A round up of other news this week.
The Upper Tribunal (UT) has reversed the First-tier Tribunal’s decision in a recent case. Now finding in favour of HMRC, the UT held that loyalty bonus payments made from a platform service provider to investors were ‘annual payments’, and therefore the taxpayer should have deducted and accounted for income tax on these.
Following HM Treasury’s announcement on 12 June 2019, the UK has officially lodged its annulment application against the European Commission’s decision that the Controlled Foreign Company (CFC) exemption gave rise to State Aid. The annulment application itself does not provide a significant amount of additional information on the UK’s arguments against the State Aid decision beyond those covered in our earlier article in Tax Matters Digest at the time of the announcement.
Following consultation between December 2018 and February 2019, HMRC have published their new Life Assurance Manual, providing guidance on the corporation tax treatment of insurance companies writing life assurance and other long-term insurance business. The guidance relates to the life tax regime, which has been effective since 1 January 2013. It should be noted that the manual is still to be updated to include changes introduced by Finance (No 2) Act 2017, on the corporate interest restriction and relief for carried forward losses.
The Chartered Institute of Taxation (CIOT), Institute for Fiscal Studies (IFS) and Institute for Government (IFG) have joined together to write letters to the new Financial Secretary, Jesse Norman MP, and the new Chancellor, Sajid Javid MP. The letters urge the appointees to use the opportunity provided by their new roles to take a new approach to making tax policy, stating that the UK “needs a tax system formed through a considered strategy which reduces the burdens of compliance on business and can become a source of competitive advantage for the UK”.
Yael Selfin, Chief Economist at KPMG in the UK commented on how rising inflation amid a bout of fraying economic growth puts the Bank of England in a quandary. The outlook for inflation is strongly tied with the Brexit outcome, with a no-deal likely to see further falls in the pound and a rise in inflation in the short-term. However, even in a more extreme scenario, it is expected that the Bank of England will support the economy and cut interest rates.
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