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TaxationWeb by Decision FinanceDecision Finance provide a brief introduction to Capital Allowances claims by Small and Medium Sized Enterprises (SMEs)Capital allowances enable the cost of capital assets to be written off against the taxable profits of a business. They are given in lieu of depreciation charged in the commercial accounts, which is not allowed for tax purposes. Originally allowances (currently 40%) were only available for the first year, however the government extended this indefinitely ... Continue Reading

Monthly Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author and presenter of Monthly Tax Review, outlines a potential trap in an estate planning strategy commonly adopted by married couples.ContextThere is a well known (in general) trap, provided by FA 1986 s 103 which in certain circumstances disallows a deduction for IHT purposes for a debt on death. In broad terms, where money is owed by the deceased under a debt arising on or after 18.3.86 ... Continue Reading

Tolley's Practical Tax by Philip McNeill and Sarah McNeillPhilip and Sarah McNeill look at an emotive topic.In the coming year there are likely to be developments in the penalty arena. The consultation document ‘HM Revenue and Customs and the taxpayer: Modernising Powers, Deterrents and Safeguards’ has among its many objectives ‘as far as possible aligning powers and practices across different taxes’ and ‘dealing swiftly and effectively with those who deliberately flout their obligations’. We ... Continue Reading

Brass Tax by BKL TaxBKL Tax outline two recent points of interest on the meaning of carrying on a business, and on a case concerning the recovery of costs that raises issues of legal professional privilege.None of My BusinessWhat amounts to carrying on a business? The question crops up in a number of situations, one of which is identifying associated companies for the purposes of small companies' relief - you don't include any company which has not carried on any trade or business in the relevant ... Continue Reading

Taxation of Unincorporated Businesses by Malcolm JamesMalcolm James, author of ‘Taxation of Unincorporated Businesses’ considers the tax implications of disincorporating a business.Chargeable Accounting Periods and Payment of TaxIf a taxpayer, or taxpayers, wishes to disincorporate and operate the business as a sole business or partnership, the first step must be to pass a resolution winding up the company. Under ICTA 198,8 s 12(7) passing this resolution will bring a chargeable accounting period ... Continue Reading

VAT Voice by Andrew NeedhamAndrew Needham, Director of VAT Solutions (UK) Ltd, considers the development of this important VAT principle.The defence of ‘unjust enrichment’ has only been available to HMRC since 1 January 1990, when the relevant legislation (s. 80 VATA 1994) was amended following the decision in Fine Art Developments plc (1989) 4 BVC 26, when restrictions on the liability of the then HM Customs & Excise to repay VAT overpaid by mistake were permitted. This stance was later reinforced ... Continue Reading

VAT Voice by Steve AllenSteve Allen, Director of VAT Solutions (UK) Ltd, considers what constitutes a ‘reasonable excuse’ for the purposes of escaping a VAT penalty, and provides tips on e-filing of VAT returns and the payment of VAT.The computer ate my VAT return!If you send in a VAT return and/or its payment late, you could find yourself open to a default surcharge. Is there anything you can do about it? The default surcharge regime works like this: One free goif you send in a late return ... Continue Reading

Tax Essentials: Direct Taxes 2005-06 by Mark McLaughlin CTA (Fellow) ATT TEP and Sarah Laing CTAMark McLaughlin CTA (Fellow) ATT TEP and Sarah Laing CTA, outline the meaning of ‘Close Company’ and some potential tax implications.What is a ‘close’ company?A company is ‘close’ if it is: • under the ‘control’ of 5 or fewer ‘participators’ (including ‘associates’); • under the control of any number of participators who are ‘directors’ (including associates). A company ... Continue Reading

Capital Tax Review by Matthew Hutton, MA, CTA (Fellow), AIIT, TEPMatthew Hutton MA, CTA (fellow), AIIT, TEP author of Capital Tax Review, comments on circumstances in which a deed of variation may not be desirable for CGT purposesContextIt is well known that, as against IHT (where a deed of variation is effective for all IHT purposes), the CGT provisions under TCGA 1992 s 62(6) simply prevent the variation itself from being a disposal. But the rest of the capital gains legislation (and specifically ... Continue Reading

Busy Practitioner by Mark McLaughlin CTA (Fellow) ATT TEPMark McLaughlin CTA (Fellow) ATT TEP explains when SDLT may be due in respect of goodwill, and outlines some recent money laundering rules changes.Stamp duty land tax and goodwillMost practitioners will be aware that ‘chargeable consideration’ for stamp duty land tax (SDLT) purposes includes payments for plant and machinery that are fixtures (as opposed to chattels or moveables) forming part of the land and buildings. What is perhaps less ... Continue Reading