Weekly tax brief | 1 March 2022

In this edition of RSM’s weekly round-up of the most important tax news, we cover the latest developments. Please feel free to share this update with any of your colleagues and invite them to sign up to our regular briefings here.

Cybercrime victims face tax deduction difficulties
Chris Etherington
Recent research by Chainalysis, which traces cryptocurrency payments made by victims of ‘ransomware’ cybercrime attacks, highlights that a significant proportion of this activity is likely to be affiliated to Russian individuals and organisations. As economic sanctions against Russia increase, such cyber attacks may intensify, and taxpayers need to be wary that ransomware payments may not benefit from tax relief.

Are taxpayers footing the bill for government departments’ IR35 mistakes?
Susan Ball
The new IR35 rules were introduced in April 2021. With HMRC’s light touch to penalties about to end, engagers who incorrectly classify contractors working via an intermediary as being outside IR35 will be liable for the PAYE and National Insurance, plus interest and penalties. There will be no offsetting of tax already paid to HMRC. In the absence of legislation allowing a set-off of tax already paid, engagers should consider protecting themselves with indemnity clauses in contracts.  

Moving your home back to the UK after Brexit? Beware of customs charges!
Sarah Halsted
British nationals who decide to return home after living in the EU should be wary of falling into a post-Brexit customs trap when moving their possessions back to the UK.

Proposed changes to the UK R&D tax regime will impact businesses buying in expertise from overseas
James Tetley
In one of the biggest policy shifts since the introduction of the UK R&D tax relief regime, the government is considering moving to a territorial based incentive by removing reliefs for R&D activities undertaken outside the UK. Such a policy may do more harm than good.