Tax Briefing November 2019

NEWS UPDATES

The Chartered Institute of Taxation has recommended political parties should think twice before launching a ‘rabbit out of a hat’ policies during the general election claim.

It seems to this writer that the Institute’s pleadings have fallen upon deaf ears.

As is usually the case before an election, the volume of tax news has recently taken a dip but here are a few news items which we think may be of interest to our readers.


Debt Management

There is now a dedicated telephone line which authorised agents may use to contact HMRC and discuss their clients’ debts. The number is 0300 200 3887.

A further number, 0300 200 3311, is available for authorised agents who wish to discuss their clients’ self-assessment and PAYE matters.

Non-Resident Landlords

The Chartered Institute of Taxation has raised concerns with HMRC over the wording of ‘nudge’ letters being issued to tenants of properties believed to be owned by non-resident landlords. HMRC has agreed to make various amendments to the standard letter, including the addition of a recommendation that a tenant who receives a letter should contact his or her tax agent.

Further details can be found here.

Pensions Annual Allowance Tax Charge

HMRC has updated its guidance on the ‘scheme pays’ facility which can be used in certain cases when the pensions annual allowance has been exceeded.

Employment Status

HMRC has updated its Check Employment Status for Tax (CEST) tool. It is fairly well understood that CEST has its flaws, as confirmed by the recent Tribunal decision in the IR35 case RALC Consulting Ltd. The generally held view is that if CEST gives the required answer then it can be relied upon, at least until circumstances change or it is challenged by HMRC. But if CEST does not give the required answer then an employment contract review is recommended. The employment taxes team at Croner Taxwise are able to carry out such reviews.

Principal Private Residence Relief

The Court of Appeal in Higgins [2019] EWCA Civ 1680 has overturned the earlier Upper Tribunal decision and ruled that the period of ownership of a residence for the purposes of apportioning a gain begins with the date of completion and not an earlier date of exchange of contracts.

Cryptoassets

HMRC has extended its guidance on how it believes transactions in cryptoassets should be taxed to include specific references to transactions carried out by businesses as well as individuals. The guidance can be found here.

TAX CASE DECISIONS 

Reneaux & Anor [2019] UKFTT 0666 (TC) – Entrepreneurs’ Relief – Trading Activities

Perhaps unsurprisingly, the First-tier Tribunal decided that the business of letting two commercial units for a storage business and for a workshop did not amount to a trade for entrepreneurs’ relief purposes. The Tribunal did, however, accept there was a business and the husband and wife business was a partnership, this despite the fact the income had been declared as rental income rather than partnership income. This part of the decision might be of interest to those who wish to incorporate a property business.

Reneaux

Cornelia Simpson [2019] UKFTT 0704 (TC) – Principal Private Residence Relief

The decision in this case (which the taxpayer lost) is not controversial but it does reinforce the main message which emerges from such cases. A successful outcome will almost always depend upon non-contradictory witness evidence and, wherever possible, supporting documentation.

Cornelia Simpson


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 & VAT Advice Lines 0844 892 2470 Request Callback

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


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