Autumn Finance Bill receives Royal Assent and becomes Finance Act 2024
On 22 February 2024, the Autumn Finance Bill received Royal Assent and became Finance Act 2024, having completed its passage through the House of Lords the day prior. The key pieces of tax legislation within the Act, as detailed in our previous article, include ‘full expensing’ being made permanent, the move to a merged R&D tax relief regime and amendments to creative sector tax reliefs.
Updated joint statement regarding the transition from Digital Services Taxes to Pillar One
Following the agreement by more than 130 countries to reform the international tax framework as part of the two Pillar package, the UK, Austria, France, Italy, Spain and the United States published a joint statement on 21 October 2021 outlining the terms of a political compromise on the transition from existing unilateral Digital Services Taxes (DST) to the new multilateral solution, agreeing to discuss a solution constructively. This political compromise has now been extended through to 30 June 2024, which is consistent with the revised timeline for Pillar One.
EU list of non-cooperative jurisdictions updated
On 20 February 2024, the EU General Affairs Council adopted conclusions on the EU list of non-cooperative jurisdictions (Annex I) and the state of play with respect to commitments taken by cooperative jurisdictions to implement tax good governance principles (Annex II – the ‘grey list’). The Council agreed to remove the Bahamas, and Turks and Caicos Islands from the list of non-cooperative jurisdictions (Annex I). In addition, Belize and the Seychelles were moved from Annex I to Annex II. A Euro Tax Flash from KPMG’s EU Tax Centre discusses this in more detail.
‘Simplifying and modernising HMRC’s Income Tax services through the tax administration framework’ outcome and new consultation on how tax administration may be reformed published
On 15 February 2024, HMRC published the outcome to their consultation on ‘simplifying and modernising HMRC’s Income Tax services through the tax administration framework’, which concluded in June 2023. The outcome discusses plans to move some paper outlets to digital, make improvements to allow quicker updates to tax codes and a review of the self-assessment tax return filing criteria. A new consultation seeking views on how tax administration may be reformed was published on the same day, with a particular focus on HMRC’s enquiry and assessment powers, penalties and safeguards. The consultation is open until 9 May 2024. Please contact your usual KPMG in the UK contact if you have any comments you would like us to consider for our own response.
Proposed change to double cab pickup truck tax treatment cancelled
On 12 February 2024, HMRC announced that double cab pickup trucks with a payload of one tonne or more would be classified as cars for tax purposes from 1 July 2024 rather than as goods vehicles. Guidance was also updated to reflect this change which would have resulted in a less favourable treatment for capital allowances and benefit in kind purposes. However, on 19 February 2024, the Government reversed this decision following feedback from the farming and motoring industry.
Making Tax Digital for Income Tax Self-Assessment: Final regulations and accompanying Notice published
From April 2026, Making Tax Digital (MTD) for Income Tax will apply to unincorporated businesses and landlords with business and/or property income over £50,000, followed by those with income over £30,000 from April 2027. Following an earlier consultation, The Income Tax (Digital Requirements) (Amendment) Regulations 2024 have now been finalised. These regulations, alongside earlier regulations that they amend, set out the requirements which must be complied with, including the use of MTD-compatible software to keep and preserve business records digitally and the sending of quarterly updates of these records to HMRC. An Update Notice has also been published which sets out the information that should be sent to HMRC quarterly using MTD-compatible software.