Indirect tax news from the past week
25/11/2024
Scottish aggregates tax – Act receives Royal assent
The Aggregates Tax and Devolved Taxes Administration (Scotland) Act 2024 (the Act) received Royal assent on 12 November 2024. The Scotland Act 2016 gave the Scottish Parliament the power to introduce a devolved aggregates tax in Scotland, to replace the UK aggregates levy. The Act implements this power, and creates the Scottish aggregates tax, to be administered by Revenue Scotland. The Act sets out the scope of the tax, including exemptions, who should pay the tax, and how the tax should be calculated. The Act also provides for the powers of the Scottish Ministers to set the rate of tax, and includes provisions for penalties and administration. The Scottish government has stated that the Scottish aggregates tax is expected to come into effect on 1 April 2026, and that Revenue Scotland will engage with stakeholders in the development of return and payment processes. (Contact: Jen Donnachie)
Amendment to penalties for failure to pay VAT – SI
The Penalties for Failure to Pay Tax (Schedule 26 to the Finance Act 2021) (Assessments) Regulations 2024 (the Regulations) will come into force on 4 December 2024. The Regulations relate to the penalties rules for late payment of specified taxes, including VAT, that have applied since 1 January 2023. The rules as enacted allowed HMRC to assess a second late payment penalty (where tax is outstanding 31 days after the payment due date) once the amount of outstanding tax was paid in full, within a two-year assessment time limit. Under the Regulations, HMRC will additionally be able to assess a second late payment penalty where the outstanding tax has not been paid, towards the end of the two-year time limit. The only change from the draft regulations that were published for consultation in May 2024 was that having a time to pay agreement in place would no longer preclude HMRC from imposing the second late payment penalty. (Contact: Adam Routledge)
OECD report on greenhouse gas emissions pricing
The OECD has published the latest edition of its annual report on Pricing Greenhouse Gas Emissions 2024: Gearing Up to Bring Emissions Down. The report covers 79 countries, collectively emitting approximately 82% of global greenhouse gas (GHG) emissions. The report tracks the evolution between 2021 and 2023 of carbon taxes, fuel and energy excise taxes, emissions trading systems, and subsidies that lower pre-tax prices on emissions or energy products. Its findings include that the coverage of GHG emissions by pricing systems stalled at 42% between 2021 and 2023, although some governments are introducing new carbon pricing instruments or expanding existing instruments. According to the OECD announcement, “[r]educed energy excise tax rates in many countries in response to the recent energy crisis led to lower implicit carbon prices in 2023, but the development of new emissions trading schemes should lead to a greater share of emissions being priced in the next five years.” The country summary for the UK states that “in total, 52.5% of GHG emissions in the United Kingdom are subject to a positive Net Effective Carbon Rate (ECR) in 2023.” (Contact: Zoe Hawes)
This week’s CJEU VAT calendar
On 28 November, the CJEU will deliver its judgment in rhtb on VAT amounts due for unperformed services.
Dbriefs webcast
On 28 November at 12.00, the webcast Digitalisation of supply chains – how do tax and legal play their part? will be hosted by Gareth Pritchard. Our panel will discuss themes and trends in digitalisation from a supply chain perspective, and the importance and role of tax and legal teams in supply chain digitalisation projects.