Indirect tax news from the past week
03/02/2025
Deposit return scheme for drinks containers – regulations
The Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations 2025 have been made to establish a Deposit Return Scheme (DRS) for drinks containers in England and Northern Ireland. Under the DRS, a person supplied with a drink in an in-scope container will pay a deposit to the supplier of the container, and a person returning the container to a designated return point will be entitled to redeem that deposit. The DRS will commence on 1 October 2027. The regulations set out: the scope of the DRS; retailer, drinks producer and supplier roles; the functions of the deposit management organisation (the administrator who will operate the scheme); and monitoring, compliance and enforcement measures. The regulations’ explanatory memorandum provides that further legislation will be made to implement the DRS, including the VAT treatment of deposits. Draft regulations for the VAT provisions for DRSs were issued for consultation in early 2023, however no response has been issued to date. In a policy paper issued in April 2024, the UK government; the Department of Agriculture, Environment and Rural Affairs in Northern Ireland; the Scottish Government; and the Welsh Government stated that whilst there will be three legally distinct DRSs in the UK (in England and Northern Ireland, Wales, and Scotland), the schemes will be aligned, and will be “as interoperable and as simple as possible”. In Scotland, the legal framework for a DRS is in place, and further amending legislation will be made to bring the Scottish scheme into effect. (Contact: Callum Lomas-Harrison)
Corporate Criminal Offences – HMRC update
HMRC have updated their statistics on compliance activities in relation to Corporate Criminal Offences (CCO) for the failure to prevent the facilitation of tax evasion. As of 31 December 2024, HMRC had 11 live CCO investigations, with no charging decisions yet made, and a further 28 identified cases were under review as to whether they should proceed to an investigation. The cases identified span 10 business sectors, including software providers, labour provision, accountancy and legal services, and transport. To date, HMRC have reviewed and rejected an additional 114 cases. HMRC note that some of their investigations have led to satisfactory explanations that did not establish deliberate facilitation but have led to other tax and regulatory offences being pursued. (Contact: Adam Routledge)
Scottish aggregates tax administration regulations – consultation
The Aggregates Tax and Devolved Taxes Administration (Scotland) Act 2024 provided for the new, devolved, Scottish aggregates tax (SAT) to replace the UK aggregates levy, with an intended application date of 1 April 2026. The Scottish government has published a consultation on the regulations necessary to implement the SAT. The consultation will close on 21 March 2025. There will be a separate process to seek views on the taxation of aggregate moved between Scotland and the rest of the UK, because of the Scottish government’s ongoing engagement with the UK government and industry on the issue. (Contact: Jennifer Donnachie)