Tax news in brief

17 November: Highlights from the broader tax news this week includes: confirmation from the Scottish Government and Welsh Assembly of their planned Budgets, HMRC clarifying VAT liability of school holiday clubs and acceptance of digital signatures for CGT hold-over relief.

Welsh draft Budget expected before Christmas

The Welsh Assembly has confirmed it is delaying the publication of its draft Budget for 2021-22 until 21 December. The original timetable was to publish the draft on the 8 December, but this was pushed back due the announcement that the UK Spending Review will be on 25 November, later than expected.

Scottish Budget planned for 28 January 2021

The Scottish Finance Secretary, Kate Forbes, has confirmed that the devolved administration has opted to wait until late January to publish the Scottish Budget. Forbes cited the Spending Review publication date and the absence of a UK Budget this autumn as contributing factors, as well as the ability to take account of any EU exit deal and the “evolving situation with COVID-19”.

Activity-based school holiday clubs exempt from VAT

HMRC has clarified its policy on the VAT liability of “activity-based” school holiday clubs following a First Tier Tribunal (FTT) decision that such clubs fall within the welfare exemption.

In RSR Sports Limited (Decision No TC07453), the FTT ruled the activities offered by RSR in its school holiday camps were an adjunct to the essential service which was childcare. The FTT also distinguished the case from Sports Academies (Decision No TC05171) in that the staff held no coaching or teaching qualifications and were merely overseeing activities.

The FTT concluded that RSR was entitled to a refund of the output VAT declared. Find out more.

Digital signatures for CGT relief

HMRC has updated its guidance on capital gains tax (CGT) relief on gifts and similar transactions confirming that it will accept digital signatures on the claim for hold-over relief form. The form needs to be signed by the transferor and the transferee, however, in light of measures to stop the spread of coronavirus HMRC has confirmed it will accept digital signatures until further notice. See the updated guidance.