Tax news in brief

GAAR: employment award arrangements

The general anti-abuse rule (GAAR) advisory panel has published its opinion on tax arrangements involving:

• the creation by A of an obligation to make pension payments to an employee;
• the transfer of that obligation to a third party (B); and
• the making of a payment by A to B in exchange for B taking on that obligation.

The panel has found that:

• entering into the tax arrangements is not a reasonable course of action in relation to the relevant tax provisions; and
• carrying out of the tax arrangements is not a reasonable course of action in relation to the relevant tax provisions.

For further information on the GAAR, including a list of opinions published by the panel, see GOV.UK.

HMRC guidance on employment related securities (ERS)

HMRC has:

• published guidance on its view of what constitutes an 'arrangement' for the purposes of an enterprise management incentive (EMI) scheme and thereby leads to loss of independence for the purposes of being able to qualify for an EMI scheme;
• updated its guidance in relation to the deeming provisions in the ERS legislation following the outcome of the case of Vermilion. HMRC's position is that an option made available by an employer will automatically be considered an ERS option and liable to income tax and national insurance rather than capital gains tax. The deeming provisions focus only on who makes the option available and remove the need to consider why and option may be made available; and
• added to its practical guidance on ERS processes. Recent developments include the publication of new guidance highlighting the requirements when a scheme ceases, including the impact if a linked pay as you earn scheme is closed, and what to do if an employer misses a registration deadline, and other implications of late filing.

Celtic freeport tax sites

HMRC has published maps showing the tax sites relating to Celtic Freeport. The tax sites have been designated with effect from 26 November 2024. Freeports benefit from a range of tax and other incentives, including enhanced capital allowances. Further information can be found on ICAEW’s hub.

Updated guidance on the public service pensions remedy

HMRC has updated the following guidance on the public service pensions remedy (also known as McCloud):

• how to elect for the scheme to pay additional tax charges;
• what to do if the person wants a different scheme to pay the additional tax charges; and
• what happens after a submission for a refund has been received.

HMRC webinars

HMRC is delivering webinars on the following topics:

• VAT on private school fees;
• basis period reform; and
• the research and development expenditure credit (RDEC).

Budget Responsibility Act 2024

Regulations have been made which bring into force key provisions of the Budget Responsibility Act 2024 with effect from 15 October 2024. In July 2024, the government explained that the legislation was intended to ensure that “future fiscal announcements making significant, permanent tax and spend changes” would be “subject to an independent assessment by the OBR”.

HMRC guidance for alcohol producers

HMRC has published a factsheet setting out the penalties it may charge where a business is late in submitting alcohol production returns, or in paying alcohol duty.