HM Revenue and Customs (HMRC) will be targeting 6,000 Swiss bank accounts for further enquiry following the completion of the preliminary review resulting from the co-operation agreement in the area of taxation between Switzerland and the UK, which was...
The Supreme Court has denied HM Revenue and Customs (HMRC) the right of appeal in a tax case involving a series of transactions that were carried out for no commercial purpose but which led to a tax saving by the taxpayer. The decision represents a blow for...
HM Revenue and Customs (HMRC) have announced that, from 1 January 2012, supplies made by employers under salary sacrifice schemes (schemes whereby an employee accepts a lower salary in return for receiving certain benefits) will be treated as taxable...
The Government is proposing to integrate the operation of the Income Tax and National Insurance Contributions systems, as announced in the 2011 Budget. Following an initial consultation with businesses and other interested parties, to gather evidence on the...
If you are used to taking part of your company income by way of dividends (a common tax planning device, the main advantage of which is savings on National Insurance Contributions), but you require time to pay your taxes because of cash-flow problems,...
Operators of Amusement With Prizes (AWP) machines who receive VAT refunds as a result of a review carried out by HM Revenue and Customs (HMRC) in the wake of a court reverse in 2009 are advised to ensure that they are able to repay the refund if necessary,...
News that HM Revenue and Customs (HMRC) are to create a dedicated team of investigators to ‘target’ restaurants suspected of evading their tax liabilities is no real surprise: the sector offers them rich pickings in terms of under-declared...
Readers are reminded that an application to reclaim VAT incurred in another EU country can be made to that country via HM Revenue and Customs (HMRC) provided the claimant business is registered for VAT in the UK and is not VAT registered, or does not have to...
HM Revenue and Customs (HMRC) have won a major battle in the Supreme Court which may have severe implications for tax planning exercises. HMRC have persuaded the Court that a tax avoidance scheme, which was based on the wide definitions that apply to the...
When it comes to contesting tax assessments, the playing field is far from level, as a recent VAT case shows. HM Revenue and Customs (HMRC) made assessments on a trader based on discrepancies between recorded sales and cash in the tills on two visits. The...
HM Revenue and Customs (HMRC) have announced a probe into under-recording of takings and cash tips at restaurants of all sorts, commenting that payments made in cash for sales and tips make tax evasion a high risk. The move forms part of HMRC’s plan...
HM Revenue and Customs (HMRC) look carefully at the documentation supporting all investment schemes that have a tax advantage, such as the Enterprise Investment Scheme (EIS). One of the rules for an investment to qualify for EIS relief is that the...
VAT penalties are not set at a level which provides compensation to HM Revenue and Customs (HMRC), but are intended to penalise the taxpayer’s error, as is illustrated by the decision of the First-Tier Tribunal in a case in which a careless mistake,...
A recent decision of the European Court of Justice will come as good news for hard-pressed hoteliers and has led to HM Revenue and Customs issuing new guidance on deposits. The decision confirms that there is no relationship between a deposit taken for a...
Avoiding penalties for under-declarations of output VAT is a tricky business, even when the mistakes are innocently made. The VAT legislation allows penalties to be forgiven when there is a ‘reasonable excuse’, but HM Revenue and Customs (HMRC)...
There are hundreds – possibly thousands – of companies listed as ‘dormant’ at Companies House and often these are retained rather than wound up because although they do not trade, they do contain assets. For more than a quarter of a...
The guidance relating to the tax legislation that HM Revenue and Customs (HMRC) use to determine whether a contractor who uses a limited company to carry out contracts should be treated as employed by the end-user client is contained in HMRC leaflet IR35. ...
The Supreme Court has ruled that a director of a company that was itself the corporate director of a second company was not a de facto director of the second company. He was not therefore liable for the misuse of the second company’s assets, if his...
The recession has brought many changes to the way HM Revenue and Customs (HMRC) deal with taxpayers. A generally more aggressive approach on the part of HMRC has coincided with the much-touted ‘time to pay’ agreements for businesses experiencing...
Input VAT is normally only available for deduction with respect to motor cars in very limited circumstances and subject to extremely tight criteria. One of the exceptions is where a car is used wholly for private hire (e.g. a taxi or a self-drive hire car). ...
Over the years, a number of ‘tax-efficient’ methods of giving remuneration have been developed, such as Employee Benefit Trusts (EBTs) and Employer-Funded Unapproved Retirement Benefit Schemes (EFURBS). The Government has recently published...
Following the announcement in last June's budget of 'National Insurance (NI) holidays' for new businesses, HM Revenue and Customs have now published a Technical Note detailing the conditions of the scheme. In order for the NI holiday to apply, the new...
All the positive publicity generated about ‘time to pay’ agreements has increasingly been shown to be misplaced as new research shows that HM Revenue and Customs (HMRC) are now leading the way in bringing insolvency proceedings. Recent research...
The Government has announced that from April 2011 the maximum pension contribution which will attract full tax relief is being restricted to £50,000 per year and the lifetime allowance (LA) will be reduced to £1.5 million from April 2012. Where...
If your business has followed the common practice of giving trade samples, your VAT returns will have been prepared on the basis that a single sample could be supplied to a person as a VAT-free supply but where a larger number of samples was given, output...
As heralded by the Chancellor of the Exchequer’s announcement in the June 2010 Budget, the standard rate of VAT rose to 20 per cent on 4 January 2011. HM Revenue and Customs have published guidance on the change ....
HM Revenue and Customs (HMRC) have issued three new ‘toolkit’ guides to help taxpayers reduce the risk of submitting an incorrect tax return. Although primarily aimed at tax advisers and agents, the toolkits are a useful reference guide for any...
A case involving a ‘multiple shares’ company, in which different classes of shares were created, with different rights and varying dividends paid to the shareholders over time, illustrates the baleful look that HM Revenue and Customs (HMRC) give...
From 1 January 2011, the National Minimum Wage (NMW) Regulations will be changed in order to close a loophole whereby some Employment Businesses and umbrella companies operate travel and subsistence schemes for temporary workers in order to save on tax and...
A London accountant has recently been jailed after pocketing £11 million of clients’ money. The accountant used a simple technique – he submitted false returns for his clients, which led to refunds of tax and VAT being received. His...
HM Revenue and Customs (HMRC) have recently taken a swipe at websites which pass on enquiries to the websites of companies which engage in the selling of insurance. Insurance contracts are exempt from VAT, but HMRC argued that the service provided by a...
A new regime for VAT and Excise penalties commenced on 1 April 2010. It provides that the penalties levied for underpayments of VAT and Excise Duty will depend on both the reason for the wrongdoing and whether the disclosure was unprompted or prompted. ...
In a recent case , a man who entered into a scheme to avoid Capital Gains Tax (CGT), which later led to a charge to CGT occurring even though a loss had been made, brought a claim for professional negligence against the accountants who provided him with...
Firms that offer vouchers to employees in exchange for salary sacrifices may face a VAT charge, following a recent opinion of the Advocate General of the European Court of Justice (ECJ). It involved AstraZeneca, which had given employees vouchers in...
Recently, two issues relating to foreign travel have arisen which are relevant for taxpayers. Firstly, HM Revenue and Customs (HMRC) have advised that taxpayers who expect to have problems paying tax on time as a result of the volcanic ash cloud should...
A recent case illustrates the extent of the investigative powers available to HM Revenue and Customs (HMRC). It involved a company that HMRC suspected of evading Excise Duty. A raid on its premises was undertaken and HMRC officers found quantities of alcohol...
Following the travel disruptions caused by the volcanic ash cloud, HM Revenue and Customs have announced that non-UK residents who spent more than 90 days in the UK as a result of their travel plans being disrupted by the ash cloud will not be treated as...
The sale of a business which is already trading will normally be treated for VAT purposes as a ‘transfer as a going concern’ (TAGC). TAGC is an important concept for VAT purposes, because such a transfer is not a taxable supply...
The difference between someone who has knowledge of a thing and someone who ought to have knowledge of it can be crucial in a court of law and nowhere is this more true than in fraud cases. In a recent case, HM Revenue and Customs (HMRC) sought to show that...
During the recession, HM Revenue and Customs (HMRC) have been willing to make ‘time to pay’ agreements with businesses struggling to meet their tax liabilities as they fall due. However, this should not be taken to mean that HMRC are taking a...
HMRC has announced new advisory fuel rates for company cars applicable from today. The rates show how much employers can reimburse employees for business travel in their company cars, or require employees to repay the cost of fuel used for private travel,...
Following a Dutch VAT case which has significantly restricted the use of 'Lennartz' accounting, HM Revenue and Customs (HMRC) have issued a new brief regarding its use . Lennartz accounting (named after the VAT case which established the principle)...
Employee expenses are often a problematic issue for businesses and are one of the first items PAYE inspectors look at, since it is so easy to get the paperwork wrong. For that reason, as well as the saving of what is for many smaller firms a...
HM Revenue and Customs have updated their car benefit calculator, so you can see what your benefit in kind for having a company car will cost you. We doubt you’ll like the answer! HMRC's website contains further information on car benefits . The...
HM Revenue and Customs (HMRC) have now published their interpretation of an ambiguous decision of the European Court of Justice (ECJ), made last summer, which is relevant for landlords that supply ancillary services to tenants. It involved the common case...
HMRC have recently announced that they are intending to target doctors and dentists, using information obtained from sources such as Health Trusts and private hospitals. This follows a recent 'disclosure window' giving medical professionals the chance to...
When items of mixed VAT status (e.g. when one is exempt or zero-rated and the other is standard-rated) are supplied together, the VAT treatment can be complicated. Where the two supplies are in effect inseparable, they become a ‘composite...
HM Revenue and Customs (HMRC) have now updated their instructions on how companies which move premises should inform them of a change of company address. The essential point is that HMRC will not accept a notification of change of address until such time as...
With many companies suffering from the effects of the recession, business owners looking for an exit are thick on the ground. One problem those in this situation face is that if their business is in a fairly weak financial position, it is difficult to take a...
Traders which supply insurance contracts on products where the policies are underwritten by insurance companies should take note of a little-reported decision of the court. It involved Homeserve, which supplies insurance contracts to householders on behalf...
Small items of high value have always represented a major problem for HM Revenue and Customs (HMRC), since they are the favoured means by which criminals commit a simple VAT fraud. In essence, the fraud works by producing evidence that goods have been...
