At the time of the 2016 Spring Budget, the government announced that the existing capital gains tax (CGT) entrepreneurs’ relief would be extended to certain long-term investors in unlisted trading companies who had subscribed for their shares. However, when the Finance Bill 2016 was published a few days later, it became apparent that in fact a new relief – investors’ relief – was being created. This new relief is designed to complement entrepreneurs’ relief by extending the 10% rate of CGT to gains accruing on disposals of qualifying…Read More
The confusion over HMRC’s application of the IR35 legislation continues after an IT contractor successfully appealed to the First Tier Tribunal (FTT) against a tax charge of some £26,000 in connection with a project he was working on with the Department for Work and Pensions (DWP).
In Jensal Software Ltd v HMRC Commrs  TC 00667, the IT contractor, Ian Wells, successfully appealed a tax bill relating to a succession of contracts during the 2012/13 tax year. Wells provided his services through his limited company, Jensal Software Ltd, to…Read More
HMRC’s guidance on corporate offences for failing to prevent criminal facilitation of tax evasion has recently been updated to include information about self-reporting a company or partnership that has facilitated such an offence.
All corporate entities need to be aware of the two new offences that were introduced by the Criminal Finances Act 2017, which apply from 30 September 2017 onwards. The first applies to the facilitation of UK tax evasion, and the second applies to the facilitation of foreign tax evasion.
Criminal facilitation of tax evasion involves a person…Read More
HMRC have recently highlighted that charities are collectively missing out on some £600m extra funding because a third of donations made do not add Gift Aid when they could have done so.
Broadly, Gift Aid allows charities and community amateur sports clubs (CASC) to claim an extra 25p for every £1 donated. To add Gift Aid to a donation, the donor must have paid income or capital gains tax that year worth at least the value of the Gift Aid being added, and must give the charity permission to…Read More
The rules for taxing petrol company cars apply equally to diesel cars, but the latter are then subject to further adjustment.
The taxable benefit arising on a car is, broadly, calculated using the car’s full manufacturer’s published UK list price, including the full value of any accessories. This figure is multiplied by the ‘appropriate percentage’, which can be found by reference to the car’s CO2 emissions level using HMRC’s ready reckoner. This will give the taxable value of the car benefit.
For cars that are ‘propelled solely by diesel’,…Read More
HMRC have updated their guidance, following the recent decision in Christianuyi Ltd v R & C Commrs  UKUT 10 (TCC), in which the Upper Tribunal ruled that a number of companies were operating as managed service companies (MSCs).
In this case, the Upper Tribunal upheld the decision of the First-tier Tribunal that the appellant companies were MSCs within the scope of the MSC legislation, and subsequently that the individuals were liable for PAYE income tax and National Insurance contributions (NICs) on the dividends they received from the…Read More
The Sum season usually sees a rise in the number of casual staff taken on by restaurants and cafes. Whilst the tax and NIC implications of wages is generally straight-forward, confusion often arises regarding tips and gratuities as the necessary tax and NIC treatment depends on how they are paid to the recipient.
Cash tips handed to an employee, or left on the table at a restaurant and retained by that employee, are not subject to tax and NICs under PAYE, but the employee is obliged to declare the…Read More
HMRC are getting noticeably tougher on those who try to evade tax by hiding their assets or income offshore. They are increasing the size and range of penalties charged, and increasing the number of prosecutions of serious evaders.
Broadly, a UK-resident taxpayer has a responsibility to notify HMRC of any taxable offshore income they receive. Income is considered ‘offshore income’ if it comes from a territory outside the United Kingdom. It includes:
– interest from overseas bank or building society accounts;
– dividends and interest from overseas companies;
– rent from overseas…
The Welsh Government and the National Assembly for Wales take responsibility for some of the taxes paid in Wales in April 2018.
Three taxes in Wales are affected by the partial devolvement:
– Stamp duty land tax;
– Landfill tax; and
– Income tax.
Land transaction tax (LTT)
From 1 April 2018, Land Transaction Tax (LTT) replaces Stamp Duty Land Tax (SDLT) in Wales. LTT will be collected by the Welsh Revenue Authority (WRA). The Welsh rates and bands for LTT were published in October 2017.
The change means that HMRC will not accept SDLT…Read More
Finance Act 2018, which received Royal Assent on 15 March 2018, enacts several changesaffecting the taxation of partnerships, most of which apply for the 2018-19 tax year onwards. The changes will be relevant to general and limited partnerships, Limited Liability Partnerships (LLPs) carrying on business with a view to profit, and foreign entities classified as partnerships for UK tax purposes.
Although HMRC believe there will be little impact for most partnerships, it will be important for partnership structures to review the rules and assess their likely impact.
The legislation…Read More