Corporate tax update July 2019

Welcome to the latest edition of our Corporate Tax Update, written by members of RPC’s tax team.

This month’s report includes summaries of the recent decision of the Upper Tribunal on corporate tax residence in Development Securities plc, two ECJ decisions on cross-border loss relief and yet another decision on the application of the ‘IR35’ rules.

Consideration paid for a “free” item was attributable to that item for VAT purposes

On 27 June 2019, the Upper Tribunal dismissed the taxpayer’s appeal and held that part of a payment made for a “free” item under a promotion was, for VAT purposes, attributable to that item.  Read more

VAT groups and partnerships – First-tier Tribunal interprets VATA to conform with EU law

On 25 June 2019, the First-tier Tribunal held that the grouping rules in the Value Added Tax Act 1994 (VATA) could be interpreted to allow a Scottish Partnership to form a VAT group with the companies it owned.  Read more

First-tier Tribunal holds that retention payment earned, for taxation of earnings purposes, when paid (not over the course of the retention period)

On 24 June 2019, the First-tier Tribunal held that a retention payment was earned, and therefore taxed, in full in the tax year in which the payment was made.  Read more

Two ECJ decisions restrict scope of Marks & Spencer decision on cross-border loss relief

On 19 June 2019, the ECJ published decisions in two cases on two aspects of Swedish law that allow a Swedish parent company to claim relief for losses of overseas subsidiaries in certain circumstances.  Read more

Latest IR35 decision demonstrates importance of contractual terms

On 13 June 2019, the First-tier Tribunal held that similar (but not identical) short-term engagements between a single personal service company and two hospitals, when considered separately, should be taxed differently under the ‘IR35’ rules.  Read more

Jersey-incorporated SPVs held not to be UK tax resident – Upper Tribunal overturns decision on appeal

On 5 June 2019, the Upper Tribunal (UT) held that a number of Jersey-incorporated companies were, in fact, resident for tax purposes in Jersey.  Read more

HMRC publishes IPT call for evidence

On 3 June 2019, HMRC published a “call for evidence” on The Operation of Insurance Premium Tax (IPT).  Read more