Perhaps bizarrely given the circumstances, M&A has kept me busy over the past six months. Other than that, there’s been employee incentives work and a range of topics including ATED disputes, APNs, ERS reporting, VAT on digital services, and the furlough scheme. I also find an increasing amount of my practice relates to international investment in the UK.
I know I’m not the only one who has struggled with DAC 6, although the Law Society’s guidance on the interaction between legal professional privilege and DAC 6 been helpful. Even dealing with ostensibly manageable tasks, like revising engagement letters and terms of business, is often less than straightforward. At first blush, DAC 6 looks deceptively irrelevant, but closer examination of the hallmarks, plus the widened scope of the definition of an intermediary (someone who ‘knows or could be reasonably expected to know that they have undertaken to provide, directly or by means of any other persons, aid, assistance or advice’), makes it clear that there are issues where third parties are involved in a project.
Expect the start of your career to sometimes feel like a jungle when you need help, and a nursery when you don’t. I started out in an era when there were almost no online resources or duffers’ guides to documents and topics, and many smaller firms did not have any real tax knowhow or precedent banks. I remember being asked to provide comments on a tax deed, a document which I found unintelligible at the time. When I suggested it might be an idea to develop a precedent for one of these mysterious things, I was invited to draft one!
I think the changes to HMRC’s guidance published in the wake of the CJEU rulings in Meo and Vodafone have caused concern. Vodafone establishes that early termination fees constitute consideration for a supply, so a revision to HMRC’s previous approach was perhaps to be expected to some extent. However, the guidance broadens the scope of this approach to cover other types of payments, and it also requires it to be applied retrospectively to taxpayers who have failed to account for VAT to HMRC in accordance with the new approach. I understand that various industry bodies are making representations on this issue.
It’s not a tax case, but the decision in AXA SA v Genworth Financial International Holdings LLC and others [2020] EWHC 2024 (Comm) is interesting to anyone dealing with tax provisions in transactional documentation, as it relates to how some fairly workaday language in a gross up clause (‘subject to tax’) could be interpreted as applying to tax which was not (or not yet) actually due.
I think all eyes would have been looking at the November Budget, but as I write, it has been announced that it has been cancelled, presumably to clear the decks for a replacement for the furlough scheme. When the Budget does come (and it won’t come this year), I would guess that the widely trailed proposals to align CGT rates on residential property with income tax rates may well happen. Bear in mind that marginal income tax rates applied to CGT rates only 25 years ago.
It has been suggested that not only will the CGT rate rise, but that PPR – which successive chancellors have chipped away at over the last decade, including by whittling down the exemption for the last three years of ownership – will also be the subject of major reform.
Back in the good old days prior to Covid, I used to go wreck diving. Over the past six months, I’ve tried reading some more leftfield stuff – not all of which I managed to complete, including Oswald Spengler and the Taxation magazine readers’ queries page...
Perhaps bizarrely given the circumstances, M&A has kept me busy over the past six months. Other than that, there’s been employee incentives work and a range of topics including ATED disputes, APNs, ERS reporting, VAT on digital services, and the furlough scheme. I also find an increasing amount of my practice relates to international investment in the UK.
I know I’m not the only one who has struggled with DAC 6, although the Law Society’s guidance on the interaction between legal professional privilege and DAC 6 been helpful. Even dealing with ostensibly manageable tasks, like revising engagement letters and terms of business, is often less than straightforward. At first blush, DAC 6 looks deceptively irrelevant, but closer examination of the hallmarks, plus the widened scope of the definition of an intermediary (someone who ‘knows or could be reasonably expected to know that they have undertaken to provide, directly or by means of any other persons, aid, assistance or advice’), makes it clear that there are issues where third parties are involved in a project.
Expect the start of your career to sometimes feel like a jungle when you need help, and a nursery when you don’t. I started out in an era when there were almost no online resources or duffers’ guides to documents and topics, and many smaller firms did not have any real tax knowhow or precedent banks. I remember being asked to provide comments on a tax deed, a document which I found unintelligible at the time. When I suggested it might be an idea to develop a precedent for one of these mysterious things, I was invited to draft one!
I think the changes to HMRC’s guidance published in the wake of the CJEU rulings in Meo and Vodafone have caused concern. Vodafone establishes that early termination fees constitute consideration for a supply, so a revision to HMRC’s previous approach was perhaps to be expected to some extent. However, the guidance broadens the scope of this approach to cover other types of payments, and it also requires it to be applied retrospectively to taxpayers who have failed to account for VAT to HMRC in accordance with the new approach. I understand that various industry bodies are making representations on this issue.
It’s not a tax case, but the decision in AXA SA v Genworth Financial International Holdings LLC and others [2020] EWHC 2024 (Comm) is interesting to anyone dealing with tax provisions in transactional documentation, as it relates to how some fairly workaday language in a gross up clause (‘subject to tax’) could be interpreted as applying to tax which was not (or not yet) actually due.
I think all eyes would have been looking at the November Budget, but as I write, it has been announced that it has been cancelled, presumably to clear the decks for a replacement for the furlough scheme. When the Budget does come (and it won’t come this year), I would guess that the widely trailed proposals to align CGT rates on residential property with income tax rates may well happen. Bear in mind that marginal income tax rates applied to CGT rates only 25 years ago.
It has been suggested that not only will the CGT rate rise, but that PPR – which successive chancellors have chipped away at over the last decade, including by whittling down the exemption for the last three years of ownership – will also be the subject of major reform.
Back in the good old days prior to Covid, I used to go wreck diving. Over the past six months, I’ve tried reading some more leftfield stuff – not all of which I managed to complete, including Oswald Spengler and the Taxation magazine readers’ queries page...