Weekly tax brief | 13 October 2020

The loan charge settlement saga continues
Sarah Saunders
Taxpayers who participated in disguised remuneration (DR) or loan charge (LC) structures had until 30 September 2020 to submit their 2018/19 tax returns to help regularise their position, by reflecting the changes in the rules put in place to allow taxation of these loans. Now that the deadline has passed, it is time to think about what happens next.

Government seeks views of producers and retailers on plans to reform alcohol duty
Sarah Halsted
Could the government’s latest review of the UK’s alcohol duty system make it cheaper to drink in pubs than at home, and what could this mean for off licences, restaurants and supermarkets?

More needs to be done to help creatives
Andy Grey
The Department for Culture, Media and Sport has announced how the first tranche of spending from the £1.57bn emergency recovery fund, launched in July, will be allocated. This relief package is a welcome boost to a sector. However, without further targeted measures we are in danger of retaining the country’s cultural architecture and trophy assets, but without the creative artists to put on the performances to fill them.

Including data and cloud costs would incentivise businesses to undertake more R&D
Sheetal Sanghvi
HMRC recently published a consultation document to explore how the scope of qualifying expenditure for research and development (R&D) tax credits ought to evolve to reflect the modern trends in R&D. This is a welcome step in ensuring that the UK has a tax regime which is internationally competitive and supports future investment in innovation.

Yet another set of residency rules: SDLT surcharge for non-residents
Zoe Martin
A 2 per cent Stamp Duty Land Tax surcharge will apply from 1 April 2021 on purchases by non-residents of residential property in England and Northern Ireland, increasing the maximum SDLT rate for overseas buyers to 17 per cent. Further clarity is however required on the draft legislation to understand the full impact of the proposed test of residence to be used, as anomalies could arise.

Could a hard Brexit see the introduction of a higher rate of VAT on luxury goods?
George Bull
One of the skills of an accomplished Chancellor of the Exchequer is to use a single tax to achieve multiple political objectives. We review the UK’s pre-EEC experience of a purchase tax and ask whether a hard Brexit could see the introduction of a higher rate of VAT on luxury goods.