17 January 2025
Finance Bill – Committee Stages
Finance Bill 2024-25 began its Committee Stages last month. The Bill’s provisions on capital gains tax, oil and gas taxation, VAT on private school fees, and stamp duty land tax were considered by MPs sitting in a Committee of the Whole House in December and were approved by MPs unamended.
The Bill’s other clauses and schedules will be considered by MPs in a separate Public Bill Committee. The first sitting of the Committee is expected to take place on 28 January 2025. On 19 December 2024, the government tabled 14 amendments and one new clause for the Public Bill Committee stage:
· Amendments ‘Gov 1’ to ‘Gov 14’ would make changes to Schedule 4 of the Finance Bill on the Pillar Two global minimum tax rules. HMRC have re-published their explanatory notes to Schedule 4 updated for the changes proposed.
· New Clause 1 would provide for an increase in the rate of vehicle excise duty applicable to haulage vehicles from April 2025. HMRC have published separate explanatory notes.
Spring Forecast date announced – 26 March 2025
On 16 December 2024, HM Treasury issued a press release, and the Chancellor issued a written ministerial statement, confirming that the Office for Budget Responsibility (OBR) has been commissioned to prepare its next economic and fiscal forecast for publication on Wednesday 26 March 2025. The Chancellor will respond with a parliamentary statement on the same day.
OECD Inclusive Framework Pillar Two updates
On 15 January 2025, the OECD/G20 Inclusive Framework published a number of documents related to the Pillar Two global minimum tax rules:
· An updated version of the Pillar Two information return alongside: additional agreed administrative guidance on the basis for completing information returns; new annexes on notification templates and transitional penalty relief; a multilateral agreement for the exchange of information returns between tax authorities; and an agreed XML schema and user guide for the filing and exchange of information returns digitally. For further details, please see our alert.
· A new central record of countries’ domestic Pillar Two legislation with transitional qualified status, and further administrative guidance in respect of deferred tax assets arising from tax benefits provided by governments. For further details, please see our separate alert.
OECD Inclusive Framework releases Pillar One Amount B factsheet and pricing tool
On 19 December 2024, the OECD/G20 Inclusive Framework on BEPS published a factsheet and a pricing automation tool on Amount B. Amount B is a new approach for transfer pricing baseline marketing and distribution activities that seeks to streamline and simplify the application of the arm’s length principle. All businesses, regardless of size, are potentially within the scope of Amount B if they carry out suitable distribution activities. Countries can choose to adopt Amount B from 1 January 2025. For further details please see our Alert.
UK-Ecuador double tax treaty now in force
The double taxation convention and protocol signed by the UK and Ecuador in August 2024 entered into force on 19 December 2024 following the completion of ratification procedures by both countries. This is the first comprehensive double tax treaty between the UK and Ecuador. According to HMRC, and in accordance with the timings set out in Article 29 of the convention, the agreement took effect in the UK from 1 January 2025 for taxes withheld at source, and will take effect from 1 April 2025 for corporation tax purposes and from 6 April 2025 for income tax and capital gains tax purposes. The agreement took effect in Ecuador from 1 January 2025 for taxes on income.
HMRC launch research and development tax relief voluntary disclosure service
On 31 December 2024, HMRC published details of a new research and development-specific voluntary disclosure service. The new guidance page, Tell HMRC if you've claimed too much Research and Development (R&D) tax relief, sets out how the service can be used by certain companies that have overclaimed R&D tax relief in the past and are no longer in time to amend returns, to disclose the issue to HMRC voluntarily and repay anything owed. The disclosure facility uses an online form and requires a company to upload details and calculations of the R&D tax relief overclaimed, together with calculations of interest and penalties due. The disclosure must also include a company’s ‘letter of offer’ to form part of a contractual settlement with HMRC. Within 30 calendar days of submission of the disclosure, HMRC will either issue an acceptance, state that they cannot accept the offer, or will ask for further information.
Australian public country-by-country reporting rules enacted
On 10 December 2024, Australia enacted new public country-by-country (CbC) reporting rules. The rules will apply to large multinational groups (with global annual turnover of AUD 1 billion or more – approximately EUR 600 million at today’s rates) with a non-small presence in Australia. The rules will require the annual reporting of certain tax and other information on a jurisdiction-by-jurisdiction basis. Data for Australia and specified countries will be reported individually, with data for the rest of the world aggregated and reported together. The rules will apply for businesses’ reporting periods commencing on or after 1 July 2024, with in-scope groups being required to report their information to the Australian Tax Office within 12 months of their year-end for publication. See Deloitte Australia’s alert for further details.
Digital platform reporting – Registration open
With effect from 1 January 2024, the UK implemented the OECD’s model reporting rules for digital platform operators in the UK. The rules require in-scope UK digital platforms to collect information, and report to HMRC annually, on the income of sellers (in the UK and partner jurisdictions) using their platforms to provide personal services, sell tangible goods, and rent out immoveable property or transport. The first reporting of data is due by 31 January 2025. On 30 December 2024, HMRC opened the registration for digital platform reporting. HMRC also issued guidance on the registration process and guidance on managing digital platform reporting.
UK accedes to CPTPP
The UK acceded to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 15 December 2024, and the Agreement came into force on that date with Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam. The Agreement entered into force with Australia on 24 December 2024. For an assessment of CPTPP’s content and potential implications for UK businesses, please see this Deloitte article, from when the UK signed the Agreement in 2023.
EMEA Dbriefs webcasts
We have two Dbriefs webcasts over the next month: Talent has no boundaries: challenges and solutions for retaining a global workforce (21 January) and Legislative forces for change impacting global talent and mobility (28 January). If you missed it, you can also watch on demand yesterday’s webcast UK Tax Update January (16 January). Please visit our Dbriefs website for more information, and to view any other recent webcasts on demand.