The main tax news in November was the 2017 Autumn Budget. If you have not already seen our Budget Summary, it can be accessed HERE. Meanwhile, the second Finance Bill 2017 received Royal Assent on 16 November and became Finance (No 2) Act 2017.
Perhaps understandably, the rest of the month was fairly quiet but elsewhere in the news ….
It has been announced that the National Insurance Contributions Bill will be introduced in 2018. As a result, the proposed new measures, including the abolition of Class 2 NICs, changes to the treatment of termination payments and changes to the treatment of sporting testimonials, will not now take effect until April 2019.
Interest on late payment of the main taxes increased from 2.75% to 3% with effect from 21 November. Interest on repayments of tax is unchanged at 0.5%.
HMRC has published the second tranche of draft guidance covering group relief for carried forward losses and the relaxation of the rules for carried forward non-trade losses. Further guidance is promised in due course.
As a result of additional delays in implementing the new online trust registration service, the deadline for the registration of trusts with income or gains first arising in 2016-17 is extended again, this time to 5 January 2018. HMRC guidance for agents can be found here.
HMRC has issued guidance on the Fulfilment House Due Diligence Scheme. If a business stores goods in the UK for sellers established outside the EU, they may need to apply for the Scheme.
HMRC has updated Revenue & Customs Brief 3 (2017) to reflect that it has decided to delay the changes announced to the application of the VAT exemption for pension fund management services supplied by insurers until 1 April 2019.
VAT Notice 700/62: Self Billing
This notice has been updated to clarify requirements for self-billing agreements and confirm the self-billee is responsible for output VAT.
VAT Notice 706/2: Capital Goods Scheme
HMRC has updated VAT Notice 706/2 to include an example in the section explaining how to deal with an incorrect initial claim.
New rates apply from 1 December 2017 although it is permissible to use the previous rates for up to one month from that date. These are the approved rates which may be used when reimbursing employees for the fuel costs of business travel in their company cars and for employees repaying employers the fuel costs of private travel.
TAX CASE DECISIONS
This case was concerned with a late appeal in connection with a Stamp Duty Land Tax avoidance scheme and is mentioned here since it confirms the Tribunal is unlikely to afford any leniency in such cases. The Tribunal judge decided: “Where taxpayers embark on a course of action which involves careful reliance on detailed technical provisions to avoid tax, they cannot reasonably expect an indulgent attitude to be shown to them when they fail so spectacularly to observe basic time limits in seeking to exercise their rights of appeal when HMRC challenge the effectiveness of the scheme.”
The Upper Tribunal held that the First Tier Tribunal was incorrect to conclude that the supply of distance learning was a principal supply of zero rated books and ancillary support services. The Upper Tribunal found that the support services were not subordinate to the books and that they had a value of their own. It held that the provision of manuals, as part of a distance learning package, was a single standard-rated supply.
The Upper Tribunal dismissed HMRC’s appeal against the First-tier Tribunal’s earlier decision in the case concerning termination payments made to the footballers Wilson Palacios and Peter Crouch. The Tribunal reaffirms a distinction can be drawn between cases where the entire contract of employment is abrogated in exchange for the termination payment and those where the payment is made in pursuance of a pre-existing obligation to make such a payment arising under a contract of employment. The case report includes a useful summary and analysis of the decided precedent cases.
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