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What Goes Around... TW Ed warns that HMRC may not be able to capitalise on the public's distate for perceived tax avoidance if it cannot help the ordinary taxpayer to navigate several significant changes to the tax system in the coming months. I think this week it is worth reflecting a moment longer on the Public Accounts Committee (PAC) and Mark’s comments in his Editorial - That's Entertainment! I think I see things a little differently to Mark. We have each spent a long time ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP points out that joint investment accounts can cause some difficulty for Inheritance Tax purposes - with a risk that funds can be taxed twice. Introduction If two individuals hold a joint bank account, how much of the funds in that account do they ‘own’ for Inheritance Tax (IHT) purposes? The instinctive answer for many will be "50%". However, as with most tax questions the answer is not necessarily that straightforward. The legislation ... Continue Reading

In a recent article for TAx Insider, Jennifer Adams has an eye to the end of the tax year on 5 April as she explains the principles behind taxing the sale of rental or investment properties. Introduction There is a great deal of truth to be found in the statement that "Timing is everything" - the difference between a good joke and a bad one, for example, is a person's sense of timing. Timing and the recognition of timing also creates advantages and disadvantages in the field of taxation ... Continue Reading

Peter Vaines of Squire Sanders considers some recent tax cases in relation to payment by post and late payment due to a lack of available funds. Delivery By Post Last September I made reference to the case of Browns CTP Limited v HMRC TC 2244 (see Taxpayer Entitled to Assume First Class Post Delivered Next Business Day and Penalties for Late Tax Returns or Tax Payments) where the issue was whether the taxpayer had a reasonable excuse for late payment of tax where his cheque was delayed ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP points out when CGT relief can be due for payments under guarantee. Introduction A capital loss can arise on a loan to a trader that has become irrecoverable. Relief is also available for certain payments made under guarantee in respect of a qualifying loan. Both types of relief are subject to various conditions. Claiming the Relief The legislation giving relief for loans to traders is in TCGA 1992 s 253. In the case of a loan guarantee, the ... Continue Reading

Mark McLaughlin asks if the Public Accounts Committee has achieved anything constructive in its latest hearings on tax avoidance.  Much has been said about the House of Commons Public Accounts Committee meeting with heads of tax from the 'Big 4' firms of accountants on 31 January 2013, including an excellent article by Mike Truman ('Tax Prat of the Year') in Taxation on 7 February 2013. The purpose of the meeting was to discuss tax avoidance. The implications was that the Big 4 were an ... Continue Reading

We are pleased to note that HMRC has finally revised VAT Notice 700/18 Relief from VAT on Bad Debts TaxationWeb pointed out over a year ago in Can We Trust HMRC Advice? that HMRC's guidance on reclaiming VAT Bad Debt Relief still failed to mention that the time limit for making claims had been extended from 3 to 4 years. This change - in favour of the taxpayer - was introduced for VAT purposes in April 2009. While the new guidance is welcome, it is surprising that it has taken almost ... Continue Reading

By taking the lump sum option offered on most personal pension schemes you receive a tax-free lump sum and purchase an annuity with the balance. Because the annuity is taxable whereas the lump sum is not (as long as it does not exceed 25% of the pension fund), you can be considerably better off from a tax viewpoint by taking the lump sum. Example: Upon retirement Alex is offered the choice of: •    a straightforward annuity for his pension fund of £100,000 of £6,000 per ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP highlights a recent case which considered when a company owner can hold funds 'on trust’ on the company's behalf. Introduction It is normally a straightforward task to determine whether a close company has made a loan to a shareholder, for the purposes of a tax charge under CTA 2010 s 455 (previously ICTA 1988 s 419). However, sometimes the position may become a little blurred. For example, what happens if company funds are held in an account ... Continue Reading

A record 9.61 million people found “inner peace” and sent their tax return on time this year, HM Revenue and Customs (HMRC) revealed on 1 February. Filing Deadline With 10.34 million people in Self Assessment in 2011-12, this means that around 93 out of every 100 taxpayers (92.9 per cent) met the return deadlines – 31 October for paper and 31 January for online. Of the 9.61 million on-time tax returns, 7.93 million (82.5 per cent) were sent online – a record ... Continue Reading