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TaxationWeb's Mark McLaughlin recounts another woeful tale of HMRC holding on to taxpayers' money - only this time, it's personal.    At the start of 2014, I received a letter from HM Revenue & Customs (HMRC) about an overpayment which had arisen on my company's PAYE scheme for 2012/13. The letter broadly pointed out the overpayment and requested an explanation of why it had arisen before HMRC would ... Continue Reading

Peter Vaines of Squire Patton Boggs reflects on the new IHT rules for loans, a case on penalties won by the taxpayer, and the problem with "insufficiency of funds" for late payment of liabilities. IHT and Deduction of Liabilities It may be remembered that one of the changes in 2013 was a restriction to the deduction of liabilities for Inheritance Tax purposes. This issue seems to be causing widespread problems.   The general rule in IHTA 1984 s 162 (4) ... Continue Reading

TaxationWeb's Mark McLaughlin wishes HMRC would come clean over its suspicion of trusts. HM Revenue & Customs (HMRC) published the consultation document Ineritance Tax: A Fairer Way of Calculating Trust Chargess   on 6 June 2014. This is their third consultation in this area. The subject of the consultation is "Simplifying the calculation of Inheritance Tax (IHT) charges on trusts at ten yearly intervals or when assets are transferred out ... Continue Reading

Surprisingly, many people still die intestate (i.e. without a will). With the ease that wills can now be drafted and the low cost of such services, it makes good sense to make a will and can save a lot of needless heartache and stress for those left behind, not to mention saving a lot of tax. A simple will gifting all your worldly goods to your spouse or civil partner will avoid IHT on your entire estate, as gifts between spouses/civil partners are exempt from IHT. Remember, if ... Continue Reading

The distinction between a sole trader and a partnership can sometimes be problematic for family businesses, as Julie Butler explains. Introduction Many family businesses have “blurred” structures as many members of the family help and “lend a hand” with the tasks needed. The question of whether an operation was a sole trade or a partnership was looked at in the case of G Christodoulou (TC2819). This can be important for all types of tax reliefs – from ... Continue Reading

If you rent out a property, which was at one time your PPR, you will qualify for the lettings relief. This can be worth up to £40,000 against the gain realised on the disposal of a property. Note that this relief is per person, so if property is held jointly it can attract up to £80,000 relief. Unrepresented taxpayers frequently miss this relief from their calculation of the chargeable gain on a property where they could have claimed it. Example: John and Mary sell their investment ... Continue Reading

Over £4.6 million in wage arrears has been paid to more than 22,000 workers following a successful year for HM Revenue and Customs’ (HMRC) National Minimum Wage (NMW) enforcement teams. New figures show that, in 2013/14, HMRC: conducted 1,455 investigations issued 652 financial penalties, worth £815,269 found arrears in 47 per cent of cases – the highest strike rate since the NMW was introduced recovered average arrears of around £205 ... Continue Reading

Inheritance tax is essentially a voluntary tax, in that with proper planning there is no need for your estate to pay any tax on your death. One of the most useful tools is the potentially exempt transfer, or PET. Under the PET rules any gift made to an individual is exempt from inheritance tax if you survive seven years from the date of the gift. If you die before seven years have elapsed, the amount charged to tax is calculated on a sliding scale, with a lower amount being taxed the ... Continue Reading

Tax credits customers are being prompted, through an advertising campaign launched today, to renew their claim now. HM Revenue and Customs (HMRC) is sending out 5.8 million tax credits renewals packs which will arrive by 30 June. Over 3 million of these claims need to be renewed before the deadline for claimants to continue receiving tax credits. Last year some 650,000 claimants had their money stopped because they did not renew by the 31 July deadline. Claimants must tell HMRC about any ... Continue Reading

HMRC has publicised that it has been vindicated at both the First Tier and now the Upper Tier Tribunals, in refusing Industrial Buildings Allowance (IBAs). (Next Distribution Ltd. & Others v HMRC [2014] UKUT 0227 (TCC)) While IBAs were abolished some years ago, at a time when the relief was available the retailer Next (under Next and Paige Groups respectively) had attempted to claim some £19million in expenditure on two premises it used for logistics - the taxpayer claimed that the ... Continue Reading