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Matthew Hutton MA, CTA (fellow), AIIT, TEP, presenter of Monthly Tax Review (MTR), highlights a question on the priority of anti-avoidance provisions in respect of settlor-interested trusts. Context: The QuestionWhere a non-UK resident settlor of a settlor-interested trust moves to the UK, he will become chargeable to UK income tax on the trust’s UK income on an arising basis under ITTOIA 2005 s 624.The transfer of assets abroad provisions (now contained in ITA 2007 ss 720-735) can also apply to ... Continue Reading

HMRC investigation specialist Chris Chadburn offers his view of the tax enquiry landscape.IntroductionIn common with hundred of others I followed with interest the tale of Nick Morgan’s battle with HMRC during the spring of 2008. [ See Nick Morgan's article Everything You Wanted to Know About a Tax Investigation - Should I Go to a Meeting? - Ed. ] The unique aspect of the story for me was Nick’s total openness and willingness to share his experiences with the public, warts and all. A few weeks ... Continue Reading

Julie Butler FCA of Butler & Co provides a summary of common errors in the client files of accountancy practices in England and Wales.   IntroductionSet out below is a summary of the common errors identified on file reviews by members of the Institute of Chartered Accountants in England and Wales' (ICAEW's) Quality Assurance Department (QAD). This list is based on the data contained in Audit News 44, published by the ICAEW in October 2008.Missing tax reconciliation and effective rate of tax chargeIncorrect ... Continue Reading

Steve Allen of VAT Advisers Ltd provides a VAT tip based on a little-known (apparently even to HMRC!) VAT concession. IntroductionWith more and more people now choosing to working from home, the question of what can be done with the VAT on the conversion costs is becoming a common issue. In this article, we explain what the rules are, and how you can go about reclaiming that VAT. Example  The Managing Director of a company, Mr Jones, works from home a lot, and is considering having his loft converted ... Continue Reading

A High Court judgement has overturned on appeal a 2008 Tax Tribunal ruling that organisers and administrators of insurance contracts were liable to charge UK insurance premium tax (IPT).  Many intermediaries, faced with tax assessments running into the millions, are now relieved of the potential liability.The background to the case involves Homeserve, the emergency home plumbing and electrics call out specialist.  As an additional service for its customers, it started providing a 3rd party insurance ... Continue Reading

Families and individuals currently receiving tax credits are being reminded that they need to renew their claims by 31 July – otherwise their payments could stop.Renewing is simple – claimants need to check the information in the renewals pack they’ve been sent, and let HM Revenue & Customs (HMRC) know if their circumstances have changed, such as working hours, child care costs or pay. They must also provide details of their previous year’s income, so HMRC can check they are receiving all ... Continue Reading

HMRC Trusts department has advised that the letters formerly issued to acknowledge that a return has been processed without needing to repair or amend it, have been withdrawn.HMRC Trusts have until now sent an acknowledgement letter to agents following the processing of a paper return where the taxpayer has self-calculated their liability and they had no reason at that stage to revise the calculation. The wording on the acknowledgement letter read, 'Your client’s trust tax return for the year ... Continue Reading

Andrew Needham, Director of VAT Specialists Ltd, provides VAT tips for some company owners and those incurring travel costs in the EU.  Getting back the VAT on the costs of a holding companyIf you set up a holding company to provide management services to one or more subsidiaries, it can either register for VAT individually because it makes taxable supplies to its subsidiaries, or else it can register as part of a VAT group registration.  However, what do you do if it is a ‘pure’ holding company ... Continue Reading

Ex-HMRC employee Tom Casagranda outlines research techniques used by HMRC for the purposes of selecting cases for enquiry.IntroductionThis article deals with the research methods deployed by HMRC to locate cases for enquiry, and just how much they know about their putative subjects.Research Sources for EnquiriesEnquiries were located in a variety of ways: e.g., if you operated a clandestine activity, such as a strip club, or a massage parlour, not only would you be scrutinised by Immigration, but ... Continue Reading

Cheryl Sacks M Eng Oxon CTA provides a 10 point 1 Minute Guide to Disincorporation.IntroductionRecent tax rate changes have reduced the fiscal attraction of the small company. This has led some companies to consider disincorporation. Disincorporation means transferring the company's trade and assets to the shareholder(s), who carry on the successor business as a sole trader or partnership, and winding up the company.This 1 Minute Guide is a brief guide to the mechanics of disincorporation. To calculate ... Continue Reading