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The Low Incomes Tax Reform Group is concerned that government proposals designed to target tax evaders are likely to catch low-income migrants to the UK who have made a genuine mistake about the UK tax status of a source of income in their home country.    In a consultation on offshore tax evasion, the Government have announced their intention to make it a criminal offence of ‘strict liability’ (i.e. without the need to prove criminal intent) to have taxable offshore ... Continue Reading

The Business Premises Renovation Allowance (BPRA) allows 100% capital allowances to be claimed on the cost of conversion of derelict or unused business premises – dependent upon specific conditions being met. One condition is that relief is only available for renovating or converting disused business premises in what is designated a ‘disadvantaged area’ (as specified in the Assisted Areas Order 2007).    If the full allowance is not claimed then a writing down allowance ... Continue Reading

A premium is a sum paid by a tenant to a landlord either on the creation or surrender of an interest in a property.    Surrender premiums payable to terminate a lease early are generally tax inefficient; depending on the length of the lease and whether or not there is a provision in the agreement for early termination, the landlord will be taxed on a capital and/or revenue receipt whilst the tenant receives neither a capital nor revenue deduction.   Tax planning ... Continue Reading

A premium is a sum paid by a tenant to a landlord either on the creation or surrender of an interest in a property.    Surrender premiums payable to terminate a lease early are generally tax inefficient; depending on the length of the lease and whether or not there is a provision in the agreement for early termination, the landlord will be taxed on a capital and/or revenue receipt whilst the tenant receives neither a capital nor revenue deduction.   Tax planning possibilities:   Rather ... Continue Reading

As well as there being the ‘intention’ to occupy there must be a degree of permanence in order for Principal Private Residence relief (PPR) to be allowed, as cited in the tax case of Moore v HMRC (2013).   Example: Mr Moore bought a house with the intention of renovating it and living in it. He worked in the building trade. Soon after finishing building Mr Moore and his fiancé had disputes with the neighbours and decided not live in the property. It was decided to let out ... Continue Reading

Back in June, I reported on my difficulties in obtaining repayment of PAYE tax overpaid from HM Revenue and Customs (HMRC) for 2012/13 ('The nightmare of PAYE overpayments').   The recommendation to readers of my earlier article was to avoid getting into a position where HMRC owe you money if at all possible, to avoid my unfortunate and frustrating experiences.   I was willing to accept that I may have been unlucky on that ... Continue Reading

The ‘wear and tear’ allowance can only be claimed on rental property let as fully furnished. This means when it includes such items as a cooker, fridge, sofa, etc. The allowance cannot be claimed on unfurnished or partly furnished properties. The usual ‘test’ of status is whether the tenant can walk into the property and live there immediately. It would also confirm the situation if the lease included the word ‘furnished’. The claim is an annual allowance ... Continue Reading

HM Revenue and Customs (HMRC) is warning taxpayers to be on their guard against fraudulent phishing emails, after almost 75,000 fake emails were reported to the taxman over the last six months.   Some 74,743 scam emails were reported to HMRC’s dedicated phishing email account between April and September – a 70% increase on the same period in 2013. Over the same six-month period, HMRC worked with other law enforcement agencies to help close down more than 4,000 websites ... Continue Reading

The ability of taxpayers in dispute with HMRC about how much tax is owed, to turn to the court system for a ruling, is under threat, the President of the Chartered Institute of Taxation has warned.   In a speech at the CIOT’s annual President’s Reception, Anne Fairpo said that the balance of power is in danger of tilting too far towards the state at the expense of taxpayer rights and that, if the court system is not working adequately, it should be reformed to work better ... Continue Reading

When deciding whether a property should be given PPR status HMRC look as to whether the owner had any intention of living in the property. It is a matter of fact whether a property is the PPR or not but to allow a PPR claim HMRC require proof that the property has actually been lived in as the PPR.    In Metcalf v HMRC (2010), lack of both oral and other evidence, including lack of consumption of electricity, helped the Tribunal find in favour of HMRC.   Example: Mr Metcalfe ... Continue Reading