The Changes in Accounting Standards (Loan Relationships and Derivative Contracts) Regulations, SI 2014/Draft, have been published. These draft regulations will amend the ‘disregard regulations’ to preserve the existing tax treatment for loans treated as permanent-as-equity on transition to 'new UK GAAP' on 1 January 2015. Permanent-as-equity loans are where a company lends money in a foreign currency to an overseas subsidiary, but there are no plans for it to be repaid. The company will not need to bring a credit or debit into account on transition to the new accounting standards. Subsequent exchange gains and losses will be brought into account on the disposal of the loan asset. HMRC consulted on a first draft of these regulations in August, together with two other sets of draft amending regulations.
The Tax Relief for Social Investments (Accreditation of Social Impact Contractor) Regulations, SI 2014/3066, which come into force on 10 December 2014, specify the conditions a social impact contractor company must meet in order to receive accreditation from the Cabinet Office. A company must be accredited to allow individual investors to claim social investment tax relief in respect of their investment. The regulations should be read in conjunction with guidance issued by the Cabinet Office in November 2014.
The government has tabled a further set of 39 amendments for report stage of the Taxation of Pensions Bill. These include less stringent reporting requirements for flexible drawdown. A revised version of the Bill now incorporates amendments made by the Public Bill Committee on 18 and 20 November, bringing in the changes announced in September for passing death benefits to nominated beneficiaries.
The Income Tax (Removal of Ordinary Residence) Order, SI 2014/3062, was laid before the House of Commons on 18 November. The order removes a remaining reference to the term ‘ordinarily resident’ from the Income Tax (Trading and Other Income) Act 2005 with effect from 6 April 2015. This corrects an oversight in earlier provisions which removed the concept of ‘ordinary residence’ from most primary tax legislation with effect from 6 April 2013.
The OECD has announced that Switzerland has become the 52nd jurisdiction to sign the Multilateral Competent Authority Agreement, which will allow it to go forward with plans to activate automatic exchange of financial account information in tax matters with other countries beginning in 2018. The landmark decision comes after Switzerland told the global forum on transparency and exchange of information for tax purposes that it would implement in a timely manner the standard for automatic exchange of financial information in tax matters developed by the OECD and the G20 countries. The Swiss decision is subject to parliamentary approval, as well as the possibility that voters may be asked to approve the necessary laws and agreements.
Deloitte has reported that discussions are taking place at European Commission level to reach a consistent approach across the EU regarding the VAT treatment of Bitcoins and other virtual (or crypto-) currencies. The issue was discussed at recent meetings of the VAT Committee and the VAT Expert Group. Deloitte also reports that the Finnish tax authorities published a decision that commissions earned by an exchange from trading in Bitcoins are VAT exempt transactions; and that a case was referred to the CJEU from Sweden in June asking whether the exchange of virtual currency for traditional currency (and vice versa), for consideration added by the supplier when the exchange rates are determined, constitutes the supply of a service for consideration, and if so, whether the exchange transactions are VAT exempt (Hedqvist (C-264/14)). HMRC issued its guidance on the VAT treatment of activities involving Bitcoins and similar crypto-currencies in March.
HMRC has updated its digital strategy to include the establishment of personalised digital tax accounts for individuals and businesses between now and 2018. Beyond 2018, the aim is to create a multi-channel digital tax platform for all new digital services, with most of HMRC’s taxpayer interaction automated through digital self-service. More compliance activity will be conducted ‘upstream’ (i.e. pre-filing) and through pre-population of data. Inside HMRC, there will be a move away from the current culture of relationships based on tax regimes, towards multi-disciplinary teams of policy, compliance, operational and digital specialists.
Revenue Scotland has launched its new website at www.revenue.scot. Users can find tax calculators on the site, while guidance on LBTT and SLfT will be added in phases before 1 April 2015. Agents dealing with taxes will be able to register to use the new system (for example to submit tax returns) by February 2015.
HMRC has published the following on its website and/or on gov.uk:
The Changes in Accounting Standards (Loan Relationships and Derivative Contracts) Regulations, SI 2014/Draft, have been published. These draft regulations will amend the ‘disregard regulations’ to preserve the existing tax treatment for loans treated as permanent-as-equity on transition to 'new UK GAAP' on 1 January 2015. Permanent-as-equity loans are where a company lends money in a foreign currency to an overseas subsidiary, but there are no plans for it to be repaid. The company will not need to bring a credit or debit into account on transition to the new accounting standards. Subsequent exchange gains and losses will be brought into account on the disposal of the loan asset. HMRC consulted on a first draft of these regulations in August, together with two other sets of draft amending regulations.
The Tax Relief for Social Investments (Accreditation of Social Impact Contractor) Regulations, SI 2014/3066, which come into force on 10 December 2014, specify the conditions a social impact contractor company must meet in order to receive accreditation from the Cabinet Office. A company must be accredited to allow individual investors to claim social investment tax relief in respect of their investment. The regulations should be read in conjunction with guidance issued by the Cabinet Office in November 2014.
The government has tabled a further set of 39 amendments for report stage of the Taxation of Pensions Bill. These include less stringent reporting requirements for flexible drawdown. A revised version of the Bill now incorporates amendments made by the Public Bill Committee on 18 and 20 November, bringing in the changes announced in September for passing death benefits to nominated beneficiaries.
The Income Tax (Removal of Ordinary Residence) Order, SI 2014/3062, was laid before the House of Commons on 18 November. The order removes a remaining reference to the term ‘ordinarily resident’ from the Income Tax (Trading and Other Income) Act 2005 with effect from 6 April 2015. This corrects an oversight in earlier provisions which removed the concept of ‘ordinary residence’ from most primary tax legislation with effect from 6 April 2013.
The OECD has announced that Switzerland has become the 52nd jurisdiction to sign the Multilateral Competent Authority Agreement, which will allow it to go forward with plans to activate automatic exchange of financial account information in tax matters with other countries beginning in 2018. The landmark decision comes after Switzerland told the global forum on transparency and exchange of information for tax purposes that it would implement in a timely manner the standard for automatic exchange of financial information in tax matters developed by the OECD and the G20 countries. The Swiss decision is subject to parliamentary approval, as well as the possibility that voters may be asked to approve the necessary laws and agreements.
Deloitte has reported that discussions are taking place at European Commission level to reach a consistent approach across the EU regarding the VAT treatment of Bitcoins and other virtual (or crypto-) currencies. The issue was discussed at recent meetings of the VAT Committee and the VAT Expert Group. Deloitte also reports that the Finnish tax authorities published a decision that commissions earned by an exchange from trading in Bitcoins are VAT exempt transactions; and that a case was referred to the CJEU from Sweden in June asking whether the exchange of virtual currency for traditional currency (and vice versa), for consideration added by the supplier when the exchange rates are determined, constitutes the supply of a service for consideration, and if so, whether the exchange transactions are VAT exempt (Hedqvist (C-264/14)). HMRC issued its guidance on the VAT treatment of activities involving Bitcoins and similar crypto-currencies in March.
HMRC has updated its digital strategy to include the establishment of personalised digital tax accounts for individuals and businesses between now and 2018. Beyond 2018, the aim is to create a multi-channel digital tax platform for all new digital services, with most of HMRC’s taxpayer interaction automated through digital self-service. More compliance activity will be conducted ‘upstream’ (i.e. pre-filing) and through pre-population of data. Inside HMRC, there will be a move away from the current culture of relationships based on tax regimes, towards multi-disciplinary teams of policy, compliance, operational and digital specialists.
Revenue Scotland has launched its new website at www.revenue.scot. Users can find tax calculators on the site, while guidance on LBTT and SLfT will be added in phases before 1 April 2015. Agents dealing with taxes will be able to register to use the new system (for example to submit tax returns) by February 2015.
HMRC has published the following on its website and/or on gov.uk:
