The Office of Tax Simplification is calling for evidence by 31 August 2014 to explore the medium and long-term recommendations made in its interim report in January. The recommendations include: developing education for the smallest partnerships; whether partners should be able to include partnership expenses on their personal returns; and reducing difficulties surrounding stamp taxes and double taxation treaties. The document also sets out HMRC’s responses to the OTS’s short-term recommendations.
Employment-related securities of internationally mobile employees
The government is consulting until 16 October 2014 on a draft statutory instrument, included within the condoc Consultation: internationally mobile employees (IMEs) and earnings related securities (ERS). Due to international social security treaties and agreements, a full alignment of income tax and NIC rules would create a risk of double charging for some internationally mobile employees. The draft statutory instrument provides a disregard for the proportion of the employment-related securities (ERS) income which is attributable to periods in which the individual would not otherwise be liable for earnings-related NIC (because the individual does not meet domestic law conditions relating to residence or is exempt from national insurance due to the application of EU social security rules or an international social security convention). The ERS income is treated as having been earned over the same period as applies for the purposes of ITEPA 2003 Part 2 Chapter 5B.
DRT: surrenders to UK unit trusts and OEICs
The Stamp Duty Reserve Tax (Finance Act 1999, Schedule 19) (Consequential Amendments) Regulations, SI 2014/1932, come into force on 14 August 2014. They make amendments to secondary legislation consequential to the abolition of the charge to SDRT (FA 1999 Sch 19 Part 2), which currently applies on the surrender of units to UK unit trusts and of shares to UK open-ended investment companies (OEICs). The abolition has effect retrospectively from 30 March 2014. The consequential amendments made by this instrument also have retrospective effect from that date.
UK/Canada double tax treaty
A Protocol and Interpretative Protocol to the double tax treaty between the UK and Canada was signed on 21 July 2014, with the agreement coming into force once both countries have completed their legislative procedures. As well as providing a zero withholding tax rate on dividends to registered pension funds, the protocol will update the treaty with the latest OECD articles on business profits, the mutual agreement procedure, exchange of information and assistance in collection.
Recovery of debt through coding out
HMRC has announced changes to the recovery of debt through coding out. Tax codes can be used as a way to collect tax and debts due to HMRC (coding out). A new graduated scale will apply so that those on higher incomes will have more recovered from their income than those on lower incomes. This will increase the amount of debt that can be recovered from those on higher incomes. Although HMRC already has a business rule in place to prevent the issue of tax codes that would deduct more than 50% of an employee’s pay, this is now being made statutory.
HMRC guidance
New HMRC guidance is available from HMRC’s website, including:
HMRC’s Stamp taxes on shares manual, covering the application of stamp duty on shares and SDRT. It includes sections on exemptions and reliefs, bearer instruments, derivatives and pension schemes;
minor changes to examples in HMRC’s guidance published on 19 March 2014 concerning the rules in FA 2014 (inserting CTA 2009 s 695A) designed to prevent companies from obtaining a corporation tax advantage through the transfer of profits between group companies;
answers to specific issues raised during and after a seminar concerning the VAT place of supply rule changes and the mini-one stop shop; and
amendments to regulations for online filing of VAT returns.
The Office of Tax Simplification is calling for evidence by 31 August 2014 to explore the medium and long-term recommendations made in its interim report in January. The recommendations include: developing education for the smallest partnerships; whether partners should be able to include partnership expenses on their personal returns; and reducing difficulties surrounding stamp taxes and double taxation treaties. The document also sets out HMRC’s responses to the OTS’s short-term recommendations.
Employment-related securities of internationally mobile employees
The government is consulting until 16 October 2014 on a draft statutory instrument, included within the condoc Consultation: internationally mobile employees (IMEs) and earnings related securities (ERS). Due to international social security treaties and agreements, a full alignment of income tax and NIC rules would create a risk of double charging for some internationally mobile employees. The draft statutory instrument provides a disregard for the proportion of the employment-related securities (ERS) income which is attributable to periods in which the individual would not otherwise be liable for earnings-related NIC (because the individual does not meet domestic law conditions relating to residence or is exempt from national insurance due to the application of EU social security rules or an international social security convention). The ERS income is treated as having been earned over the same period as applies for the purposes of ITEPA 2003 Part 2 Chapter 5B.
DRT: surrenders to UK unit trusts and OEICs
The Stamp Duty Reserve Tax (Finance Act 1999, Schedule 19) (Consequential Amendments) Regulations, SI 2014/1932, come into force on 14 August 2014. They make amendments to secondary legislation consequential to the abolition of the charge to SDRT (FA 1999 Sch 19 Part 2), which currently applies on the surrender of units to UK unit trusts and of shares to UK open-ended investment companies (OEICs). The abolition has effect retrospectively from 30 March 2014. The consequential amendments made by this instrument also have retrospective effect from that date.
UK/Canada double tax treaty
A Protocol and Interpretative Protocol to the double tax treaty between the UK and Canada was signed on 21 July 2014, with the agreement coming into force once both countries have completed their legislative procedures. As well as providing a zero withholding tax rate on dividends to registered pension funds, the protocol will update the treaty with the latest OECD articles on business profits, the mutual agreement procedure, exchange of information and assistance in collection.
Recovery of debt through coding out
HMRC has announced changes to the recovery of debt through coding out. Tax codes can be used as a way to collect tax and debts due to HMRC (coding out). A new graduated scale will apply so that those on higher incomes will have more recovered from their income than those on lower incomes. This will increase the amount of debt that can be recovered from those on higher incomes. Although HMRC already has a business rule in place to prevent the issue of tax codes that would deduct more than 50% of an employee’s pay, this is now being made statutory.
HMRC guidance
New HMRC guidance is available from HMRC’s website, including:
HMRC’s Stamp taxes on shares manual, covering the application of stamp duty on shares and SDRT. It includes sections on exemptions and reliefs, bearer instruments, derivatives and pension schemes;
minor changes to examples in HMRC’s guidance published on 19 March 2014 concerning the rules in FA 2014 (inserting CTA 2009 s 695A) designed to prevent companies from obtaining a corporation tax advantage through the transfer of profits between group companies;
answers to specific issues raised during and after a seminar concerning the VAT place of supply rule changes and the mini-one stop shop; and
amendments to regulations for online filing of VAT returns.
