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The tax credits renewals deadline has now passed. But all is not lost if you missed the deadline, provided you take action quickly. For the 2013/14 renewals cycle, HM Revenue & Customs (HMRC) extended the tax credits renewal deadline from the usual 31 July 2014 to 10pm on 6 August 2014 due to industrial action. This extended deadline has now passed and it is reported that some 455,000 people have failed to complete the renewals process. Each year, tax credits claimants receive ... Continue Reading

The Tax Credits 31 July is an important deadline, partly because it renews the claim for the current year, partly because it also confirms the claim for the previous year and partly because, if you miss the deadline, usually the payments will stop and HMRC will write to you to ask for its money back from the beginning of the tax year. We think HMRC ‘done good’ this year by extending the filing deadline by a few days because of the industrial action around 31 July. HMRC has ... Continue Reading

TW Ed takes great exception to HMRC’s proposed criminal sanctions for failing to declare offshore income or gains. Unsurprisingly. Introduction – Strict Liability – Innocence is No Excuse HMRC has published its consultation on new proposals to introduce a “strict liability” criminal offence for failing to account for tax on offshore income or capital gains. This is a consultation so the final version may well be different to the current proposals – ... Continue Reading

Expenses incurred in the running of a property letting business are deductible from rental income received in calculating the taxable profit. However, just because a payment has been made it does not necessarily mean that it will be allowable. Strictly, for an expense to be allowed the business purpose must be the sole purpose; there must be no dual reason for the expense. Where it is difficult to split the business element from any private element then the whole expense amount is usually ... Continue Reading

HMRC warns deadline date for EBT Settlement Opportunity; joint announcement with Liechtenstein. A settlement opportunity for employers who have used Employee Benefit Trusts (EBT) to avoid tax will close in March 2015, HM Revenue and Customs (HMRC) announced today.                         The initiative, which launched in April 2011 following the introduction of the new ... Continue Reading

Peter Vaines of Squire Patton Boggs reflects on a recent case in which HMRC argued the taxpayer could not incorporate his self-employed business. When an individual transfers to a company a business as a going concern together with the whole of the assets of the business (other than cash), in exchange for shares issued by the company, TCGA 1992 s 162 applies to roll any inherent capital gains on the business assets into the shares. A key issue here is that the activity which is transferred ... Continue Reading

For income tax and capital gains tax purposes only, the operation of a furnished holiday let (FHL) is deemed to be a business and not a property income investment.    Specific points: Accommodation must be available for short-term letting for 210 days in any one tax year and actually be let for 105 days of the year. Accommodation should not normally be in the same occupation for a continuous period of 31 days in a period of 155 days in any one tax year. Long-term letting ... Continue Reading

TW Ed wonders if HMRC's version of reality allows room for failure... HMRC has recently announced that it has won yet another tax avoidance case in the Upper Tribunal, which is apparently the fifth victory against a particular tax planning boutique. Ironically enough, a boutique which I’d never even heard of before HMRC kindly donated the “oxygen of publicity”. Yet again, it seems that HMRC has no problem “naming names”, when it suits HMRC’s purpose ... Continue Reading

In calculating the profit or loss of a rental business the on-going costs of renting a property (agents’ fees, repairs, insurance, etc.) being ‘revenue costs’ are allowable immediately as a deduction against rental income received. No deductions are allowed for capital expenditure but capital allowances may be claimed to take into account the depreciation of some capital assets used. Ascertaining whether a cost is revenue or capital expense can be difficult, but HMRC ... Continue Reading

Many tax credits claims have to be renewed by 31 July. Due to industrial action around that date, HMRC have extended the deadline to 6 August. Background The tax credits renewals process involves claimants receiving a renewal pack from HMRC each year, which does two things: it finalises the claim for the tax year that has just ended (2013/14) and it acts as a claim for the new tax year (2014/15). The annual declaration form is normally to be completed by 31 July. As industrial action ... Continue Reading