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Highlights from the broader tax news for the week ending 21 February 2024, including: updated HMRC guidance on the evidence required to make a claim for a creative industry tax relief; the publication of a discussion paper on tax thresholds; a warning from HMRC to watch out for fake tax refund offers; updated insolvency guidance; updated VAT registration guidance for businesses making specified supplies; and a reminder from HMRC relating to second-hand cars bought in Great Britain but sold in Northern Ireland.

Evidence required when claiming creative industry tax reliefs

From 1 April 2024, a company claiming a creative industry tax relief must provide evidence in support of its claim. HMRC has updated its guidance on the supporting evidence required in order to make a valid claim for creative industry tax reliefs. Where mandatory information is not provided, HMRC may amend the company’s tax return to remove the claim.

TLRC report on tax thresholds

The Tax Law Review Committee (TLRC) has published a discussion paper on thresholds in the tax system. The paper sets out the difficulties in the main tax threshold rules as they affect individuals and small businesses, and considers a range of principles and tools that would assist in the design of future tax policy. ICAEW Tax Faculty participated in discussions that helped inform the report. The team behind the report will summarise the main findings in an article for TAXline.

HMRC warns of bogus tax refund offers

HMRC has reported that it responded to 207,800 referrals from the public of suspicious contact in the past year, an increase of 14% on the previous year. More than 79,000 of those referrals offered bogus tax rebates, and HMRC is concerned that fraudsters could again contact taxpayers following the 31 January self assessment deadline.

HMRC corrects insolvency guidance

HMRC has apologised for an error made in insolvency guidance published in January 2024. In the updated guidance, HMRC confirms that all of the income tax and national insurance contributions (NIC) deducted and due on any payslip issued to an employee after the relevant date of insolvency, should be paid to HMRC as an expense of the insolvency.

VAT registration for businesses making specified supplies

HMRC has updated paragraph 2.7 of VAT Notice 700/1 in respect of businesses applying to register for UK VAT because they make specified supplies of finance, insurance services or investment gold to customers in countries outside the UK. The update reads: “If you are registering because you make specified supplies, ensure you clearly state ‘SPECIFIED SUPPLIES’ in the free-text box when asked to describe your business activities during the application process”.

Second-hand cars bought in Great Britain but sold in Northern Ireland

HMRC is writing to businesses to remind them that, from 1 May 2024, the VAT margin scheme for second-hand vehicles can no longer be used for any vehicles purchased in Great Britain but sold in Northern Ireland. The scheme is currently available for eligible vehicles purchased in Great Britain before 1 May 2023 and sold in Northern Ireland by 30 April 2024. More information on this can be found here.

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