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Arthur Weller and Amer Siddiq consider an important capital gains tax issue for property investors.IntroductionThe pre-budget report from Alistair Darling in early October 2007 was heralded as a budget for residential property investors.Why? Because one of the main headlines was that the capital gains tax rate from 6th April 2008 would be reduced to a flat rate of 18%.What this means is that people who have been investing in property and have been concerned at paying capital gains at a whopping 40% ... Continue Reading

Steve Allen, Director of VAT Solutions (UK) Ltd, examines the forthcoming penalty regime for errors in VAT returns.  Steve AllenIntroductionYou may have heard by now that HMRC are proposing to introduce a new penalty regime covering both direct taxes and VAT.  In this article, we provide an overview of how the proposed regime will work from a VAT perspective.Penalties Will Not Always Be ChargedFirst of all, not every error will incur a penalty. If a person takes reasonable steps to complete ... Continue Reading

HMRC have published Research Report 40, which explores the early effects of the new Construction Industry Scheme (CIS).The CIS is a special deduction scheme designed to manage the construction industry’s poor record of complying with tax obligations.The new scheme was introduced in April 2007 to address the difficulties experienced with the old CIS. Broadly, the new CIS has the following three main aims (as set by Government):to reduce the regulatory burden of the scheme on construction businesses;to ... Continue Reading

In response to concerns from business representatives over the proposed capital gains tax changes due to take effect from April 2008, the government has announced a new capital gains tax relief for entrepreneurs.Entrepreneurs' relief will be targeted on the owners of small businesses, and will apply when they sell their business. The relief will also be available to all employees and company directors who invest a material stake in a qualifying company. It will take effect from 6 April 2008 ... Continue Reading

The House of Lords has upheld the claims for VAT refund of tax made by two taxpayers, Condé Nast Publications Limited and Michael Fleming t/a Bodycraft.The tax was overpaid in periods running from 1973 (when VAT was introduced) to 1996 (when claim time bars were tightened).  Equivalent claims by thousands of other taxpayers big and small – together with contingent fees payable to advisers who helped compile claims – had been riding on the outcome of these two test cases.  ... Continue Reading

The government is set to unveil details of its proposed changes to capital gains tax (CGT), amid reports of concessions after business criticism.According to the BBC, business leaders still expect ministers to scrap CGT taper relief from 1 April 2008 and set a single 18% rate. However, the government is also tipped to halve the rate to 9% on gains of up to £750,000, to help small firms. Chancellor Alistair Darling first announced changes to CGT in the 2007 pre-Budget report back in October. ... Continue Reading

Latest figures show that one in two legal practitioners are now submitting Stamp Duty Land Tax (SDLT) forms online.The percentage of solicitors and conveyancers submitting forms electronically has more than doubled in a year. In December 2006, 35,753 registered online, 22 per cent of all legal practitioners, but by December last year that number had increased to 65,346, up to 46 per cent.A research study into online filing, published on the HMRC website, has confirmed that solicitors and conveyancers ... Continue Reading

Andrew Needham, of Consultancy firm VAT Solutions, comments on an interesting result in a recent VAT tribunal - and asks if professional representation is always the better optionAndrew NeedhamIntroductionThe recent tribunal case of Martin Jamieson Motor Repairs (VTD 20,269) was such a breath of fresh air and common sense that it almost restores one’s faith in the tax system (though not in HMRC, alas). The decision is worth a read just because its whole tone will cheer you up, but in summary, ... Continue Reading

Matthew Hutton MA, CTA (fellow), AIIT, TEP, author and presenter of Monthly Tax Review (MTR), highlights some planning issues in the context of an important Inheritance Tax relief.    Matthew HuttonContext The two year ownership rule in IHTA 1984, s 106 needn’t present insuperable problems.The claw-backThe general rule under IHTA 1984, s 113A is that, to maintain the benefit of Business Property Relief, (BPR), the asset given away must (subject to reinvestment in replacement ... Continue Reading

HMRC have published more detail on the amendments to the residence and domicile tax rules which were announced in the 2007 Pre-Budget Report.The published documents are:draft legislation, covering day counting and the remittance basis of taxation (including the £30,000 charge and personal allowances for those claiming the remittance basis);explanatory notes in relation to the draft legislation; anda number of frequently asked questions and corresponding answers explaining the proposals. The ... Continue Reading