Weekly VAT News

Indirect tax news from the past week

09/08/2021

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Changes to IPT legislation – Location of risk rules

The draft clauses for the Finance Bill published on ‘L day’ (20 July) included changes to Insurance Premium Tax legislation. UK IPT is due if an insurance contract covers risks located in the UK, unless the risks are specifically exempt. Current UK location of risk rules are derived (by means of statutory instruments) from EU Directives. The new legislation seeks to incorporate these rules within UK IPT law by amending the primary legislation, Finance Act 1994. Although HMRC reported that these changes should have no substantive impact, the current draft legislation does not exactly mirror the EU wording. The principal differences are in connection with the location of moveable property and where the location of risk depends on the location of the policyholder. If carried forward into the final legislation, in certain circumstances these variations could give rise to a different IPT treatment than would previously have been the case. It is not clear whether such a change in treatment is intended, and we understand that there will be industry discussions with HMRC on this subject. (Contact: Nick Standford

Option to tax land and buildings – Changes to notification

HMRC have confirmed that the temporary extension to the time limit for notifying HMRC of an option to tax land and buildings to 90 days has now ended. For decisions to opt to tax made from 1 August 2021, taxpayers are again required to notify HMRC within 30 days of the decision to opt to tax. HMRC have also confirmed that the ability to notify HMRC of an option to tax by way of electronic signature, another COVID-19-related measure, has been made permanent. The relevant form can be submitted with an electronic signature, provided there is evidence that the signature is from a person authorised to make the option on behalf of the business, and if an agent is notifying an option to tax on behalf of a business, the agent has the necessary authority to use the electronic signature. Notice 742A: Opting to tax land and buildings has been updated accordingly. (Contact: Ben Tennant

CHIEF to close on 31 March 2023

HMRC have announced that the Customs Declaration Service (CDS) will serve as the UK’s single customs platform from 31 March 2023. The Customs Handling of Import and Export Freight (CHIEF) system will close on that date, and from then, all businesses will need to declare goods through the CDS. Services on CHIEF will be withdrawn in two stages: on 30 September 2022 for import declarations and 31 March 2023 for export declarations. (Contact: Caroline Barraclough

Reporting rules for digital platforms – UK consultation

Following the announcement at Spring Budget 2021, the Government is consulting on the implementation of the OECD’s Model Reporting Rules for Digital Platforms. From January 2023, at the earliest, these rules will require platforms to report information about the income of sellers providing goods and services to help sellers get their tax right and to enable HMRC to detect and tackle non-compliance. The consultation seeks views on the Government’s implementation, including on optional elements of the rules. Comments are invited by 22 October 2021. (Contact: Abi Briggs

Dbriefs webcasts

Our programme of Dbriefs webcasts is taking a break over the summer. The programme will recommence in September. You can catch up on any titles you may have missed, including: Taking Action On Tax Evasion: Corporate Criminal Offence And Beyond and the SAP S/4HANA series. For further details of our webcasts available to view on demand see here.