Tax Briefing August 2017

TAX

News Updates

August saw the release of the GAAR advisory panel’s first opinion since it was created in 2013. The scheme under consideration involved arrangements using gold bullion which were intended to reward employees without creating income tax and national insurance charges but at the same time giving a corporation tax deduction. Perhaps unsurprisingly, the panel decided the arrangements were ineffective but HMRC is only able to issue counteraction notices once the panel has given its opinion.

Elsewhere in the news ….


Corporation tax loss relief

Initial draft guidance has been published on the new and more flexible rules which are due to come into force for corporation tax losses arising from 1 April 2017.

https://www.gov.uk/government/publications/reform-to-corporation-tax-loss-relief-draft-guidance


Image rights

Updated guidance on the tax treatment of payments for image rights is extremely brief but it does include a link to the updated pages and more detailed guidance in HMRC’s Employment Income Manual.

https://www.gov.uk/guidance/tax-on-payments-for-use-of-image-rights


Payrolling taxable benefits and expenses

HMRC has updated the guidance on payrolling benefits and expenses.

https://www.gov.uk/guidance/payrolling-tax-employees-benefits-and-expenses-through-your-payroll

The document also includes a link to guidance for employers who did not register in time to use the online service for the current tax year and wish to payroll benefits and expenses informally.


Non-statutory clearance applications

The address for business property relief requests has changed.

https://www.gov.uk/guidance/non-statutory-clearance-service-guidance


Company cars – advisory fuel rates

New rates have been published, taking effect from 1 September 2017. These are the advisory rates to be used where employers reimburse employees for business travel in their company cars or where employees repay employers the cost of fuel used for business travel.

https://www.gov.uk/government/publications/advisory-fuel-rates

As usual, employers may continue to use the old rates for a period of up to one month following the date the new rules apply.


Small Business Online Forum

Following the introduction of a pilot scheme earlier this year, HMRC has now launched the Forum which is intended to help businesses to get answers to tax questions and to help with subjects such as starting a business and completing tax returns.

https://online.hmrc.gov.uk/webchatprod/community/forums/list.page


Childcare service compensation

Claimants who, as a result of technical problems with the online childcare service, have been unable to complete application, have been unable to access their childcare account or have not received timely eligibility decisions, may be entitled to compensation.

https://www.gov.uk/government/publications/childcare-service-compensation


TAX CASE DECISIONS

Directors’ loan account entries – TC06028 – Ventura UK Ltd – [2017] UKFTT 0585 (TC)

A director and chairman of a company had £16,000 annual fees credited to his loan account with the company. The Company had not accounted for PAYE and NICs on the fees in the mistaken belief they were not taxable until drawn by the director. The company attempted to negate the tax problem by reversing the accounting entries by way of a prior year adjustment in its 2013 accounts when the accrued fees amounted to £128,000 in total. The Tribunal held that even though the director may have absolved the company of its liability to him, the accounting adjustment did not absolve the company of its liability to HMRC.

Business property relief – TC06068 –  Maureen Vigne (deceased) – [2017] UKFTT 0632 (TC)

The deceased carried on a livery business. The extent of the livery business activity fell somewhere between grass livery, which is simply allowing a horse to graze, and full livery where all of the horses day-to-day care and needs are provided by the livery operator. The Tribunal was asked to decide whether the business was wholly or mainly that of holding investments, in which case the value of the business would not qualify for inheritance tax business property relief. The personal representatives were successful in their claim for the relief and the case is interesting because it includes a useful summary of previously decided cases on the subject along with discussion of the questions which must be addressed to determine whether BPR is due in such cases.


At Croner Taxwise we have a team of more than 35 Tax and VAT consultants with over 750 years’ experience. Please get in touch with a member of the Croner Taxwise team if you would like to discuss any Tax or VAT issues.


Contacts:

Tax Advice Lines 0844 892 2470 taxadvice@cronertaxwise.com

VAT Advice Lines 0844 892 2470 vatadvice@cronertaxwise.com

VAT & Tax Consultancy 0844 728 0120 consultancy@cronertaxwise.com

 

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Tax Advice Consultant
0844 892 2470

Colin began to specialise in tax in 1983. He has previously spent time as a tax partner with two leading accountancy firms and, more recently, as partner in a specialist tax consultancy business providing planning advice and problem solving for successful owner-managed businesses and their owners across the UK.