Other news in brief

HMRC publish outcome to consultation on ‘Improving the data HMRC collects from its customers’

On 28 January 2025, HMRC published the outcome to their consultation ‘Improving the data HMRC collects from its customers’, which requested feedback on two draft statutory instruments. The Government will not proceed with the first statutory instrument – ‘Income Tax (Pay As You Earn) (Amendment) Regulations 2024’, which contained proposals for employers to provide details of employees' working hours on RTI returns. The Government cited its introduction would increase the administrative burden on businesses. However, the Government did decide to proceed with the second statutory instrument – ‘Income Tax (Additional Information to be included in Returns) Regulations 2025’ and this was laid before Parliament on the same day. Taking effect from 6 April 2025, these regulations will require certain additional information to be provided. For personal tax returns this includes for directors of close companies, information about the company and the amount of dividend income including details of percentage shareholdings. For trustee, partnership and personal tax returns this includes the dates of commencement and cessation of business activities.

Public Accounts Committee publish report on HMRC customer service

On 22 January 2025, the House of Commons Public Accounts Committee published HMRC Customer Service and Accounts 2023-24. This is a report outlining HMRC’s performance in delivering customer service, drawing conclusions from its findings and making recommendations to the Government on how improvements may be made. The Government has two months in which to provide a response to the report.

Charter for Budget Responsibility approved by Parliament

On 29 January 2025, the House of Commons voted to approve the Charter for Budget Responsibility, which sets out the Government’s fiscal and debt management policy including the new ‘fiscal rules’. The accompanying press release included the following comment: “Through the Charter, fiscal and economic stability will be enhanced by confirming the Government’s intention to move to one major fiscal event per year”, suggesting that the Chancellor is still not expecting to announce major tax changes at the Spring Statement on 26 March 2025.

Institute for Fiscal Studies compares the UK’s Government revenues with other advanced countries

The Institute for Fiscal Studies recently published ‘The UK’s near-record Government revenues are not uncommon internationally’. This article considers how changes in UK Government revenues compares with other advanced economies including the G7 and EU27. The article notes that although UK Government revenues are at record high levels, the country has only recently started to catch up to its peers in terms of average revenue as a percentage of Gross Domestic Product (GDP).

UK suspends Double Taxation Treaties with Russia and Belarus

On 4 February 2025, HMRC announced that the UK will revoke the legislation which gives effect to the UK-Russia and UK-Belarus Double Taxation Treaties in UK law and that these will therefore cease to have effect from 6 April 2025 for income and capital gains tax and 1 April 2025 for corporation tax in respect of both treaties. This is a response to the decisions by Russia in August 2023 and Belarus in March 2024 to unilaterally suspend key elements of the treaties, an action which the UK regarded as placing both countries in breach of their treaty obligations. Although the UK has continued to honour its obligations under the treaties – and will continue to do so until the formal revocation of the legislation giving effect to these – from that point there will be an increased risk of double taxation, with a need to rely on the relief (if any) available under the domestic law of the jurisdictions concerned where amounts are potentially subject to tax in both the UK and Russia/Belarus (although in practice the incidence of this may be restricted by ongoing sanctions). The treaties remain in existence and the UK announcement confirms the possibility of new legislation bringing these back into effect in UK law if Russia and/or Belarus also take action to come back into compliance with the treaties.

Maps of East Midlands Investment Zone tax sites published

On 3 February 2025, HMRC published the maps of East Midlands Investment Zone tax sites. The tax sites have been designated with effect from 26 February 2025. Investment Zone tax sites offer a range of incentives including enhanced capital allowances and structures and buildings allowance and reliefs for SDLT, business rates and employer’s NIC.

Practical steps to prepare for the EU Pay Transparency Directive

A recent article by Scott Cullen, Susie Zhu and Alla Pavolotska of KPMG in the UK, published by the Reward and Employee Benefit Association (REBA), sets out some guidelines to help employers get prepared for the EU Pay Transparency Directive and the significant changes to the workplace it will herald.

Benefits strategies and policies to review for the coming year

Another recent article published by REBA by Scott Cullen, Manish Godhwani Camellia Law of KPMG in the UK, discusses the growing pressure employers are facing to adapt their benefits offerings to match changing employee expectations. The authors advise that employers should rethink their current offerings to stay competitive and this shift calls for strategic planning and transformation that has a significant bearing on how the benefits are designed, delivered and communicated.

Merger Control & National Security: key considerations for corporate transactions

Readers who regularly get involved with global M&A activity may be interested in reading about the latest insights on merger control and national security published in Financial Worldwide Magazine’s February issue, in conjunction with KPMG in the UK and Germany.