Last Thursday on Tax and Maintenance Day, the Government published a written ministerial statement setting out further detail on various commitments made at the March 2024 Spring Budget. This includes the launch of a consultation on the impact of recent High Court rulings on the VAT treatment of private hire vehicles and an update on the recent consultation on tackling non-compliance in the umbrella company market. The government also announced two further technical tax policy proposals.
In summary, the announcements were as follows:-
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VAT treatment of private hire vehicles – a consultation has been launched on the potential tax impact of recent High Court rulings on the private hire vehicle sector. This consultation also invites views on potential Government interventions that could help to mitigate any undue adverse effects on this sector and its passengers. The consultation is open until 8 August 2024;
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Tackling non-compliance in the umbrella companies market – the Government will publish a response to this consultation in due course. HMRC will publish new guidance later this year which will include an online pay checking tool. At present, the Government is considering introducing a statutory due diligence regime for businesses that use umbrella companies and will continue to engage with the recruitment industry and other key stakeholders on the detail of this;
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VAT treatment of charitable donations - to encourage charitable giving, the Government will consult later this year on introducing a targeted VAT relief for low value goods donated to charities by businesses which the charities then give away free of charge to those in need; and
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Mandating postcode provision for freeports and investment zones national insurance contributions (“NICs”) reliefs – a legislative change will be introduced which will require employers operating in a freeport or investment zone special tax site to provide their employee’s workplace postcode to HMRC if they are claiming the relevant secondary Class 1 NICs relief through payroll. This will be underpinned by a four-week technical consultation on the draft regulations required to implement this.
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