Tax Bites - July 2020
Welcome to the latest edition of RPC's Tax Bites - providing monthly bite-sized updates from the tax world.
As always, if there are any areas you would like more information on (or if you have any questions or feedback), please let us know or get in touch with your usual RPC contact.
News
COVID-19: HMRC guidance on implications of crisis-driven changes to trading activities
In response to the COVID-19 outbreak, HMRC has published guidance in its Business Income Manual on the implications of crisis-driven changes to trading activities. The guidance sets out how HMRC will respond in situations where a crisis has resulted in changes to normal business activities. Read more
Draft insolvency regulations published: HMRC debts to have preferential status
HM Treasury has provided the Public Bill Committee with a draft copy of The Insolvency Act 1986 (HMRC Debts: Priority on Insolvency) Regulations 2020, to be made pursuant to the current clause 96 of the Finance Bill 2020. The draft regulations have not yet been formally laid before Parliament but are drafted to come into force on 1 December 2020. Read more
COVID-19: First-tier Tribunal (Tax Chamber) guidance on conducting tax litigation during pandemic
The First-tier Tribunal (Tax Chamber) (FTT) has published a document answering some frequently asked questions about the conduct of tax litigation in the FTT during the COVID-19 outbreak. Read more
Case reports
Partners and closure notices: making amends
In R (on the application of Amrolia) v HMRC and R (on the application of Ranjit-Singh) v HMRC [2020] EWCA Civ 488, the Court of Appeal held that notices amending individual partners’ tax returns under section 28B(4), Taxes Management Act 1970 (TMA), were not closure notices and therefore did not need to specify the final amounts of tax due. Read more
Court of Appeal confirms partnership contributions not deductible
In Investec Asset Finance Plc and Another v HMRC [2020] EWCA Civ 579, the Court of Appeal has held that partnership contributions were non-deductible, but has upheld the 'no double taxation' principle and prevented HMRC from introducing arguments not previously relied upon. Read more
Game Match Officials - the final whistle for HMRC?
In Professional Game Match Officials Ltd v HMRC [2020] UKUT 147 (TCC), the UT confirmed that certain football referees and other match day officials were not employees of Professional Game Match Officials Ltd and accordingly it did not have tax and NICs liabilities in respect of the officials in question. Read more
And finally...
A recent report written by Arun Advani, Assistant Professor, University of Warwick Economics, CAGE, IFS and Andy Summers, Assistant Professor, LSE Law, International Inequalities Institute entitled: "How much tax do the rich really pay? New evidence from tax microdata in the UK" examines the effective rates of tax payed by the UK's wealthiest taxpayers. The report floats the idea of introducing a 'minimum tax' to narrow lower effective rates of tax for the wealthiest people in the UK.
Whilst the report overlooks certain aspects, such as the role of Corporation Tax/NICs, and why there is a distinction between taxes on capital gains and income, given where the country is headed economically, alternative proposals, such as a minimum tax, may prove attractive for policy makers. The alternative minimum tax proposed by Warwick and LSE it is said would raise around £11bn annually. This could rise to £20bn annually, depending on which reliefs and adjustments are taken into account.
The report can be viewed here.