HMRC have updated their guidance, following the recent decision in Christianuyi Ltd v R & C Commrs [2018] 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…

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…

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.

Reporting requirements

The legislation…

Insurance company Canada Life’s annual survey for 2017 has revealed growing confusion over the operation of inheritance tax. According to the survey, more than two thirds of respondents did not know the current level of the inheritance tax nil rate band – among adults over the age of 45 with assets in excess of £325,000, some 70% did not know that the threshold for the standard nil rate band is currently £325,000. This is a significant increase on the 61% shown in the 2016 survey. In addition, 55% of…

Many adults are likely to embrace the offer of help with technology from the younger generation! So where a child is employed in a family business to work on, say, website creation, management and social media, how can the owner make sure that their wages will be tax deductible? The recent case of Nicholson v HMRC (TC06293), in which the first tier tax tribunal examined a deduction made in sole trader’s accounts for his university student son, gives us some pointers.

In this case, Mr Nicholson claimed that his…