News

Dividing business in the UK and in the rest of EU into two separate entities will not be seen as revenue splitting when it comes to registering for the VAT mini one-stop shop (MOSS), HMRC have appeared to accept.

So-called pay-day-by-pay-day (PDPD) provisions continue to be used by low-paid agency workers to obtain tax relief for travel costs, despite HMRC deeming such schemes non-compliant, according to the Low Income Tax Reform Group (LITRG).

Management costs relating to defined contribution (DC) occupational pension schemes are to be treated as exempt from VAT, HMRC have announced.

The inaugural meeting of the taxman’s new employment and payroll group is set to be held on 4 December.

Trade bodies will be joined by software developers, small and large employers, and payroll bureaux to provide primary route through which the Revenue and other government departments will discuss PAYE operational issues with the employment and payroll sectors.

Telecoms

Nearly two-thirds of smaller businesses are unaware of radical new VAT regulations that will affect them directly from the new year, according to the results of a KPMG survey. Rules for sales of telecoms, broadcasting and e-services to EU consumers will change on 1 January 2015, meaning VAT will be charged and accounted for not based on where the supplier is established but according to the EU country to which the customer belongs.

HMRC’s civil penalty system is working in line with its objectives but cannot be shown to be encouraging positive behavioural change in taxpayers, according to the Office of Tax Simplification (OTS).

The announcement follows a short research project by the office that focused on inconsistencies in the application of the fines and found them to be appropriate for the increasingly digitised nature of the tax system.

Tax experts have applauded the government’s decision to water down controversial plans to give HMRC extra tax debt-collection powers.

Extra safeguards and additional time for consultation on direct recovery of debts (DRD) mean the measure will be delayed until after next year’s general election.

Tax experts back department against PAC report

FATCA

Entities considered to be financial institutions under Foreign Account Tax Compliance Act (FATCA) must register with the US Internal Revenue Service (IRS) – to obtain a global intermediaries’ identification number – no later than 22 December to be included on the American tax department's foreign financial institution list on 1 January.

The Office of Tax Simplification (OTS) has published a series of questions as part of its review of employment status.

The body says it is keen to receive comments on the complexities of employment status from businesses and individuals, as well as from representative groups and professional tax advisers.

Views are sought on changes to working patterns over recent decades, dealings with HMRC, and the tax system’s compatibility with employment law and current working practices.

HMRC have published a technical note on regulation 17(2) of the Authorised Investment Funds (Tax) Regulations 2006 (SI 2006/964), after representations from the industry.

The regulation forms part of the corporation tax acts dealing with income derived from land and buildings. It states, “Amounts chargeable to corporation tax in accordance with part 4 of CTA 2009 must not be included in any amount of income allocated for distribution as yearly interest.”

HMRC appeal against Brockenhurst College ruling set for February