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Highlights from the broader tax news for the week ending 13 March 2024, including: the publication of legislation providing for the Spring Budget NIC cuts; changes made by secondary legislation across a range of areas, including R&D tax relief, PAYE and CIS; new HMRC guidance on ISAs; and the opportunity to claim a refund for Italian VAT paid on goods and services related to Italian business activities.

Legislation providing for NIC cuts introduced

The National Insurance Contributions (Reduction in Rates) (No. 2) Bill has been introduced to the House of Commons. The Bill provides for the cuts to class 4 and employees’ class 1 national insurance contributions (NIC) announced at Spring Budget 2024. From 6 April 2024, the headline rate of class 1 NIC will be 8% and Class 4 NIC 6%.

Changes made by secondary legislation to R&D tax relief, and more

The following regulations have been made:

  1. The Research and Development (Chapter 2 Relief) Regulations 2024. The regulations relate to the additional relief for loss-making, R&D-intensive small or medium-sized enterprises and apply to companies with a registered office in Northern Ireland.
  2. The Relief for Creative Industries (Additional Information Requirements and Miscellaneous Amendments) Regulations 2024. The regulations require claims for the creative sector tax reliefs to be submitted electronically and specify the additional information required in support of a claim.
  3. The Income Tax (Pay As You Earn) (Amendment) Regulations 2024. The regulations amend the PAYE Regulations with regard to the treatment of an advance payment of salary.
  4. The Income Tax (Construction Industry Scheme) (Amendment) Regulations 2024. The regulations add an obligation to submit VAT returns and an obligation to pay VAT to the current prescribed obligations under the construction industry scheme (CIS), and remove payments made by a landlord to a tenant from CIS in certain circumstances.

The regulations at 1. and 2. come into force on 1 April 2024. The regulations at 3. and 4. come into force on 6 April 2024.

HMRC guidance on ISAs

HMRC has published its latest Tax-free savings newsletter, providing an update for individual savings account (ISA) managers and child trust fund (CTF) providers. The newsletter has articles on the changes announced at Autumn Statement 2023, which come into effect from 6 April 2024, and the consultation on the new UK ISA announced at Spring Budget 2024.

Italian VAT refunds now available to UK businesses

UK businesses without a VAT fixed establishment in Italy can now claim refunds for Italian VAT paid on goods and services related to their Italian business activities. Businesses can make claims directly without the need for a tax representative. The agreement with the Italian government applies retroactively from 1 January 2021. Claims submitted to the Italian tax authority (Agenzia delle Entrate) on or after this date will be eligible. Businesses should visit the Agenzia della Entrate website for instructions on how to claim a refund.

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