Tax Take
Spring Capital -Tribunal directs postponement of payment of tax
In Spring Capital Ltd v HMRC , the First-tier Tribunal (FTT) allowed the taxpayer's application for the postponement of payment of tax under section 55 Taxes Management Act 1970 (TMA), as it had a reasonable argument in relation to the underlying substantive issue.
Read moreTax update, December 2016
In this update we report on HMRC’s new guidance on client notification regarding Common Reporting Standards, the targeting by HMRC of the UK’s richest people and HMRC’s progress in reviewing the so-called Panama Papers. We also comment on three recent cases on whether the Tribunal has jurisdiction to entertain an application to provide witness evidence made by a non-party to the appeal, an inheritance tax scheme which succeeded and the Ramsay principle in the context of a proposed scheme of arrangement.
Read moreHigh Court considers the Ramsay principle in the context of a proposed scheme of arrangement
In Re Home Retail Group Plc , the High Court considered the so-called Ramsay principle of purposive construction in deciding whether a cancellation scheme following the sale of a business, to be carried out in connection with a takeover, fell within the anti-avoidance provisions contained in section 641(2A), Companies Act 2006 (CA 2006).
Read moreVAT update, November 2016
In this month’s update we report on new regulations which allow HMRC to refuse registration of VAT representatives, HMRC’s new policy on the correct treatment of VAT incurred by a business prior to its VAT registration and the EU’s extension of the UK’s VAT derogation permitting the UK to restrict input tax recovery on car leasing costs to 50% where the car is available for private use.
Read moreBBC prevented from submitting evidence in IR35 case
In Paya Limited and Tim Willcox Limited v HMRC [2016] UKFTT 0660 (TC), the First-tier Tribunal (FTT) held that the BBC could not provide witness evidence of its own motion to the FTT in tax appeals, to which it was not a party.
Read moreSalinger: IHT scheme succeeds
In M L Salinger and J L Kirby v HMRC [2016] UKFTT 677 (TC), the First-tier Tribunal (FTT) held that the transfer of a reversionary interest had not been a transfer of value for Inheritance Tax (IHT) purposes and allowed the taxpayers' appeal.eal.
Read moreTax update, November 2016
In this update we report on the proposed new corporate offence of failure to prevent facilitation of tax evasion, success against HMRC in the Supreme Court in relation to unlawful disclosure of confidential information and HMRC’s new specialist team which has been set up to tackle exploitation of freelance workers.
Read moreLomas – Court confirms statutory interest payable on insolvency is not 'yearly interest' and criticises HMRC's change of position
In Lomas and others v HMRC [2016] EWHC 2492 (Ch), the High Court has confirmed that statutory interest payable on insolvency is not 'yearly interest' for UK tax purposes. The administrators therefore had no obligation to account for income tax on the interest payments made. The Court was also critical of HMRC's contradictory guidance on this issue.
Read morePartial success for taxpayer in Dutch-subsidiary quantification judgment following FII
In Six Continents Ltd and Another v HMRC [2016] EWHC 2426 (Ch), the High Court held that the claimants are entitled to a credit at the foreign nominal rate (FNR) of corporation tax in respect of dividends paid from a Dutch subsidiary but are not entitled to a credit in respect of dividends linked to the return of share capital.
Read moreVAT update, October 2016
In this month’s update we report on new HMRC guidance in relation to retrospective VAT group treatment, use and enjoyment rules in relation to insurance repaid services and a new consultation on the introduction of a new penalty for those involved in VAT fraud. We also report on three recent cases involving the collection of commercial waste and whether this constitutes a “special purpose regime”, whether a stall at a craft fair amounted to the grant of a licence to occupy land and was not therefore exempt from VAT and whether a taxpayer can withdraw its request that the proceedings be excluded from the costs regime.
Read moreCorporate tax update, third quarter 2016
Welcome to the latest edition of our Corporate Tax Update, written by members of RPC’s tax team and published quarterly. Summer 2016 will certainly go down as one of the more interesting in recent British history but developments in UK tax law continue regardless of the wider political turmoil. In this edition we highlight some of the key tax developments of interest to UK corporates from the third quarter of 2016. As far as the tax legislative timetable is concerned, in this quarter: the Finance Bill 2016 finally received Royal Assent on 15 September 2016 (known as Finance Act 2016); it was announced that this year’s Autumn Statement will be given on 23 November 2016; it was also announced that draft Finance Bill 2017 clauses will be published on 5 December 2016 (for consultation until 30 January 2017).
Read moreEden Consulting Services - Tribunal has no jurisdiction to consider HMRC's duty to act fairly in administering its statutory powers
In Eden Consulting Services (Richmond) Ltd v HMRC [2016] UKFTT 656 (TC), the First-tier Tribunal (FTT) determined, as a preliminary issue, that it did not have jurisdiction to consider HMRC's alleged conduct, behaviour and abuse of its powers in determining an appeal against unauthorised payment charges and that such issues are properly for judicial review proceedings and/or the HMRC Adjudicator.
Read moreStan Murray-Hession: Tribunal allows taxpayer's share loss relief claim
In Stan Murray-Hession v HMRC [2016] UKFTT 612, the First-tier Tribunal (FTT), held that Mr Murray-Hession (the Appellant) had subscribed for shares within the meaning of section 135(2), Income Tax Act 2007 (ITA), so that share loss relief, under section 131, ITA, was available.
Read moreTribunal rejects HMRC's attempt to transfer PAYE liability to employee
In Stephen West v HMRC [2016] UKFTT 536 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal and confirmed that under the PAYE system the obligation to pay income tax fell on the employer, and liability will only be transferred to the employee under the regulation of the Income Tax (Pay As You Earn) Regulations 2003, if he has received his remuneration knowing that his employer has wilfully and deliberately failed to deduct PAYE.
Read moreTax update, October 2016
In this update we report on the Worldwide Disclosure Facility recently announced by HMRC, new sanctions for failure to register, and the latest Spotlights published by HMRC. We also comment on some recent tax decisions relating to industrial buildings allowance, offsetting losses arising in a UK permanent establishment against profits earned by its UK business and opting out of the costs regime.
Read moreVat update, September 2016
In this update we report on changes to the VAT treatment of single dwellings with more than one building, an extension to the simplified mechanism for employer input tax deductions in relation to investment management services and new guidance on HMRC’s powers to seek to recover underpaid VAT from online marketplaces. We also report on three recent cases involving MTIC fraud, reasonable excuse for late payment of VAT and whether supplies relating to fractional ownership interests in a property are exempt from VAT.
Read moreN Brown Group Plc: Tribunal confirms there is no going back once a taxpayer has opted out of the costs regime
In N Brown Group Plc and Another v HMRC [2016] UKFTT 445 (TC), the First-tier Tribunal (FTT), has confirmed that it did not have the power to permit a taxpayer to withdraw its written request that the proceedings be excluded from the costs regime.
Read moreJaved And Azra Mughal - Tribunal considers the rules relevant to "hardship" applications
In Javed and Azra Mughal (Partnership) Trading as Dallas Chicken and Ribs v HMRC [2016] UKFTT 456 (TC), the First-tier Tribunal (FTT) has considered the extent of information necessary for a 'hardship' application.
Read moreTribunal allows set-off of corporation tax loss against income tax profit
In English Holdings Ltd v HMRC [2016] UKFTT 0346 (TC), the First-tier Tribunal (FTT) allowed an appeal by a non-UK resident company against a decision of HMRC refusing its claim to offset losses arising in its UK permanent establishment (PE) against profits earned by its UK property rental business.
Read moreErrors of law in MTIC case leads to case being remitted to the First-tier Tribunal
In HMRC V Pacific Computers Ltd [2016] UKUT 350 (TCC), the Upper Tribunal (UT) has concluded that the First-tier Tribunal (FTT) made errors of law that had been material to the outcome of a taxpayer's appeal in a case involving missing trader intra-community (MTIC) fraud.
Read moreTribunal finds in taxpayer's favour in IBA case
In David Wellstead v HMRC [2016] UKFTT 0492 (TC), the First-tier Tribunal (FTT) has held that where a developer acquired a lease of land, constructed industrial units on that land and sold one of the units by way of an under-lease, the grant of the under-lease amounted to the sale of a relevant interest for the purposes of section 296, Capital Allowances Act 2001 (CAA 2001), entitling the purchaser to claim industrial buildings allowances (IBAs) on the purchase price.
Read moreTax update, September 2016
In this month's edition we report on (1) HMRC's much anticipated consultation on proposals to tackle disguised remuneration (2) further amendment to the Finance Bill 2016 in relation to EBT settlement relief and (3) HMRC's consultation on proposed penalties for "enablers" of tax avoidance arrangements. We also comment on three recent cases concerning penalties, scheme sanction changes and industrial buildings allowance.
Read moreHarry Potter star loses £1m battle with HMRC
The First-tier Tribunal (FTT) has held that a taxpayer's new accounts did not meet the requirements of section 217, Income Tax (Trading and Other Income) Act 2005 (ITTOIA), for a change in accounting date, as the accounts did not exist when HMRC were notified of the change.
Read moreVAT update, August 2016
In this month's edition of our VAT update we report on (1) the Law Society's response to HMRC's consultation on VADRA, (2) HMRC's new brief on TOGCs, and (3) HMRC's new policy paper on "Use and Enjoyment" of insurance repair. We also comment on three recent cases concerning Article 9 of the VAT Directive, repayment of VAT by an individual member of a VAT group, and a "hardship" application.
Read moreSIPP scheme administrator avoids 'pension liberation' tax charge
In a recent case the First-tier Tribunal (FTT) has found that HMRC was wrong to refuse Sippchoice's application for the discharge of liability to scheme sanction charges in circumstances where it was not aware of a pension liberation scheme being operated in respect of the pension scheme's invested funds.
Read moreTaxpayer succeeds on penalties issue in Pendulum scheme
In a recent case the First-tier Tribunal (FTT) has found that a taxpayer was not fraudulent or negligent in the completion of his tax return when relying on the advice of his professional advisors.
Read moreTaxpayer wins appeal against HMRC after receiving contradictory tax demand
In Walkers’ Baggage Transfer Company Ltd v HMRC [2016] UKFTT 0415 (TC), the First-tier Tribunal (FTT) has allowed the taxpayer's appeals and concluded that the appellant had accounted for the PAYE properly due in relation to one of its employees over a three year period.
Read moreTax update, August 2016
In this month's edition we report on (1) HMRC's new guidance on contracting-out for defined benefit pension schemes (2) this years' tax take, (3) a new EU directive aimed at reducing corporate tax avoidance. We also comment on three recent cases concerning the validity of a discovery assessment, the tribunal's hardened approach to compliance with directions, and the validity of a notice of enquiry.
Read moreVAT update, July 2016
In this month’s edition of our VAT update we will report on (1) the EU Council’s variation to the Principal VAT Directive relating to vouchers, (2) HMRC’s update on VAT Notice 708, and (3) a variation in the law on the applicably of VAT to offshore property held by insurers. We also comment on three recent cases concerning the supply of services by a bank, the applicability of VAT to an incomplete transfer of title, and whether VAT is payable on charitable donations.
Read moreTribunal allows taxpayer's appeal as notice of enquiry was invalid
First-tier Tribunal (FTT) determined that HMRC had not given a valid notice of intention to enquire into the taxpayer's return because the purported notice of enquiry referred to tax year ended 6 April 2009, rather than 5 April 2009.
Read moreHigh Court criticises HMRC's conduct finding that it breached taxpayer's legitimate expectation
High Court criticises HMRC's conduct finding that it breached taxpayer's legitimate expectation
Read moreCorporate tax update, second quarter 2016
On 23 June 2016 the UK voted to leave the EU in an historic referendum result. A period of some political, economic and social uncertainty will undoubtedly follow (and we've already had a turbulent few weeks) but as far as corporate tax is concerned there should be no immediate consequences. It remains to be seen what happens to the planned further reduction in corporation tax to 15% as announced by the then-Chancellor George Osborne. Some initial views on the likely corporate tax consequences of Brexit are set out below. It has also been announced that Royal Assent to this year's Finance Bill is not now expected before the Autumn. In the aftermath of the referendum result, it is perhaps easy to forget that some significant changes to the UK corporate tax regime are planned. Whether all of these changes now proceed, at the pace originally intended, will become clear in due course. In this edition we therefore also highlight some of the key tax developments of interest to UK corporates from the second quarter of 2016.
Read moreFailure to comply with direction leads to strike out of taxpayers' appeals
In the recent case of Grindley & Others v HMRC [2016] UKFTT 0834 (TC), the First-tier Tribunal (FTT) has directed that the taxpayers' appeals be struck out for failure to comply with a direction issued by the FTT.
Read moreTribunal finds HMRC was not entitled to issue a discovery assessment
In Anderson v HMRC [2016] UKFTT 335 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeal and held that HMRC was not entitled to issue a discovery assessment pursuant to section 29(1) TMA, as the taxpayer had not been careless.
Read moreTax update, July 2016
In this month's edition of our Tax Update we will report on HMRC's (1) revised corporate interest deductibility rules consultation, (2) new company taxation manual, and (3) off-payroll working and IR35 consultation. We also comment on three recent cases concerning 'trading', the applicability of income tax on employment termination payments, and SDLT planning.
Read moreTribunal dismisses taxpayer's appeal as trade not conducted on a commercial basis
In Gray v HMRC [2016] UKFTT 0379 (TC), the First-tier Tribunal (FTT) has held that a taxpayer conducting promotional activities for his musician wife was not entitled to set losses from those activities against profits from his legal business.
Read moreVAT update, June 2016
The result of last week's referendum on the UK's membership of the EU is likely to lead to a prolonged period of uncertainty in many areas of taxation
Read moreTribunal confirms that double charge to tax is contrary to taxpayer's human rights
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Tax update
The Finance Bill 2016 contains provisions which will introduce a specific penalty linked to the General Anti-Abuse Rule (GAAR) provisions.
Read moreWould you know what to do if you received a Production Order from HMRC?
Last year HMRC issued over 1,400 production orders. They were issued by HMRC’s Criminal Investigation Directorate, as part of investigations into tax evasion and money laundering.
Read moreTribunal allows taxpayer's appeal following poor customer service by HMRC
In Usher & Perkins, Executors of Terence J Guy (deceased) v HMRC [2016] (TC04849), the First-tier Tribunal (FTT), allowed the executors' appeal against a penalty.
Read moreTribunal considers carelessness test and finds discovery assessments to be invalid
In Bubb v HMRC [2016] UKFTT 0216 (TC), the First-tier Tribunal (FTT) allowed the taxpayer's appeals and concluded that two discovery assessments made by HMRC under section 29, TMA 1970, were not validly made because only part of the tax underpayment resulted from the taxpayer's carelessness.
Read moreTax update
In the 2016 Budget, the Chancellor announced proposed legislation to tackle so-called “disguised remuneration”. HMRC has now published an impact note and draft legislation.
Read moreCorporate tax update
Welcome to the latest edition of our Corporate Tax Update, written by members of RPC’s tax team and published quarterly. In this edition we highlight some of the key tax developments of interest to UK corporates from the first quarter of 2016.
Read moreTribunal finds that deferred shares are ordinary shares for the purposes of entrepreneurs' relief
In Alan Castledine v HMRC [2016] UKFTT 145, the First-tier Tribunal (FTT) dismissed Mr Castledine's appeal and found that deferred shares qualified as ordinary shares for the purposes of entrepreneurs' relief.
Read moreVAT update
On 7 April 2016, the European Commission adopted a Communication on an Action Plan on VAT, which sets out the first steps the Commission intends to take with the aim of creating a single EU VAT area.
Read moreReview letter from HMRC should be read as cancelling discovery assessment
In Easinghall Limited v HMRC [2016] UKUT 105 (TCC), the Upper Tribunal (UT) has confirmed that where an agreement has been reached with HMRC under section 54, Taxes Management Act 1970 (TMA 1970), it cannot commence an enquiry or issue a discovery assessment unless they concern an issue which was not the subject of the agreement.
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