Our Insights

VAT De-registration: the CJEU decision in the Promexor case

On 18 November 2021, the Court of Justice of the European Union (the “CJEU”) delivered its judgment in Case C-385/20 (Promexor Trade SRL v Directia Generala a Finantelor Publice Cluj – Administratia Judeteana a Finantelor Publice Bihor). Promexor is a Romanian company whose VAT number was revoked by the local tax authorities following a period of six months in which its VAT returns did not record any transactions subject to VAT. Under Romanian legislation, a company whose VAT number has been revoked could re-register and retroactively deduct input VAT for the period when it was not registered. However, in this case, Promexor was prevented from doing so because its director was also a shareholder of a company that was going through insolvency proceedings.

FICkle fortunes

Helen McGhee discusses the use of corporate vehicles in family wealth and succession planning in the UK

Will it be a safe landing?

Helen McGhee and Tom O’Reilly consider the Court of Appeal’s judgment in the Fisher case and how it is likely to impact the rules on transfer of assets abroad.

Even Closer? A Global Minimum Tax on Corporations December Update

This article is an update from a previous article published on 20 August 2021.

On 8 October 2021, the OECD/G20 Inclusive Framework published a statement where 136 jurisdictions^[1] agreed to a global minimum tax on corporations (“GMCT”). The previous article noted that much will depend on the outcome of future political negotiations. After some negotiations, the new statement represents an improvement from the previous one, incorporating more countries.

Joint and Several Liability Notices

Schedule 13 of the Finance Act 2020 (the “FA 2020”) introduced measures that allow HMRC to give joint and several liability notices (“JSLN”) to company directors, shadow directors and members of LLPs in certain circumstances. Although the FA 2020 came into force on 22 July 2020, HMRC only recently published a guidance note about these new powers.

JSLNs provide HMRC with a power to recover from individuals taxes that might otherwise not be paid by a corporate taxpayer.

Lloyd v Google LLC: Supreme Court closes floodgates on opt-out data protection claims

On 10 November 2021, the Supreme Court delivered its judgment in Lloyd v Google LLC [2021] UKSC 50, finding unanimously in favour of Google and rejecting the claim brought by Mr Lloyd on behalf of himself and over 4 million other iPhone users in respect of alleged breaches of data protection law.

The judgment will come as a significant relief to data controllers of all sizes who, following the Court of Appeal’s decision, faced the prospect of large-scale data claims. The Supreme Court’s discussion of the representative claim procedure will also be of interest to anyone involved in multi-party litigation.

Autumn Budget 2021: effects on tax disputes

On 27 October 2021, the Rt Hon Rishi Sunak MP, the Chancellor of the Exchequer, unveiled the contents of the Autumn Budget 2021. This comes after the International Monetary Fund (IMF) published its world economic forecast on 12 October 2021. The IMF expects the British economy to grow 6.8% in 2021 and 5.0% in 2022.¹ During 2021, the UK GDP is expected to grow more strongly than that of France (6.3%), the US (6.0%), Italy (5.8%), Spain (5.7%), and Germany (3.1%). In this context, the UK government is in a good position to strengthen the protection of the public revenue whilst tackling the growing inequalities intensified by the pandemic.

The present article focuses on those specific measures that might have an effect on tax disputes.

Test Claimants in the Franked Investment Income GLO v HMRC

On 23 July 2021, the Supreme Court (“UKSC”) delivered its decision in Test Claimants in the Franked Investment Income Group Litigation v HMRC [2021] UKSC 31. This is the third judgment given by the UKSC in this long-running litigation concerning the tax treatment of dividends received by UK-resident companies from non-resident subsidiaries, compared with those paid and received within wholly UK-resident groups of companies.

This note discusses the three most significant issues – in financial terms – that were decided by the UKSC: (1) the remedy for claims in respect of unduly levied Advance Corporation Tax (“ACT”), which had been set off against lawful mainstream corporation tax (“MCT”); (2) the lawfulness of the UK statutory provisions which prevented double taxation relief (“DTR”) from being carried forward; and (3) whether HMRC could set off payments of tax credits which had been made to the claimants’ shareholders against the restitution due to the claimants for unlawful ACT.

An Assessment to Tax is never ‘stale’, but it might be out of date: HMRC v Tooth

This article briefly discusses the key points arising out of the decision of the UK Supreme Court in HMRC v Tooth [2021] UKSC 17.  The case considered (1) whether a discovery assessment could become “stale” and (2) the meaning of the phrase “deliberate inaccuracy”.

VATA 1994 s.47, Agency, Onward Supply Relief, & Double Taxation

On 12 July 2021, the First-tier Tribunal (Tax Chamber) (“FTT”) released its decision in Scanwell Logistics (UK) Limited v HMRC [2021] UKFTT 261 (TC), rejecting the taxpayer’s claim for onward supply relief (“OSR”).

Whilst OSR is now limited, post-Brexit, to goods imported into Northern Ireland for onward supply to the EU, the FTT’s discussion of agency under section 47 of the Value Added Tax Act 1994 (“VATA”) is of broader interest.

The case serves as a reminder of the significant financial consequences that can result from errors in tax planning, as Scanwell was ultimately held liable for £5.7 million in unpaid import VAT despite the fact that the imported goods almost immediately left the UK (which, if properly planned, could have meant Scanwell was relieved from liability to import VAT).