11 Oct 2019

Tax and the City Review for October 2019

Mike Lane and Zoe Andrews review the latest corporation tax statistics; the FTT decision in Potter; the judgments in Fiat and Starbucks; and the recently published HMRC guidance on the hybrid capital instrument rules.

The latest corporation tax statistics show that the finance and insurance sector was the largest single contributor to corporation tax in 2017/18, thanks in part to the bank surcharge, the loss restriction rules and increased profits, although receipts from the sector dropped 15% in 2018/19. In Potter, the FTT considers the trading company test is satisfied for the purposes of entrepreneurs’ relief despite gaps in trading and the lack of documentary evidence of the company’s trading activities. The General Court publishes its judgments in the Fiat and Starbucks cases confirming that the Commission may use the arm’s length principle to check that intra-group transactions endorsed by the relevant transfer pricing ruling correspond to prices that would have been negotiated under market conditions. HMRC publishes guidance in the Corporate Finance Manual on the hybrid capital instrument rules.

This article was first published in the 11 October 2019 edition of Tax Journal.


Tax and the City review - October 2019

Practices Tax, Tax Disputes
Contact Information
Mike Lane
Partner at Slaughter and May
Zoe Andrews
Head of Tax Knowledge at Slaughter and May