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Judicial review in tax cases

Judicial review in tax casesAnne is a barrister who sits as a judge of the Upper Tribunal (Tax and Chancery Chamber) and the First-tier Tax Tribunal. The commentary in this guidance note is her personal view as she is not authorised to write on behalf of the Tribunals Service or the judiciary.This guidance note considers judicial review in the context of tax.In particular, it explains:•what judicial review is•the scope of judicial review•where to make an application for judicial review, and in particular:◦when it is possible to make an application to the Upper Tribunal◦whether it is possible to make an application to the First-tier Tribunal•what to do if your dispute involves both public law and technical tax issues•the remedies available ― ie what outcomes taxpayers can expect if they winJudicial review is complex and this guidance note is only a summary. Unless you are experienced in judicial review work, it is recommended that you take specialist advice.In particular, this guidance note does not cover non-tax related claims, criminal matters, or Scots or Northern Irish law.What is judicial review?Judicial review is the procedure whereby the court considers whether the decision of a public body was lawful. Judicial review has classically been described as ‘not an appeal from a decision but a review of the manner in which the decision was made’. Judicial review proceedings can be taken against:•any public body, including HMRC, and•legislation, including secondary legislationJudicial review is normally only available when

Sector summary ― retail

Sector summary ― retailIntroduction to the sectorThe retail industry includes any businesses involved with selling products directly to consumers for use or consumption, rather than for resale. Traditionally, the retail sector encompassed shops, department stores and supermarkets. However, online retail is a prolific and growing segment of the market. This guidance note covers the key areas of consideration within VAT and indirect taxes for the retail sector. This guidance note acts as a useful starting point for advisers preparing for a meeting with a retail client, as well as in-house VAT teams.Key considerationsTopicOverviewCommon issuesLinks to further guidanceVAT liability of productsEnsuring that the correct VAT rate is applied to each product can be a significant challenge for retailers. Regular VAT liability reviews should be performed and product files updated to reflect any changes in the applicable VAT rate. This will be a particular focus for retailers selling:– food– pharmaceutical products (including contraceptives and smoking cessation products) – children’s clothes or safety equipment– books / magazines– women’s sanitary products– ensuring the correct VAT rate is applied to new products (it is not sufficient to rely on the VAT rate applied by the manufacturer) – monitoring changes to VAT rates – single vs multiple supplies. For example, applying the correct VAT rate to meal deals or products which are bundled (eg a free toy with a magazine)VAT rates applicable to goods and services ― overview; Single or multiple supplies ― overviewRetail

Social security agreements

Social security agreementsThe purpose of social security agreementsSocial security agreements exist for three main purposes:•to ensure contributions are not paid twice on the same earnings•to offer some protection to social security benefit entitlements by allowing contributions to be aggregated or treated as having been paid in another country•to ensure contributions are payable somewhereAgreements can be between two individual countries, such as the bilateral agreement between the UK and the US, or the UK and Turkey, but they can also be agreed by groups of countries. The largest in the latter category is the EU which covers all the Member States plus some EEA countries (see the EU provisions guidance note). The UK also has a collective agreement with Jersey, Guernsey and most of the other smaller Channel Islands. Most countries with developed social security schemes will have a series of agreements.Some countries, such as the US, have a fairly standard format for their agreements with only minor variations from country to country (see below for more on the UK / US agreement). In more recent years the UK has tried to use a standard format which generally allows a continuing period of five years in the home country social security scheme, but there can still be variations in the agreements.Following Brexit, an employee who is seconded between the UK and the EEA countries or Switzerland, beginning on or after 1 January 2021, is still likely to be able to elect to stay in their home country’s

Economic Operator Registration and Identification Scheme (GB EORI)

Economic Operator Registration and Identification Scheme (GB EORI)This guidance note covers the GB EORI number. This is a unique number assigned by HMRC to businesses and individuals that import / export goods into or out of the UK. The GB EORI number should be used in all communications with HMRC where applicable.For information about the VAT rules in each EU country, please refer to the VAT in the EU guidance note.Who needs a GB EORI number?Any business that is involved in the import / export of goods to from Great Britain will need a GB EORI number. Persons who are not registered for VAT who import and / or export goods will still require a GB EORI number. Businesses only providing services do not require a GB EORI number. EU resident businesses that import or export goods into / out of the UK will require a GB EORI number, as an EU EORI number is not valid in the UK. A GB EORI number can only be issued to a legal person, which is:•a company•an individual•a partnership, or•a sole proprietorEXPP3060A GB EORI number cannot be allocated to individual branches or divisions within a legal entity. Only one number can be issued per legal entity. For GB EORI purposes, all members of a VAT group are treated as legal entities in their own right, but it is only group members who import or export commercial goods that will require a GB EORI number. The representative member

PAYE obligations

PAYE obligationsComing to work in the UKAn employee is subject to income tax if he is resident or carrying out employment duties in the UK. Just one day of work in the UK can result in a UK tax liability for the individual. It can also result in pay as you earn (PAYE) obligations for the employer. See the Setting up a payroll and Employees starting and leaving ― payroll consequences guidance notes.PAYE obligationsUnder normal procedures an employer is required to consider the status of any individual performing work on their behalf. See the Employment status ― why it matters guidance note. Payments to employees are required to be made under the PAYE regulations. However, registration is not required for an employer PAYE scheme if all employees are paid below the national insurance threshold (lower earnings limit) and do not have another job. Under real time information (RTI) reporting, an employer is required to operate PAYE, where at least one employee is earning at least the lower earnings limit, in which case all payments of earnings to all employees must be reported to HMRC, including those employees earning less than the lower earnings limit.If an individual has a contract with an overseas employer it may not be possible for HMRC to enforce the operation of UK PAYE regulations. In order to be liable to operate a PAYE scheme an overseas employer must have a presence in the UK (see the Non-resident employers and liability to PAYE in the UK

Brexit ― cross-border supplies of services after the implementation period

Brexit ― cross-border supplies of services after the implementation periodThis guidance note considers a number of issues that may be relevant to businesses involved in cross-border supplies of services between the UK and the EU in connection with Brexit. It also covers certain transitional rules where there is a risk of double taxation.For an overview of the impact of Brexit on VAT and customs more broadly, see the Brexit ― overview guidance note.For further in depth commentary on the law, see De Voil Indirect Tax Service V1.301.Impact on place of supply of servicesThe UK’s place of supply rules did not change fundamentally after the end of the implementation period. However, there were some consequential changes to the rules / the practical application of the rules as a result of the UK no longer being an EU member state. The changes particularly affected certain services that are not covered by the ‘general’ place of supply rule. For the general rule and special rules, see the International services ― overview guidance note.The table below summarises the kinds of services most affected by changes when the implementation period came to an end:Type of serviceBrexit impactGuidance noteHiring of goodsThe place of supply rules previously contained ‘use and enjoyment’ provisions that could shift the place of supply where it would otherwise be non-EU but the goods were used and enjoyed in the UK (and vice versa). The provisions have changed so use and enjoyment applies

Is an overseas Will needed?

Is an overseas Will needed?It is not uncommon to encounter clients with a foreign element to their affairs. When preparing a Will for such a client, it is necessary to consider whether an English Will is sufficient or whether an overseas Will is needed. Even if an English Will is valid in a foreign jurisdiction, there may be practical reasons to use an overseas Will.The interaction of laws of more than one jurisdiction can be complex. This note deals only with the law applying in England and Wales (English law) and only considers the broad rules of thumb as to when an overseas Will is needed. Advice from overseas is usually required where there is any foreign aspect.From an English law perspective, an overseas Will generally becomes an issue when one or both of the following foreign elements exists:•the client is domiciled abroad•the client has property abroadDomicileThe English law concept of domicile is explained in detail in the Domicile for UK inheritance tax guidance note. Domicile is determined by many factors but generally the country which a person considers his home and where he intends to live permanently or indefinitely will be his domicile. This may be different to a person’s place of residence or his citizenship. Everyone acquires a domicile at birth. This may change but it is only possible to have one domicile at any time.The concept of domicile may differ under foreign laws; it is not uniform even across Europe. Furthermore, whilst domicile is

Benefit entitlements

Benefit entitlementsShort-term benefit entitlementsShort-term benefits are those payable for sickness, unemployment and maternity absences, and usually require a recent history of social security contributions before any payment can be made. Each country has its own rules covering benefit entitlements and these can vary significantly. Where an individual moves from one country to another and where a social security agreement exists it may be possible for contributions paid in one country to be treated as having been paid in another.The provisions of the various social security agreements have to be considered separately, but in practice this is usually only an issue where individuals are moving between EU countries. There is a general requirement that a contribution needs to have been paid in a country where a claim is made immediately before the contributions paid elsewhere can be taken into account.See Example 1.The authorities in each of the countries involved can liaise and provide the necessary contribution details, but this will take time and inevitably delays the payment of any benefit. A quicker route is for the individual to obtain a portable document U1, which will help with an unemployment benefit claim. This is a statement of recently paid contributions issued on request to an EEA national when he leaves an EU country. For non-EEA nationals, the statement of contributions is form E301. The U1 and the E301 are readily acceptable by the social security authorities in all EU countries for the purpose of unemployment benefit claims. An employee leaving the

UK country-by-country reporting

UK country-by-country reportingWhat is country-by-country reporting?Country-by-country (CbC) reporting essentially requires large multinational enterprises (MNEs) to provide an annual return that breaks down the key elements of their activities among the jurisdictions in which they operate.For accounting periods beginning on or after 1 April 2023, additional transfer pricing documentation requirements are required for MNEs within the CbC reporting regime. For more information, see the UK transfer pricing in practice guidance note. The role of the Organisation for Economic Co-operation and Development (OECD)MNEs are under increasing pressure to operate in a fair and transparent way, with particular regard to the payment of taxes and making a fair contribution to public finances. Meanwhile, governments across the globe are under pressure to reduce public deficits, generate higher tax revenues and tackle international tax avoidance. In response to these issues, the OECD has developed a range of proposals as part of the wider base erosion and profit shifting (BEPS) project. The final package of recommendations was published by the OECD on 5 October 2015.CbC reporting is one of the areas covered by these proposals and the detailed recommendations are set out in the final report on Action 13: Transfer Pricing Documentation and Country-by-Country Reporting.Certain MNEs are required to provide the relevant tax authorities with a report containing high-level details of the following:•territories in which they have carried out economic activity•the quantum of revenue and profits generated•the amount of tax paidThe OECD has developed a model CbC reporting template which is included

Research and development SME tax reliefs

Research and development SME tax reliefsThis guidance note provides information on the R&D reliefs available specifically to companies which are small and medium sized enterprises (SMEs). The definition of an SME is detailed in the Research and development (R&D) relief ― overview guidance note. The Qualifying expenditure for R&D tax relief guidance note provides information on what expenditure qualifies for SME relief.See also Simon’s Taxes D1.419, D1.420.For accounting periods beginning on or after 1 April 2024, SMEs can claim relief for qualifying R&D expenditure under the merged RDEC scheme. See the Research and development expenditure credit (RDEC) guidance note. Only loss making SMEs which meet an R&D intensity condition can claim the more generous SME reliefs described in this guidance note. This is sometimes referred to as the ‘SME intensive scheme’ or ‘ERIS’ (enhanced R&D intensive support).For accounting periods beginning before 1 April 2024, SMEs can claim RDEC only for contracted out, subsidised or capped expenditure by SMEs that does not qualify for the SME scheme. Otherwise, SMEs can only claim for relief under the SME scheme, whether or not the company is loss making or R&D intensive.R&D intensive SMEsA company meets the R&D intensity condition for an accounting period if its R&D expenditure is at least 30% of its total expenditure for the period. If the company is connected with any other companies, the test is applied to the expenditure of all of the connected companies. Where the claimant company’s accounting period does not fully coincide with that