration deadline deferred
The Belgian tax authorities have issued an update regarding the obligation of groups within the scope of the Pillar Two global minimum tax rules with a presence in Belgium to comply with Belgium’s Pillar Two registration requirements. The new update announces that, for groups that do not need to make Pillar Two tax prepayments in Belgium during 2024, the deadline has been extended to 16 September 2024. For in-scope groups that decide to make prepayments in 2024, the registration deadline remains, in practice, 15 July 2024. Prepayments are not mandatory under Belgian’s Pillar Two rules, but if they are not made, any eventual top-up tax amounts due may be subject to an increase of 9%. Please see Deloitte Belgium’s alert for further details.
Bottled Science: First-tier Tribunal holds collagen drink product is not food for VAT purposes
Bottled Science Limited sold ‘Skinade’, marketed as “a uniquely formulated drink using advanced technology and high-quality ingredients for your skin”. The company made a claim for overpaid output VAT of £1,250,840, on the basis that Skinade should be zero-rated as food. The First-tier Tribunal (FTT) has ruled that, for VAT purposes, Skinade was not food. Factors reviewed by the FTT but considered not to be conclusive included whether Skinade was a beauty product, its name, its nutritional value, its palatability and taste, and the application of food safety regulations. The factor weighing most heavily on the FTT was the way in which Skinade was packaged and marketed. The packaging of the product was “quite clinical”, and “its overall presentation and route to market are very different from what one would expect of a foodstuff”. The FTT considered that “a well-informed, broad-minded VAT payer” would recognise that, although Skinade had some nutritional value, it was not consumed to keep the body alive or able to function and develop, and it was distributed and marketed differently from what would be expected for food. In conclusion, while acknowledging that the issue was not easy to resolve, the FTT considered that Skinade was not food, and did not qualify for zero-rating. (Contact: Donna Baker)
EMEA Dbriefs webcasts
The next EMEA Dbriefs tax webcast will be on Wednesday 17 July 2024 at 12:00 BST/13:00 CEST. Navigating the global talent landscape – the payroll perspective, hosted by Louise Wilson, will be from our Global Employer Services A world of talent series. Our panel will consider current payroll compliance and regulatory pain points, how technology is shaping payroll delivery, and how businesses can leverage connections between payroll and wider corporate functions.
On Tuesday 23 July 2024, at 14:00 BST/15:00 CEST there will be an EMEA Dbriefs webcast US 2024 Election forecast – What to expect. Hosted by Richard Williams, our presenters will examine the upcoming elections in the United States this November and will discuss what kinds of tax legislative changes may be possible in a divided government this year, as well as looking ahead to tax policy decisions US lawmakers will face in 2025.