Legal News

Tax weekly highlights—22 July 2021

Published on: 22 July 2021
Published by: LexisPSL
  • Tax weekly highlights—22 July 2021
  • In this issue:
  • Finance Bill 2022
  • Government publishes draft provisions for Finance Bill 2022
  • ATT calls for delay to change in how profits are taxed
  • VAT
  • Court of Appeal rules that third-party loan servicing is liable to VAT (Target Group Ltd v HMRC)
  • Taxes management and litigation
  • Taxpayers had no right to attend third party information notice application hearing (Kandore v HMRC)
  • HMRC has published Agent Update issue 86 on developments for tax agents and advisers
  • More...

Article summary

This week’s edition of Tax highlights includes (1) publication of draft provisions for Finance Bill 2022 and accompanying documents, (2) the Court of Appeal’s judgment in Target that third-party loan servicing is liable to VAT; (3) the Court of Appeal’s judgment in Kandore that taxpayers had no right to attend a third party information notice application hearing and (4) HMRC updating the GAAR guidance. or take a trial to read the full analysis.

Tax weekly highlights—22 July 2021


In this issue:

Finance Bill 2022

VAT

Taxes management and litigation

Coronavirus (COVID-19)

Anti-avoidance

Stamp taxes

Energy and environment

Daily and weekly news alerts

New and updated content

Dates for your diary

Trackers

Useful information


Finance Bill 2022

Government publishes draft provisions for Finance Bill 2022

The government has published draft provisions to be included in Finance Bill 2022 (FB 2022, also known as Finance Bill 2021–22) together with accompanying explanatory notes, other supporting documents and consultations. The consultation on the draft legislation will run until 14 September 2021. FB 2022 is expected to be introduced to Parliament in autumn 2021 (after the Autumn Budget) and to receive Royal Assent in spring 2022.

The majority of the provisions were previously announced, including the highly anticipated draft legislation relating to the notification of uncertain tax treatments, and clauses concerning the tax treatment of asset holding companies in alternative fund structures. There were also some new announcements relating to basis period reform for income tax and identifying where insurance premium tax risks are situated.

For analysis of the key business tax provisions, see News Analysis: Legislation Day: Draft Finance Bill 2022—Tax analysis.

All of our FB 2022 analysis can be found in the subtopic: 2021–22—Budget and Finance Bill.

For a clause by clause guide to FB 2022, which will be updated as the Bill is introduced to, and progresses through, Parliament, see: Tax—Finance Bill 2022 tracker, and for comprehensive tracking across current (as well as recently completed) consultations with links to relevant documents and analysis, see: Tax—consultation and legislation tracker.

See: Finance Bill 2021–22.

20 July 2021


ATT calls for delay to change in how profits are taxed

Responding to the UK government proposal included in the ‘Legislation Day’ draft legislation on 20 July 2021, the Association of Taxation Technicians (ATT) broadly supports the intention to tax unincorporated businesses on profits arising in the tax year instead of the current rule where businesses pay tax on the profits earned in their accounting year which ends in that tax year.

However, the ATT is calling for a delay to this major change, as well as appealing for extension of the consultation period and a clear roadmap leading up to the introduction of the basis period proposals.

See: Call to delay major change to how profits are taxed.

20 July 2021


VAT

Court of Appeal rules that third-party loan servicing is liable to VAT (Target Group Ltd v HMRC)

In Target Group Ltd v HMRC [2021] EWCA Civ 1043, the Court of Appeal dismissed the taxpayer's appeal, finding that loan administration services were not within the VAT exemption for financial services.

For more information on this Court of Appeal decision, see News Analysis: Court of Appeal rules that third-party loan servicing is liable to VAT (Target Group Ltd v HMRC).

For more information on the VAT exemption for financial services, see Practice Note: Exemption from VAT for intermediary financial services.

Decision date: 12 July 2021


Taxes management and litigation

Taxpayers had no right to attend third party information notice application hearing (Kandore v HMRC)

In Kandore v HMRC [2021] EWCA Civ 1082, the Court of Appeal rejected the taxpayer’s argument that the principle of access to justice required an inter partes procedure. The Court of Appeal upheld the decision of the Upper Tribunal (UT) that the First-tier Tax Tribunal (FTT) does not have the power to hear applications from HMRC for approval of a third party information notice as an inter partes hearing, ie including the taxpayer or the third parties who will be subject to the notice. The Court also upheld the decision of the UT not to require the application to be heard in public.

For more information on this Court of Appeal decision, see News Analysis: Taxpayers had no right to attend third party information notice application hearing (Kandore v HMRC).

For more information on information notices, see Practice Note: HMRC information powers.

Decision date: 16 July 2021


HMRC has published Agent Update issue 86 on developments for tax agents and advisers

Issue 86 brings together the latest technical updates and reminders, including the following:

• the changes to the CJRS grants from August 2021 and the use of updated templates for bulk claims

• corporate interest restriction return—HMRC has developed an application programming interface (API) for submitting interest restriction returns and for reporting company appointments and revocations, which will be available for use from mid to late July 2021

• noting that the VAT deferral scheme is now closed. Customers with outstanding VAT debt can seek help by searching ‘if you cannot pay your tax bill on time’ on gov.uk. A 5% penalty and interest may be charged to customers if they did not pay in full, join the VAT new payment scheme online by 21 June 2021 or make an arrangement to pay by 30 June 2021

• online print and post VAT1 for manual applications for VAT registration—introduction of the new online print and post version

• off-payroll working rules—additional resources added on how changes to the off-payroll working rules may affect businesses that engage with contractors from April 2021, and

• a list of consultations that are now closed

See: Agent update: issue 86.

14 July 2021


Law Society responds to call for evidence on timely tax payment

The Law Society has responded to HMRC’s call for evidence on timely payment for income tax self-assessment and corporation tax for small companies.

The call for evidence sought views on the proposal to increase the frequency and accelerate the timing of calculation and payment of income tax (outside of the existing regular payment regimes such as PAYE) and corporation tax for smaller companies.

The Law Society’s response is focused particularly on the impacts of such a proposal on partnerships and LLPs because many law firms are established this way. The Law Society highlights additional compliance and complexity arising from issues such as working capital funding, allocation of profits and charges, partnership charges and personal allowances and reliefs.

The Law Society recommends that HMRC considers the above impacts on partnerships and LLPs for any further policy developments in this area.

Timely payment call for evidence—Law Society response.

19 July 2021


ATT responds to call for evidence on timely tax payment

The ATT considers that more timely tax payment should be offered on a voluntary basis only, and not be made compulsory because bringing forward tax payments may have a negative impact on business cash flow.

The ATT recommends HMRC better promotes its largely unknown and unused budget payment plan before embarking on a wholesale change to the tax system to achieve more timely payments. Individual taxpayers can set up a budget payment plan with HMRC if they want to put aside money to cover their next income tax self-assessment bill.

See: More frequent tax payment proposal for small businesses worries ATT.

15 July 2021


CIOT responds to call for evidence on tax administration framework

The Chartered Institute of Taxation (CIOT) has published its response to HMRC’s call for evidence on the tax administration framework: supporting a 21st century system.

In summary, the CIOT is supportive of the review of the UK tax administration framework, although it would have preferred greater clarity around the long-term end goal in order that a clear roadmap could be developed. Its responses include:

• it being essential that the eventual outcome results in the replacement of the Taxes Management Act 1970 (TMA 1970) with a new Taxes Management Act for all administrative legislation that is easier to find and follow for HMRC, taxpayers and professional tax advisers, and

• that there should be a single system for taxpayers to use to register and deregister for different taxes, to track the progress of applications and appoint one or more agents

See: CIOT’s response to Tax Administration Framework Review.

15 July 2021


OECD publishes a note on sustainable remote working by tax authorities after the pandemic

The coronavirus pandemic saw a significant shift among most tax administrations to remote working by many of their staff and many are examining the options for some degree of continued remote working for employees on a longer-term basis.

This note published by the OECD explores some of the key issues that tax administrations may wish to consider in designing remote working policies, processes and guidance to help ensure that longer-term remote working is sustainable for both the tax administration as a whole as well as individual employees. It does not provide recommendations for particular measures as the circumstances of each administration will vary. Instead, the intention is that it will help to stimulate thinking in tax administrations as to where changes or additions to existing strategies could be needed, which is brought to life through examples of actions taken or planned by Forum on Tax Administration members.

See: Tax Administration: Towards Sustainable Remote Working in a Post-COVID-19 Environment.

19 July 2021


Coronavirus (COVID-19)

HMRC has updated its CJRS guidance

HMRC has updated its guidance with information about the changes to the Coronavirus Job Retention Scheme (CJRS) from 1 August 2021 and claims for furlough days in July 2021.

From 1 August 2021, the government will pay 60% of wages up to a maximum cap of £1,875 for the hours the employee is on furlough.

For claims from 1 July 2021, employers will top up employees’ wages to make sure they receive 80% of wages (up to £2,500) in total for the hours the employee is on furlough. The caps are proportional to the hours not worked.

Claims for furlough days in July 2021 must be made by 16 August 2021.

For more information on the CJRS generally, see Practice Note: Coronavirus job retention scheme.

See: Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme, Find examples to help you calculate your employees' wages, Claim for wages through the Coronavirus Job Retention Scheme, Check if your employer can use the Coronavirus Job Retention Scheme and Calculate how much you can claim using the Coronavirus Job Retention Scheme.

15 July 2021


Updated guidance on NICs for UK workers temporarily working in the EEA or Switzerland or the other way around

HMRC has updated its guidance for citizens of the EU, Iceland, Liechtenstein, Norway and Switzerland working in the UK, as well as UK citizens working in any of the aforementioned areas, on where they need to make their social security contributions (which, in the UK are National Insurance contributions (NICs)). The updates reflect the rules for workers who normally work in the UK or the EU but whose work location has temporarily changed as a result of travel restrictions put in place as a result of the coronavirus pandemic. HMRC has highlighted that under these circumstances, it will be able to consider individual circumstances to ascertain where these payments need to be made.

If individuals need proof that they have to pay UK NICs, they should apply for a certificate or document and include details of the coronavirus restrictions.

See: National Insurance for workers from the UK working in the EEA or Switzerland and Social security contributions for workers coming to the UK from the EEA or Switzerland.

16 July 2021


HMRC outlines its approach to dealing with tax debt for those concerned about their ability to pay their tax due

As the UK emerges from the coronavirus pandemic and economic activity resumes, many customers are worried as the financial support schemes start to wind down. HMRC wants to work with customers to find a way to support them in an affordable way, such as a payment plan (ie time to pay), where customers pay what they owe in affordable instalments.

To this end, HMRC has published a policy paper that sets out:

• what HMRC expects from customers using the various government lending schemes available, in relation to servicing tax debts, and

• HMRC’s approach to company voluntary arrangements

See: Tax debt, government lending schemes and Company Voluntary Arrangements (CVAs).

15 July 2021


Anti-avoidance

HMRC updates GAAR guidance

HMRC has updated parts A–C (covering the purpose and status of the GAAR, what it aims to achieve and specific points) and E (covering the GAAR procedure) of the GAAR guidance with effect from 16 July 2021. The examples in Part D have not been updated.

The main update is the addition of a new section E3.26 in Part E of the GAAR guidance to deal with the changes introduced by the Finance Act 2021 (FA 2021) to apply the GAAR procedure to partnerships consistently with how the tax enquiry and assessment process works for partnership returns.

The partnership GAAR provisions apply to all partnership returns made under TMA 1970, s 12AA or Sch A1 Pt 2, para 10, whether they are submitted before or on or after 10 June 2021 (ie Royal Assent to FA 2021). They do not apply where a partnership submits other types of returns (eg SDLT returns), in which case the normal non-partnership GAAR procedures apply.

The key general update (that applies to all taxpayers, whether partners in partnerships or not) reflects the FA 2021 change to the meaning of the closed period (the period during which no GAAR-related adjustments can be made) in cases where a notice of binding has been given. It now starts from the 31st day after the giving of the notice and ends immediately before the final decision notice is given, just like it always did for pooling notices. This is why para E3.22.3 has been amended to include a notice of binding and para E3.22.5 has been deleted.

Where the partnership GAAR provisions introduced by FA 2021 apply, main points covered in para E3.26 of the guidance include:

• any GAAR adjustments in respect of amounts included on partnership returns must be made at partnership level even though any tax advantage arises to one or more partners (referred to as ‘relevant partners’)—the adjustments made at partnership level flow through to the relevant partners through the partnership assessing framework

• the responsible partner (ie the partner that submitted the return or their successor) will be the recipient of, and have responsibility for dealing with, a GAAR notice (ie a protective GAAR notice, a notice of proposed counteraction, a pooling notice or a notice of binding) even if the responsible partner does not get a tax advantage from the tax arrangements

• any final GAAR counteraction notice will also be given to the responsible partner

• partnership arrangements can be pooled or bound to arrangements undertaken by other types of entity (not just partnerships)

• in order to stop the GAAR process, corrective action can be taken by the responsible partner, in which case it applies to all the partners, or by each relevant partner—if only some of the relevant partners take corrective action, the GAAR process continues

• only the responsible partner has the right to make representations

• if no appeal is made against the making of the adjustments specified in a Schedule 43D notice (or if an appeal is withdrawn or settled by agreement), the notice is treated as if it was a final GAAR counteraction notice

• although the GAAR penalty applies to each relevant partner (not to the partnership) in respect of the value of that partner’s tax advantage counteracted under the GAAR, any appeals against the GAAR penalty must be made by the responsible partner

16 July 2021


HMRC updates compliance factsheet on penalties for enablers of tax avoidance

HMRC has updated its factsheet on the penalties it may charge for enablers of tax avoidance which are subsequently defeated to reflect changes made by FA 2021.

See: Compliance checks: penalties for enablers of defeated tax avoidance—CC/FS43.

20 July 2021


Stamp taxes

HMRC updates guidance on intra-group relief from stamp duty

HMRC has updated its guidance on intra-group relief from stamp duty.

Updates have been made to:

• section 4.2 to provide a postal address for those who cannot submit their claim electronically (normally, claims should be submitted by email, attaching the completed and signed instrument of transfer and letter of claim as well as supporting evidence), and

• section 4.5 to provide further examples of common reasons why claims are queried or rejected

See: Relief from Stamp Duty when instruments effect intra-group transfers of stock or marketable securities.

16 July 2021


Energy and environment

European Commission adopts green deal proposals

On 14 July, the European Commission adopted a set of proposals to make the EU's climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. It states that achieving these emission reductions in the next decade is crucial to Europe becoming the world's first climate-neutral continent by 2050 and making the European Green Deal a reality.

See: A European Green Deal.

14 July 2021


Daily and weekly news alerts

Did you know that you can set up your own personal alerts to let you receive all of our news stories on either a daily or a weekly basis? Go to your ‘News’ tab and amend your personal settings to subscribe to regular updates by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.


New and updated content

News Analysis

NICs on LLP's LTIP bonus scheme: In HMRC v Charles Tyrwhitt LLP, the UT upheld the decision of the FTT that bonus payments received by members of an LLP were earnings derived from employment (and therefore subject to Class 1 NICs), because the bonuses were paid in respect of earlier periods when the individuals were employees of the LLP and the source of those payments did not change because of the individuals becoming members of the LLP before the conditions for making the bonus payments were met and the payments themselves made. See News Analysis: Bonus payments received by LLP members were earnings from previous employment (Charles Tyrwhitt LLP v HMRC).

Insolvency and validity of closure notice: HMRC challenged the rejection of its proof of debt in the bankruptcy of the late Mr Deville, who had received a payment from HMRC of around £5m to which he was not entitled before his death. The trustee in bankruptcy had taken leading tax counsel’s advice that the closure notice relied upon by HMRC was subject to a technical defect, and as a result HMRC’s proof was rejected. The court upheld HMRC’s challenge on multiple grounds, holding that there was no defect; that if there was a defect it was cured by TMA 1970, s 114; and the principle in Ex p James (1874) LR 9 Ch App 609 would not allow the trustee to reject the proof, creating a windfall of £5m for Mr Deville’s estate at the expense of the revenue. Written by Matthew Parfitt, barrister at Erskine Chambers. See News Analysis: Court allows HMRC’s challenge to rejection of its proof of debt (HMRC v Sanders, Re Deville (deceased) (2021)).


Updated Practice Notes

● Company migration or corporate inversion—how to change tax residence in practice

● EIS—conditions for relief: individual investor conditions

● HMRC information powers

● Self-Employment Income Support Scheme

● Tax—consultation and legislation tracker


Dates for your diary

DateTypeDetails
26–28 July 2021CaseGray & Farrar International LLP v HMRC (VAT: Whether matchmaking services were the services of consultants): UT scheduled to hear taxpayer’s appeal
31 July 2021DeadlineDecisions made up to this date benefit from the temporary extended time limit for notifying an option to tax land and buildings.
3 August 2021ConsultationSimplifying the VAT Land Exemption call for evidence closes
24 August 2021Call for evidenceCall for evidence on business rates closes

Trackers

Case Tracker

The following cases are those on which there has been a development this week which has not been covered elsewhere in this update:

Names of partiesCourt and citationSubjectDevelopmentPrevious Analysis
Wilhunter (UK) Ltd v HMRC[2021] UKFTT 265 (TC)Corporation tax—oil ring fenceThe FTT decided that the lump sum received by the taxpayer on the termination of an agreement under which it provided a crewed oil rig which it had hired from an associated company was a sum 'arising from' oil contractor activities. Therefore, it fell within the ring fence activities and the taxpayer's non-ring fence losses could not be set against it, so a tax liability arose to the taxpayer.
Scanwell Logistics (UK) Ltd v HMRC[2021] UKFTT 261 (TC) VAT—onward supply relief (OSR)In relation to the taxpayer that imported goods to the UK from China for onward transport to EU countries, the FTT decided that the taxpayer was not entitled to OSR. This was because: (1) the taxpayer did not make, and was not deemed to make, supplies of goods; (2) a supply of goods required the transfer of title in goods, but the taxpayer did not make any actual supply of goods; and (3) the taxpayer's activities did not fall within VATA 1994, s 47(2A) because it did not bring about the supply of goods and did not act in its own name in relation to any supply.
North Point (Pall Mall) Ltd; China Town Development Company Ltd v HMRC [2021] UKFTT 259 (TC)Construction industry schemeThe FTT dismissed the taxpayer's appeal against determinations under the Income Tax (Construction Industry Scheme) Regulations 2005 for failing to deduct amounts. The FTT decided that, correctly interpreted, regulation 13(3) operates so as to prevent both HMRC and the FTT from issuing a direction under Regulation 9(5), and thus, as submitted by HMRC, the FTT has no jurisdiction to consider whether the conditions in regulation 9(3) have been made out by the taxpayer. In addition, the FTT found that the taxpayer had failed to take reasonable care so the determination should not be reduced.
JRO Griffiths Ltd v HMRC[2021] UKFTT 257 (TC)Capital allowancesThe FTT decided in favour of the taxpayer that capital allowances were available on its capital expenditure on a potato storage facility as it was plant which constitutes either a silo for temporary storage or a cold store.
Gheorghita Puiu v HMRC[2021] UKFTT 255 (TC)Deliberate behaviourApplying the ratio in Tooth, the FTT found that deeming provisions in another enactment did not require them to find that the taxpayer had exhibited deliberate behaviour. It then found that the taxpayer’s behaviour had not been deliberate and he had a reasonable excuse.
Perenco UK Ltd v HMRC[2021] UKFTT 254 (TC)Petroleum revenue tax (PRT)The FTT allowed the appeal of the taxpayer oil company, finding that it was entitled to a deduction for PRT purposes of costs it had incurred in carrying out work on its gas terminal in order to comply with new environmental regulations. Under the Oil Taxation Act 1975, expenditure was disallowed if it was 'met directly or indirectly' by someone else. Part of the cost had been reimbursed by the owners of the oil fields but the FTT found that this did not 'meet directly or indirectly' the taxpayer's expenditure on the works, being instead additional contractual consideration for the services provided to the oil field owners by the taxpayer.
Alan Loughrey v HMRC[2021] UKFTT 252 (TC)Discovery assessment The FTT allowed the taxpayer's appeal against the discovery assessment because the FTT found that the taxpayer took reasonable care in completing his tax return relating to his termination payment and there was information to make HMRC aware of the insufficiency of tax.
Ladson Preston Ltd aka Developments Greenview v HMRC[2021] UKFTT 251 (TC)SDLT—multiple dwellings relief (MDR)In these two lead cases on MDR where the two appellants argued that the existence of planning permission should satisfy the statutory language of a dwelling 'in the process of being constructed', the FTT decided that neither of the appellants were entitled to MDR. This was because the main subject matter of the land transaction must consist of an interest in at least two dwellings, those dwellings must be acquired by the purchaser from the seller and planning permission is not something that a person can own and so is not something they can acquire.
Nike and Converse v European CommissionCase T‑648/19EU State aidThe Court of Justice of the EU dismissed an action for annulment of the Commission’s decision in 2019 to open an in-depth investigation to examine tax rulings granted by the Netherlands tax administration to Nike and Converse to determine whether there might be any unlawful State aid. It held that the Commission complied with the procedural rules and had neither failed to fulfil its obligations to state reasons nor made a manifest error of assessment.
For more information, see: Case T-648/19 Nike European Operations Netherlands and Converse Netherlands v Commission [Archived].

The bold text reflects the new developments occurring over the course of the last week.

For comprehensive tax case tracking across current (and recently completed) tax cases, see the Tax—case tracker tool.


Consultation tracker

The following consultations are those on which there has been a development this week and which are not covered elsewhere in this update:

TitleSummaryDocumentsStatusAnalysis
Draft legislation for Finance Bill 2022 (FB 2022)HMRC is consulting on legislation for FB 2022 in draft before the Finance Bill is laid before Parliament.Draft legislation for Finance Bill 2021–22Open from 20 July 2021–14 September 2021Legislation Day: Draft Finance Bill 2022—Tax analysis
Basis period reformHMRC has launched a consultation on reform of basis periods for unincorporated trading businesses whereby businesses will be taxed on the profits arising in a tax year for 2023–24 with a transitional year in 2022–23.HMRC: Consultation document (20 July 2021)Open from 20 July 2021–31 August 2021Legislation Day: Draft Finance Bill 2022—Basis period reform for unincorporated trading businesses
Plastic Packaging TaxFollowing the enactment of the main legislation for the introduction of PPT from 1 April 2022, HMRC has published a technical consultation on two draft statutory instruments relating to categories of plastic packaging and the meaning of substantial modification.Draft statutory instruments (20 July 2021)Open from 20 July 2021–17 August 2021Legislation Day: Draft Finance Bill 2022—Other developments
VAT and value shiftingFollowing a call for evidence on the proposed revision of the rules for apportioning consideration between supplies with mixed liabilities in a single transaction, HMRC has published a summary of responses and states that it is continuing to actively engage with these stakeholders to gain a ‘fuller understanding’ of views on the proposals.Summary of responses (20 July 2021)Summary of responses published
Closed, but HMRC is keeping the changes proposed in the consultation under review.
Legislation Day: Draft Finance Bill 2022—VAT
VAT and the sharing economyHMRC has published a summary of responses to its call for evidence seeking stakeholder views on the government’s assessment of the VAT challenges created by the sharing economy.Summary of responses (20 July 2021)Summary of responses published
Closed, but the government is using the responses gathered to explore more detailed policy options for future change.
Legislation Day: Draft Finance Bill 2022—VAT
VAT Grouping: Establishment, Eligibility, and RegistrationFollowing a call for evidence to examine how VAT grouping provisions operate in the UK and potential changes, including on establishment and compulsory grouping, the government has published a summary of responses.Summary of responses (20 July 2021)Summary of responses published
Closed, and the government reiterated the announcement made in the tax policies and consultations paper on 23 March 2021 that it has decided not to take this any further.
Legislation Day: Draft Finance Bill 2022—VAT
Modernisation of the stamp taxes on shares frameworkFollowing two earlier calls for evidence, firstly from the OTS on stamp duty on paper share transactions, with a view to removing the need for physical stamping; and secondly from HMRC on the principles and design of a new framework for stamp duty and stamp duty reserve tax (SDRT), the government has published a summary of responses and remains committed to exploring modernisation and moves towards digitisation.Consultation outcome (20 July 2021)Consultation outcome published and stakeholders are invited to join working groups to inform future policy proposals
Closed, but the government remains committed to exploring modernisation and moves towards digitisation.
Physical stamping has been removed permanently with effect from 19 July 2021.
Legislation Day: Draft Finance Bill 2022—Modernisation of the stamp taxes on shares framework

The bold text reflects the new developments occurring over the course of the last week.

For comprehensive tax consultation tracking across current (and recently completed) consultations, see the: Tax—consultation and legislation tracker tool.


HMRC Manual Tracker

Changes to HMRC Manuals this week, include:

ManualPage(s) and date of changeComments
Appeals, Reviews and Tribunals Guidance ManualUpdated: ARTG2150 (19 July 2021)Updated guidance on who can make an appeal to clarify that only the trustee in bankruptcy (and not the person who has been subject to a bankruptcy order) has legal standing to make or continue with an appeal in relation to tax debts which are provable claims in the bankruptcy.
Capital Gains ManualArchived: CG35710 (14 July 2021)Archived guidance on transferring gifts into settlement.
Capital Gains ManualUpdated: CG50240 (15 July 2021)Updated definition of depositary in the context of depositary receipts.
Compliance Handbook ManualUpdated: CH190100, CH190890, CH190920, CH190940, CH191000, CH191040, CH191060, CH191350 (19 July 2021)Updated guidance but only to refer to the new team name, the Publishing Deliberate Defaulter Specialist Team (which has replaced the Managing Serious Defaulters Programme (MSD)).
Employment Income ManualUpdated: EIM71302Updated guidance on the tax treatment of working rule agreements to clarify that this special tax procedure (which only applies to the payment of travel and lodging allowances) does not extend to benefits in kind such as the provision of travel vouchers or a company car or van, to which the normal rules for taxing benefits in kind apply.
International Exchange of Information ManualUpdated: IEIM570900 (16 July 2021)Updated guidance on Template for exchange of tax rulings.
Oil Taxation ManualAdded: OT28047 (14 July 2021)Added guidance on the meaning of general decommissioning expenditure for expenditure incurred on or after 3 March 2021.
Updated: OT28001 (15 July 2021)Updated guidance on recommissioning and abandonment to state that further legislation was introduced in Finance Act 2021 to treat certain expenditure incurred before the approval of an abandonment programme as qualifying for relief.
VAT ConstructionUpdated: VCONST24400 (15 July 2021)Updated guidance on VAT on importation to refer to goods purchased from outside the EU up to when the UK left the EU and goods purchased from outside UK from when UK left the EU.
VAT Postal Services ManualVPOST5000 (20 July 2021)Updated guidance on VAT on international mail by reflecting the post-Brexit position that supplies to business customers belonging outside the UK are outside the scope of UK VAT and supplies to non-business customers in the case of mail going to or from the UK to a place outside the UK is zero-rated/outside the scope of VAT.
VAT Postal Services ManualVPOST4550 (20 July 2021)Updated guidance on scope of the VAT exemption for terminal dues by clarifying the position prior to the end of the Brexit implementation period and the period thereafter. Since 1 January 2021, all terminal dues received from outside the UK were outside the scope of VAT with the right to input tax recovery, whereas prior to the end of the implementation period, such dues received from the EU were treated as exempt from VAT.
VAT Protective Equipment ManualUpdated: VPROTEQUIP3040, VPROTEQUIP2060, VPROTEQUIP4040 (19–20 July 2021)Updated guidance on the zero rating of protective equipment (such as motorcycle helmets, protective boots, etc) to reflect that the Taxation (Cross-border Trade) Act 2018 amended the VAT legislation to allow zero rating for such equipment which is manufactured to standards which satisfy the requirements of regulation 8(2) of the Personal Protective Equipment Regulations 2002, SI 2002/1144 and bear the mark of conformity required by that regulation.
VAT Clothing ManualUpdated: VCLOTHING1150, VCLOTHING1100 (19 July 2021)Updated guidance on zero-rating of young children’s clothing to reflect the end of the Brexit implementation period by: (in VCLOTHING1150) removing a reference to the legal basis for such zero-rating being in the VAT Directive and (in VCLOTHING1100) adding a paragraph to explain the legal basis before Brexit.

Useful information

Each week, we select a handful of interesting articles from Tax Journal and Taxation to highlight to our readers:

Tax Journal, Issue 1540 (16 July 2021)

The OECD’s statement on international tax reform Tax Journal, Issue 1540, 8 [£] Sandy Bhogal and James Chandler (Gibson, Dunn & Crutcher) review the proposed reforms allocating corporate profits to customer-heavy jurisdictions and imposing a global minimum tax rate

A guide to Finance Act 2021 Tax Journal, Issue 1540, 14 [£] A concise guide to this year’s Finance Act, with practitioner comment on some of the key measures

Football player transfers Tax Journal, Issue 1540, 11 [£] Football may not be coming home, but there is always tax to consider. Paul Pritchard (FTI Consulting) reviews the tax issues on player transfers, including the reinvestment relief on players, employment tax issues with buyout and the withholding of tax on image rights payments

Taxation, Issue 4801 (22 July 2021)

Secret weapon—employment status Taxation, 22 July 2021, 16 [£] Alexander Wilson discusses the impact of the Uber decision on the intentions of the parties

Get your losses in order! Taxation, 22 July 2021, 14 [£] Emma Rawson discusses how the temporary extension to the loss relief rules can be used to maximise profits offset

VAT—waiting times Taxation, 22 July 2021, 12 HMRC is under pressure to process VAT forms more quickly. Neil Warren investigates the problem of delays and how they can be reduced

To read last week's edition of tax highlights, see: Tax weekly highlights—15 July 2021.

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