Corporate tax update September 2019

Published on 30 September 2019

Welcome to the latest edition of our Corporate Tax Update, written by members of RPC’s tax team.

This month’s update reports on the key developments from August 2019. Although this was a relatively quiet month in the corporate tax world, this update includes summaries of an important Upper Tribunal decision on the correct tax treatment of “trail commissions” and a First-tier Tribunal decision on the recovery of pre-incorporation input VAT.


VAT cost sharing exemption available for social housing associations – HMRC Brief

On 22 August 2019, HMRC published Revenue & Customs Brief 8 (2019) in which it announced the continued application of the VAT cost sharing exemption (CSE) to cost sharing groups (CSGs) implemented by social housing associations. Read more

Upper Tribunal holds that loyalty bonuses paid to investors were taxable as annual payments (subject to income tax withholding)

On 9 August 2019, the Upper Tribunal held that so-called “loyalty bonuses” paid to investors by an investment platform service provider (Hargreaves Lansdown, “HL”) were “annual payments” subject to withholding of basic rate income tax. Read more

Upper Tribunal holds operation of salary sacrifice neither a supply, nor an economic activity, for VAT purposes

On 7 August 2019, the Upper Tribunal dismissed HMRC’s appeal and held that the operation of a salary sacrifice scheme by an employer did not constitute an economic activity for VAT purposes. Read more

Input VAT on legal fees incurred (by future owner/director) prior to incorporation of company held to be recoverable by First-tier Tribunal

On 2 August 2019, the First-tier Tribunal held that a company could recover input VAT on legal fees incurred by a shareholder / director (Mr McKee) of the company even though the legal fees were incurred (i) prior to incorporation of the company and (ii) in respect of a claim against him by a third party. Read more


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