Finance Bill to be published after summer recess; draft updated legislation published
Global Tax Update:July 2017/United Kingdom
This UK newsletter explains 7 topics including " Finance Bill to be published after summer recess; draft updated legislation published ". (Global Tax Update:July 2017/United Kingdom)
1. Finance Bill to be published after summer recess; draft updated legislation published
The Government has confirmed that a new Finance Bill will be introduced “as soon as possible after the summer recess”, reintroducing changes to tax legislation that were withdrawn from the previous Finance Bill (now Finance Act 2017) as a result of the calling of the general election. The Commons is due to break for its summer recess on 20 July, returning on 5 September.
2. Coin-A-Drink: VAT repayments and interest held taxable: Upper Tribunal
The Upper Tribunal has dismissed the taxpayer's appeal in the case of Coin-A-Drink, which concerned the taxability of VAT repayments and associated simple interest. The appeal was pursued on the basis of EU law arguments that were not put forward in the Shop Direct case. The taxpayer argued that, in the light of EU law, the VAT repayment and interest concerned should be characterised as falling due under the English law of restitution.
3. Introduction of Making Tax Digital deferred
In the same statement, the Government confirmed a change in the timetable for the implementation of the Making Tax Digital (MTD) programme. Businesses above the VAT registration threshold will not be mandated to use the MTD system until April 2019, and then only to meet VAT-related MTD obligations.
4. HMRC guidance on non-statutory clearances
HMRC have updated their guidance on non-statutory clearances. This now states that 'HMRC won't give clearances or advice in respect of the application of the 'settlements legislation' in Chapter 5 Part 5 Income Tax (Trading and Other Income) Act 2005 or the tax consequences of executing non-charitable trust deeds or settlements.
5. The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act: Royal Assent
The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill, which was introduced into the National Assembly for Wales on 12 September 2016, received Royal Assent on 24 May 2017. Its purpose is to establish a new tax on land transactions to replace Stamp Duty Land Tax (SDLT), as well as measures to tackle devolved tax avoidance. SDLT is expected to cease to apply in Wales from April 2018. Decisions on tax rates and bands will be made closer to April 2018.
6. VAT: Paper Consult: input tax on supplies from ‘inactive’ Romanian traders: Advocate General
Romania lists traders as ‘inactive’ if they fail to file VAT returns for 6 months, or can’t be found at their registered address, and any customers purchasing goods from inactive traders are not entitled to recover input tax. The system is designed to discourage trading with companies that might not account for output tax properly, but in the opinion of AG Mengozzi, it is not permissible.
7. VAT: Di Maura: Italian bad debt relief and the insolvency condition: Advocate General
In October 2016, the Court of Appeal confirmed in GMAC that bad debt relief could not be restricted to occasions when insolvency proceedings had taken place. Because of domestic time limits, this decision about the ‘insolvency condition’ has had limited impact in the UK. However, Di Maura shows that it remains a relevant issue in other Member States.