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On Friday, HM Revenue & Customs announced that they would open a 4-week consultation period to discuss proposed changes to the legislation governing VAT claims and business entertaining.This follows a case involving Danfoss and AstraZeneca, wherein the businesses successfully argued that the UK blanket 'block' on reclaiming Input VAT on business entertaining, should not apply to the business entertaining of overseas customers, as it was inconsistent with EU law.In Revenue & Customs Brief 44/10, ... Continue Reading

Steve Allen of VAT Advisers Ltd highlights a further selection of recent VAT cases. ECJ says VAT was Due on Boat when Title was Transferred, Not when it Arrived in the Member State of Destination An interesting case if only because it involves the ever-contentious issue of VAT incurred on purchases of yachts and sail boats by private individuals.  The Appellant, the purchaser, intends to take possession of the boat in the UK. The sailing boat will be used in the UK and other Member ... Continue Reading

Malcolm Finney looks at some tax and non-tax consequences when an individual dies without having made a valid will, for Tax Insider. Introduction Dying without a will is commonly referred to as ‘dying intestate’. However, even if a will has been made, if it is held to be invalid, the individual still dies intestate. A will may be invalid for a number of reasons; for example, only one witness (instead of two, as required) attests and signs the will or the individual making ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP outlines the Capital Gains Tax loss relief for loans to traders. Introduction The number of capital loss claims in respect of irrecoverable loans to businesses (or loan guarantee payments) has probably increased significantly during the economic downturn. Claiming relief seems straightforward enough on the face of it, but there are some potentially difficult obstacles to overcome. For example, the relief applies to qualifying loans (TCGA 1992 ... Continue Reading

Yesterday, HM Revenue & Customs published updated guidance on the Annual Allowance for pension contributions.The guidance will be most welcome for financial advisers and others, who have been concerned about the changes and how they will be implemented.The changes orient around the significant reduction in the Annual Allowance - basically how much can be paid into a person's scheme in a year - from £255,000 to £50,000. Even the reduced amount seems like a lot of money; but because of the way that ... Continue Reading

Tax cheats will face up to five years’ detailed scrutiny from the taxman, it was announced today. Letters will start to land on the doorsteps of 900 tax cheats, telling known evaders that they are now under increased levels of personal scrutiny as part of the new Managing Deliberate Defaulters (MDD) programme. MDD will closely monitor the tax affairs of individuals and businesses who have deliberately evaded tax to ensure that they are complying with their tax obligations and have ... Continue Reading

Free tools to help SMEs get their business records ship-shape were launched today by HM Revenue & Customs (HMRC). The four new products are suitable for the self-employed, sole traders and small businesses. They have been produced in advance of the launch of HMRC’s new Business Record Checks programme later this year, which will impose penalties for significant record-keeping failures. Brian Redford, HMRC’s Acting Director, Business Customer Unit, said: “In these ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP highlights a recent tax case looking at the 'badges of trade'. Introduction The distinction between income and capital assumed greater importance following the introduction of a 50% Income Tax rate. The subsequent introduction of a 28% Capital Gains Tax rate has narrowed the differential between the tax rates, but the gap is still significant. The treatment of an activity as a trade (as opposed to, say, an investment) can also be useful if losses ... Continue Reading

James Bailey of Tax Insider Lite looks at claiming for the cost of running a car for property rental business owners. Introduction If you use your car for the purposes of your property business, you can claim an appropriate amount of the running costs as a business expense, but what can be claimed and how is a claim made? Apportionment You will need to apportion the cost of the car between business and private travel. Make a note of the recorded mileage at 5 April each year, ... Continue Reading

Steve Allen of VAT Advisers Ltd highlights a selection of recent VAT cases. Upper Tribunal Rejects Use of 'Redrow' Principle on Recovery of Input VAT on Corporate Restructuring Fees This case concerns the right of a business to recover VAT charged by an adviser undertaking a strategic review of its business. It examines the key question of ‘to whom’ did the adviser provide its services, and as such, who can recover the VAT charged. The Appellant wanted to restructure ... Continue Reading