UK Tax Round Up - October 2017

UK Tax News and Developments Government White Paper on Customs Bill

On 9 October, the Government published a White Paper setting out its approach to the introduction of a new customs and VAT regime after the UK leaves the EU. The paper repeats the suggestion of "a new and time-limited customs union between the UK and the EU customs union" and introduces a new possibility for the introduction of necessary legislation if the UK and the EU fail to agree on appropriate customs arrangements before the UK leaves the EU in March 2019.

The work will be reflected in a draft Customs Bill which is expected to be published later this year, which will set out the legislative framework to allow the Government to create the new customs and VAT regime without presupposing what it will look like.

Comments are requested on the draft bill by 3 November 2017.

Draft regulations on group relief of carried forward losses

On 16 October draft regulations (along with an explanatory statement) were published which will extend the existing simplified arrangements for group relief to the surrender of carried forward losses that will be possible (from 1 April 2017) once the Finance (No. 2) Bill 2017 has been passed.

Updated draft regulations for insurance-linked securities

On 12 October 2017 updated draft regulations (along with an explanatory statement) were published which will establish a new tax and regulatory framework for special purpose companies which will issue capital market securities the return on which will be linked to insurance risks held by the company. The tax provisions will mean that the issuing company will be exempt from corporation tax and the payments on the securities will be exempt from withholding tax.

The regulations state that they will come into force three days after they are passed by Parliament.

HMRC publishes Spotlight 41

HMRC has added a new Spotlight 41 to the list of tax avoidance arrangements of particular interest to them. The new Spotlight relates to the recent Supreme Court decision in the so-called Glasgow Rangers EBT case, which held that payment to sub-funds of an EBT which could benefit employees were "indirect" earnings and subject to tax and PAYE and national insurance contributions at the time that they were paid to the EBT.

The Spotlight states that HMRC consider that the principle discussed in the Rangers case is of application to a wide range of disguised remuneration arrangements including other EBT arrangements...