Tax Insider Monthly Newsletter

HM Revenue and Customs’ (HMRC’s) power to make discovery assessments is a formidable tool. The ordinary time limit for HMRC to make income tax or capital gains tax discovery assessments is four years after the end of the relevant tax year. However, a 20-year extended time limit applies in cases of ‘deliberate behaviour’ by taxpayers. 

Mark McLaughlin looks at an important Supreme Court decision on HMRC’s ‘discovery’ powers.

Rent-a-room receipts can include more than rent for the use of furnished accommodation in a residence. It can also include receipts in respect of goods or services (i.e., meals, cleaning and laundry) supplied in connection with that use. 

Reshma Johar explores a useful relief which aims to encourage individuals to let out rooms in their only or main residence in the UK. 

In Budget 2018, the government announced that it was planning a consultation on the introduction of a new stamp duty land tax (SDLT) supplement for non-resident individuals and companies purchasing residential property. 

Meg Saksida explains the traps to bear in mind in connection with the 2% stamp duty land tax supplement and considers the definition of ‘non-resident’.

If a business is run from home or has an office at home, it is entitled to claim back the VAT on any legitimate business expenses. 

Andrew Needham looks at VAT consequences of working from home.

In Budget 2020, as part of the transition to a digital tax system, the UK government set out its proposals on the further modernisation of the UK tax system. A report by the Office of Tax Simplification proposed a change of tax year end and covered two specific dates, 31 March and 31 December.

Iain Rankin examines the rationale behind the proposed change of tax year end date, and the forthcoming abolition of the basis period rules for unincorporated businesses.

The disparity between residential and non-residential (including mixed-use) land for stamp duty land tax (SDLT) rates is such that the latter makes for a far more attractive purchase. 

Chris Thorpe looks at whether some land bought with a house will necessarily be subject to the residential rates of stamp duty land tax.

Many directors own business premises either personally or via a self-invested personal pension (SIPP), charging the company rent rather than the company owning the premises itself. 

Jennifer Adams considers the tax implications of a director charging the company rent for the use of commercial property.

Employees in the UK are chargeable to income tax on their net taxable earnings. These earnings are made up of the employees’ cash earnings, such as their salaries, wages and any bonuses, as well as any benefits-in-kind they might receive. 

Meg Saksida explains the mechanics of how benefits-in-kind are taxed to income tax.

When looking at how a business is to operate, there are several factors in deciding how that business should be run. 

Chris Thorpe looks at the various structures from which a business owner can operate.

A VAT invoice can only be issued by a VAT registered business and must legally contain certain information, which is detailed in VAT Notice 700/21, section 5. The legislation specifies two types of VAT invoices: less detailed invoices for supplies under £250, and full VAT invoices for supplies over £250. And they are required for standard and reduced rated supplies.

Andrew Needham looks at the circumstances when a business must issue a tax invoice to its customers and what types of invoices are required.

I was recently instructed to advise on the tax consequences of company voluntary arrangements (CVAs), which have continued to increase in popularity in recent times, and the results were quite interesting.

Ken Moody highlights his recent experience of advising on a company voluntary arrangement.

A capital gains tax (CGT) rollover relief is potentially available when dealing with a ‘compulsory purchase order’ (CPO) of land. A CPO can only be made by central government, including public and local authorities.

Reshma Johar explores a relatively less well-known form of capital gains tax relief.

Most of the cases on entrepreneurs’ relief (now called business asset disposal relief (BADR)) have concerned the disposal of private company shares. 

Kevin Read discusses a recent case that has highlighted a key difference between partnerships and shares in the business asset disposal relief rules.

For individuals who own businesses or an interest in them, business property relief (BPR) is a valuable relief from inheritance tax (IHT). BPR potentially provides relief at 100% (or 50%) on ‘relevant business property’ (e.g., shares in an unquoted company carrying on an eligible activity). 

Mark McLaughlin highlights a potential pitfall for inheritance tax (IHT) business property relief purposes.

When a business or a limited company has run its course, for whatever reason, the owner needs to decide what happens to it; for example, the company will not automatically end when the owner dies.

Chris Thorpe looks at liquidations and some related tax planning opportunities and pitfalls.

Selling a business can be a complex matter. One point to consider is the VAT consequences of the sale. When a business is sold, it can be either by a share sale if it is a company, or it can be the sale of the trade and assets of all or part of the business. 

Andrew Needham looks at the different ways of selling a business and their VAT consequences.

The recovery of VAT on business entertainment is normally blocked by legislation. However, there are some circumstances when VAT recovery is permitted.

Andrew Needham looks at the recovery of VAT on business entertainment.

Most individuals in the UK will be eligible for the state pension. This is a monthly amount payable to the individual once they reach pensionable age (currently 66 in the UK), at a level depending on the level of the
National Insurance payments the individual has paid over their working life.

Meg Saksida explains the mechanics and benefits of contributing to an occupational pension scheme.

The ability of HMRC’s ‘Connect’ database to identify links between businesses, shareholders, properties, families and across different government departments is increasing in its sophistication, such that investigations are being targeted, rather than being conducted on a
speculative basis, as in the past. So, if a request for information is received, it is more than likely that HMRC has some information for which the taxpayer’s input or confirmation is required.

Jennifer Adams outlines the powers that enable HMRC to obtain documents from the taxpayer and third parties.

Employer pension contributions are very tax-efficient. They will become even more so from April 2023, when corporation tax (CT) is increasing for companies with profits exceeding £50,000. For stand-alone companies, the marginal CT rate on profits between £50,000 and £250,000 will rise to 26.5% from the current flat rate of 19%, while for profits above £250,000, it will become 25%. 

Kevin Read explains why owner-managed businesses may want to consider deferring directors’ pension contributions.

The 'helpful sidekick' of capital gains tax (CGT) business asset disposal relief (BADR, formerly entrepreneurs' relief), has been hiding in the wings for several years.

Reshma Johar looks at an often-overlooked form of capital gains tax relief.