Other news in brief

A round up of other news this week.

A round up of other news this week.

On 14 April 2022 the OECD published a short consultation on the extractives exclusion under Amount A of Pillar One. The extractives exclusion will exclude profits from Extractive Activities from the scope of Amount A. The exclusion would apply where a Group derives revenue from the exploitation of Extractive Products and the Group has carried out the relevant Exploration, Development or Extraction. The consultation closed on 29 April 2022 and comments were submitted by KPMG International. Separately, the public consultation meeting on the Implementation Framework for the Pillar Two global minimum tax rules took place on 25 April 2022 and a recording is now available on the OECD website.

The Court of Appeal (CA), comprising the same judges in each case, handed down its decisions in the Atholl House Productions Ltd  and Kickabout Productions Ltd Off-Payroll Working (OPW) or ‘IR35’ appeals on 26 April 2022. HMRC were successful in both cases. In Atholl House Productions Ltd, the CA held that the Upper Tribunal (UT) had incorrectly focused on the radio presenter Kaye Adams’ overall freelance career when considering whether her hypothetical contract with the BBC would be one of employment, rather than on the specific terms of the hypothetical contract themselves. The case will return to the UT to be reconsidered, though this does not mean that it will necessarily reach a different conclusion on OPW status. In Kickabout Productions Ltd, which also concerned a radio presenter, the CA dismissed the taxpayer’s appeal. It held that the hypothetical contract between Paul Hawksbee and Talksport Radio contained an obligation to provide work, and there was no basis on which the UT’s decision could be challenged. These are the first CA decisions on how the OPW (or ‘IR35’) rules apply to workers’ services provided through personal service companies or other intermediaries. On that basis, they currently represent the highest authorities on the relevant issues.

HMRC have launched a consultation which invites comments on a draft revocation order that would remove the Moscow Stock Exchange’s (MICEX) status as a ‘recognised stock exchange’ under section 1005 ITA 2007. Per a Government press release, HMRC will revoke the status of MICEX as a recognised stock exchange from 5 May 2022 if restrictions placed by MICEX on non-resident investors remain in place. The press release explains that these restrictions imposed by MICEX mean that “it is no longer operating in line with the normal commercial standards expected of a recognised exchange.” As a result of the revocation order, certain tax treatments and reliefs contingent on recognised stock exchange status would not be available, although the order broadly seeks to preserve the status of existing investments for some purposes for existing investors. The move comes alongside other sanctions the UK Government has placed upon Russia, but unlike other sanctions is specifically linked to the restrictions imposed by MICEX, with the announcements suggesting that the revocation will only proceed if those restrictions remain in place on 5 May 2022. The consultation closed on 2 May 2022.

Following the release of the latest public sector finances data, Michal Stelmach, Senior Economist at KPMG UK commented “borrowing plummets in 2021-22 but debt has yet to peak.”