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In brief: social investment; venture capital schemes; childcare; fuel duty; VAT rulings pilot; cross-border IHT; foreign entities; guidance

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Social investment tax relief consultation

HM Treasury has published a consultation document, Social investment tax relief: enlarging the scheme, for comment until 19 September 2014. The consultation covers:

  • the maximum amount of money an investee organisation should be able to receive under the scheme (this will require EU state aid approval);
  • requirements for renewable energy and agriculture under an expanded scheme;
  • the types of social impact bond that an enlarged SITR should include; and
  • options for providing for indirect investment via a separate legal entity.

Legislation was introduced to Finance Bill 2014 at report stage allowing investment through social impact bonds (SIBs).

Tax advantaged venture capital schemes consultation

The government is gathering evidence until 19 September 2014 on recent developments in venture capital schemes (EIS, SEIS and VCTs) to ensure that the schemes continue to be well-targeted in supporting small and growing companies access to finance. The consultation also focuses on two areas of improvement: to consider a more principled approach to reduce investment into lower-risk companies already benefitting from government support; and to explore options for EIS and SEIS to accommodate the use of convertible loans. It also suggests that the use of crowd-funding platforms should be facilitated to allow more individuals to participate in the schemes. Finally, the government also needs to ensure that the schemes remain in line with the updated state aid guidelines.

Tax-free childcare draft regulations

HMRC is consulting until 3 October 2014 on two sets of draft regulations for the proposed ‘tax-free childcare’ scheme, together with a commentary. The scheme was first announced at Budget 2013 and legislation is contained in the Childcare Payments Bill, introduced to Parliament in June 2014. One set of regulations contains detailed rules on eligibility, for example what is meant by ‘qualifying paid work’. The second set contains detailed rules on the operation of the scheme.

UK referred to the CJEU on fuel duty

The European Commission is referring the UK to the CJEU for not properly applying the rules on fiscal marking of fuel. Under EU rules, fuel that can benefit from a reduced rate of duty has to be marked by coloured dye. Fishing vessels, for example, are allowed to benefit from a lower taxed fuel but private leisure boats must use fuel subject to a standard rate. Currently, UK law does not require fuel distributors to have two separate fuel tanks to distinguish between the lower tax marked fuel and the fuel subject to the standard rate. As a result, private leisure boat owners are often in a situation where they can only purchase marked fuel, not paying the right amount of duty.

Mid-term review of cross-border VAT rulings pilot

The EU VAT Forum has made a first review of the VAT cross-border rulings pilot case. This pilot case, which started in June 2013, allows taxable persons to obtain advance rulings on the VAT treatment of complex cross-border transactions. At present, 15 member states participate in this project (Belgium, Estonia, Spain, France, Cyprus, Latvia, Lithuania, Malta, Hungary, the Netherlands, Portugal, Slovenia, Finland, Sweden and the United Kingdom). All participants expressed positive views regarding the handling of the first CBR cases and expressed their support to continue this initiative beyond 2014. They also acknowledged the need to give more visibility to this project in order to raise more awareness among business, in particular SMEs. They also agreed on a voluntary basis to the publication of the cross-border rulings. A further assessment of the pilot case will take place at the end of this year.

EC update on cross-border inheritance tax proposals

The Confédération Fiscale Européenne (CFE) has submitted its opinion statement on cross-border inheritance tax problems within the EU to the European Commission, following the EC’s publication in December 2011 of recommendations on ways for member states to avoid the incidence of double taxation and discriminatory tax rates relating to inheritance tax. The CFE, which represents the tax profession in Europe and consists of 32 professional organisations from 25 European countries (22 EU member states) with 180,000 individual members, commented that: ‘Member states should amend their domestic legislation to grant relief from double taxation on inheritance in the way set out in the 2011 recommendation. Any measure other than a change in the national legislation would not be an effective solution … The recommendation should only be a first step, as soft law may be interpreted in a wrong manner and generate discrepancies [and] the Commission should explore the possibility of binding EU legislation dealing with the matters contained in the 2011 recommendation.’

Charity status of foreign entities

The Taxes (Definition of Charity) (Relevant Territories) (Amendments) Regulations, SI 2014/1807, come into force on 31 July 2014. They amend the Taxes (Definition of Charity) (Relevant Territories) Regulations, SI 2010/1904, to add the Principality of Liechtenstein to the list of relevant territories in which organisations meeting certain criteria may qualify for charity status in the UK.

HMRC guidance

New HMRC guidance is available from HMRC’s website, including:

  • HMRC toolkits on VAT covering the partial exemption, input tax and output tax;
  • SDLT certificates in Scotland: HMRC has announced a change to its service in Scotland for obtaining a handwritten SDLT certificate within two days, in cases where the buyer faces a real risk of losing the property by following usual registration procedures. Applicants are no longer required to present the relevant documents in person, but may now scan and email them. This service applies only to SDLT returns filed outside of ARTL and is subject to specific conditions;
  • Compensatory interest on inward processing relief suspension goods and temporary importation goods; this is charged to prevent operators who divert such goods from gaining a financial advantage over operators importing directly to the EC market.
Issue: 1225
Categories: News