Other news in brief

Other news in brief

A round up of other news this week.


Also on home.kpmg

On 23 November 2020, HMRC updated their guidance to confirm that the annual events tax exemption of £150 per head will apply to the costs associated with virtual parties in the same way that it would for traditionally held parties, subject to the normal conditions of the exemption being met. Please see our blog post for further information.

In his spending review on 25 November 2020, the Chancellor confirmed that there will be the following increases to the hourly national minimum wage effective from April 2021: for individuals aged 23 and over an increase from £8.72 to £8.91; for 21 to 22-year-olds, an increase from £8.20 to £8.36; for 18 to 20-year-olds an increase from £6.45 to £6.56; for 16 to 17-year-olds an increase from £4.55 to £4.62; and for apprentices, an increase of £4.15 to £4.30. There will also be an increase to the daily accommodation offset rate from £8.20 to £8.36. In addition, the Government has confirmed it will increase the 2021-22 Income Tax Personal Allowance and Higher Rate Threshold in line with the September consumer price index (CPI) figure (note that the Scottish Higher Rate Threshold, which applies to certain income of Scottish taxpayers, will be set by the Scottish Parliament). The Government will also use the September CPI figure as the basis for setting all National Insurance limits and thresholds, and the rates of Class 2 & 3 National Insurance contributions, for 2021-22.

Broadly speaking, where a group currently holds pre-2002 intellectual property (IP) overseas, new rules in Finance Act 2020, may allow the group to bring the IP into the UK and claim amortisation relief from 1 July 2020. HMRC have now published detailed guidance on these new rules at CIRD46000 onwards including worked examples.

The Supreme Court handed down judgment in the latest instalment of the Franked Investment Income (FII) group litigation on 20 November 2020 and allowed HMRC’s appeal. The judgment concerns limitation periods for High Court restitution claims under mistake of law. The limitation period in restitution for the recovery of money is generally six years from the date of payment. However, the limitation period is extended in respect of cases of mistake by section 32(1)(c) of the Limitation Act 1980. The majority of the Supreme Court held that section 32(1)(c) applies to restitution claims under mistake of law. However, they considered that the limitation period commenced when the claimant discovered, or could with reasonable diligence have discovered, their mistake in the sense of realising that they had a worthwhile claim. This approach differed to that before the Court of Appeal, which proceeded on the basis that the mistake was realised when the true state of the law was established by a judicial decision. The case has been referred to the High Court for determination of when the mistake was realised on the facts. The outcome of that finding may mean certain claims are time barred. As such, there remains further litigation before this case can be considered final. It should be noted that the FII judgment concerns High Court claims rather than statutory claims. As such, where taxpayers made statutory claims which stood behind the FII case, the judgment on limitation will not be of relevance.

HMRC have published full details of the third SEISS grant to support self-employed people affected by coronavirus. The third grant will be based on 80 percent of three months’ average trading profits, paid out in a single taxable instalment capped at £7,500, and will cover the period from 1 November to 29 January 2021. Self-employed people who are eligible will be able to claim the third grant at any time from 30 November 2020 to 29 January 2021. As before, taxpayers must be self-employed or a member of a partnership and have traded in both the tax years 2018 to 2019 and 2019 to 2020. For the third SEISS grant HMRC have stated that taxpayers must also: either be currently trading but are impacted by reduced business activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus; declare that they intend to continue to trade, or restart trading, and that they reasonably believe that the impact on their business will cause a significant reduction in their trading profits; and only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus. A fourth grant will also be available from February 2021 to April 2021, but those details have yet to be published.

In the latest Economic Outlook report, Yael Selfin, Chief Economist at KPMG in the UK, looks at the impact of the pandemic on the UK economy, forecasts what can be expected next year, how quickly can we expect the UK economy to recover and how will Brexit affect this.

Melissa Geiger, Partner and Head of International Tax Policy at KPMG UK, and Yael Selfin, Chief Economist at KPMG UK, both comment on the Chancellor’s recent Spending Review announcement.

© 2021 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.

Connect with us


Want to do business with KPMG?


loading image Request for proposal

Save, Curate and Share

Save what resonates, curate a library of information, and share content with your network of contacts.

Sign up today