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PH COVID-19 Client Alert Series: U.K. Tax Implications

Mar 24, 2020, 07:04 AM

By Arun Birla, Jiten Tank, Hannah Gray & Abigail Hung

Publication Type(s):
Client Alerts
Exlcude on home page:
No

The U.K. government continues to announce intervention and assistance measures to help businesses and individuals deal with the impact of COVID-19 on the U.K. economy. The continued disruption to worldwide travel will mean that various businesses will need to consider not only the human impact, but the economic impact on their businesses. In this article, we set out a few of the key tax considerations and government measures intended for businesses (and individuals where relevant) at this time.

Tax Payment Deferrals

Time to Pay Scheme

HMRC’s Time to Pay scheme allows businesses and individuals to set up payment plans and agree to deferred payments with HMRC where they are under financial distress and unable to meet their tax liabilities. HMRC has established a specific COVID-19 helpline and will discuss issues on a case-by-case basis in order to support those in need.

VAT

Last week the U.K. government announced a deferral on VAT payments for all U.K. businesses for the next quarter, until 30 June 2020. The offer is automatic with no applications required. For liabilities that accumulate during this deferral period, taxpayers will have until the end of the 2020 to 2021 tax year to pay. VAT refunds and reclaims will be paid by the government as normal.

It remains to be seen whether the government will also defer deadlines for VAT returns (a measure which some other European countries have already announced).

Income Tax Payments

For all self-employed individuals, income tax payments due on 31 July 2020 will be deferred until 31 January 2021. Again, no application is required as the offer will apply automatically. The government confirmed that no penalties or interest would be charged for late payment owing to the deferral period.

Business Rates Relief

All retail, hospitality and leisure businesses in England and Scotland are now subject to a business rates holiday for the 2020/2021 tax year. Certain businesses which qualify for small business rates relief will also be entitled to small business grants from their local authority.

Residency

Non-U.K. Company Directors

A company may be considered U.K. tax resident if: (i) it is incorporated in the U.K.; or (ii) it is incorporated outside the U.K. but its central management and control is deemed to be in the U.K. A company that has dual residency between the U.K. and a jurisdiction with which the U.K. has a double tax treaty will usually be subject to a tie-breaker test to determine which authority has the taxing right. Where there is no double tax treaty, a non-U.K. resident company which is deemed to be resident in the U.K. may be subject to U.K. tax.

Non-U.K. resident companies should take care to ensure that they try to avoid inadvertently affecting their tax residency. Whilst travel restrictions remain strict across the world, and directors of non-U.K. resident companies may be in the U.K., there is a risk that the central management and control of the non-U.K. resident company may be considered to be in the U.K. Similarly, U.K. companies that have directors who are currently residing abroad and unable to travel for meetings should also consider the potential local law guidelines on tax residency.

As the length of time for which non-essential travel will be inadvisable is not certain, but likely to be a considerable amount of time, businesses should put in place contingency plans for how best to protect their business from any residency concerns. Things to consider for non-U.K. resident companies include: (i) whether it would be prudent to postpone meetings and avoid directors in the U.K. from making any strategic business decisions at this time; (ii) whether the relevant U.K. director is required for such a meeting; or (iii) whether a proxy could be appointed.

Where these measures may not be possible, best practice would be to ensure that only a minority of the directors participate from the U.K. via telephone conferencing (or other means of communication) and that the meeting is initiated from outside the U.K.. In addition, all board minutes should be taken and kept outside the U.K., and evidence as to why it was necessary for the director to attend via telephone conferencing from within the U.K. should be retained by the non-U.K. resident company.

Ultimately, whilst there is no official guidance on what to do in these unprecedented circumstances, determination as to where the central management and control of a company is will depend on the specific facts and circumstances in question – which we anticipate should include an analysis of the historic pattern of the non-U.K. resident company over time and not just what may occur in the coming days or weeks.

U.K. Statutory Residency Test

The U.K. has a Statutory Residency Test which allows individuals to work out their residence status for a tax year. The Statutory Residency Test takes into consideration different factors; generally, consideration is placed on: (i) the number of days an individual spends and, where relevant, works in the U.K.; and (ii) the connections that that individual has with the U.K.

As set out above, given the strict travel restrictions that many governments have imposed, individuals may find themselves in a situation where they are approaching the maximum number of days they may be present in the U.K. before they are considered resident in the U.K. for tax purposes. However, the Statutory Residency Test does allow an individual's U.K. day count to be reduced due to “exceptional circumstances”, which would seem to apply in the current situation. Whether circumstances may be regarded as exceptional will depend on the facts and circumstances and also the choices available to the individual at that point in time. Note, however, the maximum number of days that can be discounted due to exceptional circumstances is 60 days.

Tax Administration

With those professionals who are able to now advised to work from home, it is likely that firms will encounter increased difficulty and delays in practical areas of their business with a physically distant workforce and resources being redeployed into more business (and economy) critical areas where required.

As yet, no specific measures have been announced by the U.K. government on whether tax returns and other company administration will be subject to deferred deadlines or leniency from the authorities. We would expect that this will be considered in more detail in the coming weeks.

IsRss:
  • tax law
  • europe
  • client alerts

Related professionals

Linked PracticeAreas

11 comments

Leave a comment
  1. roger lagasca | Jul 10, 2020
    Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  It proved to be Very helpful to me and I am sure to all the commentators here! 
  2. rogerlagasca | Jul 09, 2020
  3. Michel jorden | Jul 08, 2020
  4. rogerlagasca | Jul 08, 2020
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  5. rogerlagasca | Jul 07, 2020
  6. rogerlagasca | Jul 03, 2020
  7. rogerlagasca | Jul 01, 2020
  8. rogerlagasca | Jul 01, 2020
  9. yaerdu rarks | Jul 01, 2020
  10. Michel jorden | Jul 01, 2020
  11. rogerlagasca | Jun 30, 2020

    Leave a comment

    Client Alert

    PH COVID-19 Client Alert Series: U.K. Tax Implications

    Mar 24, 2020, 07:04 AM

    By Arun Birla, Jiten Tank, Hannah Gray & Abigail Hung

    Publication Type(s):
    Client Alerts
    Exlcude on home page:
    No

    The U.K. government continues to announce intervention and assistance measures to help businesses and individuals deal with the impact of COVID-19 on the U.K. economy. The continued disruption to worldwide travel will mean that various businesses will need to consider not only the human impact, but the economic impact on their businesses. In this article, we set out a few of the key tax considerations and government measures intended for businesses (and individuals where relevant) at this time.

    Tax Payment Deferrals

    Time to Pay Scheme

    HMRC’s Time to Pay scheme allows businesses and individuals to set up payment plans and agree to deferred payments with HMRC where they are under financial distress and unable to meet their tax liabilities. HMRC has established a specific COVID-19 helpline and will discuss issues on a case-by-case basis in order to support those in need.

    VAT

    Last week the U.K. government announced a deferral on VAT payments for all U.K. businesses for the next quarter, until 30 June 2020. The offer is automatic with no applications required. For liabilities that accumulate during this deferral period, taxpayers will have until the end of the 2020 to 2021 tax year to pay. VAT refunds and reclaims will be paid by the government as normal.

    It remains to be seen whether the government will also defer deadlines for VAT returns (a measure which some other European countries have already announced).

    Income Tax Payments

    For all self-employed individuals, income tax payments due on 31 July 2020 will be deferred until 31 January 2021. Again, no application is required as the offer will apply automatically. The government confirmed that no penalties or interest would be charged for late payment owing to the deferral period.

    Business Rates Relief

    All retail, hospitality and leisure businesses in England and Scotland are now subject to a business rates holiday for the 2020/2021 tax year. Certain businesses which qualify for small business rates relief will also be entitled to small business grants from their local authority.

    Residency

    Non-U.K. Company Directors

    A company may be considered U.K. tax resident if: (i) it is incorporated in the U.K.; or (ii) it is incorporated outside the U.K. but its central management and control is deemed to be in the U.K. A company that has dual residency between the U.K. and a jurisdiction with which the U.K. has a double tax treaty will usually be subject to a tie-breaker test to determine which authority has the taxing right. Where there is no double tax treaty, a non-U.K. resident company which is deemed to be resident in the U.K. may be subject to U.K. tax.

    Non-U.K. resident companies should take care to ensure that they try to avoid inadvertently affecting their tax residency. Whilst travel restrictions remain strict across the world, and directors of non-U.K. resident companies may be in the U.K., there is a risk that the central management and control of the non-U.K. resident company may be considered to be in the U.K. Similarly, U.K. companies that have directors who are currently residing abroad and unable to travel for meetings should also consider the potential local law guidelines on tax residency.

    As the length of time for which non-essential travel will be inadvisable is not certain, but likely to be a considerable amount of time, businesses should put in place contingency plans for how best to protect their business from any residency concerns. Things to consider for non-U.K. resident companies include: (i) whether it would be prudent to postpone meetings and avoid directors in the U.K. from making any strategic business decisions at this time; (ii) whether the relevant U.K. director is required for such a meeting; or (iii) whether a proxy could be appointed.

    Where these measures may not be possible, best practice would be to ensure that only a minority of the directors participate from the U.K. via telephone conferencing (or other means of communication) and that the meeting is initiated from outside the U.K.. In addition, all board minutes should be taken and kept outside the U.K., and evidence as to why it was necessary for the director to attend via telephone conferencing from within the U.K. should be retained by the non-U.K. resident company.

    Ultimately, whilst there is no official guidance on what to do in these unprecedented circumstances, determination as to where the central management and control of a company is will depend on the specific facts and circumstances in question – which we anticipate should include an analysis of the historic pattern of the non-U.K. resident company over time and not just what may occur in the coming days or weeks.

    U.K. Statutory Residency Test

    The U.K. has a Statutory Residency Test which allows individuals to work out their residence status for a tax year. The Statutory Residency Test takes into consideration different factors; generally, consideration is placed on: (i) the number of days an individual spends and, where relevant, works in the U.K.; and (ii) the connections that that individual has with the U.K.

    As set out above, given the strict travel restrictions that many governments have imposed, individuals may find themselves in a situation where they are approaching the maximum number of days they may be present in the U.K. before they are considered resident in the U.K. for tax purposes. However, the Statutory Residency Test does allow an individual's U.K. day count to be reduced due to “exceptional circumstances”, which would seem to apply in the current situation. Whether circumstances may be regarded as exceptional will depend on the facts and circumstances and also the choices available to the individual at that point in time. Note, however, the maximum number of days that can be discounted due to exceptional circumstances is 60 days.

    Tax Administration

    With those professionals who are able to now advised to work from home, it is likely that firms will encounter increased difficulty and delays in practical areas of their business with a physically distant workforce and resources being redeployed into more business (and economy) critical areas where required.

    As yet, no specific measures have been announced by the U.K. government on whether tax returns and other company administration will be subject to deferred deadlines or leniency from the authorities. We would expect that this will be considered in more detail in the coming weeks.

    IsRss:
    • tax law
    • europe
    • client alerts

    Related professionals

    Linked PracticeAreas

    11 comments

    Leave a comment
    1. roger lagasca | Jul 10, 2020
      Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  It proved to be Very helpful to me and I am sure to all the commentators here! 
    2. rogerlagasca | Jul 09, 2020
    3. Michel jorden | Jul 08, 2020
    4. rogerlagasca | Jul 08, 2020
      I think this is one of the most significant information for me. And i’m glad reading your article. But should remark on some general things, The web site style is perfect, the articles is really great : D. Good job, cheers buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours I am unable to read articles online very often, but I’m glad I did today.  This is very well written and your points are well-expressed.  Please, don’t ever stop writing.
    5. rogerlagasca | Jul 07, 2020
    6. rogerlagasca | Jul 03, 2020
    7. rogerlagasca | Jul 01, 2020
    8. rogerlagasca | Jul 01, 2020
    9. yaerdu rarks | Jul 01, 2020
    10. Michel jorden | Jul 01, 2020
    11. rogerlagasca | Jun 30, 2020

      Leave a comment

      LABOR & EMPLOYMENT

      PH COVID-19 Client Alert Series: U.K. Tax Implications

      Mar 24, 2020, 07:04 AM

      By Arun Birla, Jiten Tank, Hannah Gray & Abigail Hung

      Publication Type(s):
      Client Alerts
      Exlcude on home page:
      No

      The U.K. government continues to announce intervention and assistance measures to help businesses and individuals deal with the impact of COVID-19 on the U.K. economy. The continued disruption to worldwide travel will mean that various businesses will need to consider not only the human impact, but the economic impact on their businesses. In this article, we set out a few of the key tax considerations and government measures intended for businesses (and individuals where relevant) at this time.

      Tax Payment Deferrals

      Time to Pay Scheme

      HMRC’s Time to Pay scheme allows businesses and individuals to set up payment plans and agree to deferred payments with HMRC where they are under financial distress and unable to meet their tax liabilities. HMRC has established a specific COVID-19 helpline and will discuss issues on a case-by-case basis in order to support those in need.

      VAT

      Last week the U.K. government announced a deferral on VAT payments for all U.K. businesses for the next quarter, until 30 June 2020. The offer is automatic with no applications required. For liabilities that accumulate during this deferral period, taxpayers will have until the end of the 2020 to 2021 tax year to pay. VAT refunds and reclaims will be paid by the government as normal.

      It remains to be seen whether the government will also defer deadlines for VAT returns (a measure which some other European countries have already announced).

      Income Tax Payments

      For all self-employed individuals, income tax payments due on 31 July 2020 will be deferred until 31 January 2021. Again, no application is required as the offer will apply automatically. The government confirmed that no penalties or interest would be charged for late payment owing to the deferral period.

      Business Rates Relief

      All retail, hospitality and leisure businesses in England and Scotland are now subject to a business rates holiday for the 2020/2021 tax year. Certain businesses which qualify for small business rates relief will also be entitled to small business grants from their local authority.

      Residency

      Non-U.K. Company Directors

      A company may be considered U.K. tax resident if: (i) it is incorporated in the U.K.; or (ii) it is incorporated outside the U.K. but its central management and control is deemed to be in the U.K. A company that has dual residency between the U.K. and a jurisdiction with which the U.K. has a double tax treaty will usually be subject to a tie-breaker test to determine which authority has the taxing right. Where there is no double tax treaty, a non-U.K. resident company which is deemed to be resident in the U.K. may be subject to U.K. tax.

      Non-U.K. resident companies should take care to ensure that they try to avoid inadvertently affecting their tax residency. Whilst travel restrictions remain strict across the world, and directors of non-U.K. resident companies may be in the U.K., there is a risk that the central management and control of the non-U.K. resident company may be considered to be in the U.K. Similarly, U.K. companies that have directors who are currently residing abroad and unable to travel for meetings should also consider the potential local law guidelines on tax residency.

      As the length of time for which non-essential travel will be inadvisable is not certain, but likely to be a considerable amount of time, businesses should put in place contingency plans for how best to protect their business from any residency concerns. Things to consider for non-U.K. resident companies include: (i) whether it would be prudent to postpone meetings and avoid directors in the U.K. from making any strategic business decisions at this time; (ii) whether the relevant U.K. director is required for such a meeting; or (iii) whether a proxy could be appointed.

      Where these measures may not be possible, best practice would be to ensure that only a minority of the directors participate from the U.K. via telephone conferencing (or other means of communication) and that the meeting is initiated from outside the U.K.. In addition, all board minutes should be taken and kept outside the U.K., and evidence as to why it was necessary for the director to attend via telephone conferencing from within the U.K. should be retained by the non-U.K. resident company.

      Ultimately, whilst there is no official guidance on what to do in these unprecedented circumstances, determination as to where the central management and control of a company is will depend on the specific facts and circumstances in question – which we anticipate should include an analysis of the historic pattern of the non-U.K. resident company over time and not just what may occur in the coming days or weeks.

      U.K. Statutory Residency Test

      The U.K. has a Statutory Residency Test which allows individuals to work out their residence status for a tax year. The Statutory Residency Test takes into consideration different factors; generally, consideration is placed on: (i) the number of days an individual spends and, where relevant, works in the U.K.; and (ii) the connections that that individual has with the U.K.

      As set out above, given the strict travel restrictions that many governments have imposed, individuals may find themselves in a situation where they are approaching the maximum number of days they may be present in the U.K. before they are considered resident in the U.K. for tax purposes. However, the Statutory Residency Test does allow an individual's U.K. day count to be reduced due to “exceptional circumstances”, which would seem to apply in the current situation. Whether circumstances may be regarded as exceptional will depend on the facts and circumstances and also the choices available to the individual at that point in time. Note, however, the maximum number of days that can be discounted due to exceptional circumstances is 60 days.

      Tax Administration

      With those professionals who are able to now advised to work from home, it is likely that firms will encounter increased difficulty and delays in practical areas of their business with a physically distant workforce and resources being redeployed into more business (and economy) critical areas where required.

      As yet, no specific measures have been announced by the U.K. government on whether tax returns and other company administration will be subject to deferred deadlines or leniency from the authorities. We would expect that this will be considered in more detail in the coming weeks.

      IsRss:
      • tax law
      • europe
      • client alerts

      Related professionals

      Linked PracticeAreas

      11 comments

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      1. roger lagasca | Jul 10, 2020
        Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  It proved to be Very helpful to me and I am sure to all the commentators here! 
      2. rogerlagasca | Jul 09, 2020
      3. Michel jorden | Jul 08, 2020
      4. rogerlagasca | Jul 08, 2020
        I think this is one of the most significant information for me. And i’m glad reading your article. But should remark on some general things, The web site style is perfect, the articles is really great : D. Good job, cheers buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours I am unable to read articles online very often, but I’m glad I did today.  This is very well written and your points are well-expressed.  Please, don’t ever stop writing.
      5. rogerlagasca | Jul 07, 2020
      6. rogerlagasca | Jul 03, 2020
      7. rogerlagasca | Jul 01, 2020
      8. rogerlagasca | Jul 01, 2020
      9. yaerdu rarks | Jul 01, 2020
      10. Michel jorden | Jul 01, 2020
      11. rogerlagasca | Jun 30, 2020

        Leave a comment

        FINANCIAL REGULATION & THE CARES ACT

        PH COVID-19 Client Alert Series: U.K. Tax Implications

        Mar 24, 2020, 07:04 AM

        By Arun Birla, Jiten Tank, Hannah Gray & Abigail Hung

        Publication Type(s):
        Client Alerts
        Exlcude on home page:
        No

        The U.K. government continues to announce intervention and assistance measures to help businesses and individuals deal with the impact of COVID-19 on the U.K. economy. The continued disruption to worldwide travel will mean that various businesses will need to consider not only the human impact, but the economic impact on their businesses. In this article, we set out a few of the key tax considerations and government measures intended for businesses (and individuals where relevant) at this time.

        Tax Payment Deferrals

        Time to Pay Scheme

        HMRC’s Time to Pay scheme allows businesses and individuals to set up payment plans and agree to deferred payments with HMRC where they are under financial distress and unable to meet their tax liabilities. HMRC has established a specific COVID-19 helpline and will discuss issues on a case-by-case basis in order to support those in need.

        VAT

        Last week the U.K. government announced a deferral on VAT payments for all U.K. businesses for the next quarter, until 30 June 2020. The offer is automatic with no applications required. For liabilities that accumulate during this deferral period, taxpayers will have until the end of the 2020 to 2021 tax year to pay. VAT refunds and reclaims will be paid by the government as normal.

        It remains to be seen whether the government will also defer deadlines for VAT returns (a measure which some other European countries have already announced).

        Income Tax Payments

        For all self-employed individuals, income tax payments due on 31 July 2020 will be deferred until 31 January 2021. Again, no application is required as the offer will apply automatically. The government confirmed that no penalties or interest would be charged for late payment owing to the deferral period.

        Business Rates Relief

        All retail, hospitality and leisure businesses in England and Scotland are now subject to a business rates holiday for the 2020/2021 tax year. Certain businesses which qualify for small business rates relief will also be entitled to small business grants from their local authority.

        Residency

        Non-U.K. Company Directors

        A company may be considered U.K. tax resident if: (i) it is incorporated in the U.K.; or (ii) it is incorporated outside the U.K. but its central management and control is deemed to be in the U.K. A company that has dual residency between the U.K. and a jurisdiction with which the U.K. has a double tax treaty will usually be subject to a tie-breaker test to determine which authority has the taxing right. Where there is no double tax treaty, a non-U.K. resident company which is deemed to be resident in the U.K. may be subject to U.K. tax.

        Non-U.K. resident companies should take care to ensure that they try to avoid inadvertently affecting their tax residency. Whilst travel restrictions remain strict across the world, and directors of non-U.K. resident companies may be in the U.K., there is a risk that the central management and control of the non-U.K. resident company may be considered to be in the U.K. Similarly, U.K. companies that have directors who are currently residing abroad and unable to travel for meetings should also consider the potential local law guidelines on tax residency.

        As the length of time for which non-essential travel will be inadvisable is not certain, but likely to be a considerable amount of time, businesses should put in place contingency plans for how best to protect their business from any residency concerns. Things to consider for non-U.K. resident companies include: (i) whether it would be prudent to postpone meetings and avoid directors in the U.K. from making any strategic business decisions at this time; (ii) whether the relevant U.K. director is required for such a meeting; or (iii) whether a proxy could be appointed.

        Where these measures may not be possible, best practice would be to ensure that only a minority of the directors participate from the U.K. via telephone conferencing (or other means of communication) and that the meeting is initiated from outside the U.K.. In addition, all board minutes should be taken and kept outside the U.K., and evidence as to why it was necessary for the director to attend via telephone conferencing from within the U.K. should be retained by the non-U.K. resident company.

        Ultimately, whilst there is no official guidance on what to do in these unprecedented circumstances, determination as to where the central management and control of a company is will depend on the specific facts and circumstances in question – which we anticipate should include an analysis of the historic pattern of the non-U.K. resident company over time and not just what may occur in the coming days or weeks.

        U.K. Statutory Residency Test

        The U.K. has a Statutory Residency Test which allows individuals to work out their residence status for a tax year. The Statutory Residency Test takes into consideration different factors; generally, consideration is placed on: (i) the number of days an individual spends and, where relevant, works in the U.K.; and (ii) the connections that that individual has with the U.K.

        As set out above, given the strict travel restrictions that many governments have imposed, individuals may find themselves in a situation where they are approaching the maximum number of days they may be present in the U.K. before they are considered resident in the U.K. for tax purposes. However, the Statutory Residency Test does allow an individual's U.K. day count to be reduced due to “exceptional circumstances”, which would seem to apply in the current situation. Whether circumstances may be regarded as exceptional will depend on the facts and circumstances and also the choices available to the individual at that point in time. Note, however, the maximum number of days that can be discounted due to exceptional circumstances is 60 days.

        Tax Administration

        With those professionals who are able to now advised to work from home, it is likely that firms will encounter increased difficulty and delays in practical areas of their business with a physically distant workforce and resources being redeployed into more business (and economy) critical areas where required.

        As yet, no specific measures have been announced by the U.K. government on whether tax returns and other company administration will be subject to deferred deadlines or leniency from the authorities. We would expect that this will be considered in more detail in the coming weeks.

        IsRss:
        • tax law
        • europe
        • client alerts

        Related professionals

        Linked PracticeAreas

        11 comments

        Leave a comment
        1. roger lagasca | Jul 10, 2020
          Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  It proved to be Very helpful to me and I am sure to all the commentators here! 
        2. rogerlagasca | Jul 09, 2020
        3. Michel jorden | Jul 08, 2020
        4. rogerlagasca | Jul 08, 2020
          I think this is one of the most significant information for me. And i’m glad reading your article. But should remark on some general things, The web site style is perfect, the articles is really great : D. Good job, cheers buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours I am unable to read articles online very often, but I’m glad I did today.  This is very well written and your points are well-expressed.  Please, don’t ever stop writing.
        5. rogerlagasca | Jul 07, 2020
        6. rogerlagasca | Jul 03, 2020
        7. rogerlagasca | Jul 01, 2020
        8. rogerlagasca | Jul 01, 2020
        9. yaerdu rarks | Jul 01, 2020
        10. Michel jorden | Jul 01, 2020
        11. rogerlagasca | Jun 30, 2020

          Leave a comment

          ASSET MANAGEMENT

          PH COVID-19 Client Alert Series: U.K. Tax Implications

          Mar 24, 2020, 07:04 AM

          By Arun Birla, Jiten Tank, Hannah Gray & Abigail Hung

          Publication Type(s):
          Client Alerts
          Exlcude on home page:
          No

          The U.K. government continues to announce intervention and assistance measures to help businesses and individuals deal with the impact of COVID-19 on the U.K. economy. The continued disruption to worldwide travel will mean that various businesses will need to consider not only the human impact, but the economic impact on their businesses. In this article, we set out a few of the key tax considerations and government measures intended for businesses (and individuals where relevant) at this time.

          Tax Payment Deferrals

          Time to Pay Scheme

          HMRC’s Time to Pay scheme allows businesses and individuals to set up payment plans and agree to deferred payments with HMRC where they are under financial distress and unable to meet their tax liabilities. HMRC has established a specific COVID-19 helpline and will discuss issues on a case-by-case basis in order to support those in need.

          VAT

          Last week the U.K. government announced a deferral on VAT payments for all U.K. businesses for the next quarter, until 30 June 2020. The offer is automatic with no applications required. For liabilities that accumulate during this deferral period, taxpayers will have until the end of the 2020 to 2021 tax year to pay. VAT refunds and reclaims will be paid by the government as normal.

          It remains to be seen whether the government will also defer deadlines for VAT returns (a measure which some other European countries have already announced).

          Income Tax Payments

          For all self-employed individuals, income tax payments due on 31 July 2020 will be deferred until 31 January 2021. Again, no application is required as the offer will apply automatically. The government confirmed that no penalties or interest would be charged for late payment owing to the deferral period.

          Business Rates Relief

          All retail, hospitality and leisure businesses in England and Scotland are now subject to a business rates holiday for the 2020/2021 tax year. Certain businesses which qualify for small business rates relief will also be entitled to small business grants from their local authority.

          Residency

          Non-U.K. Company Directors

          A company may be considered U.K. tax resident if: (i) it is incorporated in the U.K.; or (ii) it is incorporated outside the U.K. but its central management and control is deemed to be in the U.K. A company that has dual residency between the U.K. and a jurisdiction with which the U.K. has a double tax treaty will usually be subject to a tie-breaker test to determine which authority has the taxing right. Where there is no double tax treaty, a non-U.K. resident company which is deemed to be resident in the U.K. may be subject to U.K. tax.

          Non-U.K. resident companies should take care to ensure that they try to avoid inadvertently affecting their tax residency. Whilst travel restrictions remain strict across the world, and directors of non-U.K. resident companies may be in the U.K., there is a risk that the central management and control of the non-U.K. resident company may be considered to be in the U.K. Similarly, U.K. companies that have directors who are currently residing abroad and unable to travel for meetings should also consider the potential local law guidelines on tax residency.

          As the length of time for which non-essential travel will be inadvisable is not certain, but likely to be a considerable amount of time, businesses should put in place contingency plans for how best to protect their business from any residency concerns. Things to consider for non-U.K. resident companies include: (i) whether it would be prudent to postpone meetings and avoid directors in the U.K. from making any strategic business decisions at this time; (ii) whether the relevant U.K. director is required for such a meeting; or (iii) whether a proxy could be appointed.

          Where these measures may not be possible, best practice would be to ensure that only a minority of the directors participate from the U.K. via telephone conferencing (or other means of communication) and that the meeting is initiated from outside the U.K.. In addition, all board minutes should be taken and kept outside the U.K., and evidence as to why it was necessary for the director to attend via telephone conferencing from within the U.K. should be retained by the non-U.K. resident company.

          Ultimately, whilst there is no official guidance on what to do in these unprecedented circumstances, determination as to where the central management and control of a company is will depend on the specific facts and circumstances in question – which we anticipate should include an analysis of the historic pattern of the non-U.K. resident company over time and not just what may occur in the coming days or weeks.

          U.K. Statutory Residency Test

          The U.K. has a Statutory Residency Test which allows individuals to work out their residence status for a tax year. The Statutory Residency Test takes into consideration different factors; generally, consideration is placed on: (i) the number of days an individual spends and, where relevant, works in the U.K.; and (ii) the connections that that individual has with the U.K.

          As set out above, given the strict travel restrictions that many governments have imposed, individuals may find themselves in a situation where they are approaching the maximum number of days they may be present in the U.K. before they are considered resident in the U.K. for tax purposes. However, the Statutory Residency Test does allow an individual's U.K. day count to be reduced due to “exceptional circumstances”, which would seem to apply in the current situation. Whether circumstances may be regarded as exceptional will depend on the facts and circumstances and also the choices available to the individual at that point in time. Note, however, the maximum number of days that can be discounted due to exceptional circumstances is 60 days.

          Tax Administration

          With those professionals who are able to now advised to work from home, it is likely that firms will encounter increased difficulty and delays in practical areas of their business with a physically distant workforce and resources being redeployed into more business (and economy) critical areas where required.

          As yet, no specific measures have been announced by the U.K. government on whether tax returns and other company administration will be subject to deferred deadlines or leniency from the authorities. We would expect that this will be considered in more detail in the coming weeks.

          IsRss:
          • tax law
          • europe
          • client alerts

          Related professionals

          Linked PracticeAreas

          11 comments

          Leave a comment
          1. roger lagasca | Jul 10, 2020
            Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  It proved to be Very helpful to me and I am sure to all the commentators here! 
          2. rogerlagasca | Jul 09, 2020
          3. Michel jorden | Jul 08, 2020
          4. rogerlagasca | Jul 08, 2020
            I think this is one of the most significant information for me. And i’m glad reading your article. But should remark on some general things, The web site style is perfect, the articles is really great : D. Good job, cheers buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours I am unable to read articles online very often, but I’m glad I did today.  This is very well written and your points are well-expressed.  Please, don’t ever stop writing.
          5. rogerlagasca | Jul 07, 2020
          6. rogerlagasca | Jul 03, 2020
          7. rogerlagasca | Jul 01, 2020
          8. rogerlagasca | Jul 01, 2020
          9. yaerdu rarks | Jul 01, 2020
          10. Michel jorden | Jul 01, 2020
          11. rogerlagasca | Jun 30, 2020

            Leave a comment

            TAX LAW

            PH COVID-19 Client Alert Series: U.K. Tax Implications

            Mar 24, 2020, 07:04 AM

            By Arun Birla, Jiten Tank, Hannah Gray & Abigail Hung

            Publication Type(s):
            Client Alerts
            Exlcude on home page:
            No

            The U.K. government continues to announce intervention and assistance measures to help businesses and individuals deal with the impact of COVID-19 on the U.K. economy. The continued disruption to worldwide travel will mean that various businesses will need to consider not only the human impact, but the economic impact on their businesses. In this article, we set out a few of the key tax considerations and government measures intended for businesses (and individuals where relevant) at this time.

            Tax Payment Deferrals

            Time to Pay Scheme

            HMRC’s Time to Pay scheme allows businesses and individuals to set up payment plans and agree to deferred payments with HMRC where they are under financial distress and unable to meet their tax liabilities. HMRC has established a specific COVID-19 helpline and will discuss issues on a case-by-case basis in order to support those in need.

            VAT

            Last week the U.K. government announced a deferral on VAT payments for all U.K. businesses for the next quarter, until 30 June 2020. The offer is automatic with no applications required. For liabilities that accumulate during this deferral period, taxpayers will have until the end of the 2020 to 2021 tax year to pay. VAT refunds and reclaims will be paid by the government as normal.

            It remains to be seen whether the government will also defer deadlines for VAT returns (a measure which some other European countries have already announced).

            Income Tax Payments

            For all self-employed individuals, income tax payments due on 31 July 2020 will be deferred until 31 January 2021. Again, no application is required as the offer will apply automatically. The government confirmed that no penalties or interest would be charged for late payment owing to the deferral period.

            Business Rates Relief

            All retail, hospitality and leisure businesses in England and Scotland are now subject to a business rates holiday for the 2020/2021 tax year. Certain businesses which qualify for small business rates relief will also be entitled to small business grants from their local authority.

            Residency

            Non-U.K. Company Directors

            A company may be considered U.K. tax resident if: (i) it is incorporated in the U.K.; or (ii) it is incorporated outside the U.K. but its central management and control is deemed to be in the U.K. A company that has dual residency between the U.K. and a jurisdiction with which the U.K. has a double tax treaty will usually be subject to a tie-breaker test to determine which authority has the taxing right. Where there is no double tax treaty, a non-U.K. resident company which is deemed to be resident in the U.K. may be subject to U.K. tax.

            Non-U.K. resident companies should take care to ensure that they try to avoid inadvertently affecting their tax residency. Whilst travel restrictions remain strict across the world, and directors of non-U.K. resident companies may be in the U.K., there is a risk that the central management and control of the non-U.K. resident company may be considered to be in the U.K. Similarly, U.K. companies that have directors who are currently residing abroad and unable to travel for meetings should also consider the potential local law guidelines on tax residency.

            As the length of time for which non-essential travel will be inadvisable is not certain, but likely to be a considerable amount of time, businesses should put in place contingency plans for how best to protect their business from any residency concerns. Things to consider for non-U.K. resident companies include: (i) whether it would be prudent to postpone meetings and avoid directors in the U.K. from making any strategic business decisions at this time; (ii) whether the relevant U.K. director is required for such a meeting; or (iii) whether a proxy could be appointed.

            Where these measures may not be possible, best practice would be to ensure that only a minority of the directors participate from the U.K. via telephone conferencing (or other means of communication) and that the meeting is initiated from outside the U.K.. In addition, all board minutes should be taken and kept outside the U.K., and evidence as to why it was necessary for the director to attend via telephone conferencing from within the U.K. should be retained by the non-U.K. resident company.

            Ultimately, whilst there is no official guidance on what to do in these unprecedented circumstances, determination as to where the central management and control of a company is will depend on the specific facts and circumstances in question – which we anticipate should include an analysis of the historic pattern of the non-U.K. resident company over time and not just what may occur in the coming days or weeks.

            U.K. Statutory Residency Test

            The U.K. has a Statutory Residency Test which allows individuals to work out their residence status for a tax year. The Statutory Residency Test takes into consideration different factors; generally, consideration is placed on: (i) the number of days an individual spends and, where relevant, works in the U.K.; and (ii) the connections that that individual has with the U.K.

            As set out above, given the strict travel restrictions that many governments have imposed, individuals may find themselves in a situation where they are approaching the maximum number of days they may be present in the U.K. before they are considered resident in the U.K. for tax purposes. However, the Statutory Residency Test does allow an individual's U.K. day count to be reduced due to “exceptional circumstances”, which would seem to apply in the current situation. Whether circumstances may be regarded as exceptional will depend on the facts and circumstances and also the choices available to the individual at that point in time. Note, however, the maximum number of days that can be discounted due to exceptional circumstances is 60 days.

            Tax Administration

            With those professionals who are able to now advised to work from home, it is likely that firms will encounter increased difficulty and delays in practical areas of their business with a physically distant workforce and resources being redeployed into more business (and economy) critical areas where required.

            As yet, no specific measures have been announced by the U.K. government on whether tax returns and other company administration will be subject to deferred deadlines or leniency from the authorities. We would expect that this will be considered in more detail in the coming weeks.

            IsRss:
            • tax law
            • europe
            • client alerts

            Related professionals

            Linked PracticeAreas

            11 comments

            Leave a comment
            1. roger lagasca | Jul 10, 2020
              Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  It proved to be Very helpful to me and I am sure to all the commentators here! 
            2. rogerlagasca | Jul 09, 2020
            3. Michel jorden | Jul 08, 2020
            4. rogerlagasca | Jul 08, 2020
              I think this is one of the most significant information for me. And i’m glad reading your article. But should remark on some general things, The web site style is perfect, the articles is really great : D. Good job, cheers buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours I am unable to read articles online very often, but I’m glad I did today.  This is very well written and your points are well-expressed.  Please, don’t ever stop writing.
            5. rogerlagasca | Jul 07, 2020
            6. rogerlagasca | Jul 03, 2020
            7. rogerlagasca | Jul 01, 2020
            8. rogerlagasca | Jul 01, 2020
            9. yaerdu rarks | Jul 01, 2020
            10. Michel jorden | Jul 01, 2020
            11. rogerlagasca | Jun 30, 2020

              Leave a comment

              REAL ESTATE & HOSPITALITY

              PH COVID-19 Client Alert Series: U.K. Tax Implications

              Mar 24, 2020, 07:04 AM

              By Arun Birla, Jiten Tank, Hannah Gray & Abigail Hung

              Publication Type(s):
              Client Alerts
              Exlcude on home page:
              No

              The U.K. government continues to announce intervention and assistance measures to help businesses and individuals deal with the impact of COVID-19 on the U.K. economy. The continued disruption to worldwide travel will mean that various businesses will need to consider not only the human impact, but the economic impact on their businesses. In this article, we set out a few of the key tax considerations and government measures intended for businesses (and individuals where relevant) at this time.

              Tax Payment Deferrals

              Time to Pay Scheme

              HMRC’s Time to Pay scheme allows businesses and individuals to set up payment plans and agree to deferred payments with HMRC where they are under financial distress and unable to meet their tax liabilities. HMRC has established a specific COVID-19 helpline and will discuss issues on a case-by-case basis in order to support those in need.

              VAT

              Last week the U.K. government announced a deferral on VAT payments for all U.K. businesses for the next quarter, until 30 June 2020. The offer is automatic with no applications required. For liabilities that accumulate during this deferral period, taxpayers will have until the end of the 2020 to 2021 tax year to pay. VAT refunds and reclaims will be paid by the government as normal.

              It remains to be seen whether the government will also defer deadlines for VAT returns (a measure which some other European countries have already announced).

              Income Tax Payments

              For all self-employed individuals, income tax payments due on 31 July 2020 will be deferred until 31 January 2021. Again, no application is required as the offer will apply automatically. The government confirmed that no penalties or interest would be charged for late payment owing to the deferral period.

              Business Rates Relief

              All retail, hospitality and leisure businesses in England and Scotland are now subject to a business rates holiday for the 2020/2021 tax year. Certain businesses which qualify for small business rates relief will also be entitled to small business grants from their local authority.

              Residency

              Non-U.K. Company Directors

              A company may be considered U.K. tax resident if: (i) it is incorporated in the U.K.; or (ii) it is incorporated outside the U.K. but its central management and control is deemed to be in the U.K. A company that has dual residency between the U.K. and a jurisdiction with which the U.K. has a double tax treaty will usually be subject to a tie-breaker test to determine which authority has the taxing right. Where there is no double tax treaty, a non-U.K. resident company which is deemed to be resident in the U.K. may be subject to U.K. tax.

              Non-U.K. resident companies should take care to ensure that they try to avoid inadvertently affecting their tax residency. Whilst travel restrictions remain strict across the world, and directors of non-U.K. resident companies may be in the U.K., there is a risk that the central management and control of the non-U.K. resident company may be considered to be in the U.K. Similarly, U.K. companies that have directors who are currently residing abroad and unable to travel for meetings should also consider the potential local law guidelines on tax residency.

              As the length of time for which non-essential travel will be inadvisable is not certain, but likely to be a considerable amount of time, businesses should put in place contingency plans for how best to protect their business from any residency concerns. Things to consider for non-U.K. resident companies include: (i) whether it would be prudent to postpone meetings and avoid directors in the U.K. from making any strategic business decisions at this time; (ii) whether the relevant U.K. director is required for such a meeting; or (iii) whether a proxy could be appointed.

              Where these measures may not be possible, best practice would be to ensure that only a minority of the directors participate from the U.K. via telephone conferencing (or other means of communication) and that the meeting is initiated from outside the U.K.. In addition, all board minutes should be taken and kept outside the U.K., and evidence as to why it was necessary for the director to attend via telephone conferencing from within the U.K. should be retained by the non-U.K. resident company.

              Ultimately, whilst there is no official guidance on what to do in these unprecedented circumstances, determination as to where the central management and control of a company is will depend on the specific facts and circumstances in question – which we anticipate should include an analysis of the historic pattern of the non-U.K. resident company over time and not just what may occur in the coming days or weeks.

              U.K. Statutory Residency Test

              The U.K. has a Statutory Residency Test which allows individuals to work out their residence status for a tax year. The Statutory Residency Test takes into consideration different factors; generally, consideration is placed on: (i) the number of days an individual spends and, where relevant, works in the U.K.; and (ii) the connections that that individual has with the U.K.

              As set out above, given the strict travel restrictions that many governments have imposed, individuals may find themselves in a situation where they are approaching the maximum number of days they may be present in the U.K. before they are considered resident in the U.K. for tax purposes. However, the Statutory Residency Test does allow an individual's U.K. day count to be reduced due to “exceptional circumstances”, which would seem to apply in the current situation. Whether circumstances may be regarded as exceptional will depend on the facts and circumstances and also the choices available to the individual at that point in time. Note, however, the maximum number of days that can be discounted due to exceptional circumstances is 60 days.

              Tax Administration

              With those professionals who are able to now advised to work from home, it is likely that firms will encounter increased difficulty and delays in practical areas of their business with a physically distant workforce and resources being redeployed into more business (and economy) critical areas where required.

              As yet, no specific measures have been announced by the U.K. government on whether tax returns and other company administration will be subject to deferred deadlines or leniency from the authorities. We would expect that this will be considered in more detail in the coming weeks.

              IsRss:
              • tax law
              • europe
              • client alerts

              Related professionals

              Linked PracticeAreas

              11 comments

              Leave a comment
              1. roger lagasca | Jul 10, 2020
                Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  Podcast  It proved to be Very helpful to me and I am sure to all the commentators here! 
              2. rogerlagasca | Jul 09, 2020
              3. Michel jorden | Jul 08, 2020
              4. rogerlagasca | Jul 08, 2020
                I think this is one of the most significant information for me. And i’m glad reading your article. But should remark on some general things, The web site style is perfect, the articles is really great : D. Good job, cheers buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours buy youtube watch hours I am unable to read articles online very often, but I’m glad I did today.  This is very well written and your points are well-expressed.  Please, don’t ever stop writing.
              5. rogerlagasca | Jul 07, 2020
              6. rogerlagasca | Jul 03, 2020
              7. rogerlagasca | Jul 01, 2020
              8. rogerlagasca | Jul 01, 2020
              9. yaerdu rarks | Jul 01, 2020
              10. Michel jorden | Jul 01, 2020
              11. rogerlagasca | Jun 30, 2020

                Leave a comment

                DISPUTES

                PH COVID-19 Client Alert Series: U.K. Tax Implications

                Mar 24, 2020, 07:04 AM

                By Arun Birla, Jiten Tank, Hannah Gray & Abigail Hung

                Publication Type(s):
                Client Alerts
                Exlcude on home page:
                No

                The U.K. government continues to announce intervention and assistance measures to help businesses and individuals deal with the impact of COVID-19 on the U.K. economy. The continued disruption to worldwide travel will mean that various businesses will need to consider not only the human impact, but the economic impact on their businesses. In this article, we set out a few of the key tax considerations and government measures intended for businesses (and individuals where relevant) at this time.

                Tax Payment Deferrals

                Time to Pay Scheme

                HMRC’s Time to Pay scheme allows businesses and individuals to set up payment plans and agree to deferred payments with HMRC where they are under financial distress and unable to meet their tax liabilities. HMRC has established a specific COVID-19 helpline and will discuss issues on a case-by-case basis in order to support those in need.

                VAT

                Last week the U.K. government announced a deferral on VAT payments for all U.K. businesses for the next quarter, until 30 June 2020. The offer is automatic with no applications required. For liabilities that accumulate during this deferral period, taxpayers will have until the end of the 2020 to 2021 tax year to pay. VAT refunds and reclaims will be paid by the government as normal.

                It remains to be seen whether the government will also defer deadlines for VAT returns (a measure which some other European countries have already announced).

                Income Tax Payments

                For all self-employed individuals, income tax payments due on 31 July 2020 will be deferred until 31 January 2021. Again, no application is required as the offer will apply automatically. The government confirmed that no penalties or interest would be charged for late payment owing to the deferral period.

                Business Rates Relief

                All retail, hospitality and leisure businesses in England and Scotland are now subject to a business rates holiday for the 2020/2021 tax year. Certain businesses which qualify for small business rates relief will also be entitled to small business grants from their local authority.

                Residency

                Non-U.K. Company Directors

                A company may be considered U.K. tax resident if: (i) it is incorporated in the U.K.; or (ii) it is incorporated outside the U.K. but its central management and control is deemed to be in the U.K. A company that has dual residency between the U.K. and a jurisdiction with which the U.K. has a double tax treaty will usually be subject to a tie-breaker test to determine which authority has the taxing right. Where there is no double tax treaty, a non-U.K. resident company which is deemed to be resident in the U.K. may be subject to U.K. tax.

                Non-U.K. resident companies should take care to ensure that they try to avoid inadvertently affecting their tax residency. Whilst travel restrictions remain strict across the world, and directors of non-U.K. resident companies may be in the U.K., there is a risk that the central management and control of the non-U.K. resident company may be considered to be in the U.K. Similarly, U.K. companies that have directors who are currently residing abroad and unable to travel for meetings should also consider the potential local law guidelines on tax residency.

                As the length of time for which non-essential travel will be inadvisable is not certain, but likely to be a considerable amount of time, businesses should put in place contingency plans for how best to protect their business from any residency concerns. Things to consider for non-U.K. resident companies include: (i) whether it would be prudent to postpone meetings and avoid directors in the U.K. from making any strategic business decisions at this time; (ii) whether the relevant U.K. director is required for such a meeting; or (iii) whether a proxy could be appointed.

                Where these measures may not be possible, best practice would be to ensure that only a minority of the directors participate from the U.K. via telephone conferencing (or other means of communication) and that the meeting is initiated from outside the U.K.. In addition, all board minutes should be taken and kept outside the U.K., and evidence as to why it was necessary for the director to attend via telephone conferencing from within the U.K. should be retained by the non-U.K. resident company.

                Ultimately, whilst there is no official guidance on what to do in these unprecedented circumstances, determination as to where the central management and control of a company is will depend on the specific facts and circumstances in question – which we anticipate should include an analysis of the historic pattern of the non-U.K. resident company over time and not just what may occur in the coming days or weeks.

                U.K. Statutory Residency Test

                The U.K. has a Statutory Residency Test which allows individuals to work out their residence status for a tax year. The Statutory Residency Test takes into consideration different factors; generally, consideration is placed on: (i) the number of days an individual spends and, where relevant, works in the U.K.; and (ii) the connections that that individual has with the U.K.

                As set out above, given the strict travel restrictions that many governments have imposed, individuals may find themselves in a situation where they are approaching the maximum number of days they may be present in the U.K. before they are considered resident in the U.K. for tax purposes. However, the Statutory Residency Test does allow an individual's U.K. day count to be reduced due to “exceptional circumstances”, which would seem to apply in the current situation. Whether circumstances may be regarded as exceptional will depend on the facts and circumstances and also the choices available to the individual at that point in time. Note, however, the maximum number of days that can be discounted due to exceptional circumstances is 60 days.

                Tax Administration

                With those professionals who are able to now advised to work from home, it is likely that firms will encounter increased difficulty and delays in practical areas of their business with a physically distant workforce and resources being redeployed into more business (and economy) critical areas where required.

                As yet, no specific measures have been announced by the U.K. government on whether tax returns and other company administration will be subject to deferred deadlines or leniency from the authorities. We would expect that this will be considered in more detail in the coming weeks.

                IsRss:
                • tax law
                • europe
                • client alerts

                Related professionals

                Linked PracticeAreas

                11 comments

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                1. roger lagasca | Jul 10, 2020
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                2. rogerlagasca | Jul 09, 2020
                3. Michel jorden | Jul 08, 2020
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                5. rogerlagasca | Jul 07, 2020