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Tax Take

Blog

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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Publication

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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Publication

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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Publication

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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Blog

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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Blog

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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Publication

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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Publication

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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Publication

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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Publication

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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Publication

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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Publication

Tax update

Published on 06 June 2018. By Adam Craggs, Partner

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In this month’s update we report on Guidance from HMRC on identifying who is an “enabler” of tax avoidance; a consultation on “off-payroll” working by contractors; and HMRC’s update to its International Exchange of Information Manual to reflect amendments to the list of reportable jurisdictions for Common Reporting Standards.

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Blog

Investec: payments to acquire partnership interests were trading in nature

Published on 06 June 2018. By Adam Craggs, Partner and Constantine Christofi, Associate

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In HMRC v Investec Asset Finance Plc and Another [2018] UKUT 0069 (TCC), the Upper Tribunal (UT) has held that payments made to acquire partnership interests are deductible in calculating the profits of the partners’ solo trades of dealing in those partnership interests.

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VAT update

30 May 2018

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In this month’s update we report on HMRC’s cooperation agreement, intended to tackle online VAT fraud; HMRC’s recently published Guidance on online marketplace seller checks; and the government’s pilot for Making Tax Digital for VAT.

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Patel: Enquiry and closure notices held to be invalid

Published on 25 May 2018. By Adam Craggs, Partner and Constantine Christofi, Associate

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In Patel & Anor v HMRC [2018] UKFTT 0185 (TC), the First-tier Tribunal ('FTT'), in finding in favour of the taxpayers at a preliminary hearing, has held that HMRC had not opened valid enquiries into the taxpayers' self-assessment returns, as the returns had not been made pursuant to a notice issued by HMRC under section 8(1) Taxes Management Act 1970 ('TMA').

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Customs and excise quarterly update

Published on 23 May 2018. By Adam Craggs, Partner

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In this update we report on the government’s consultation on Gaming Duty Accounting Periods; the Licensing of Tobacco Manufacturing Machinery; and the European Commission’s consultation on amendments to guarantees. We also comment on three recent cases involving customs classification; excise duty drawback; and excise duty liability on persons with no actual or constructive knowledge of unpaid duty.

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Publication

Wealth and trusts quarterly digest

Published on 23 May 2018. By Adam Craggs, Partner

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Welcome to our latest Wealth and 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.

Read more
Blog

Tooth – discovery assessment invalid as no inaccuracy in return

Published on 21 May 2018. By Nicole Kostic, Senior Associate

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In HMRC v Tooth [2018] UKUT 38, the Upper Tribunal (UT) has concluded that a discovery assessment issued by HMRC was invalid as the taxpayer's self-assessment did not contain an inaccuracy and in any event there was no deliberate intent by the taxpayer to bring about an insufficiency of tax.

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MDCM Ltd - Tribunal confirms that IR35 does not apply in employment status case

Published on 14 May 2018. By Alexis Armitage, Associate

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In MDCM Ltd v HMRC [2018] TC 6400, the First-tier Tribunal (FTT) has allowed the taxpayer's appeal, concluding that its contractual arrangements were such that its principal employee was not an employee of the ultimate contracting company, for the purposes of IR35.

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Sippchoice Ltd: Taxpayer can claim income tax deduction for contribution in specie to SIPP

Published on 04 May 2018. By Robert Waterson, Legal Director

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In Sippchoice Ltd v HMRC [2018] UKFTT, the First-tier Tribunal (FTT) has held that a taxpayer can obtain tax relief at source in respect of contributions made to s Self-Invested Pension Plan (SIPP) settled in the form of unquoted shares.

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Publication

Tax update May 2018

01 May 2018

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In this month’s update we report on HMRC’s recently published guidance relating DOTAS for inheritance tax, its guidance for the GAAR and a new consultation relating to tax avoidance involving Profit Fragmentation.

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Corporate tax update

Published on 01 May 2018. By Ben Roberts, Senior Associate

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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.

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Onillon – Failure to take Follower Notice 'corrective action' reasonable in all the circumstances

Published on 27 April 2018. By Michelle Sloane, Senior Associate

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In Onillon v HMRC [2018] UKFTT 33 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against a penalty imposed for failing to take corrective action following the issue of a Follower Notice (FN) as it was reasonable in all the circumstances for the taxpayer not to take such action.

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VAT update April 2018

Published on 24 April 2018. By Adam Craggs, Partner

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In this month’s update we report on the publication of the draft agreement on the UK’s withdrawal from the EU; the Government’s “split payment” collection model for online sales by non-UK sellers; and HMRC’s revised guidance on the cost sharing exemption.

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Hargreaves: Loyalty pays

Published on 13 April 2018. By Constantine Christofi, Associate

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In Hargreaves Lansdown Asset Management LTD v HMRC [2018] UKFTT 127 (TC) TC06383, the First-tier Tribunal (FTT) has found that loyalty bonus payments paid to investors were not "annual payments" for the purpose of section 683, ITTOIA.

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Volkswagen: CJEU provides guidance on the time limit for input VAT recovery

Published on 11 April 2018. By Nicole Kostic, Senior Associate

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In Volkswagen AG v Finančné riaditeľstvo Slovenskej republiky C-533/16, the Court of Justice of the European Union (CJEU) has held that Member States cannot impose a time limit on input tax recovery that denies claims before the taxable person is in a position to exercise its right to recover.

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Jackson : HMRC penalised in penalties case

Published on 04 April 2018. By Adam Craggs, Partner

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In Jackson v HMRC [2018] UKFTT 0064 (TC), the First-tier Tribunal (FTT) has held that HMRC had misapplied the law in respect of penalties it had issued to the taxpayer for filing late returns.

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Publication

Tax update April 2018

03 April 2018

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In this month’s update we report on HMRC’s new Code of Practice 8 guidance, the OECD’s consultation on misuse of residence and citizenship schemes to circumvent the common reporting standard.

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Hicks: Discover the limits

Published on 28 March 2018. By Constantine Christofi, Associate

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In J Hicks v HMRC [2018] UKFTT 22, the First-tier Tribunal (FTT), in allowing the taxpayer's appeal, has held that discovery assessments issued by HMRC were invalid as the condition contained in section 29(5), TMA 1970, was not satisfied.

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VAT update March 2018

26 March 2018

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In this month’s update we report on HMRC’s informal VAT grouping consultation; HMRC’s update on its project to digitise the VAT Retail Export Scheme and HMRC’s new guidance for Fast Parcel Operators.

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