United Kingdom

HM Revenue and Customs is reforming late-filing and payment penalties to make them fairer and more consistent across taxes. The first stage of these reforms was set to come into effect early this year. However, on January 13, 2022, HMRC postponed the effective dates by nine months to one year.

With the UK corporate tax rate set to rise 25 percent from April 2023, the UK Government has announced various tax proposals that are intended to support businesses and the UK economy, in the newly released 2022 Budget.

HM Revenue and Customs has recently issued new guidance on the Stamp Duty Land Tax (SDLT) on non-resident buyers of residential property in England and Northern Ireland.

The European Union has released its Winter 2021 Economic Forecast, which says that Brexit will dent UK economic growth considerably, and more than for the European Union, despite the new free trade deal between the two parties.

Norway intends to provide value-added tax administrative relief measures to UK businesses in response to Brexit.

On December 15, 2020, the UK and Mexico signed a trade continuity agreement that will apply when the Brexit transition period ends.

The UK Government is inviting input on the tax challenges associated with the rise of the sharing economy.

Canada and the UK have formally signed a post-Brexit trade continuity agreement that will apply from January 1, 2021.

The EU has referred the UK to the Court of Justice over its failure to comply with EU rules on marked fuel.

HM Revenue and Customs has confirmed that UK businesses who wish to pay their deferred VAT liabilities in installments will be able to decide a payment schedule early next year.

Canada and the UK have announced the successful conclusion of negotiations on an interim trade agreement, which will be in place as they work toward a comprehensive post-Brexit free trade deal.

The UK Government has announced that the temporary GBP1m (USD1.31m) cap for the Annual Investment Allowance (AIA) will be extended until January 1, 2022.

More closely aligning UK capital gains tax (CGT) rates with income tax rates could raise significant revenues for the UK, a government-commissioned review has concluded.

On November 5, 2020, HM Revenue and Customs issued a consultation on proposals to improve the administration of Insurance Premium Tax (IPT) and prevent unfair outcomes.

The UK's Public Accounts Committee has recommended that the UK tax authority first review the potential administrative burden and cost on taxpayers before further expanding its Making Tax Digital initiative.

The OECD has released a new report on countries' tax rules for virtual currencies, alongside an announcement that the Common Reporting Standard will be expanded next year to newly cover virtual currency assets.

On October 5, 2020, the UK tax authority added considerably to its Brexit guidance for businesses on the value-added tax rules that will apply to goods entering Great Britain from outside the UK.

On September 24, 2020, HM Revenue and Customs released in-depth guidance on the introduction of the VAT reverse charge mechanism on the supply of building or construction services.

The UK Government on September 16, 2020, tabled The Taxes (Interest Rate) (Amendment No. 2) Regulations 2020, which will enable HM Revenue and Customs to collect or pay interest on overpaid or underpaid digital services tax liabilities.

The European Commission has published its latest VAT gap report, which show that EU countries lost an estimated EUR140bn (USD165.7bn) in VAT revenues in 2018.

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