Tax - coronavirus guidance
See the latest guidance in tax amid the coronavirus crisis.
HMRC Approach to Company Residence and Permanent Establishment in response to COVID-19
HMRC has issued guidance on its approach to company residence and permanent establishments in response to COVID-19. The intention is to insert this guidance into the HMRC International Tax Manual when that is possible.
The overview outlines the key points covered:
- HMRC consider that the existing legislation and guidance in relation to company residence and permanent establishments, already provides flexibility to deal with changes in business activities necessitated by the response to the COVID-19 pandemic.
- We do not consider that a company will necessarily become resident in the UK because a few board meetings are held here, or because some decisions are taken in the UK over a short period of time. The existing HMRC guidance makes it clear that we will take a holistic view of the facts and circumstances of each case.
- With regard to permanent establishments, we do not consider that a non-resident company will automatically have a taxable presence by way of permanent establishment after a short period of time. Similarly, whilst the habitual conclusion of contracts in the UK would also create a taxable presence in the UK, it is a matter of fact and degree as to whether that habitual condition is met. Furthermore, the existence of a UK PE does not in itself mean that a significant element of the profits of the non-resident company would be taxable in the UK.
Revenue Scotland (LBTT & landfill tax arrangements)
Revenue Scotland, the Scottish tax authority responsible for Land and Buildings Transaction Tax and Scottish Landfill Tax, has made a number of alterations to its operations in response to the developing COVID-19 pandemic. This is of particular relevance to those who use cheque to make payments or make LBTT submissions on paper. More information is available on the Revenue Scotland website.
A new HMRC helpline has been launched to help businesses concerned about paying their tax due to COVID-19. HMRC will explore:
- agreeing an instalment arrangement
- suspending debt collection proceedings
- cancelling penalties and interest due to administrative difficulties contacting or paying HMRC immediately.
HMRC have updated their Technical Manual to provide guidance on coronavirus and its impact on exceptional circumstances for the purposes of the statutory evidence test for tax domicile purposes.
HMRC new measures for stamp duty because of COVID 19:
Note that this is initial guidance. It will be updated in future to include further guidance about different types of cases.