Corporate tax update - Fourth quarter 2018

Welcome to the latest edition of our Corporate Tax Update, written by members of RPC’s tax team and published quarterly. In this final 2018 edition we highlight some of the key tax developments of interest to UK corporates from the fourth quarter of 2018.

Autumn 2018 Budget

On 29 October 2018, the Chancellor delivered the Autumn 2018 Budget. Read more.

Corporation tax

On 7 November 2018, the draft Finance Bill 2019 was published. The draft Bill includes provisions for the extension of the UK tax regime for non-UK residents holding UK property (following publication of draft legislation on 6 July 2018). Read more.

VAT

VAT recovery and holding companies – link between consideration and “economic activity”

On 18 December 2018, the First-tier Tribunal held that a holding company making (or intending to make) supplies to its subsidiaries in return for consideration was necessarily carrying on an economic activity for VAT purposes. Read more.

Payments for goods/services not supplied – HMRC change of treatment

On 14 December 2018, HMRC published a Brief setting out its “new policy” for “unfulfilled supplies”. Read more.

“Offshore looping” in insurance sector – order made

On 10 December 2018, an order was made to prevent so-called “offshore looping” in the insurance sector. Read more.

HMRC guidance on transfers of business as going concerns (TOGCs)

On 5 December 2018, HMRC published an updated version of its guidance on TOGCs (VAT Notice 700/9). Read more.

HMRC guidance on opting to tax land

On 30 November 2018, HMRC published an updated version of its guidance on the VAT option to tax (VAT Notice 742A). Read more.

VAT recovery on (failed) share acquisitions

On 17 October 2018, the ECJ ruled that VAT on professional fees incurred on a failed takeover bid was recoverable by the bidder. The case relates to Ryanair’s failed 2006 bid to takeover Aer Lingus (AL). Ryanair’s intention was to provide VAT-able management services to AL. Read more.

Miscellaneous

DPT – revised guidance published by HMRC

On 31 December 2018, HMRC published revised guidance on the diverted profits tax (DPT). Read more.