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Steve Allen, Director of VAT Advisers Ltd, highlights a selection of recent VAT cases. Tribunal says penalty due for failure to register as a 'high value dealer'The appellant, a high quality second-hand car dealer, appealed against a penalty imposed by HMRC under the Money Laundering Regulations 2003. This was the first such appeal to be heard before the VAT and Duties Tribunal. The penalty came about from a VAT audit, where, although no VAT issues arose, it was found the appellant acted as a ‘high ... Continue Reading

HMRC have revealed that a record number of taxpayers filed their self assessment tax returns online this year.A total of 5,759,006 people filed online by the 31 January deadline, which represents an increase of over 50% on the 2008 total, when 3.8m people filed online.Welcoming the figures, Financial Secretary to the Treasury, Stephen Timms, said: "I am delighted that more and more people are recognising the benefits of filing their tax return online. Online returns make it easier and quicker to ... Continue Reading

HMRC have published draft regulations, which will impose new penalties on people failing to notify the authorities when they become liable to pay Class 2 national insurance contributions.The draft Social Security (Contributions) (Amendment No. xx) Regulations 2009 are subject to Parliamentary approval but are expected to come into force from 6 April 2009.Broadly, the Regulations amend the Social Security (Contributions) Regulations 2001 and align the penalty provisions for failure to notify liability ... Continue Reading

Julie Butler FCA highlights an inheritance tax case regarding business property relief and the sometimes difficult distinction between trading and investment for the purposes of business property relief.IntroductionThe case of McCall and Anor (Personal Representative of McClean Dec’d) v R & C Commissioners (2008) SpC 678 (7 April 2008) highlighted the fine division between investment and trade for inheritance tax (IHT) purposes.Market Value of £5.8 millionThe farm land owned by Mrs McClean at ... Continue Reading

Matthew Hutton MA, CTA (fellow), AIIT, TEP reports on Inheritance Tax planning points concerning the transferable nil rate band between spouses and civil partners, and Immediate Post-Death Interest Trusts.   The Transferable Nil-Rate Band: Maximising the BenefitsExampleJason, a widower, has just remarried Judith, a widow.  Both deceaseds' first spouses left everything to the survivor.  In drafting Jason’s Will does not leave everything to Judith.The ideal IHT planning1.  To use Jason and his ... Continue Reading

Andrew Needham, Director of VAT Specialists Ltd, reveiews a HMRC VAT Information Sheet on the VAT implications for housebuilders who temporarily let new dwellings whilst still trying to sell them. Introduction Over the past year of financial crisis, the housing market has been hit particularly hard, and has slowed almost to a standstill.  As a result of this, many housebuilders have had to consider renting out their unsold stock until such time as the market improves. In this article, we look at ... Continue Reading

The Financial Secretary to the Treasury, the Right Honourable Stephen Timms MP, has confirmed that legislation will be introduced in the next  Finance Bill to prevent a recent decision of the High Court from affecting the tax treatment of real payments of manufactured interest.The legislation will ensure that tax treatment follows the treatment of the payments in company accounts prepared in accordance with Generally Accepted Accounting Practice ('GAAP').The recent case of DCC Holdings (UK) Ltd ... Continue Reading

Following a successful trial period, HMRC have announced an extension of their clearance procedure. At Pre-Budget Report 2007 HMRC announced that the clearance procedure would be extended over a period of time to provide business with their view of the tax consequences of significant commercial issues wherever there is uncertainty, regardless of when the legislation was enacted. HMRC also committed to responding to clearance applications within 28 days as the norm.A six month trial commenced in ... Continue Reading

The influence of the global economic downturn on the tax avoidance industry was one of the key issues for leaders of the Joint International Tax Shelter Information Centre (JITSIC) in Kyoto. JITSIC was established in 2004 by the tax administrations of Australia, Canada, the United Kingdom and the United States, to supplement the ongoing work of the Australian Taxation Office, the Canada Revenue Agency, HM Revenue & Customs, and the Internal Revenue Service in identifying and curbing tax avoidance ... Continue Reading

John Andrews of the Low Incomes Tax Reform Group (LITRG) points out an unfortunate effect of the Pre-Budget Report 2008 announcement on the 'capping' of the lifetime allowance from 2011. IntroductionWe acknowledged that this year’s Pre-Budget Report had some good news for those on low incomes.  But tucked away in the detail is a proposal which will affect the poorer pensioner in a way that we do not like at all.Since 6 April 2006, people approaching retirement who have only amassed a small amount ... Continue Reading