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In its response to the consultation on inheritance tax (IHT) requirements for excepted transfers and settlements, which was launched by HMRC on 12 July 2007, the Chartered Institute of Taxation (CIOT) says that whilst it welcomes any improvement in the current system, the proposals do not go far enough in simplifying compliance.Under the self-assessment regime which applies to IHT, there is currently no penalty for failure to file an account when no tax is payable. In the original consultation ... Continue Reading

HMRC have published an update to the currently position regarding the issue of student loan statements.Last year, HMRC advised student loan account holders that some delays in processing employers’ annual returns had held up some student loan repayment information and that details of these student loan deductions had yet to be passed to the Student Loans Company. HMRC have now confirmed that Whilst most of the affected employers’ returns have now been processed, they are aware that some ... Continue Reading

Matthew Hutton MA, CTA (fellow), AIIT, TEP highlights some potential problems in an Inheritance Tax planning arrangement.Matthew HuttonContext: settling more than the nil-rate bandMy article in Taxation of 16 August 2007 made five suggestions as to ways in which value of more than the nil-rate band might be settled without triggering an immediate charge to IHT.  Among these were sales at an under-value, as follows.ExampleSuppose that the settlor wants to settle property in excess of the nil-rate ... Continue Reading

Andrew Needham, Director of VAT Solutions (UK) Ltd, considers the implications on the new invoicing requirements for suppliers.Andrew NeedhamIn Revenue & Customs Brief 51/07 and VAT Information Sheet 10/07, both issued in July 2007, HMRC announced that the changes to the rules on VAT invoicing will come into force on 1 October 2007 (they had originally intended to introduce them on 1 August 2007). The changes are intended to harmonise UK and EU law, and will affect the details suppliers must ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP, consultant to TaxDebts, offers some practical advice to taxpayers with tax arrears.Mark McLaughlinTax arrears are part of a larger debt problem in the UK. With many banks, credit card companies and others offering larger overdrafts and extended credit facilities to more people than ever, it is perhaps not difficult to see why. The old adage that “prevention is better than cure” has never been truer than in the context of tax debt control. Here are ... Continue Reading

From October 2007 HMRC will be introducing penalties for late filing of monthly returns, and will also be commencing rolling automatic compliance checks for contractors paid gross.According to the Chartered  Institute of Taxation (CIOT), HMRC are issuing a further reminder to contractors about the introduction from October 2007 of penalties and the new rolling automatic compliance checks, together with information about arrangements for making appeals. In addition, HMRC are sending a corresponding ... Continue Reading

HMRC have started to issue interim penalty notices for outstanding 2006-07 employer year-end returns.HMRC have started to issue this year's round of penalty notices where their records show that an employer has not yet submitted 2006-07 PAYE annual returns (forms P14s and P35) and, where due, a 2006-07 contractor’s annual return (form CIS36).These returns should have been submitted by 19 May 2007 and are now well overdue. The penalty for failure to submit such returns on time is currently ... Continue Reading

Milton Grundy, Barrister, recounts the tale of an 'offshore discretionary partnership' and outlines the tax problems and opportunities associated with it.   Mr. Smith lived in England. His daughter lived in Canada and his son in Australia. They wanted to be partners in the business of commodity-dealing – pork bellies in Chicago, buying long and selling short, hedging exchange risks and that sort of thing. The Smiths did not really understand it all, but that did not matter: ... Continue Reading

Steve Allen, Director of VAT Solutions (UK) Ltd, looks at the current position for businesses when claiming input VAT on mixed use assets.Steve AllenOver the past few years, there have been a number of changes in the legislation and HMRC policy relating to the recovery of VAT on goods and services with both business and private use.LennartzThe most important changes have come in the wake of the ECJ case of Lennartz v Finanzamt Munchen III in 1991.  Initially, HMRC ignored the decision and maintained ... Continue Reading

Julie Butler FCA, considers the qualifying conditions for furnished holiday lettings to qualify for favourable tax treatment.Julie ButlerBusiness property relief Furnished Holiday Lets (FHLs) will qualify for Business Property Relief (BPR) for inheritance tax (IHT) provided the owner plays an active part in the management of the “business” operation.  IHT relief can be achieved on a single property.Many clients can use this as an active tax planning tool to ensure that existing property ... Continue Reading