The UK’s rules on hybrid and other mismatches (referred to in this Practice Note as the hybrid rules) have applied since 1 January 2017 and aim to counteract tax mismatches that arise from the way in which a hybrid instrument or a hybrid entity is treated for tax purposes. Although the hybrid rules normally apply to cross-border transactions involving two or more jurisdictions, they can also apply to purely UK domestic transactions. Specifically, the hybrid rules target: • deduction/non-inclusion mismatches (D/NI mismatches), ie where a payment under a hybrid mismatch arrangement is deductible in the payer jurisdiction for tax purposes but not included in the taxable income of the payee or a related party investor, and • double deduction cases (DD cases), ie where a payment under a hybrid mismatch arrangement gives rise to more than one tax deduction The hybrid rules deal with different categories of D/NI mismatches and DD cases in separate chapters. In each case, the relevant hybrid rules only apply if the relevant conditions have been

The UK’s rules on hybrid and other mismatches (referred to in this Practice Note as the hybrid rules) have applied since 1 January 2017 and aim to counteract tax mismatches that arise from the way in which a hybrid instrument or a hybrid entity is treated for tax purposes. Although the hybrid rules normally apply to cross-border transactions involving two or more jurisdictions, they can also apply to purely UK domestic transactions. Specifically, the hybrid rules target: • deduction/non-inclusion mismatches (D/NI mismatches), ie where a payment under a hybrid mismatch arrangement is deductible in the payer jurisdiction for tax purposes but not included in the taxable income of the payee or a related party investor, and • double deduction cases (DD cases), ie where a payment under a hybrid mismatch arrangement gives rise to more than one tax deduction The hybrid rules deal with different categories of D/NI mismatches and DD cases in separate chapters. In each case, the relevant hybrid rules only apply if the relevant conditions have been satisfied. For more information on

This Practice Note outlines the UK rules (referred to in this Practice Note as the hybrid rules) that counteract, for corporation tax purposes, hybrid and other mismatches. These mismatches ‘exploit differences in the tax treatment of an entity or instrument under the laws of two or more tax jurisdictions to achieve double non-taxation, including long-term deferral’. Although the hybrid rules are stated to be based on the recommendations of the Organisation for Economic Cooperation and Development (OECD)/G20’s Final Report on BEPS Action 2: Neutralising the Effects of Hybrid Mismatch Arrangements that was published on 5 October 2015 and the OECD’s Report on BEPS Action 2: Neutralising the Effects of Branch Mismatch Arrangements that was published on 27 July 2017 (together, these reports are referred to in this Practice Note as the Action 2 recommendations), HMRC’s guidance at INTM550020 also expressly states that the UK hybrids ‘legislation is deliberately broader in scope than the OECD recommendations in some areas’ meaning that the ‘outcomes…may differ from those under the OECD recommendations’. An example of this is chapter 7 which

The UK’s rules on hybrid and other mismatches (referred to in this Practice Note as the hybrid rules) have applied since 1 January 2017 and aim to counteract tax mismatches that arise from the way in which a hybrid instrument or a hybrid entity is treated for tax purposes. Although the hybrid rules normally apply to cross-border transactions involving two or more jurisdictions, they can also apply to purely UK domestic transactions. Specifically, the hybrid rules target: • deduction/non-inclusion mismatches (D/NI mismatches), ie where a payment under a hybrid mismatch arrangement is deductible in the payer jurisdiction for tax purposes but not included in the taxable income of the payee or a related party investor, and • double deduction cases (DD cases), ie where a payment under a hybrid mismatch arrangement gives rise to more than one tax deduction The hybrid rules deal with different categories of D/NI mismatches and DD cases in separate chapters. In each case, the relevant hybrid rules only apply if the relevant conditions have been

The UK’s rules on hybrid and other mismatches (referred to in this Practice Note as the hybrid rules) have applied since 1 January 2017 and aim to counteract tax mismatches that arise from the way in which a hybrid instrument or a hybrid entity is treated for tax purposes. Although the hybrid rules normally apply to cross-border transactions involving two or more jurisdictions, they can also apply to purely UK domestic transactions. Specifically, the hybrid rules target: • deduction/non-inclusion mismatches (D/NI mismatches), ie where a payment under a hybrid mismatch arrangement is deductible in the payer jurisdiction for tax purposes but not included in the taxable income of a payee or a related party investor, and • double deduction cases (DD cases), ie where a payment under a hybrid mismatch arrangement gives rise to more than one tax deduction For more information on the hybrid rules, see Practice Note: Hybrid mismatches—introduction to the rules. For an overview in table format of the conditions required by each chapter before

The UK’s rules on hybrid and other mismatches (referred to in this Practice Note as the hybrid rules) have applied since 1 January 2017 and aim to counteract tax mismatches that arise from the way in which a hybrid instrument or a hybrid entity is treated for tax purposes. Although the hybrid rules normally apply to cross-border transactions involving two or more jurisdictions, they can also apply to purely UK domestic transactions. Specifically, the hybrid rules target: • deduction/non-inclusion mismatches (D/NI mismatches), ie where a payment under a hybrid mismatch arrangement is deductible in the payer jurisdiction for tax purposes but not included in the taxable income of a payee or a related party investor, and • double deduction cases (DD cases), ie where a payment under a hybrid mismatch arrangement gives rise to more than one tax deduction The hybrid rules deal with different categories of D/NI mismatches and DD cases in separate chapters. In each case, the relevant hybrid rules only apply if the relevant conditions have been

What is a hybrid pension scheme? At present, the majority of pensions legislation defines types of occupational pension scheme in the UK on a binary basis by reference to whether or not they are a money purchase scheme: • a money purchase scheme is a scheme under which all the benefits that may be provided are money purchase benefits (for more information on the definition of ‘money purchase benefits’, see Practice Note: Money purchase benefits—the statutory definition) Defined benefit schemes are not (generally) separately defined. Limited exceptions to this are in relation to automatic enrolment under the Pensions Act 2008 (PenA 2008) and the types of benefits that can be paid as authorised payments under the Finance Act 2004 (FA 2004): • a defined benefits (DB) scheme is a scheme under which none of the benefits that may be provided are money purchase benefits (note that there is a similar definition of a ‘defined benefits arrangement’ in FA 2004, s 152(6)) For most purposes, these definitions do not

An alternative to a lifetime annuity, without the investment risks of income withdrawals, and with a regular income and some guarantees.

An occupational pension scheme which incorporates both defined benefit and defined contribution elements of benefit provision.

This Practice Note examines the legal and practical issues for an employer to consider in relation to hybrid working, sometimes known as agile working, blended working or split working patterns or arrangements, where staff attend the workplace for part of their working time and work from home or elsewhere remotely for part of their working time. Hybrid working can be distinguished from pure home working, where the worker works entirely from home, although some employers have had partial homeworking arrangements in place for some time. The concept of hybrid working has emerged from the coronavirus (COVID-19) pandemic, during which many employees have been working entirely, or primarily, from home, and it is envisaged that employees will continue to work for part of the time at home, while returning to their workplaces for the remainder. The employer’s approach to hybrid working will vary depending on a number of factors, primarily the nature of the organisation and what it does. For example, it may be relatively straightforward for an office-based employer to offer hybrid working to nearly all of its

The coronavirus (COVID-19) pandemic heralded a significant change in the ways many of us work. This note is focussed on hybrid working, which refers to a flexibility around where we work. Inevitably, though, it also touches upon flexible working which is about when we work. An historical context Originally, most people worked from, or close to, home, whether working the land, small-scale home-based manufacturing and service provision and so on. The industrial revolution, and with it factories as well as large scale farming, meant people started having to go to a place of work so they could collectively work on the same machine or on the same land or flocks and herds. At the same time, and with the spread of printing and other technologies, commerce meant that there was an explosion of document production. Those whose roles became document based, for example lawyers and accountants, had to be where those documents were kept so as to avoid creating multiple copies of everything. Part of the reason for the advent of the modern day

This Checklist sets out the key considerations for the employer when deciding whether to introduce a hybrid working scheme, sometimes known as agile working, blended working or split working patterns or arrangements, where staff attend the workplace for part of their working time and work from home or elsewhere remotely (remote working) for part of their working time. For further information on the issues noted here, and in relation to hybrid working generally, see Practice Note: Hybrid working. Acas has published guidance on working from home and hybrid working, comprising: • home and hybrid working requests • wellbeing when working from home • home and hybrid working policies • managing staff who work from home Review and consultation • Consider the need for review in light of any changes to the needs of the organisation or individual employees • Review the outcome of a trial period, if relevant • Review policies and consult employees and their representatives to discuss how things are going and if any changes could be made • Document rationale/audit trail for approvals,