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Mark McLaughlin highlights a case in which HM Revenue and Customs was not given its own way when requesting information to check a taxpayer’s tax position. Introduction Taxpayers, understandably, do not generally relish contact with HM Revenue and Customs (HMRC), such as receiving requests for information and/or documents in respect of an individual’s tax affairs. The natural instinct of some taxpayers is to resist such requests, or alternatively to provide only the details that the ... Continue Reading

Mark McLaughlin highlights a case which underlines the importance of forward planning for tax purposes and ensuring that decisions are properly documented. Introduction A tightening of conditions for Capital Gains Tax (CGT) Entrepreneurs’ Relief (ER: now called Business Asset Disposal Relief, or BADR) in Finance Act 2019 may have resulted in some taxpayers no longer qualifying for the relief. Personal Company For example, an individual disposing of shares in a company is eligible to claim ... Continue Reading

HMRC says doctors, nurses and carers having to buy their own PPE CANNOT claim tax relief. Lee Sharpe of TaxationWeb says claiming job-related expenses is like threading a needle while wearing Level 3 PPE – in the dark. And that’s exactly how HMRC wants it. But is it right? Politick Ye Not Mark will not permit me to say anything overly (or even overtly) political so I am not allowed, for example, to opine on why the government might have been so keen to shunt 20,000+ older people back ... Continue Reading

Mark McLaughlin warns that transactions should be structured correctly to avoid the risk of adverse tax consequences. Introduction Capital gains tax (CGT) relief is generally available on the disposal of property in respect of improvements etc., for ‘the amount of any expenditure wholly and exclusively incurred on the asset by him or on his behalf for the purpose of enhancing the value of the assets, being expenditure reflected in the state or nature of the asset at the time of the disposal’ ... Continue Reading

Mark McLaughlin looks at tax relief claims for taxpayer loans to businesses which are later written off as irrecoverable. Introduction It is fairly common for a business owner to lend money to their own business, or possibly a business owned by a family member, to fund the operation of the business. Unfortunately, the business will sometimes be unsuccessful and the loan may become irrecoverable, resulting in it being written off. Tax relief may be available in respect of the loan write-off. The ... Continue Reading

Mark McLaughlin warns that penalties for tax return errors may be increased if they are not disclosed to HM Revenue and Customs within a certain timeframe. Introduction The penalty regime for errors in tax returns etc. (FA 2007, Sch 24) provides an escape from penalties if an error has arisen despite ‘reasonable care’ having been taken. Otherwise, the maximum penalty (i.e. 30% to 100% of ‘potential lost revenue’; or possibly higher if the error involves an offshore matter) ... Continue Reading

Mark McLaughlin highlights an important factor in the availability of Capital Gains Tax Principal Private Residence Relief on the disposal of a dwelling. Introduction A change in personal circumstances can have tax implications, such as affecting the availability of Capital Gains Tax Principal Private Residence (PPR) Relief. For example, a house might be occupied for only a short time before sale, due to a change of plans following a relationship breakdown. ‘Safe’ Occupation? A common ... Continue Reading

Mark McLaughlin points out that HMRC’s power to request information or documents may be wider than some taxpayers appreciate. Introduction Where a taxpayer is unfortunate enough to be subjected to an enquiry into their tax return, it is not uncommon for HM Revenue and Customs (HMRC) to issue a formal notice requiring the taxpayer to provide information or produce documents which HMRC considers is ‘reasonably required’ to check the return (FA 2008 Sch 36 para 1). For example, ... Continue Reading

TaxationWeb covers some of the main issues affecting taxpayers and 31 July 2020 deadlines. Tax Credits Renewals - Check and in Some Cases Renew HMRC has automatically renewed more claims than usual because of the SARS-CoV-2 pandemic but it is stil recommended that the awards sent out be checked carefully, in case HMRC's information and assumptions about income are wrong for last year and/or for the coming year (in which case the Tax Credits awards may well also be wrong). Apparently, as many as ... Continue Reading

Mark McLaughlin highlights a case on the tax treatment of goodwill for a professional consultant who sold his business. Introduction It is common in many occupations and professions (e.g. law, medicine) for individuals to be engaged as self-employed consultants. Some consultants will build up their own practices before eventually selling them. From a tax perspective, the question arises how the practice disposal proceeds should be treated. For example, is it an income or capital receipt? If capital, ... Continue Reading