Tax Insider Monthly Newsletter

Employing family members i.e. putting their wages through the books and claiming the tax deduction is a popular strategy for the vast majority of family businesses. This is  perfectly acceptable provided they are working as genuine employees, such that the expense is wholly and exclusively for business purposes.

Chris Thorpe looks at issues of involving members of the family in the business and the potential minefields.

For income tax purposes a partnership has no legal existence distinct from the partners themselves (this is not the case in Scotland where a partnership is a legal person) and as such each partner is taxed on their share of profit as an individual. The effect of this provision ensures that an individual is treated as commencing their business when they start to trade, even if that was before they became a member of the partnership. 

Jennifer Adams looks at some tax tips and traps that may arise when being a member of a business partnership. 

There are a large number of different loyalty schemes designed to increase turnover and maintain customer loyalty. They do this by linking purchases from a business to a reward, or reduction in price on subsequent purchases, by the issue of points. These schemes are commonly used not only by retail outlets, but also by manufacturers and other suppliers to encourage continued customer loyalty. 

Andrew Needham looks at the VAT consequences of customer loyalty schemes.

The government has several beneficial arrangements to help individuals avoid financial difficulty due to COVID-19. However, it is impossible to aid taxpayers who are not eligible for help. To be eligible for the SEISS grant, HMRC looks at whether the individual had taxable profits in the past, and then looks at the associated Income Tax and National Insurance Contributions (NICs) paid on it. They do this by looking at the taxpayer’s previous self-assessment tax returns, commencing with the 2018/19 tax year. 

Meg Saksida considers the traps to avoid.

Travel to and from temporary workplaces is allowable for tax purposes for an employee. In the last edition, I discussed the law in this area. Now let’s look at some recent cases on the subject.

Kevin Read reviews recent cases on temporary workplaces.

This article follows on from my previous one (‘Relief is at hand’), which reviewed the circumstances when a claim can be made to defer a capital gains tax (CGT) liability from arising (under TCGA 1992, s 165), including a handy checklist. 

Reshma Johar looks at how holdover relief and potential restrictions can apply.

Many individuals who are concerned about inheritance tax (IHT) being payable on their death estates will undertake IHT planning in their lifetimes. 

Mark McLaughlin looks at pre-owned assets tax and some possible let-outs from a charge. 

Upon incorporating a business, probably the most important issue for the director/shareholder and their tax adviser is how to extract the subsequent profits. 

Chris Thorpe looks at tax-efficient ways of extracting profits from a limited company.

Running your own business can be exciting as well as challenging; as a business grows, there may be situations where an extra pair of hands is needed to help with the smooth running of that business. 

Jennifer Adams considers how employing a spouse/civil partner can reduce a business's tax bill.

Valentine’s Day is an opportunity for people with a ‘significant other’ to show how much they care; and if it can be done tax-efficiently, so much the better! 

Mark McLaughlin offers some tax tips for romantic (or perhaps not-so-romantic!) couples. 

When a business discovers it has made a VAT mistake it needs to correct it in order to avoid paying additional interest and penalties, but it has to follow certain procedures or it could still find itself still liable to a penalty.

Andrew Needham looks at what methods are available to correct errors on a VAT return.

We all know employment income is taxable; but what if you earn money for babysitting the neighbour’s child? What about tips earned at work and winnings on the horses? 

Meg Saksida considers when you need to declare various types of additional income.

The tax rules (ITEPA 2003, s 338) deny a deduction from earnings for travel expenses incurred in ‘ordinary commuting’, which is travel between a) the employee’s home and a permanent workplace; or b)
a place that is not a workplace and a permanent workplace

Kevin Read looks at the rules on travel to temporary workplaces by employees.

Capital gains tax (CGT) arising from a transfer of a business asset (or agricultural property) which was either an outright gift or sale at undervalue, could be reduced either partly or entirely by a holdover relief claim.

Reshma Johar outlines the circumstances when a claim for business asset hold-over relief could alleviate an immediate charge to CGT on the transfer of a business asset.

HMRC defines remuneration as ‘the compensation an individual receives in exchange for the work or services they provide, sometimes called reward’. 

Jennifer Adams outlines some methods of remunerating directors in an owner-managed business.

In the current Covid-19 climate, it is more important than ever to stay as fit and healthy as possible. 

Sarah Laing looks at some tax-efficient incentives that employers can use to help keep employees fit for work.

When considering VAT and staff training, the first point to determine is whether VAT is being charged on staff training. The basic position is that if a business engages a profit-making organisation to provide vocational training to its staff it will normally be charged VAT at the standard rate. 

Andrew Needham looks at charging and reclaiming VAT on staff training.

When considering the incorporation of a business it is worth weighing the ‘pros’ and ‘cons’ of each alternative in order to conclude which is the optimum route in the particular circumstances. Sometimes the result is surprising. 

Ken Moody looks at a case study to illustrate that incorporating a business can be beneficial from a tax perspective in some cases. 

The Supreme Court’s decision in Pitt v Holt [2013] UKSC 26 concerned the scope of ‘Hastings-Bass doctrine’. Broadly, this allows those acting in a fiduciary capacity to unwind arrangements into which they have entered, where there are unforeseen consequences. 

Kevin Read discusses how equity, rather than tax law, can decide tax cases.

Can we still assume that termination payment will be covered automatically by the £30,000 tax free exemption?  

Reshma Johar considers the need for extra due diligence when it comes to understanding termination packages.

Anyone working in tax knows how complex it can be. There are so many ‘grey’ areas of uncertainty. It is sometimes difficult to know whether one’s interpretation of tax law is correct.

Mark McLaughlin warns that a clearance given by HMRC is not as watertight as some people might think.