Corporate Tax update - July 2020

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

This month’s update reports on some of the key developments from June 2020. Included in this update are a summary of a decision on the correct tax treatment of bonuses paid to members of an LLP, and an AG’s opinion on the VAT reverse charge position of services supplied for non-economic activity purposes. There’s also an update on HMRC guidance on “exceptional” circumstances in which anticipated losses can be used to claim back overpaid corporation tax. Finally, this update also reports on Covid-19 driven extensions to DAC6 reporting deadlines and to deadlines for notifying VAT options to tax. As ever we hope you, your family and friends are all staying safe.

Bonus payments to LLP members subject to employed earner NICs

On 25 June 2020, the First-tier Tribunal held that bonus payments paid to former employees at a time when they were members of an LLP were subject to class 1 national insurance contributions (NICs). Read more

An UnWellcome Opinion? – AG opines that reverse charge treatment applies to investment management services supplied to taxable person for purposes of non-economic activities

On 25 June 2020, Advocate General Hogan (AG) opined that the VAT place of supply of services supplied by a non-EU supplier to a UK taxable person, for the purposes of a non-economic activity, was the UK. As a result, in the AG’s view section 7A of VATA 1994 was not contrary to EU law. Read more

DAC6 reporting deadlines in UK deferred by 6 months

On 25 June 2020, HMRC confirmed that the UK will defer implementation of the initial reporting deadlines required by Directive 2018/822 (DAC6). Read more

VAT option to tax – further temporary extension of deadline

On 23 June 2020, HMRC announced that the temporary extension of the deadline for notifying VAT options to tax would continue until 31 October 2020. Read more

“Exceptional circumstances” in which anticipated losses may allow refunds of paid corporation tax – HMRC guidance

On 16 June 2020, HMRC published updated guidance on obtaining corporation tax payment refunds based on anticipated losses suffered in subsequent (but not yet ended) accounting periods. This guidance is likely to be of particular interest to companies severely impacted by the Covid-19 pandemic. Read more

HMRC Debts: Priority on Insolvency – draft Regulations published

On 4 June 2020, a draft of The Insolvency Act 1986 (HMRC Debts: Priority on Insolvency) Regulations 2020 was provided to the Public Bill Committee. The Regulations are due to come into force on 1 December 2020. Read more