The implications for tax disputes might not be the first thing springing to mind when reviewing the Autumn Statement announcements but, beyond the headline-grabbing measures, there are a few interesting points:
A familiar feature from Budgets (and other fiscal statements) in recent years is further investment in tax compliance to recover more tax from recalcitrant taxpayers. The focus this time is tackling tax fraud and non-compliance by wealthy individuals, which is politically unsurprising. The numbers are always eye-catching. In this case, the exchequer is expecting to yield an additional £725m in revenue from a £79m investment, which is a decent rate of return.
A further £830m is expected to come from the immediate introduction of an anti-avoidance measure designed to prevent ‘non-doms’ using the share-for-share exchange rules to rollover gains on holdings in UK close companies into holdings in non-UK close companies (which can then be taxed on a remittance basis). The expected exchequer impact is surprisingly large. Is there a concern that the capital gains tax-based motive test already contained within the share-for-share exchange rules is too narrow, or simply too difficult to apply?
As expected, OECD-style transfer pricing documentation rules for large multinationals operating in the UK will take effect from April 2023. The (much) more administratively onerous requirement to complete a summary audit trail remains subject to consultation, but is expected to be brought in at a later date. One might hope these measures will reduce requests for high-level transfer pricing information and streamline corporate tax disputes in this area. Let’s see.
Looking ahead into 2024 and beyond, it is inevitable that the UK’s implementation of OECD Pillar Two and the domestic top-up tax will keep HMRC’s enlarged compliance teams busy. This is a blisteringly complex area and one that is ripe for disputes, particularly where different approaches are taken by the jurisdictions implementing (or not) the Pillar Two rules.
Home >Articles > Autumn Statement 2022: a contentious tax perspective
Autumn Statement 2022: a contentious tax perspective
The implications for tax disputes might not be the first thing springing to mind when reviewing the Autumn Statement announcements but, beyond the headline-grabbing measures, there are a few interesting points:
A familiar feature from Budgets (and other fiscal statements) in recent years is further investment in tax compliance to recover more tax from recalcitrant taxpayers. The focus this time is tackling tax fraud and non-compliance by wealthy individuals, which is politically unsurprising. The numbers are always eye-catching. In this case, the exchequer is expecting to yield an additional £725m in revenue from a £79m investment, which is a decent rate of return.
A further £830m is expected to come from the immediate introduction of an anti-avoidance measure designed to prevent ‘non-doms’ using the share-for-share exchange rules to rollover gains on holdings in UK close companies into holdings in non-UK close companies (which can then be taxed on a remittance basis). The expected exchequer impact is surprisingly large. Is there a concern that the capital gains tax-based motive test already contained within the share-for-share exchange rules is too narrow, or simply too difficult to apply?
As expected, OECD-style transfer pricing documentation rules for large multinationals operating in the UK will take effect from April 2023. The (much) more administratively onerous requirement to complete a summary audit trail remains subject to consultation, but is expected to be brought in at a later date. One might hope these measures will reduce requests for high-level transfer pricing information and streamline corporate tax disputes in this area. Let’s see.
Looking ahead into 2024 and beyond, it is inevitable that the UK’s implementation of OECD Pillar Two and the domestic top-up tax will keep HMRC’s enlarged compliance teams busy. This is a blisteringly complex area and one that is ripe for disputes, particularly where different approaches are taken by the jurisdictions implementing (or not) the Pillar Two rules.
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