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Tax Take

Blog

Graham: taxpayer successfully appeals against APN penalty

Published on 11 January 2019. By Robert Waterson, Legal Director

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In Kevin Graham v HMRC [2018] UKFTT 661 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against a penalty imposed by HMRC for non-payment of an accelerated payment notice (APN).

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Addo - Disclosure against HMRC in tax appeals

Published on 20 December 2018. By Constantine Christofi, Associate

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In Addo v HMRC [2018] UKFTT 530 (TC), the First-tier Tribunal (FTT) considered the principles governing disclosure in the context of appeals before the FTT. This blog is based on an article which was first published in Tax Journal on 22 November 2018. RPC acted for the taxpayer in this case.

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Vacation Rentals – taxpayer had legitimate expectation that HMRC guidance could be relied on

Published on 14 December 2018. By Michelle Sloane, Senior Associate

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In R (on the application of Vacation Rentals (UK) Ltd) (formerly The Hoseasons Group Ltd) v HMRC [2018] UKUT 383 (TCC), the Upper Tribunal (UT), has held that HMRC was bound by its published guidance in Business Brief 18/06 (BB18/06) concerning the treatment of payments for card handling services.

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Publication

Tax update December 2018

05 December 2018

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In this month’s update we report on (1) the published response to the consultation on creating a “fund structure” within the Enterprise Investment Scheme for investment in innovative knowledge-intensive companies; (2) the published response to the consultation on extending the IR35 rules to the private sector; and (3) the published response to HMRC’s tax abuse and insolvency discussion document. We also comment on three recent decisions relating to (1) penalties attaching to employment intermediaries returns (2); penalties for failing to file tax returns; and (3) CGT holdover relief where the transferor was a foreign controller of the transferee.

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Livery business qualifies for BPR for IHT purposes

Published on 05 December 2018. By Constantine Christofi, Associate

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In HMRC v Personal Representatives of the Estate of Maureen M Vigne [2018] UKUT 357 (TCC), the Upper Tribunal (UT), in dismissing HMRC's appeal, has confirmed that a livery business attracted business property relief (BPR) under section 105, Inheritance Tax Act 1984 (IHTA), as the business did not consist of wholly or mainly in making or holding investments.

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The Serpentine Trust Ltd – HMRC entitled to raise VAT assessments despite binding contractual agreement

Published on 03 December 2018. By Michelle Sloane, Senior Associate

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In The Serpentine Trust Ltd v HMRC [2018] UKFTT 535, the First-tier Tribunal (FTT) has held that although HMRC had agreed with the taxpayer one basis for calculating VAT, under its alternative dispute resolution (ADR) procedure, it was not precluded from raising VAT assessments on a different basis because the agreement reached was ultra vires and therefore void.

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Publication

VAT update November 2018

28 November 2018

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In this month’s update we report on new regulations adopted by ECOFIN which are intended to combat VAT fraud, infringement proceedings brought against Italy and the UK following publication of the so-called “Paradise Papers” and publication of the response to HMRC’s consultation on the “split payment” method of VAT collection. We also comment on three recent decisions relating to the scope of the FTT’s jurisdiction in relation to public law issues, input tax recovery by a student union shop and application of the reverse charge rules to investment management services received from outside the EU.

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Patel – HMRC ordered to close enquiry which was  "drifting aimlessly"

Published on 26 November 2018. By Heather Rimmer, Associate

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In Patel v HMRC [2018] UKFTT 0561 (TC), the First-tier Tribunal (FTT) directed HMRC, pursuant to section 28A, Taxes Management Act 1970 (TMA), to close its enquiry.

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Customs and excise quarterly update November 2018

Published on 26 November 2018. By Adam Craggs, Partner and Michelle Sloane, Senior Associate

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In this update we report on HMRC’s guidance on how to prepare for the Customs Declaration Service, the launch of the Customs Declaration Service and HMRC’s guidance on trading with the EU in the event of a no-deal Brexit. We also comment on three recent cases relating to the calculation of gaming duty, tariff classification of seasoned chicken meat and mobility scooters.

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Wealth and trusts quarterly digest

Published on 21 November 2018. By Adam Craggs, Partner

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Welcome to our latest Wealth & Trusts digest. Our quarterly digest is specifically tailored for you and aims to provide up to date commentary, analysis and guidance on key sector developments. It is written by our wealth and trusts teams to assist you and your clients in responding to market trends and legal developments.

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Blog

Thornton – Identifiable HMRC officer must determine penalties

Published on 19 November 2018. By Michelle Sloane, Senior Associate

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In Robert, Adam and Dorothy Thornton (trading as A* Education) v HMRC [2018] UKFTT 568 (TC), the First-tier Tribunal (FTT) has held that penalties for failure to file employment intermediaries returns (EIRs) were invalidly issued, as they had not been made by an identifiable officer of HMRC under section 100, Taxes Management Act 1970 (TMA).

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Griffiths – appeal against HMRC penalties allowed as notice to file was invalid

Published on 07 November 2018. By Alexis Armitage, Associate

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In Griffiths v HMRC [2018] UKFTT 0527 (TC), the First-tier Tribunal (FTT) has allowed the taxpayer's appeal against penalties imposed by HMRC as HMRC's notice to file a tax return was invalidly issued and in any event, the taxpayer had a reasonable excuse for failing to submit his return.

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Publication

Tax update November 2018

01 November 2018

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In this month’s update we report on proposals under consideration by the Treasury to extend capital gains tax relief to private landlords, HMRC’s factsheet on new higher penalties that it can impose where taxpayers have failed to declare and pay tax in relation to offshore matters and the annual report of Tax Inspectors Without Borders (TIWB). We also comment on three recent decisions relating to the partial writing-off of loans, Schedule 36 information notices and late filing penalties.

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Reeves - CGT holdover relief available where transferor is foreign controller of transferee

Published on 25 October 2018. By Constantine Christofi, Associate

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In Reeves v HMRC [2018] UKUT 293 (TCC), the Upper Tribunal (UT) has held that a non-resident taxpayer was entitled to holdover relief from capital gains tax (CGT) on a disposal he had made when he gifted his interest in a limited liability partnership (LLP) to a UK-resident company, of which he was the sole shareholder.

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VAT Update October 2018

24 October 2018

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In this month’s update we report on changes to the VAT treatment of supplies of digital services, the European Parliament’s adoption of changes which are intended to simplify VAT for small businesses and the European Commission’s proposals for VAT rates and intra-EU supplies. We also comment on three recent decisions relating to the VAT option to tax a property third party access to documents filed at the First-tier Tribunal and the validity of Alternative Dispute Resolution agreements that are wrong in law.

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Professional Game Match Officials – football referees not employed for tax purposes

Published on 22 October 2018. By Ben Roberts, Senior Associate

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In Professional Game Match Officials Ltd v HMRC [2018] UKFTT 528, the First-tier Tribunal (FTT) has held that football referees and other match day officials were not employees of Professional Game Match Officials Ltd (PGMOL).

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HMRC cannot require an auditor to provide information regarding a taxpayer's audited accounts even if the auditor also acts as the taxpayer's tax accountant

Published on 19 October 2018. By Adam Craggs, Partner

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In HMRC ex parte a Taxpayer [2018] UKFTT 541 (TC), the First-tier Tribunal (FTT) has held that paragraph 24, Schedule 36, Finance Act 2008 (FA 2008), protects a taxpayer's auditor, who also prepares and files the taxpayer's tax returns, from having to disclose information and documents to HMRC regarding the taxpayer's audited accounts.

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Corporate tax update

18 October 2018

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Welcome to the latest edition of our Corporate Tax Update, written by members of RPC’s tax team and published quarterly. In this third 2018 edition we highlight some of the key tax developments of interest to UK corporates from the third quarter of 2018.

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Done Brothers – supplies through fixed odds betting terminals exempt from VAT

Published on 15 October 2018. By Michelle Sloane, Senior Associate

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In Done Brothers (Cash Betting) Ltd v HMRC [2018] UKFTT 406 (TC), the First-tier Tribunal (FTT) has held that supplies made through fixed odds betting terminals (FOBT) are exempt from VAT.

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Atherley - qualifying loan write off created an allowable loss

Published on 08 October 2018. By Robert Waterson, Legal Director

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In Douglas Atherley v HMRC [2018] UKFTT 0408 (TC), the First-tier Tribunal (FTT) has found that the taxpayer's partial writing-off of a loan made to a company of which he was the sole shareholder, created an allowable loss under section 253(3), Taxation of Chargeable Gains Act 1992 (TCGA).

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Tax update October 2018

03 October 2018

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In this month’s update we report on HMRC’s Spotlight 45 on umbrella company avoidance schemes, an update to HMRC’s Venture Capital Schemes Manual; and call for evidence on HMRC powers.

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Newton – Tribunal confirms that "statutory records"  should be narrowly construed

Published on 01 October 2018. By Heather Rimmer, Associate

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In Newton v HMRC [2018] UKFTT 513 (TC), the First-tier Tribunal (FTT) has held that, due to the lack of taxpayer appeal rights, the definition of "statutory records" for the purpose of an information notice issued pursuant to Schedule 36, Finance Act 2008 (FA 2008), must be construed narrowly.

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VAT update September 2018

26 September 2018

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In this month’s update we report on the ECON committee’s amendments to the European Commission’s proposal for simplification of VAT for SMEs, the government’s technical note on the impact on VAT in the event of a no-deal Brexit; and Revenue and Customs Brief 6 (2018) on VAT exemption for all domestic service charges.

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Expion: No valid determination of penalties by HMRC

Published on 24 September 2018. By Constantine Christofi, Associate

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In Expion Silverstone Ltd v HMRC [2018] UKFTT 0460 (TC), the First-tier Tribunal (FTT) has held that no valid determination was made by an officer of the board under section 100, Taxes Management Act 1970 (TMA), in respect of penalties issued following the failure to file Employment Intermediaries returns.

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Graham - holiday letting business qualified for business property relief

Published on 13 September 2018. By Alexis Armitage, Associate

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In The Personal Representatives of Grace Joyce Graham (deceased) v HMRC [2018] UKFTT 0306 (TC), the First-tier Tribunal (FTT) has held that a furnished holiday letting business did not consist wholly or mainly of making or holding investments and so qualified for business property relief (BPR).

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Armstrong: Tribunal cancels late filing penalties

Published on 10 September 2018. By Robert Waterson, Legal Director

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In Armstrong v HMRC [2018] UKFTT 0404 (TC), the First-tier Tribunal (FTT) has cancelled late filing penalties because the taxpayer had not consented to receive penalty notices electronically.

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Tax update September 2018

06 September 2018

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In this month’s update we report on HMRC’s updated position regarding payment of the April 2019 “loan charge”, HMRC’s updated guidance on the targeted anti-avoidance rule for close company distributions on a winding up and the CIOT’s comments on off-payroll working in the private sector. We also comment on recent decisions relating to, late filing penalties, an application by HMRC to amend its Statement of Case and tax geared penalties for failure to comply with information notices.

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Corporate tax update

Published on 31 August 2018. By Ben Roberts, Senior Associate and Adam Craggs, Partner and Robert Waterson, Legal Director

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Welcome to the latest edition of our Corporate Tax Update, written by members of RPC’s tax team and published quarterly. In this second 2018 edition we highlight some of the key tax developments of interest to UK corporates from the second quarter of 2018.

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Pertemps: Expenses salary sacrifice scheme not an economic activity for VAT purposes

Published on 31 August 2018. By Alexis Armitage, Associate

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In Pertemps Limited v HMRC [2018] UKFTT 0369 (TC), the First-tier Tribunal (FTT) has held that a salary sacrifice scheme providing travel and subsistence expenses to employees was not an economic activity for VAT purposes.

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VAT update August 2018

29 August 2018

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In this month’s update we report on HMRC’s revised guidance on the VAT cost share exemption, HMRC’s consultation and plans to address VAT avoidance via offshore looping, and making tax digital for VAT.

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Customs and excise quarterly update August 2018

Published on 29 August 2018. By Adam Craggs, Partner and Michelle Sloane, Senior Associate

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In this update we report on changes to gaming duty accounting periods, HMRC’s policy paper on tobacco duty on heated tobacco and an amendment to the Export (Penalty) Regulations 2003. We also comment on three recent cases relating to the customs classification of Beyblades, excise duty assessment time limits and restoration of seized tobacco.

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J P Whitter - HMRC not obliged to consider impact of cancellation of Gross Payment Status on business

Published on 23 August 2018. By Constantine Christofi, Associate

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In J P Whitter (Water Well Engineers) Ltd v HMRC [2018] UKSC 31, the Supreme Court has confirmed the view of the Court of Appeal that HMRC has the power to remove 'Gross Payment Status' from sub-contractors under the Construction Industry Scheme, without an obligation to take into account the impact on the tax-paying business.

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Groves – Tribunal confirms that a notice to file must be given by an identified HMRC officer

Published on 22 August 2018. By Alexis Armitage, Associate

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In Groves v HMRC [2018] UKFTT 0311 (TC), the First-tier Tribunal (FTT) has allowed the taxpayer's appeal against penalties issued by HMRC pursuant to Schedule 55, Finance Act 2009, for the late filing of a tax return as the notice to file was not signed by an "Officer of the Board" and in any event, the notice was invalid as it was not given by HMRC for the purpose(s) set out in section 8, Taxes Management Act 1970 (TMA) and therefore any penalties issued for late filing of the return were invalid.

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Publication

Wealth and trusts quarterly digest

Published on 21 August 2018. By Adam Craggs, Partner

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Welcome to our latest Wealth & Trusts digest. Our quarterly digest is specifically tailored for you and aims to provide up to date commentary, analysis and guidance on key sector developments. It is written by our wealth and trusts teams to assist you and your clients in responding to market trends and legal developments. We would welcome the opportunity to discuss any issues you may have and always welcome feedback on the content of our publications.

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Bradshaw – Tribunal confirms ignorance of the law is a reasonable excuse and cancels  penalties

Published on 09 August 2018. By Michelle Sloane, Senior Associate

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In A and R Bradshaw v HMRC [2018] UKFTT 0368 (TC), the First-tier Tribunal (FTT) has held that a taxpayer's ignorance of the law is a reasonable excuse in relation to the late filing of a non-resident CGT return (NRCGT return).

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Shaw: Tribunal cancels penalties … again!

Published on 06 August 2018. By Constantine Christofi, Associate

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In Shaw v HMRC [2018] UKFTT 0381 (TC), the First-tier Tribunal (FTT) has cancelled late filing penalties because HMRC had not satisfied the statutory requirements of section 8(1), Taxes Management Act 1970 (TMA) as a notice to file had not been validly served on the appellant.

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Tax update August 2018

Published on 01 August 2018. By Adam Craggs, Partner

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In this month’s update we report on the summary of responses to HMRC’s consultation on extending time limits for offshore non-compliance, HMRC’s policy paper on “profit-fragmentation” and HMRC’s consultation on proposals for new civil information gathering powers for HMRC.

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Tager – Court of Appeal allows taxpayers' appeals and reduces penalties for failure to comply with information notices

Published on 31 July 2018. By Robert Waterson, Legal Director

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In Tager & Ors v HMRC [2018] EWCA Civ 1727, in allowing the taxpayers' appeals, the Court of Appeal has provided some general observations on the scope and purpose of HMRC's power to impose tax-related penalties under paragraph 50, Schedule 36, Finance Act 2008 for failures to comply with information notices issued under paragraph 1, Schedule 36, Finance Act 2008.

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VAT update July 2018

25 July 2018

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In this month’s update we report on the alignment of the period for recovery of VAT by exempt public sector entities; new guidance concerning VAT liability on goods supplied on approval; and HMRC’s policy paper on a new regime for interest and penalties.

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Allpay - Tribunal refuses HMRC permission to amend its Statement of Case and awards costs to the taxpayer

Published on 23 July 2018. By Michelle Sloane, Senior Associate

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In Allpay Ltd v HMRC [2018] UKFTT 0273 (TC), the First-tier Tribunal (FTT) has dismissed HMRC's application to amend its Statement of Case to plead a new legal issue.

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Non-residents and UK property

19 July 2018

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Non-UK residents owning UK real estate, whether directly or via companies, partnerships, trust arrangements or collective investment vehicles, should be aware of important UK tax changes due to take effect from April 2019.

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Ames: No EIS relief without income tax claim but Tribunal grants judicial review of HMRC's decision

Published on 16 July 2018. By Constantine Christofi, Associate

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In Ames v HMRC [2018] UKUT 190, the Upper Tribunal (UT) has held that capital gains tax (CGT) relief under the Enterprise Investment Scheme (EIS) is not available on the disposal of shares where no income tax relief was claimed on their acquisition. However, in refusing to allow a late claim for EIS income tax relief, HMRC had misapplied the relevant guidance, fettered its discretion, and failed to consider material facts and the UT therefore granted judicial review of HMRC's decision.

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Bell - The importance of selecting the correct forum when alleging unfairness on the part of HMRC

Published on 05 July 2018. By Robert Waterson, Legal Director

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In J Bell v HMRC [2018] UKFTT 261 (TC), the taxpayer's appeal was struck out by the First-tier Tribunal (FTT), because it does not have jurisdiction to consider issues of public law.

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Tax update July 2018

Published on 03 July 2018. By Adam Craggs, Partner

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In this month’s update we report on new EU transparency rules for tax intermediaries, HMRC’s revised Disguised Remuneration Settlement Terms and the Law Society’s Response to HMRC’s consultation on Tax Avoidance involving profit fragmentation.

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Project Blue - Supreme Court allows HMRC's appeal in SDLT sub-sale case

Published on 02 July 2018. By Alexis Armitage, Associate

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In Project Blue Limited v HMRC [2018] UKSC 30, the Supreme Court (by a majority) has found that section 75A, Finance Act 2003 (an anti-avoidance provision), was applicable resulting in SDLT being payable notwithstanding that sections 45 (sub-sale relief) and 71A (exemption for alternative property finance) Finance Act 2003, would have otherwise resulted in no stamp duty land tax (SDLT) being payable.

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VAT update June 2018

Published on 27 June 2018. By Adam Craggs, Partner

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In this month’s update we report on HMRC’s consultation on draft legislation imposing VAT reverse charge on the construction industry; the European Commission’s proposal concerning the taxation of intra-EU supplies; and HMRC’s recently published guidance on the VAT treatment of goods supplied on approval.

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Bayonet Ventures: Loan by pension scheme was not an unauthorised payment

Published on 25 June 2018. By Constantine Christofi, Associate

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In Bayonet Ventures LLP & Anor v HMRC [2018] UKFTT 262 (TC), the First-tier Tribunal (FTT), has held that a loan made to a limited liability partnership (LLP) by a pension scheme in which one of the partners of the LLP was a member, was not an unauthorised payment (section 164, Finance Act 2004) and should not be treated as a loan to the partner (section 863, Income Tax (Trading and Other Income) Act 2005 (ITTOIA)) as section 863 only applies if the LLP is carrying on a 'trade, profession or business with a view to profit', which it was not.

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Anderson - Upper Tribunal considers knowledge test for the purpose of discovery assessments

Published on 11 June 2018. By Michelle Sloane, Senior Associate

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In Jerome Anderson v HMRC [2018] UKUT 159 (TC), the Upper Tribunal (UT) has dismissed a football agent's appeal upholding the First-tier Tribunal's (FTT) decision to disallow relief for losses incurred in relation to a football academy ran by the agent. The UT also agreed with the FTT that HMRC had issued a valid discovery assessment.

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Brexit – trade and customs arrangements

08 June 2018

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In this Brexit Bulletin, we discuss trade and customs arrangements; what has been achieved in the last 6 months and the next steps moving forward.

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Dundas: out of time capital allowance claims become valid due to HMRC opening enquiries

Published on 06 June 2018. By Robert Waterson, Legal Director

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In Dundas Heritable Limited v HMRC [2018] UKFTT 0244 (TC), the First-tier Tribunal (FTT) has held that a taxpayer was entitled to make, what would otherwise have been out of time capital allowance claims, as a result of HMRC opening enquiries.

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