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Feb 10 • 6 tweets • 3 min read
Super-fun VAT case coming soon on whether CBD "edibles" are a food benefiting from 0% VAT. bailii.org/uk/cases/UKFTT…
This was a preliminary hearing over whether HMRC could make a late new argument, that the products were illegal. #taxtwitter's own @maxschofield successfully argued they snoozed and losed.
Bad news for HMRC, who seem to have dropped the ball. Great news for connoisseurs of stupid VAT cases.

I'm hopeful this will join the A tier with jaffa cakes, mega marshmallows and, my favourite, the very specific rules for gingerbread men:
Why is VAT so stupid? Because any VAT exemption/zero rate has to be narrowly defined, and the definition will almost always be arbitrary.

The answer: have the absolute minimum number of exemptions and special rates. And, please god, don't create new ones: taxpolicy.org.uk/ebooks
h/t @PreachyPreach
The good news is that chatGPT is unable to generate stupider VAT rules than HMRC. Humanity is safe.

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More from @DanNeidle

Dan Neidle Profile picture
Feb 10
Labour MP Ian Lavery is refusing to confirm he paid tax on £140k of unexplained payments he received. taxpolicy.org.uk/lavery_questio…
Lavery is using the Zahawi playbook - refusing to engage on the actual questions, and giving bland general statements he's paid all his tax. We know how that went last time.

Full details in my article (above) and inews (below): inews.co.uk/news/politics/…
The numbers are much smaller than Zahawi's, but the principle is the same: where a politician has unexplained uncommercial financial arrangements, it's right for people to ask if the correct tax was paid. Because often it won't be.
Read 13 tweets
Dan Neidle Profile picture
Feb 9
New report from Tax Policy Associates: publishers successfully lobbied to abolish VAT on ebooks in 2020, costing the taxpayer £200m, but kept the benefit for themselves. Ebook prices weren't cut, and we can prove it. taxpolicy.org.uk/ebooks/

Thread:
The UK charged 20% VAT on ebooks until May 2020, when it was abolished following a lobbying campaign by the publishing industry. They said consumers would benefit from lower prices. ImageImage
Here's what actually happened to ebook prices: nothing. Image
Read 17 tweets
Dan Neidle Profile picture
Feb 8
Here's a Brexit benefit nobody is shouting about. A daft CJEU decision has forced the EU to drop open registers of beneficial ownership of companies. The UK can ignore it, and keep open registers - and the Government has confirmed that's precisely what they'll do:
This stuff is important. If it wasn't for open beneficial ownership registers, I wouldn't have been able to prove that Zahawi's parents owned the trust that held their Gibraltar company.
Here's the CJEU judgment: curia.europa.eu/juris/document…

To be fair, the blame probably lies more with the (IMO) inflexibility of EU privacy law than with the CJEU.
Read 4 tweets
Dan Neidle Profile picture
Feb 7
Should we windfall tax that "record $28bn BP profit"? I'm not sure. Quick thread:
taxpolicy.org.uk/2023/02/02/she…
BP just announced a record profit, and it's being reported like this:

(and that's absolutely a fair reflection of BP's own announcement)
But the reported $28bn profit is the "underlying replacement cost profit" - a non-GAAP figure (i.e. not a standard accounting definition of profit).

The standard GAAP figure shows a $15bn pre-tax profit, then $17bn of tax - so a post-tax *loss*.
Read 11 tweets
Dan Neidle Profile picture
Feb 4
The @ASI has always done interesting work on tax, but this is really weak - it ignore the key design feature of the OECD global minimum tax. If the UK pulls out, it just means other countries will collect the tax from UK companies’ foreign subsidiaries.
Worse for UK companies - who will have a compliance nightmare. Worse for HM Treasury - who surrender tax to other countries. I wrote about this here:
And by “ignore” I really mean “ignore”. The ASI report doesn’t even mention the issue. It’s a complete failure to understand a fundamental feature of the proposal. I’d hope the @ASI will withdraw the paper to avoid people being misled.
Read 4 tweets
Dan Neidle Profile picture
Feb 3
So apparently some Tories want to pull out from the OECD global minimum tax. The interesting thing is that they can’t. Here’s why.
The basic idea behind the OECD tax is simple: multinationals must pay a minimum 15% tax on profits in each country where they operate, including tax havens. If they don’t, the country where they’re headquartered collects all the “missing” tax.
But what if the headquarter country doesn’t sign up to the rules? Say, to pick a random example, the UK doesn’t sign up - does Shell escape the tax?
Read 10 tweets

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