Tax Take
Tax update, July 2017
In this month’s Update we report on draft provisions for a EU wide cross-border tax planning disclosure requirement; changes to HMRC’s guidance on the WDF and announcements in the Queen’s Speech in relation to the next Finance Bill.
Read moreBerlioz - ECJ confirms that third parties can challenge 'foreseeable relevance' of tax information exchange requests
In Berlioz Investment Fund SA v Directeur de l'administration des Contributions directes (Case C-682/15), the ECJ has confirmed that a Member State's national court can review a tax information request made by another Member State in order to assess whether the requested information is 'foreseeably relevant'.
Read moreVAT update, June 2017
In this month's update we report on proposals for the reduced VAT rate for e-publications, HMRC's first publication of VAT Notes 2017, in which it explains changes to VAT for businesses, and the latest stage in the long-running compound interest litigation involving Littlewoods.
Read moreRai - Tribunal quashes penalties for non-payment of PPNs and criticises HMRC's 'nitpicking pedantry'
In Rai v HMRC [2017] UKFTT 0467 (TC), the First-tier Tribunal (FTT) was critical of HMRC's conduct and cancelled assessments to penalties which it had issued for failure to pay on time amounts demanded in partner payment notices (PPNs), as the statutory payment period had not expired.
Read morePitcher - Tribunal finds in favour of taxpayer in APN penalty appeal
In Graham Pitcher [2017] UKFTT 0406 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal against a penalty for non-payment of an Accelerated Payment Notice (APN) due to defects in the APN.
Read moreArcher: judicial review in the context of statutory tax appeals
The High Court's judgment in R (on the application of Archer) v HMRC [2017] EWHC 296 (Admin) is one of a number of recent decisions where it has been found that the taxpayer had not challenged HMRC's decision in the correct forum.
Read moreRendall - Tribunal reduces penalties imposed for failure to file a partnership return to nil
In Rendall v HMRC [2017] UKFTT 356 (TC), the First-tier Tribunal (FTT) has reduced penalties imposed on partners for failure to file a partnership return on time to nil as the requisite information had already been disclosed to HMRC in the partners' personal self-assessment returns.
Read moreTax update, June 2017
In this update we report on the scope of the Criminal Finances Bill as it receives Royal Assent; HMRC guidance updates for businesses, individuals and agents on how to make disclosures of unpaid tax; and HMRC’s further consultation on Making Tax Digital.
Read moreTager – Application to suspend penalties for failing to comply with information notices rejected
In HMRC v Romie Tager QC the Personal Representative of Osias Tager [2017] UKUT 161 (TCC), the Upper Tribunal (UT) refused an application that it should exercise its discretion under Rule 5(3) of the Tribunal Procedure (Upper Tribunal) Rules 2008 (the Upper Tribunal Rules) and suspend the effect of its decision to impose tax-related penalties for failing to comply with information notices, pending an appeal to the Court of Appeal.
Read moreVAT update, May 2017
In this month’s update we report on HMRC’s revised guidance on holding companies’ input VAT recovery, prelaunch trials for the online tribunal appeals service and draft legislation effecting the removal of the “use and enjoyment” rule for the supplies of B2C telecommunication services.
Read moreCustoms and excise quarterly update, May 2017
In this update we report on the launch of the register of approved UK alcohol wholesalers, HMRC’s Customs Information Paper 5 (2017) (CIP 5), which clarifies the correct codes to use when sending free circulation goods to the special territories of the EU, and the new address for HMRC’s National Clearance Hub.
Read moreBCM – Tribunal grants taxpayers' application for closure notices
In BCM Cayman LP and others v HMRC [2017] UKFTT 0226 (TC), the First-tier Tribunal (FTT) directed HMRC to issue closure notices within specified time periods in respect of its enquiries into certain of the applicants' tax returns, pursuant to section 28B, Taxes Management Act 1970 (TMA) and paragraph 33, Schedule 18, Finance Act 1998 (FA 1998).
Read moreWealth and trusts quarterly digest
Our quarterly digest provides up to date commentary and analysis on key sector developments from our tax, wealth and trusts teams.
Read moreABL – Tribunal dismisses HMRC's application to vary direction staying related cases
In ABL (Holding) Ltd and Tanias Properties Ltd v HMRC [2017] UKFTT 220 (TC), the First-tier Tribunal (FTT) dismissed HMRC's application to vary the FTT's direction staying over 100 related cases until the determination of the lead appellants' appeals by the Upper Tribunal (UT).
Read moreBudget 2017 Amendments to the QROPS Regime - a Further Breach of EU Law
Back in October 2013, I wrote an article for the Tax Journal (18 October 2013, The QROPS Regime and EU Law) in which I argued that the operation of the qualifying recognised overseas pension scheme (QROPS) system, introduced by Finance 2004, breached EU law and was unlawful. The recent changes introduced by the 2017 Budget not only preserve the inherent unlawfulness which has existed in the system since at least October 2008 but introduces a further breach of EU law rights. The background to the October 2013 article was my involvement in representing individuals who had transferred their UK pensions into a fund called ROSIIP.
Read moreCorporate tax update, first quarter 2017
Welcome to the latest edition of our Corporate Tax Update, written by members of RPC’s Tax team and published quarterly. In this first 2017 edition we highlight some of the key tax developments of interest to UK corporates from the first quarter of 2017.
Read moreTax update, May 2017
In this update we report on HMRC’s recently amended guidance on the General Anti-Abuse Rule, HMRC’s draft guidance on the new disguised remuneration provisions in the Income Tax (Earnings and Pensions) Act 2003, and on the recent modifications to the Finance Bill 2017.
Read moreUpper Tribunal confirms First-tier Tribunal has jurisdiction to amend tax return
In HMRC v Eric Walker [2016] UKUT 32, the Upper Tribunal (UT) has confirmed that the First-tier Tribunal (FTT) has the power, under section 50, Taxes Management Act 1970 (TMA), to amend a return if it decides the taxpayer is entitled to a smaller repayment than the one claimed.
Read moreVAT update April 2017
In this month’s update we report on HMRC’s call for evidence on alternative methods for collecting VAT for online sales, HMRC’s policy on historical VAT bad debt relief claims following the BT and GMAC decisions and the enactment of the insolvency VAT clawback concession. We also comment on three recent cases involving mistake-based claims for unjust enrichment, the VAT treatment of temporary workers and the apportionment of residual input tax for finance houses.
Read moreEuro Packaging UK Limited – classification of long-life shopping bags
In HMRC v Euro Packaging UK Limited [2017] UKFTT 0160, the First-tier Tribunal (FTT) allowed the Appellant's appeal against decisions of HMRC relating to the customs duty to be paid on the importation from countries outside the EU of shopping bags and its refusal to remit the customs duty.
Read moreTribunal cancels penalty imposed against doctor and criticises unreasonable HMRC behaviour
In Dr Ragini Pandey v HMRC [2017] UKFTT 0216 (TC), the First-tier Tribunal (FTT) cancelled a penalty which had been issued by HMRC under paragraph 1, Schedule 24, Finance Act 2007 and in so doing criticised HMRC's 'unreasonable' behaviour.
Read moreClosure Notices defective but JR dismissed as taxpayer should have appealed to the Tribunal
In R (on the application of Archer) v HMRC [2017] EWHC 296 (Admin), the High Court agreed with the claimant that a Closure Notice issued by HMRC must state the tax due, but dismissed his application for judicial review on the ground that he should have appealed to the First-tier Tribunal (FTT).
Read moreTax update, April 2017
In this update we report on recent HMRC guidance on partnership follower notices and penalties, the new employment status checker for the intermediaries legislation (IR35) and details of tax avoidance scheme for income and national insurance contributions which HMRC has highlighted in its Spotlight 37.
Read moreSIPP scheme administrator avoids 'pension liberation' tax charge
In HMRC v Sippchoice Ltd [2017] UKUT 87 (TCC) the Upper Tribunal (UT) has upheld the decision of the First-tier Tribunal (FTT) that Sippchoice should not be subject to scheme sanction charges but said that the FTT's reference to MTIC case law in assessing the evidential burden was incorrect.
Read moreVAT update, March 2017
In this month’s update we report on the Chancellor’s announcement in the Spring Budget that he intends to “crack down” on VAT “missing trader” fraud within the construction industry, the Offce of Tax Simplification’s Interim Report on its review of VAT, and the EU’s consultation on proposals to tackle VAT fraud.
Read moreNew legislation will allow taxpayers to seek partial closure notices
Proposed legislation contained in Finance Bill 2017, will enable partial closure notices to be issued in respect of a discreet issue while other issues remain under enquiry by HMRC.
Read moreTribunal concludes that capital gains tax legislation is compliant with Human Rights and EU law
In William Reeves v HMRC [2017] UKFTT 192 (TC), the First-tier Tribunal (FTT) has held that section 167 Taxation of Chargeable Gains Act 1992 (TCGA) is compliant with the European Convention on Human Rights (ECHR) and EU law.
Read moreTribunal allows taxpayers' appeal in foreign exchange losses case
In Smith and Nephew Overseas Limited and others v HMRC [2017] UKFTT 151, the First-tier Tribunal (FTT) allowed appeals against HMRC's disallowance of foreign exchange losses incurred as a result of a change in functional currency following a company reorganisation.
Read moreRidgecrest – Tribunal allows appeal against Regulation 80 determinations
In Ridgecrest Cleaning Services Pendergate Ltd v HMRC [2016] UKFTT 778 (TC), the First-tier Tribunal (FTT) allowed an appeal against determinations of underpaid tax made under Regulation 80 of the Income Tax (PAYE) Regulations 2003 (the PAYE Regulations), as HMRC had not obtained the necessary statutory consent from the Appellant to notify it of changes to employee PAYE codes electronically.
Read moreHMRC's failure to exercise its discretion unreasonable
In G B Housley Limited v HMRC [2016] EWCA Civ 1299, the Court of Appeal allowed the Appellant's appeal and restored the decision of the First-tier Tribunal (FTT) which had discharged HMRC's VAT assessment on the basis HMRC had failed to correctly exercise its discretion.
Read moreTax update, March 2017
In this month’s update we report on HMRC’s Spotlight 36 which has been issued in respect of planning designed to circumvent the loan taxation rules in Part 7A ITEPA; new draft legislation in relation to the taxation of non-domiciled individuals and a recent report by the Public Accounts Committee on the taxation of high net worth individuals.
Read moreVAT update, February 2017
In this month’s update we report on HMRC’s withdrawal of three VAT extra-statutory concessions, the National Audit Offce’s investigation into VAT evasion by overseas online retailers and HMRC’s responses to the various “Making Tax Digital” consultations.
Read moreTiming and detail critical in misfeasance claims against HMRC
The claimant taxpayer, who had been wrongly convicted for cheating the public revenue, had his claim of misfeasance in public office against HMRC struck out by the High Court because it was brought too late and he had failed adequately to plead his case.
Read moreWealth and trusts quarterly digest, February 2017
The digest provides up to date commentary and analysis on key sector developments. Our tax, wealth and trusts teams are able to provide a wide ranging service to assist you and your clients in responding to market trends and legal developments. We would welcome the opportunity to discuss any concerns you may have and always welcome feedback on the content of our publications.
Read moreCustoms and excise quarterly update, February 2017
In this quarterly update we report on new customs examination powers which allow HMRC to examine goods away from ports, airports and other approved places under customs control after clearance, the Government’s response to its consultation on a new due diligence scheme for UK fulfilment houses handling goods imported from outside the EU and HMRC’s new raw tobacco approval scheme.
Read moreUpper Tribunal confirms transfer of pension fund is not a transfer of value for IHT purposes
In HMRC v Parry & Others [2017] UKUT 4 (TCC), the Upper Tribunal (UT) held that a transfer of funds from a registered pension scheme to a personal pension plan made by the deceased shortly before her death was not a 'transfer of value' for the purposes of section 3, Inheritance Tax Act 1984 (IHTA). Similarly, the deceased's omission to exercise her right to take lifetime benefits from the personal pension plan was not a transfer of value.
Read moreVAT recovery on management buyout fees
In Heating Plumbing Supplies Limited [2016] UKFTT 753, the First-tier Tribunal (FTT) allowed a VAT group's appeal against HMRC's denial of input tax recovery on advisory fees incurred in a management buyout.
Read moreTax update, February 2017
Non-domiciled tax reforms. Disguised remuneration. HMRC's proposals surrounding offshore structures.
Read moreTribunal allows tax deduction for motor racing sponsorship payments
In The Crown and Cushion Hotel (Chipping Norton) Ltd v HMRC [2016] UKFTT 765 (TC), the First-tier Tribunal (FTT) allowed the appeal of the appellant company against HMRC's disallowance of expenditure it had incurred in sponsoring a racing driver who was the daughter of its sole director. The FTT concluded that the payments were made "wholly and exclusively" for the purposes of the company's trade as required by section 54, Corporation Tax Act 2009 (CTA).
Read moreCorporate tax update, final quarter 2016
Welcome to the latest edition of our corporate tax update, written by members of RPC’s tax team and published quarterly. In this final 2016 edition we highlight some of the key tax developments of interest to UK corporates from the final quarter of 2016.
Read moreVAT update, January 2017
In this month’s update we report on new penalty legislation which the government intends to introduce for businesses participating in VAT fraud, HMRC’s consultation on VAT grouping and proposed new legislation to tackle the exploitation of VAT relief on adapted cars for wheelchair users.
Read moreTribunal allows taxpayer's appeal against discovery assessment
In Paul Munford v HMRC [2017] UKFTT 019 (TC), the First-tier Tribunal (FTT) considered the validity of a discovery assessment which had been issued by HMRC pursuant to section 29, Taxes Management Act 1970 (TMA) and allowed the taxpayer's appeal on the basis that HMRC had not discharged the burden of proving, for the purposes of section 36(1A), TMA, that the taxpayer had deliberately brought about a loss of capital gains tax.
Read moreTribunal refuses to allow HMRC to rely upon section 114 TMA to cure its mistakes
In Chartridge Developments Limited v Revenue and Customs Commissioners [2016] UKFTT 766, the First-tier Tribunal (FTT) allowed (in part) the taxpayer's appeal against penalties imposed for late filing of annual tax on enveloped dwellings (ATED) returns under section 161(3), Finance Act 2013, and refused to allow HMRC to rely upon section 114 Taxes Management Act 1970 (TMA).
Read moreTribunal finds for the taxpayer in "income" versus "capital" payment dispute
In James Allan Thornton v HMRC [2016] UKFTT 767 (TC), the First-tier Tribunal (FTT) considered the distinction between income and capital payments in the context of a settlement relating to rental property and held that a settlement payment made to a landlord as compensation for dilapidations to his property was a capital receipt.
Read moreDraft Finance Bill 2017 - partial closure notices
Tax analysis: we welcome the new rules on partial closures of tax enquiries and point out that the inflexibility in the current enquiry framework can lead to complex or multi-issue tax disputes taking an excessive amount of time to be resolved.
Read moreDraft Finance Bill 2017—off-payroll working in the public sector
Tax analysis: Adam Craggs, partner at RPC, and Michelle Sloane, senior associate at the firm, explain the reformed off-payroll rules for public sector engagements under the Finance Bill 2017.
Read moreUpper Tribunal confirms that right to make VAT repayment claims belongs to representative member of VAT Group
In HMRC v MG Rover Group Limited; Standard Chartered PLC v HMRC [2016] UKUT 434, the UT has confirmed that section 43, Value Added Tax Act 1994 (VATA) required repayment rights under section 80, VATA, to be held only by the representative member both before and after they have left the group or the group has been dissolved.
Read moreGMAC (UK) Plc – Court of Appeal finds VAT bad debt relief provisions incompatible with EU law
In HMRC v GMAC (UK) Plc [2016] EWCA Civ 1015, the Court of Appeal has held that the UK's legislation, which barred bad debt relief claims unless the debtor was insolvent and the property in the goods had passed, was incompatible with EU law.
Read moreBiffin - Court grants injunction preventing HMRC from enforcement action
In Biffin Limited and Others v HMRC [2016] EWHC 2926 (Admin), the High Court has granted the taxpayers an injunction prohibiting HMRC from commencing enforcement action in respect of alleged tax liabilities.
Read moreKevin Reed v HMRC - Tribunal dismisses taxpayer's application for reinstatement of his appeal
In Kevin Reed v HMRC [2016] UKFTT 0653 (TC), the First-tier Tribunal (FTT) dismissed the taxpayer's application for reinstatement of his appeal which had been struck out for failing to comply with directions issued by the FTT.
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