Other news in brief

Platform operators in scope of the new Model Rules for Digital Platforms, or the EU’s DAC7, should be aware that assumptions made for reporting may need to be revisited. On 4 December 2024, in the HMRC International Exchange of Information Manual, the UK lists of reportable and partner jurisdictions for Model Rules for Digital Platforms (MRDP) were published. These are jurisdictions with which the UK has an agreement for automatic exchange of reportable information in section III of the OECD Model Rules. It is important to note that the list only includes three EU Member States at present. Accordingly, any digital platforms which may have planned to report once for the UK and EU on the basis of the Commission Implementing Regulation will need to re-evaluate those plans for the 2024 year-end. Platforms operating across Canada, the UK, New Zealand and the EU (the earliest adopting countries for the OECD’s MRDP) will need to take care that all international requirements are met, as the anticipated international exchange of information model has yet to become fully operational. For UK platform operators, additional reporting may be required into the EU, in some cases resulting in duplicate reporting. Please reach out to your usual KPMG in the UK contact to discuss further if this may affect you.

On 16 December 2024 the Chancellor of the Exchequer published a Written Statement in Parliament confirming that she has asked the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast for publication on 26 March 2025. She will respond to this forecast with a parliamentary statement. Our expectation is that this will be a traditional ‘Spring Statement’ focussed on departmental spending plans and is therefore unlikely to contain significant tax announcements. In her statement the Chancellor confirmed her “commitment to deliver one major fiscal event a year”, implying we are likely to see another Autumn Budget next year.

The Committee of the whole House for Finance Bill 2024-25 sat on 10 and 11 December 2024 and considered certain pre-selected clauses on capital gains tax rates and reliefs, oil and gas, VAT on private school fees and stamp duty land tax (SDLT). All these clauses were passed without amendment and the remainder of the Bill will now be considered by the Public Bill Committee who are scheduled to conclude by 4 February 2025. NB Even after these committee stages are completed there is still an opportunity for amendments to be made when the Bill returns to the House of Commons for Report stage. In relation to other tax related Bills, the National Insurance Contributions (Secondary Class 1 Contributions) Bill completed its final stages in the House of Commons on 17 December and was passed without amendment and will now proceed to the House of Lords. The Non-Domestic Rating (Multipliers and Private Schools) Bill completed its committee stage in the House of Commons on 11 and 12 December without amendment and is now awaiting its report stage and third reading on a date that, at the time of writing, had still to be announced.

HMRC have published minutes of a recent meeting of a new time-limited working group focussed on the proposals for moving to a residence-based tax for Inheritance Tax and changes to the taxation of non-domiciled individuals (non-doms). Draft legislation to implement these proposals with effect from April 2025 is included in Finance Bill 2024-25 which is currently working its way through Parliament. The minutes of the meeting on 18 November confirmed that the “purpose of the meeting is to take feedback on the construction of legislation, rather than views on policy design” and that “any changes to draft legislation will be driven by the Parliamentary timetable”. In practice this means that any amendments will be made during the Public Bill Committee stage (scheduled to conclude by 4 February 2025) or Report stage (date not yet confirmed).

On 5 December 2024, HMRC published UK Stamp Tax statistics for 2023-24. Stamp tax receipts for the year totalled £14,815 million, which is a 23 percent decrease from the total receipts in 2022-23 of £19,130 million. The report points to policy changes and a reduction in the number of transactions taking place as a reason for the decrease. Stamp Duty Land Tax (SDLT) was the biggest contributor to the total, with this tax recovering £11,615 million from the taxpayer in 2023-24 however, this was a 24 percent decrease from the prior year (and 27 percent if one looks at residential SDLT in isolation).   

The Code of Practice on Taxation for Banks promotes compliance and discourages tax avoidance in the banking sector. The annual report showed that, as of 31 March 2024, 311 banks had adopted the Code and none were found to be in breach during the reporting period, nor were any ‘Disclosure of Tax Avoidance Schemes’ (DOTAS) reports made. HMRC’s compliance work with banks involves reviews and interactions to ensure adherence to the Code’s principles, including encouraging banks to discuss proposed transactions that may have tax results contrary to legislative intention.

Watch the latest episode of KPMG Talking Tax presented by Global Head of Tax Policy for KPMG International, Grant Wardell-Johnson. This is a series which delves into a specific topic of interest for tax leaders, breaking down complex concepts into insights, all in the space of five minutes.