Business Tax Briefing

Chancellor announces HMRC package of measures

On 23 September, the Chancellor of the Exchequer, Rachel Reeves, announced a package of measures aimed at improving the UK’s tax system. In addition to the proposed consultation on e-invoicing (see below), tax-related announcements include the appointment of Exchequer Secretary to the Treasury, James Murray, as Chair of the HMRC Board. Murray will oversee the implementation of his strategic priorities for HMRC, which include closing the tax gap and improving HMRC service. The Chancellor also announced a new Digital Transformation Roadmap to be published in Spring 2025, outlining HMRC’s vision to be a digital first organisation underpinned by customer insight, and further steps to recruit additional compliance staff to HMRC.

HMRC consultation on e-invoicing

The Chancellor’s HMRC package of measures included an announcement that HMRC will soon launch a consultation on electronic invoicing (e-invoicing) “to promote its wider use across UK businesses and government departments”. The Chancellor believes that e-invoicing could reduce administrative tasks, improve cash flow, boost productivity, introduce automation, and reduce errors in tax returns helping to close the tax gap. The consultation will seek input from businesses on how HMRC can support investment in and uptake of e-invoicing. E-invoicing is a long-accepted form of commercial data exchange between counterparties, however it is also developing into an important mechanism for regulatory authorities to drive improved compliance, efficiency, and broader commercial and economic forecasting. Further details of the UK consultation are yet to be announced and no timeline has been set, but this initiative demonstrates the growing global trend towards e-invoicing and HMRC’s objective to drive digital transformation.

Government announces new growth and skills levy

On 24 September 2024, the government announced a new growth and skills levy, which will replace the existing apprenticeship levy. The new levy will allow funding for shorter apprenticeships and include new foundation apprenticeships. Under the new regime, employers will be required to provide more funding outside the levy for their level 7 apprenticeships, which are equivalent to a master’s degree. The Department for Education will set out further details on the scope of the levy and how it will be accessed in due course.

HMRC publish new guidance on company registration in non-standard situations

HMRC have published five new pages on gov.uk to assist with the registration of companies for UK corporation tax where the entity is not a UK-incorporated company. The guidance covers the following situations: UK resident but non-UK incorporated companies, dependent agent permanent establishments, offshore property developers, non-resident companies disposing of UK property or land, and unincorporated associations.

Corporate Interest Restriction – appointment of reporting company by HMRC

HMRC have also published additional guidance on the limited circumstances in which HMRC will appoint a reporting company on behalf of a group for the purposes of the Corporate Interest Restriction (CIR) rules. The use of a reporting company simplifies the administration of the rules, allows the group to make appropriate elections and can result in significantly lower corporation tax liabilities. The new guidance confirms that HMRC will only appoint a reporting company in exceptional circumstances where the group has been prevented from making their own appointment. Groups should ensure that a reporting company has been reported before the submission of each CIR return. If there is any uncertainty, HMRC advise that groups should make a new reporting company appointment within the statutory time limit.

EMEA Dbriefs webcasts

There are two EMEA DBriefs tax and legal webcasts coming up next week:

  • On Wednesday 2 October 2024 at 12:00 BST/13:00 CEST is our global mobility and employment taxes webcast IR35/employment status - Autumn 2024 case law update, hosted by Rich Barrett. The webcast will look at the implications of the recent Supreme Court decision in HMRC v Professional Game Match Officials Ltd (PGMOL) and other recent case law updates on IR35 and employment status (including S&L Barnes and Atholl House).
  • On Thursday 3 October at 12:00 BST/13:00 CEST is our international tax webcast Understanding HMRC's new Guidelines for Compliance for Transfer Pricing, hosted by Jamie Bedford. The webcast will cover the background to the new guidelines, the key areas covered and the potential impact on transfer pricing compliance.