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There were few changes to tax credits beyond those already announced, but HMRC are to outsource collection of tax credit overpayments. LITRG expresses its concerns. Introduction The tax credit elements of the Autumn Statement came down to the basic element and 30-hour elements of working tax credit (WTC) remaining frozen; the disability elements in WTC and child tax credit (CTC) rising in line with the CPI measure of inflation; and the remaining elements increasing by 1%. The second ... Continue Reading

The news that the HMRC budget is to be protected from the cuts faced by other government departments is welcome, as is the promise of greater transparency for ordinary taxpayers. Background The Chancellor’s Autumn Statement declared that the HMRC budget will not suffer the 1% and 2% cuts being imposed on other departments. The Low Incomes Tax Reform Group (LITRG) believes that this could be good news for those who depend on HMRC as their only source of advice and help with a highly ... Continue Reading

LITRG welcomed the increase in personal allowance announced in the Autumn Statement, but noted that, when other reductions in benefits are factored in, savings for low-income households are much lower. Introduction The increase in personal allowance is welcome because fewer people on very low incomes will have to worry about taxation. But people on means-tested benefits whose benefit entitlement is based on after-tax income may not be very much better off overall. If their after-tax ... Continue Reading

Businesses The Chancellor's Autumn Budget - sorry, "Statement" - focused on incentives to kick-start business growth in the hope of galvanising the economy, with a £7 billion capital spending package: £1.3bn on Transport £1,8bn on Housing and Local Infrastructure and related works £0.7bn on Regional Growth and Business - predominantly Local Enterprise Partnerships and the Business Bank £0.8bn on support to encourage further Exports, such as Export Finance ... Continue Reading

Jeremy Stretton, HM Revenue & Customs’ Enforcement and Compliance Taskforce Project Lead for its Tax Taskforces, sets out what the Taskforces are doing and what they hope to achieve. Background HMRC’s Taskforces were first introduced in May 2011. They are intended to target specific businesses which we have already identified as exhibiting traits indicative of potential evasion activity, ‘clustered’ in a particular geographic area. Once the Taskforce has finished ... Continue Reading

Jeremy Stretton of HMRC explains a little bit about how the Taskforces work and what they are intended to achieve. As Taskforce Project Lead, I am responsible for HMRC’s Enforcement and Compliance Taskforces. These have been running since May 2011 and I am pleased that TW has invited me to update readers on how HMRC thinks these new Taskforces have done, and the benefit to UK taxpayers generally. I think it’s important for readers to know that we are not simply targeting ... Continue Reading

HM Revenue & Customs (HMRC) is running an Alternative Dispute Resolution (ADR) trial, which provides Small and Medium Enterprise (SME) and Individual customers with an alternative way of resolving tax disputes in compliance checks. ADR involves an independent person from HMRC (called a 'facilitator'), who has not been involved in the dispute before. The facilitator will work with both the customer and the HMRC case owner to try to broker an agreement between them. ADR has proven to be a quick ... Continue Reading

Introduction The Advocate General delivered his opinion yesterday (27 November) on whether or not non-taxable persons could validly be included in a VAT group. The Irish case has strong parallels with the domestic treatment here in the UK and will be encouraging for the many UK businesses with VAT groups containing passive holding companies, and/or dormant companies, pending formal judgment expected early 2013. Background Several countries, including the UK and Ireland, allow non-taxable ... Continue Reading

HM Revenue & Customs has published two guides, in relation to:  The Tax Treatment of Payments to Individuals and Other Non-Corporates Following Share Capital Reduction The Tax Treatment of Payments to UK Companies From  Companies Registered in an Overseas Territory In relation to distributions to individuals, etc., following a share capital reduction, the guidance relates only to UK-resident companies. The guide also distinguishes between capital dividends, (in the case of bonus ... Continue Reading

How a home business can claim the VAT back on domestic accommodation costs, by Andrew Needham for Tax Insider. Business Purpose Any VAT paid on goods or services must be incurred for a business purpose in order to be reclaimed. As a general rule it is a personal, rather than business, responsibility to provide domestic accommodation. So in most cases the VAT incurred on domestic accommodation cannot be reclaimed. However, where a business is operated from home and costs are genuinely ... Continue Reading