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Tax Bites - March 2021

Published on 04 March 2021

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 on which you would like more information (or if you have any questions or feedback), please let us know or get in touch with your usual RPC contact.


HMRC's response to loan charge review criticised

The House of Lords Finance Bill sub-committee has criticised HMRC's response to the loan charge review on the basis that it has not given enough consideration to the individual circumstances of lower income taxpayers. Read more 

GAAR applies to artificial repayment of a loan to participators 

HMRC has published the opinion of the General Anti-Abuse Rule (GAAR) Advisory Panel in relation to a tax arrangement involving the artificial repayment of a loan or advance to a participator to avoid a charge under the loans to participators legislation. Read more

HMRC publishes policy paper to assist with compliance changes to the off-payroll working rules

HMRC has published a policy paper detailing the principles relevant to entities which engage contractors or intermediaries and the steps they need to follow in order to comply with changes to the off-payroll working rules (also known as IR35). Read more 

HMRC updates NICs guidance for EU workers

HMRC has updated its guidance notes on social security contributions and national insurance contributions for workers coming to the UK from the EEA or Switzerland, to reflect that all EU member states have opted to apply the detached worker rules. Read more

Case reports

Rialas - UT dismisses HMRC's appeal in transfer of assets abroad case

In HMRC v Andreas Rialas [2020] UKUP 0367 (TCC), the Upper Tribunal (UT) has confirmed that the taxpayer was not liable to income tax on dividends paid from a UK company as a result of the transfer of assets abroad anti-avoidance legislation (TOAA), originally contained in section 739 et seq, Income and Corporation Taxes Act 1988 (the legislation has since been rewritten). Read more 

Warshaw - Cumulative preference shares constituted ordinary share capital and qualified for entrepreneurs' relief

In HMRC v Stephen Warshaw [2020] UKUT 366 (TCC), the UT has upheld the FTT's decision that cumulative preference shares with rights to compound accrued but unpaid dividends constituted "ordinary share capital", for the purposes of section 989, Income Tax Act 2007 (ITA) and therefore qualified for entrepreneurs' relief (ER). Read more

Embiricos - HMRC cannot issue a partial closure notice without specifying the amount of tax due

In HMRC v Embiricos [2020] UKUT 370 (TCC), the UT has allowed HMRC's appeal and held that HMRC cannot issue a partial closure notice without specifying how much tax is due. Read more