Corporate tax update - June 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 May 2020. As well as some further COVID-19 related tax developments, this month’s report also has a bit of a sports theme with summaries of decisions involving an ex-England cricket captain and football referees. As ever we hope you, your family and friends are all staying safe.

COVID-19: HMRC guidance on trading activities

HMRC has published guidance on the impact of COVID-19 driven changes to trading activities. Read more

Rectification of contract rejected if effect would be to provide a tax benefit

On 29 May 2020, the High Court declined to exercise its discretion to allow rectification of a contract that had adverse tax consequences. Read more

Taxation of COVID-19 business support schemes and payments – draft legislation

On 29 May 2020, HMRC published draft legislation providing for the taxation of COVID-19 business support grants. The consultation on this draft legislation has now closed, and the legislation will take effect from the date of Royal Assent of Finance Bill 2020. Read more

Employment-related options granted “by reason of” employment – HMRC wins appeal

On 27 May 2020, the Upper Tribunal held that an option granted to a director was acquired “by reason of” employment for the purposes of ITEPA 2003. Read more

Transaction costs VAT recovery – actual use overrides intended use (AG opinion)

On 14 May 2020, the Advocate General opined that the actual use of services is determinative (in terms of VAT deductibility) in cases where there had been a prior intended, but aborted, use. Read more. Read more

Corporate capital loss restriction – draft HMRC guidance published

On 12 May 2020, HMRC published draft guidance on the corporate capital loss restriction applicable from 1 April 2020. Read more

Football referees held not to be employed for tax purposes – the final whistle for HMRC?

On 6 May 2020, the Upper Tribunal dismissed HMRC’s appeal against a 2018 decision of the First-tier Tribunal (FTT) that certain football referees and other match day officials were not employees of Professional Game Match Officials Limited (PGMOL). Read more