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Richard Asquith comments on Europe’s reaction to the recent reduction in the standard rate of VAT in the UK.VAT cutsVAT Cuts: an incisive act of fiscal brilliance aimed at curbing the growing economic crisis; or a pitiful waste of taxpayers’ cash?  It seems that the rest of Europe is now putting itself in the second camp on this and looking at EU VAT increases as the inevitable solution to combating the recession.UK VAT cut grabs the European initiativeAlongside the UK’s recapitalisation of ... Continue Reading

HMRC have announced that the official rate of interest used to calculate tax due on beneficial loans will be reduced from 1 March 2009.The official rate of interest must be set by Treasury regulations and where possible, changes are usually made from the start of a tax year, because this makes calculation easier. However, sometimes it is necessary to change the official rate during a tax year and when this happens the Treasury publishes an average official rate for the year which should be used where:a ... Continue Reading

The Chartered Institute of Taxation (CIOT) has submitted its comments to HMRC on draft legislation dealing with the release of trade debts, which was published in December 2008 for consultation.Legislation, which previously gave relief where trade debts had become bad or doubtful, was repealed by Finance Act 2005. Where a company writes off a money debt that has arisen in the course of a trade, or a UK or overseas property business, the legislation now brings the debit in the company’s accounts ... Continue Reading

HMRC have launched a podcast covering the new Health in Pregnancy Grant.The podcast covers everything you need to know about the new £190 Health in Pregnancy Grant for mums-to-be.You can listen to all HMRC podcasts on the HMRC website at http://www.hmrc.gov.uk/podcasts/index.htm. The one-off payment is intended to help pregnant mums stay fit and healthy in the run up to the birth, and help meet some of the costs as the big day approaches. The money can be claimed from the 25th week of pregnancy, ... Continue Reading

Peter Arrowsmith FCA highlights a selection of NIC matters, and points out that for some people wishing to pay Class 3 NIC, they should consider doing so sooner rather than later.  Class 1A on cars for motor traders, etc. Unless you have a client in the trade, you may not know that special arrangements currently exist for dealing with car benefits to employees in the car trade who may take home many different vehicles over the course of a tax year. However, the procedures can operate in ways that ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP comments on the the new powers shortly to be made available to HMRC following Finance Act 2008. Checking 'tax positions'Despite many taxpayers (and some agents!) considering that HMRC already have enough powers, new powers were introduced in Finance Act 2008, which are scheduled to take effect from 1 April 2009 (FA 2008, Sch 36).The new powers allow HMRC officers to issue notices to provide information or produce documents “for the purpose of checking the taxpayer’s ... Continue Reading

The government is taking action to block tax avoidance under certain artificial avoidance schemes. Over recent months HMRC have become aware of an artificial and aggressive avoidance scheme that seeks to abuse tax reliefs available for employment-related liabilities incurred by employees and former employees.The government does not accept that these highly contrived arrangements have the effect that is sought, however to put the matter beyond doubt a written ministerial statement has been made in ... Continue Reading

HMRC have issued a reminder to anyone filing a Self Assessment tax return - file by 31 Janauary, or risk a £100 penalty.Taxpayers who haven't yet filed their 2007/08 tax return (for the year ended 5 April 2008), must send it online to HMRC by the 31 January deadline - file on paper and you could receive a £100 penalty, as the new 31 October paper-filing deadline has now passed. Those taxpayers new to online filing will need to register by visiting the HMRC website at http://www.hmrc.gov.uk/sa and ... Continue Reading

HMRC have confirmed that EDS have paid a lump sum in settlement of issues surrounding the Department's IT system.EDS provided IT services to the Inland Revenue under an outsourcing contract from 1994 to 2004. In November 2005 HMRC and EDS signed an agreement involving an aggregate settlement of £71.25 million for issues experienced in 2003 with the IT system developed by EDS to support the 2003 launch and subsequent operation of tax credits. The settlement agreement included an up-front payment ... Continue Reading

Julie Butler FCA considers the availability of Business or Agricultural Property Relief for Inheritance Tax purposes in respect of equine property.  IntroductionAs part of Inheritance Tax (IHT) planning and compliance, the question has to be asked as to whether the equine property will qualify for Agricultural Property Relief (APR) and/or Business Property Relief (BPR)?A Stud Farm is farming for IHT purposesStud farms have the advantage over other equestrian activities in that they do qualify for ... Continue Reading