Corporate tax update

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

Corporation tax

Non-residents and UK property – further update on April 2019 tax changes

On 6 July 2018, draft legislation (together with a further consultation paper) was published in respect of the impending changes to the UK tax regime affecting non-UK residents holding UK property. Read more.

VAT 

VAT rules in a “no deal” Brexit – insurance and financial services

On 23 August 2018, the UK government published a number of “no deal” Brexit documents. One of which was a so-called technical notice giving businesses guidance as to how the UK’s VAT rules will operate in the event of a no-deal Brexit.

VAT cost sharing exemption – HMRC guidance on “directly necessary”

On 31 July 2018, HMRC published further guidance setting out a change in its policy (following recent decided cases) on the “directly necessary” test for the purposes of the VAT cost sharing exemption (CSE).

Adecco: VAT payable on supply of non-employed temporary workers

On 30 July 2018, the Court of Appeal held that VAT was payable on the supply of non-employed temporary workers to clients.

Taylor Clark: claims for the return of overpaid VAT not to be treated as having been made by or on behalf of the “single taxable person”

On 11 July 2018, the Supreme Court held that a company seeking repayment of overpaid VAT is not to be considered to have made a claim for repayment, where another company, which had formerly been a member of its VAT Group, had made the relevant claims. The other company had claimed repayment in its own right and not on behalf of the first company.

International 

Taxation (Cross-border Trade) Act 2018 – Royal Assent

 On 13 September 2018, the Taxation (Cross-border Trade) Bill 2017-19 received Royal Assent.

Miscellaneous

Something out of the ordinary (share capital)

 On 19 September 2018, the Chartered Institute of Taxation (CIOT) published a table setting out HMRC’s views on the meaning of “ordinary share capital”.

HMRC updates guidance on VCTs

 On 10 and 13 August 2018, HMRC updated the guidance in its Venture Capital Schemes Manual on venture capital trusts (VCTs) to reflect changes made by Finance Act 2018.