This week’s miscellaneous updates – 3 June 2025

In this week’s detailed miscellaneous updates which you can read more about below, HMRC has published a new Spotlight which examines the use of a capital gains tax (CGT) avoidance scheme, and, the VAT Regulations 1995 have been amended to formalise a longstanding administrative concession regarding the due date for final VAT returns.

In other news this week:

• HMRC is reminding parents of teens to go online to extend their child benefit claim,
• As US tax reform continues, KPMG has published a useful article explaining how the Bill could impact on UK corporates with US operations, and
• Fancy yourself as a budding Chancellor of the Exchequer? Ahead of the 2025 Spending Review, the Institute for Fiscal Studies (IFS) has launched a new ‘Be the Chancellor' tool, which illustrates the key choices and fiscal challenges faced by the current Chancellor, Rachel Reeves.

New CGT Spotlight

In Spotlight 69, HMRC is warning that individuals who transfer a property business to a LLP which is subsequently put into MVL are involved in a CGT avoidance scheme. Such schemes aim to reduce/avoid a range of taxes as follows:

• CGT on the disposal of the properties to the LLP which enables a tax-free uplift to be achieved for the CGT base cost of the properties when subsequently disposed by the LLP,
• stamp duty land tax on the transfer of the properties to the LLP due to the rules for partnerships, and
• inheritance tax via potential access to business property relief.

However, it is HMRC’s view that the scheme does not work as intended therefore HMRC is advising those involved to withdraw and settle their tax affairs by emailing the relevant HMRC team.

Administrative concession for final VAT returns enshrined in law

HMRC recently amended the VAT Regulations 1995 to formalise a longstanding administrative concession regarding the due date for final VAT returns. You can find the legislation and documents here: The Value Added Tax (Amendment) Regulations 2025 and Amendment to the Value Added Tax Regulations 2025. This amendment will take effect from 13 June 2025.

The new legislation explicitly gives HMRC the power to provide businesses with additional time to submit their final return when deregistering from VAT.

Currently, the regulations required most businesses to submit a final return within one month and seven days from their effective date of deregistration. However, it has been HMRC practice to provide businesses with one month and seven days from the date it makes the final return available for completion. This allows for any administrative delay during deregistration and gives consistency of treatment by ensuring all businesses have the same amount of time to submit their final return and pay their final VAT bill.

HMRC will publish a ‘Direction’ under the amended regulations after it comes into force on 13 June. Although this will only apply in respect of businesses whose effective date of deregistration is on or after 14 June 2025, businesses with a deregistration date prior to this will effectively be treated the same under the current concession.