Tax voice – November 2021

The latest edition of Tax Voice outlines a range of topical tax related issues, including insights on the recently published Pandora papers, the key preparations to make ahead of the introduction of the plastic packaging tax, the impact the recent increase in National Insurance contributions will have on business exits, an interesting court case concerning income tax on share options and developments on the OECD’s two-pillar solution to address the digitalisation of the global economy.

 

Pandora papers – behind the headlines

20 November 2021

It has been a few weeks since the publication of the latest set of leaked documents detailing assets owned via offshore companies by the rich and famous. The Pandora papers follow the previously published Panama and Paradise papers, and the news stories surrounding them cover many of the same themes. Now that the dust has begun to settle, it is worth thinking about what the revelations really tell us about the world of offshore companies and secret bank accounts.

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Plastic packaging tax – are you ready for April 2022?

20 November 2021

On 1 April 2022, the UK government will implement a new plastic packaging tax (PPT) to combat the use of single use plastic and encourage greater reliance on recycled plastics. PPT does not just affect manufacturers of plastic packaging; importers of plastic packaging materials will also be affected. Time is running out to prepare, so make sure your business is ready for PPT and its considerable record keeping requirements.

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National Insurance increase – the impact on business exits

20 November 2021

Prime Minister Boris Johnson recently announced an increase in the rate of National Insurance contributions that employers and employees will pay on earnings. Both rates will increase by 1.25 per cent from 6 April 2022, with the 1.25 per cent charge becoming a separate Health and Social Care Levy from 6 April 2023. We have been looking at the impact on business owners who may be looking towards an exit, or who have already sold up and are waiting for an earn out payment.

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Income tax on share options – a complex exercise?

20 November 2021

The recent Court of Session case of Vermilion Holdings v HMRC provides a useful line of reasoning to support the assertion that just because a securities option is granted by an employer to an employee, it is not necessarily granted ‘by reason of an employment’. The ‘employment related securities’ rules are wide-ranging, but the grant of options for shares and other securities may or may not be subject to income tax and National Insurance contributions as employment income.

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Moving forward with the OECD’s two-pillar solution

20 November 2021

On Friday 8 October 2021, 136 of the 140 (now 137 of 141) countries that comprise the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS) agreed the OECD’s proposed two-pillar solution to address the tax challenges arising from the digitalisation of the global economy, which could bring about a sea-change in the international tax landscape as soon as 2023.

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