Weekly tax brief | 7 April 2021

A pause in tax hostilities between the USA and the UK?
George Bull
In an era marked by the weaponisation of taxes around the world, the fallout from fiscal combat between the USA and the UK seemed inevitably set to do far more damage to the UK than the USA. Recent developments suggest that the risk of serious damage to UK exports to the USA may be receding.

Hidden cost of Covid-19 for some of the hardest hit sectors
Miranda Sharp
The 2020 profits of many large businesses in sectors such as travel and hospitality have been hit hard by Covid-19. Many have also had to borrow large amounts from their banks on which interest is payable. Facing uncertain futures, some are now having to recognise that they will never obtain effective tax relief on bone fide commercial borrowings.

Carbon Border Tax – protectionism or protecting the world?
Sheena McGuinness
The Carbon Border Adjustment Mechanism (CBAM), a form of carbon border tax, was endorsed by the European Parliament last month. While ostensibly being introduced to reduce carbon emissions on a wider scale, it has been greeted with much political hostility. International disputes may lead to counter-tariffs to preserve other countries’ exports, economies and tax bases. Is there a carbon tax gap that gives an advantage to early adopters? Or is reducing carbon emissions so fundamental to safeguarding the world that this needs a collaborative approach across jurisdictions rather than localised protectionism?

Another source of funds for business?
Shirley McIntosh
Pushing the limit of filing deadlines for accounts and tax returns has become a bit of a sport for some business owners. But could access to cash by early tax filings encourage a change in approach? For loss-making trading businesses, an extension to the loss carry-back rules could be invaluable.