Tax Insider

As well as providing their employees with a salary, many employers wish to offer other benefits-in-kind (BIKs) as a means of further incentivisation or simply out of care for one’s workers. 

Chris Thorpe gives an overview of how salary sacrifice can still be used for employees.

When businesses purchase assets, they invariably use some form of finance on the pretext that it is better to conserve cash, because once it's gone – it's gone! 

Jennifer Adams considers different methods and tax implications of asset purchases by businesses.

Mark McLaughlin suggests that taxpayers should check whether tax advisers are on HMRC’s ‘naughty’ list before seeking tax advice. 

Taxpayers might be forgiven for considering that HM Revenue and Customs (HMRC) has more than enough powers to tackle taxpayers over what it regards as ‘naughty’ behaviour. 

For VAT legislation purposes, a new commercial property or civil engineering work can be partly constructed or up to three years old and still count as being new.  

Andrew Needham looks at the VAT consequences of selling new commercial buildings and civil engineering works.

Contractors in the construction industry have big regular construction industry scheme (CIS) tax obligations and responsibilities. A contractor will have to get relevant financial and fiscal details regarding the subcontractor they plan to use to carry out construction work. The contractor will then have to ‘verify’ them. This means going online, submitting the appropriate details to HMRC, and waiting for a decision from HMRC as to how to pay them. 

Tim Palmer outlines the construction industry scheme tax obligations placed on a contractor to withhold the correct amount of tax when paying a net registered subcontractor.

Christmas comes but once a year and while, one hopes, this is accompanied by a feeling of goodwill and generosity to all, this may not extend to HMRC! In fact, perhaps the seasonal expenditure on family and friends may prompt the idea that this may be softened by tax savings elsewhere. 

Richard Curtis provides a few thoughts for seasonal tax saving.

If a trust beneficiary receives a Form R185 from a trustee, it is good news. It means they have been paid some income during the tax year. 

Meg Saksida considers the purpose and application of form R185.

In family and owner-managed companies, it is not uncommon for shares in the company to be spread among family members. This might be done for various reasons – both tax and non-tax related.  

Mark McLaughlin points out that a tax avoidance arrangement involving dividend payments towards university fees is under attack from HMRC. 

Many readers will no doubt remember the ‘good old days’ when you could wind up a company, pay capital gains tax at only 10% on distributions from the liquidator (with the benefit of entrepreneurs’ relief) and then, if you wished and if practicable, you could start up a similar business in a new company – now known as ‘phoenixism’. As a (doubtful) bonus, until 2016, a winding up was not specifically a transaction in securities (TIS).

Ken Moody muses on recent advice given on the application of anti-avoidance rules to distributions in winding up and wonders, several years since its introduction, how often it is applied in practice. 

As a business expands or undertakes new projects, it may need injections of capital to fund its trading activities. 

Richard Curtis looks at the ‘pros’ and ‘cons’ of different business investments.

Being a separate legal entity, the money within a company’s bank account belongs to that company, not the owners or directors. Tempting though it is for a business owner to help themselves to the company’s profits, they cannot do so unless it is declared as a dividend or paid as a salary or pension. 

Chris Thorpe gives an overview of the implications of writing off a director’s loan. 

Capital gains tax is based on the gain on the disposal of a chargeable asset, which itself is a reasonably simple calculation. One takes the cost of the asset from the proceeds, and voilà!  

Meg Saksida points out that care is needed when considering whether to deduct certain costs on the disposal of a chargeable asset.

The transfer of shares may be for various reasons – usually when the owner decides to retire, or at least reduce their involvement in the business. Alternatively, parents may wish their children to have some of the company’s shares to receive dividends, possibly to help fund further education. The transfer can be by gift or sale, or the company may issue new shares to the family members, reducing the percentage holding of the other shareholders.   

Jennifer Adams considers the tax implications when a director or shareholder transfers shares to family members.  

Taxpayers might be forgiven for considering that HM Revenue and Customs (HMRC) has more than enough powers to tackle taxpayers over what it regards as ‘naughty’ behaviour.  

Andrew Needham looks at the submission of late VAT returns and the four-year cap. 

It is a natural instinct for individuals to wish to preserve their wealth for successive generations of their family. Trusts may seem a natural way to achieve this. However, the alternative of a family investment company (FIC) is worthy of consideration. This may be particularly true for entrepreneurs already familiar with the limited company structure and given the tax charges that can apply to trusts. 

Richard Curtis suggests that a family investment company could be useful when passing assets to future generations.

With a sole trade or a partnership, whether to accumulate or withdraw profits is an irrelevant question – the profits are already the owner-partner’s; they are subject to income tax on those profits whatever happens to them. 

Chris Thorpe gives an overview of whether it is best for a company to distribute or accumulate its profits.. 

The purchase by a company of its own shares (e.g., from a retiring or dissenting individual shareholder) is possible where company law requirements are met.

Mark McLaughlin highlights HMRC’s apparently stricter application of the rules regarding company purchases of own shares by multiple completion. 

A service charge is a charge made to tenants or owner occupiers (leaseholders) for the upkeep of common areas of an estate or apartment block, such as paths, driveways, communal gardens and children’s playgrounds, corridors, lifts, etc. These sums are due under the terms of the lease or tenancy agreement.

Andrew Needham looks at the VAT position of services charges on domestic property.

We are now well into 2023/24, the transitional year for the switch from the current year basis of assessment to the tax year basis for unincorporated businesses and LLPs. 

Kevin Read explains the special rules for trading losses arising in the tax year 2023/24.

There are specific tax rules for a category of assets termed as ‘chattels’. 

Moneeza Siddiqui looks at the capital gains tax rules for chattels, including the partial exemption for non-wasting chattels.

Just because an expense is paid out of a business bank account does not necessarily mean it will be tax-deductible. The general rule for all businesses is that expenses are tax-deductible if they are incurred 'wholly and exclusively' for that business. The sole purpose must be for the trade as incurred for the benefit of the business.  

Jennifer Adams considers whether all expenses paid for by a business are tax-deductible.