Other news in brief

As reported in previous editions of Tax Matters Digest, on 22 August 2023, HMRC unexpectedly updated the guidance at SAOG10300 in the Senior Accounting Officer (SAO) Guidance manual to include two new taxes in the list of taxes included within the scope of the SAO provisions: the Construction Industry Scheme (CIS) and Land Transaction Tax (LTT). The reasoning behind this change was unclear. HMRC then updated the guidance on 11 September to remove LTT but, at that point, CIS was still listed. However, a further update has now been made and on 25 September CIS was also removed from the list of taxes in scope. This welcome development returns the HMRC manual to the original position which reflects the long-standing widely understood scope of the SAO legislation, removing the uncertainty that has existed for the last few weeks.

On 21 September 2023, HMRC published Corporation Tax Statistics 2023. The latest edition of the annual corporation tax (CT) statistics publication includes CT, Bank Levy, Bank Surcharge, Residential Property Developer Tax and Energy Profits Levy receipts figures for the financial year 1 April 2022 to 31 March 2023. Total CT receipts increased by 26 percent (£17.3 billion) compared to the prior year, reaching £84.7 billion for the period. Financial and Insurance was the largest contributor to CT receipts in the Financial Year 2022-23, accounting for £18.4 billion (or 22 percent of the total). The second and third largest contributors were Mining and Quarrying (13 percent) and Wholesale and Retail Trade (10 percent) respectively. According to the report, the overall increase was largely driven by a strong post-pandemic recovery in the economy, a sharp increase in offshore receipts and the introduction of the Energy Profits Levy. More generally, receipts increased due to an increase in trading profits (in particular from energy companies, due to high oil and gas prices over the period), rather than a decrease in deductions and losses. 

The UK economy could struggle to keep its head above water as it experiences renewed signs of stress. Read our latest UK Economic Outlook for September 2023, which includes our analysis of growth prospects, trade and supply chains, inflation, interest rates, the labour market and public finances.