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Tax news in brief


Published: 25 Aug 2021 Update History

Highlights from the broader tax news week ending 25 Aug, which includes: draft guidance on notification of uncertain tax treatment rules, a new online service to apply for VAT partial exemption using a special method, launch of an API to submit interest restriction returns and a reminder for parents of 16 year olds on child benefit claims.

Draft guidance on notification of uncertain tax treatment rules

Large businesses will be required to notify HMRC of uncertain tax positions for returns that are due to be filed on or after 1 April 2022. Draft legislation was issued on 20 July 2021 which indicated a number of changes to the proposed regime, including a reduction in the number of “triggers” under which a tax treatment would be classed as uncertain. Draft guidance was published on 19 August and HMRC is requesting feedback on both the legislation and guidance by 14 September. ICAEW’s Tax Faculty will be summarising points of interest and areas of uncertainty in the draft guidance in due course.

New online service to apply for a VAT partial exemption special method

Businesses that are partially exempt from VAT and use a special method to calculate how much input tax they can recover, can now apply online. On 16 August, HMRC launched a new online service to enable businesses to apply for a partial exemption special method. To use the service applicants will need: a proposal document, a worked example of the proposal; the business’s latest annual adjustment calculation, its declaration and any other supporting documents. HMRC has also updated appendix 2 of its guidance on partial exemption to provide details of how to make an online application.

HMRC issues guidance on the VAT liability of COVID testing services

In Revenue and Customs Brief 11 (2021), HMRC confirms its views on the treatment of coronavirus testing services and supplies based on the existing rules and policies concerning the VAT exemption for the supply of medical care. The Brief provides various examples of coronavirus (COVID-19) testing provision and the correct VAT treatment in each circumstance (ie, standard rated or exempt). Read more.

HMRC launches API to submit interest restriction returns

The first of four new APIs in support of corporate interest restriction returns has been launched by HMRC. The new API supports the submission of interest restriction reports and while the service isn’t yet live, software developers are now able to update their products to use it. HMRC has confirmed that the existing submission service will run in parallel with the API, and that it will not mandate submission online or through the API until at least April 2022. More information about the API can be found on HMRC’s software developer hub.

31 August deadline for child benefit update for over 16s

Parents and carers of children aged 16 have until 31 August to inform HMRC that they are staying in full-time education, or training, and continue claiming child benefit. Child benefit can be claimed for children up to the age of 20 if they are in full-time education or training, but payment will be stopped unless confirmation is received by the deadline. Parents and carers can make the confirmation by updating their child benefit record on gov.uk

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