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LITRG explain that, although penalties for late self assessment tax returns are changing from April 2011, you do still have plenty of time to submit yours. Received a tax return? If you are on HMRC’s list to receive a self assessment tax return for 2010/11, probably by now you should have received one (or a notice to submit one if you filed online last time). Section 7, ‘Do you need to complete a 2010/11 tax return?’, in LITRG’s April article gives you more information, ... Continue Reading

LITRG explain HMRC’s forthcoming run of letters withdrawing claimants from the tax credits system unless urgent action is taken on receipt. Read their guide below if you receive one. HMRC letters to 1.8 million tax credits claimants Within the next few weeks, some 1.8 million tax credits claimants will receive a letter from HMRC (designated TC1015). The letter will warn them that their claim will not be renewed this year, but will lapse from 6 April 2011, unless they contact HMRC ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP points out that identifying a CIHC can be difficult, and highlights a recent case on the the distinction. Corporation Tax Rates The difference between the main rate of Corporation Tax and the Small Companies' rate is narrowing over time, and the rates will eventually be 23% and 20% respectively under Government proposals. Nevertheless, entitlement to the Small Companies' rate of Corporation Tax is an important issue for many business owners. A ... Continue Reading

In the second of two articles which looks at joint property ownership of rental properties (excluding furnished holiday lets), Malcolm Finney looks at non-spouse (or civil partner) joint ownership. Note The term ’joint ownership' refers to 'beneficial' not 'legal' joint ownership; tax consequences follow beneficial ownership. Rates of Income Tax The renting out of property produces rental income which is subject to Income Tax on the part of the beneficial owner of the property ... Continue Reading

James Bailey highlights potential Inheritance Tax problems with loans. Introduction IOUs are used a lot in planning for Inheritance Tax (IHT). They can represent a way of having your cake and eating it, if properly used, but they can also lead to problems if not carefully structured. A common use for IOUs relates to the family home. Until it became possible to transfer an unused Nil Rate Band from the first spouse to die to the other, it was commonplace to have a ‘Nil Rate ... Continue Reading

Employers across the UK are being urged to file their Employer Annual Return (Forms P35 and P14) online by 19 May, or they could face a penalty. Changes came into effect this year, which mean Employer Annual Returns sent to HMRC after the 19 May filing deadline will almost certainly result in a late-filing penalty: Previously, an Extra-Statutory Concession gave employers extra time before HMRC charged a penalty. This has now been withdrawn.  From this year, employers will be ... Continue Reading

HMRC has today announced an invitation to 'settle' outstanding enquiries as part of its strategy to deal with 'Disguised Remuneration' - very broadly, using vehicles such as Employee Benefit Trusts to hold funds in favour of employees so that those employees may derive some benefit from those funds without incurring PAYE and NIC charges. The basis of this new Settlement Initiative echoes Dave Hartnett's Guest Editorial on TaxationWeb earlier this week, wherein he said, "Our litigation ... Continue Reading

Freelance journalist Nick Morgan, author of 'Tax Investigation For Dummies' considers how HMRC gathers information about taxpayers for enquiry cases. What Does HMRC Know? Quite a bit: if they’ve launched an investigation they have done their homework first. If you do any work that is linked to your National Insurance number HMRC will know about it. If you get rental income for a property and you have gone through an agent they will know about that too (agents are ... Continue Reading

James Bailey points out how HM Revenue & Customs (HMRC) will make life tougher for deliberate defaulters, for Tax Insider. Introduction - Finance Act 2008 Since the 2008 Finance Act extended HMRC’s powers to gather information and visit businesses, they have been looking for a chance to flex their newly-acquired muscles. They now have the right to demand information from third parties about your financial and business affairs, and to pay unannounced visits to your business premises ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP highlights three successful cases for self-employed taxpayers. Basic Rules for Travelling from Home to Work As a general rule, the travel expenses of a self-employed individual from home to a workplace are not allowable under the ‘wholly and exclusively’ rule (in ITTOIA 2005 s 34(1)). However, if the individual’s trade is exercised from home, a deduction is potentially available (see Horton v Young [1971] 47 TC 60). However, ... Continue Reading