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Don Draper considers how the UK tax regime can unfairly penalise families, with effective tax rates approaching 80%. Introduction The time has come to look again at the way we tax families. Independent taxation was a necessary reform. Working wives had their own tax allowances, but until 1990 a married woman’s income was treated as that of her husband. This relic of the Victorian age  had to go. But the way this was done has resulted in some families bearing a disproportionate ... Continue Reading

Andrew Needham discusses recently updated proposals for changes to the VAT rules. Consultation Document The proposal as set out in the Consultation Document was that all the changes would take effect from 1 October 2012 and that transitional arrangements would be available for alteration works to listed buildings. The consultation was a technical consultation on the draft legislation and analysis published within the consultation document, and not a consultation on whether to proceed ... Continue Reading

Mark McLaughlin looks at the Government's proposed rules dealing with 'controlling persons' and their implications. Personal Service Companies The government announced in Budget 2012 that measures would be introduced to tackle avoidance through the use of personal service companies. It was also announced that there would be consultation on legislation requiring 'controlling persons' who are integral to the running of an organisation to have PAYE and NIC deducted at source by the organisation ... Continue Reading

HMRC Contact Centres - It's Not Just About Speed Mark McLaughlin casts a critical eye over HMRC's recent promise to increase call centre resources. I was pleased to see the recent announcement by Lin Homer, HMRC's Chief Executive, that an additional £9 million is being invested this year in recruiting up to 1,000 additional contact centre staff, with a further £25 million being spent during 2013/14, with a view to bringing HMRC contact centres up to speed two years earlier than originally ... Continue Reading

Electricians' Tax Safe Plan Electricians have just one week to pay any undisclosed tax that they owe under an HM Revenue & Customs (HMRC) campaign. Under the Electricians' Tax Safe Plan, electricians can pay any tax and interest they owe, and receive penalties of only 10 per cent. Normally, penalties of up to 100 per cent of the tax owed can be charged, with criminal investigation possible in the worst cases. The campaign is aimed at anyone who installs, maintains and tests electrical ... Continue Reading

Peter Arrowsmith, FCA, with his monthly update of all things National Insurance - and a warning that HMRC advice on the IR35 Calculation is incorrect! Tax and NIC Merger Following my unusually optimistic report last month, I’m now less optimistic. In a Commons Written Answer on 4 July, David Gauke describes what we are going to get in the autumn as ‘an update on this work’ – not the consultation document that we were promised at the end of May. Maybe the doom-mongers ... Continue Reading

Mark McLaughlin looks at what constitutes a 'business' for Capital Gains Tax Incorporation Relief purposes. Introduction The incorporation of a business will often involve the disposal by a sole trader or partnership to a company of chargeable assets for Capital Gains Tax (CGT) purposes, such as free goodwill or land and buildings. The disposal will normally be treated as taking place at market value for CGT purposes, on the basis that the parties are connected persons (TCGA 1992 s 18). ... Continue Reading

Peter Vaines of Squire Sanders LLP considers some interesting tax cases in his monthly tax bulletin. Loans to Participators The Tribunal recently had occasion to consider whether a loan had been made to a participator within the meaning of ICTA 1988 s 419 (now CTA 2010 s 455) : Aspect Capital Limited v HMRC TC 2112. The issue was whether an employee acquiring shares in the company under a facility provided by a third party and discharged by the company, was in receipt of a loan from ... Continue Reading

In the current economic climate, offering a tax efficient option may make the difference between securing a potential investment and not. Sarah Brock, Corporation Tax Manager at Ward Williams, considers some of the opportunities available to encourage investment. Business Structure Before considering the potential tax incentives available to investors, it is worth taking the time to consider the structure of the business. The main tax incentives available to investors are available only ... Continue Reading

When the Budget incorporates changes to Corporation Tax rates, HM Revenue & Customs (HMRC) has to update its systems to be able to accept online Corporation Tax Returns whose chargeable periods overlap the fiscal year with the new rates. In the past, HMRC has taken several months to incorporate the new rates so that in many cases such returns could not be filed until as late as October. Now, thankfully, HMRC has announced that its systems can accept the new rates for the Fiscal Year to 31 ... Continue Reading