Tax update - June 2019
In this month’s update we report on HMRC’s guidance in relation to off-payroll working in the public sector and the intermediaries legislation (so-called IR35), the extension of late payment and repayment interest to penalties levied under the DOTAS, promoters, and enablers of tax avoidance, regimes; and HMRC’s guidance on the economic interest requirement for shareholders who wish to claim entrepreneurs’ relief.
We also comment on three recent cases relating to (1) insurance premiums and earnings from employment; (2) an invalid discovery assessment due to ‘staleness’; and (3) carelessness on the part of the taxpayer.
News items
HMRC guidance in relation to off-payroll working in the public sector
On 16 April 2019, HMRC published updated guidance outlining changes to the way the intermediaries legislation (so-called IR35) is applied to off-payroll working in the public sector to clarify how the accounts of intermediary personal service companies should be prepared. Read more.
Late payment and repayment interest extended to penalties levied under various anti-avoidance regimes
On 9 May 2019, the Treasury made two orders applying the provisions of sections 101 and 102, Finance Act 2009, on late payment and repayment interest, to penalties levied under various anti-avoidance regimes. Read more.
HMRC guidance on new shareholding conditions in relation to entrepreneurs’ relief
On 21 May 2019, HMRC published updated paragraphs CG64050 and CG64051 of its Capital Gains Manual, which provide guidance on the economic interest requirement, introduced by Finance Act 2019, for a shareholder who wishes to claim entrepreneurs’ relief on a disposal of shares in a personal company on or after 29 October 2018. Read more.
Case reports
Macleod – insurance premiums paid were not earnings from taxpayer’s employment
In Macleod and Mitchell Contractors Limited and William Mitchell v HMRC, the Upper Tribunal (UT) has held that insurance premiums paid by a company on policies taken out in the sole director’s name were not earnings from his employment. Read more.
Hargreaves – discovery assessment invalid due to “staleness”
In Hargreaves v HMRC, the FTT has found that HMRC’s discovery of an underpayment of tax had become “stale” and accordingly the subsequent assessment issued under section 29, Taxes Management Act 1970, was invalid. All statutory references below are to this Act, unless stated otherwise. Read more.
Atherton – discovery assessment not stale and taxpayer was careless
Richard Atherton v HMRC, the UT has held that a discovery had not become stale by the time an assessment was issued under section 20, Taxes Management Act 1970 and that the taxpayer had been careless in making an inadequate “white space” disclosure in his self-assessment return. Read more.