Multinational top-up tax

STOP PRESS relating to new MTT and DTT draft legislation: Clause 19 of, and Schedule 4 to, the draft Finance Bill 2024–25 contains draft legislation amending the current MTT and DTT rules and implementing the Undertaxed Profits Rule (UTPR). Most of the changes to the existing MTT and DTT rules will take effect for accounting periods beginning on or after 31 December 2024 but some provisions will have retroactive effect for accounting periods beginning on or after 31 December 2023. For certain other provisions, taxpayers can elect as to whether a change takes effect for accounting periods on or after 31 December 2023 or for accounting periods beginning on or after 2024. The UTPR will have effect for accounting periods beginning on or after 31 December 2024. The transitional country-by-country reporting safe harbour anti-arbitrage rule, which will prevent groups that have entered into certain hybrid arbitrage arrangements from qualifying for the safe harbour, will have effect from 14 March 2024. HMRC released a policy paper at Autumn Budget 2024 explaining the changes contained in the Finance Bill. For more information, see News

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Latest Tax News

Tax weekly highlights—21 November 2024

This week's edition of Tax weekly highlights includes: (1) the Supreme Court decision in Refinitiv concerning the interaction between the diverted profits tax and an advance pricing agreement, and (2) the Supreme Court decision in Cobalt Data Centre on the scope of the enterprise zone allowance.

UT finds FTT made errors when setting aside HMRC best judgment assessment (HMRC v Sintra Global)

Tax analysis: In Sintra Global, the Upper Tribunal (UT) set aside the decision of the First-tier Tax Tribunal (FTT) insofar as it related to a notice HMRC had issued to an individual making him liable for the payment of a civil evasion penalty charged against a company he was a director of. The UT found that the FTT had failed to follow the guidance provided by the Court of Appeal in Pegasus Birds in relation to the assessment the penalty was based on.

Supreme Court rules on the scope and limitations of the enterprise zone tax incentive (R (oao Cobalt Data Centre) v HMRC)

The Supreme Court unanimously dismissed the taxpayers’ argument that the relevant expenditure fell within section 298(1) of the Capital Allowances Act 2001 (CAA 2001) and concluded that, based on the proper interpretation of that provision, the expenditure was not incurred under a contract executed prior to the conclusion of the initial ten-year period, as required. Adam Craggs, partner at RPC, discusses the implications that the judgment has on taxpayers going forward.

Consultation on expanding tax conditionality to new sectors

Environment analysis: On 30 October 2024, HM Revenue and Customs (HMRC) issued a consultation on ‘Tackling the hidden economy: expanding tax conditionality to new sectors’. The consultation runs to 21 January 2025. Angus Evers, partner at Shoosmiths, comments on the consultation.