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Tax Take

Blog

Rai - Tribunal quashes penalties for non-payment of PPNs and criticises HMRC's 'nitpicking pedantry'

Published on 26 June 2017. By Constantine Christofi, Associate

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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.

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Pitcher - Tribunal finds in favour of taxpayer in APN penalty appeal

Published on 19 June 2017. By Robert Waterson, Legal Director

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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.

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Archer: judicial review in the context of statutory tax appeals

Published on 13 June 2017. By Michelle Sloane, Senior Associate

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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.

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Rendall - Tribunal reduces penalties imposed for failure to file a partnership return to nil

Published on 01 June 2017. By Constantine Christofi, Associate

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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.

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Publication

Tax update, June 2017

Published on 31 May 2017. By Adam Craggs, Partner

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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.

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Tager – Application to suspend penalties for failing to comply with information notices rejected

Published on 30 May 2017. By Alexis Armitage, Associate

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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.

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VAT update, May 2017

Published on 24 May 2017. By Adam Craggs, Partner

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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.

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Customs and excise quarterly update, May 2017

Published on 23 May 2017. By Adam Craggs, Partner

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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.

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BCM – Tribunal grants taxpayers' application for closure notices

Published on 22 May 2017. By Nicole Kostic, Senior Associate

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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).

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Wealth and trusts quarterly digest

Published on 17 May 2017. By Adam Craggs, Partner

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Our quarterly digest provides up to date commentary and analysis on key sector developments from our tax, wealth and trusts teams.

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ABL – Tribunal dismisses HMRC's application to vary direction staying related cases

Published on 16 May 2017. By Alexis Armitage, Associate

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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).

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Budget 2017 Amendments to the QROPS Regime - a Further Breach of EU Law

Published on 08 May 2017. By Robert Waterson, Legal Director

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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.

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Publication

Corporate tax update, first quarter 2017

Published on 05 May 2017. By Adam Craggs, Partner

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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 first 2017 edition we highlight some of the key tax developments of interest to UK corporates from the first quarter of 2017.

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Tax update, May 2017

Published on 03 May 2017. By Adam Craggs, Partner

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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.

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Upper Tribunal confirms First-tier Tribunal has jurisdiction to amend tax return

Published on 02 May 2017. By Constantine Christofi, Associate

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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.

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Publication

VAT update April 2017

Published on 26 April 2017. By Adam Craggs, Partner

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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.

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Euro Packaging UK Limited – classification of long-life shopping bags

Published on 25 April 2017. By Michelle Sloane, Senior Associate

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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.

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Tribunal cancels penalty imposed against doctor and criticises unreasonable HMRC behaviour

Published on 18 April 2017. By Nicole Kostic, Senior Associate

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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.

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Closure Notices defective but JR dismissed as taxpayer should have appealed to the Tribunal

Published on 10 April 2017. By Adam Craggs, Partner

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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).

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Tax update, April 2017

Published on 05 April 2017. By Adam Craggs, Partner

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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.

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SIPP scheme administrator avoids 'pension liberation' tax charge

Published on 04 April 2017. By Robert Waterson, Legal Director

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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.

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VAT update, March 2017

Published on 30 March 2017. By Adam Craggs, Partner

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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.

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New legislation will allow taxpayers to seek partial closure notices

Published on 29 March 2017. By Adam Craggs, Partner

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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.

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Tribunal concludes that capital gains tax legislation is compliant with Human Rights and EU law

Published on 20 March 2017. By Constantine Christofi, Associate

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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.

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Tribunal allows taxpayers' appeal in foreign exchange losses case

Published on 16 March 2017. By Alexis Armitage, Associate

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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.

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Ridgecrest – Tribunal allows appeal against Regulation 80 determinations

Published on 08 March 2017. By Adam Craggs, Partner

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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.

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HMRC's failure to exercise its discretion unreasonable

Published on 03 March 2017. By Michelle Sloane, Senior Associate

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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.

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Tax update, March 2017

Published on 01 March 2017. By Adam Craggs, Partner

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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.

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VAT update, February 2017

Published on 22 February 2017. By Adam Craggs, Partner

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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.

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Timing and detail critical in misfeasance claims against HMRC

Published on 22 February 2017. By Robert Waterson, Legal Director

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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.

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Wealth and trusts quarterly digest, February 2017

Published on 16 February 2017. By Adam Craggs, Partner

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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.

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Customs and excise quarterly update, February 2017

Published on 16 February 2017. By Adam Craggs, Partner

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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.

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Upper Tribunal confirms transfer of pension fund is not a transfer of value for IHT purposes

Published on 15 February 2017. By Constantine Christofi, Associate

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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.

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VAT recovery on management buyout fees

Published on 07 February 2017. By Michelle Sloane, Senior Associate

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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.

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Tax update, February 2017

Published on 01 February 2017. By Adam Craggs, Partner

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Non-domiciled tax reforms. Disguised remuneration. HMRC's proposals surrounding offshore structures.

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Tribunal allows tax deduction for motor racing sponsorship payments

Published on 01 February 2017. By Alexis Armitage, Associate

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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).

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Corporate tax update, final quarter 2016

30 January 2017

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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 final 2016 edition we highlight some of the key tax developments of interest to UK corporates from the final quarter of 2016.

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VAT update, January 2017

Published on 26 January 2017. By Adam Craggs, Partner

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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.

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Tribunal allows taxpayer's appeal against discovery assessment

Published on 24 January 2017. By Nicole Kostic, Senior Associate

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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.

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Tribunal refuses to allow HMRC to rely upon section 114 TMA to cure its mistakes

Published on 18 January 2017. By Michelle Sloane, Senior Associate

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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).

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Tribunal finds for the taxpayer in "income" versus "capital" payment dispute

Published on 11 January 2017. By Robert Waterson, Legal Director

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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.

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Draft Finance Bill 2017 - partial closure notices

Published on 06 January 2017. By Adam Craggs, Partner

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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.

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Draft Finance Bill 2017—off-payroll working in the public sector

Published on 05 January 2017. By Michelle Sloane, Senior Associate

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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.

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Upper Tribunal confirms that right to make VAT repayment claims belongs to representative member of VAT Group

Published on 03 January 2017. By Michelle Sloane, Senior Associate

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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.

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GMAC (UK) Plc – Court of Appeal finds VAT bad debt relief provisions incompatible with EU law

Published on 29 December 2016. By Michelle Sloane, Senior Associate

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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.

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Biffin - Court grants injunction preventing HMRC from enforcement action

Published on 21 December 2016. By Constantine Christofi, Associate

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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.

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Kevin Reed v HMRC - Tribunal dismisses taxpayer's application for reinstatement of his appeal

Published on 12 December 2016. By Alexis Armitage, Associate

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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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Icebreaker litigation: partial award of costs upheld as HMRC recognised as the "substantial victor"

Published on 06 December 2016. By Constantine Christofi, Associate

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In Bastionspark LLP and others v HMRC , the Upper Tribunal (UT) has held that the First-tier Tribunal (FTT) was entitled to find that HMRC had been the "substantial victor" and to make a partial award of costs in favour of HMRC notwithstanding that each party had been partially successful in an appeal against HMRC's decision regarding allowable expenditure.

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Spring Capital -Tribunal directs postponement of payment of tax

Published on 02 December 2016. By Constantine Christofi, Associate

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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.

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Tax update, December 2016

Published on 01 December 2016. By Adam Craggs, Partner

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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.

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