Tax Insider Monthly Newsletter

Tax compliance is difficult and complex. Making a mistake in a tax return is a distinct possibility for many taxpayers.

Mark McLaughlin looks at how penalties for careless errors in tax returns can be suspended and ultimately cancelled.
 

Qualifying individuals are eligible to open a lifetime individual savings account (LISA) in the same way as opening a regular ISA and contribute up to £4,000 each year, with the government providing a 25% bonus on contributions at the end of each tax year up to the age of 50. 

Sarah Laing looks at the benefits of opening a lifetime ISA and flags up an important recent change.
 

Under current UK VAT law, the standard rate of VAT (20%) applies to all supplies of restaurant services, hot takeaway food, holiday accommodation and admission to many attractions.  

Andrew Needham looks at the implications of the temporary 5% VAT rate for the hospitality industry.

The divide between solicitors and accountants has been getting fuzzier over the last 20-30 years; it is certainly not a new question. 

Chris Thorpe looks at the differing services which a solicitor and accountant can offer for tax planning.

For UK tax purposes all sources of rental income, be they commercial or residential lets, furnished or unfurnished, are regarded as being derived from the same single property rental business, except for furnished holiday lets (FHL), which are kept separate. EU lettings and EU FHL are also separate activities.

Jennifer Adams considers the date on which a property business ceases to trade.

Where people act as personal representatives (PRs) for those who died in the months leading up to the coronavirus pandemic, there is a good chance that they will be realising assets for less than their value at death.  

Kevin Read explains how personal representatives can save inheritance tax where quoted investments or land have lost value.

Tax allowances for children have been around since 1798 and are a very welcome contribution to most UK households. In its modern form, child benefit was phased in from 1977 to 1979. 

Meg Saksida considers the workings of the high income child benefit charge.

Many individual business owners are aware that a capital gains tax (CGT) rate of only 10% can apply if business asset disposal relief (BADR) (previously known as entrepreneurs’ relief (ER)) is available on qualifying business disposals, up to a lifetime limit.

Mark McLaughlin highlights a valuable capital gains tax relief that is sometimes overlooked.
 

The tax legislation provides that a tax charge will arise where a director or employee obtains a benefit by reason of their employment when they, or any of their relatives, are given a cheap or interest-free loan. 

Sarah Laing looks at how employers can help employees by offering a tax-free cheap or interest-free loan. 
 

The key characteristics of a ‘block policy’ are that there is a contract between the block policyholder (sometimes called the master policy) and the insurer, which allows the block policyholder to affect insurance cover subject to certain conditions. 

Andrew Needham looks at the VAT consequences of block insurance policies.
 

Normally, a property let out to tenants is an investment asset for tax purposes. However, if that property is a furnished holiday let (FHL) everything changes; the property is treated as a trading asset and the corresponding rents are regarded as trading receipts. Land rental will never normally be considered a trade, but this is an exception.

Chris Thorpe explores the current position regarding furnished lets and their tax treatment.
 

Despite the support that the government has given businesses via the Coronavirus job retention scheme (CJRS) many will be looking to make employees redundant, if not immediately then potentially when the furlough scheme ends on 31 October 2020.

Jennifer Adams considers the tax rules regarding redundancy payments for employed workers who lose their jobs as a result of the Coronavirus.
 

The owner of Hull City FC, who is perhaps best known for his unsuccessful attempts to change the club’s name to Hull Tigers FC, has recently been the appellant in Assem Allam v Revenue and Customs [2020] UKFTT 0026 (TC).

Kevin Read reviews a recent case dealing with three distinct areas of tax.
 

The Coronavirus pandemic is encouraging some entrepreneurs to bring forward their retirement plans. Business owners should carefully consider a number of potential tax strategies.

Iain Rankin looks at some options potentially available to business owners contemplating the cessation of their businesses.

When an individual sells shares in (for example) a family company, and the buyer is another company, instead of receiving all the proceeds in cash up front (and/or shares in the buying company) the vendor will sometimes receive ‘loan notes’ instead. Mark McLaughlin outlines how a capital gains tax problem for certain individuals can be made to ‘disappear’.

When an individual disposes of an asset at a gain, capital gains tax may be due. Ordinarily, for gains falling above the higher rate threshold (i.e. £50,000 in 2020/21), this will be charged at a rate of 20%. Sarah Laing examines the changes to entrepreneurs’ relief as announced in the March 2020 Budget

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 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 the VAT consequences.

A partnership is defined (by Partnership Act 1890, s 1(1)) as ‘the relation which subsists between persons carrying on a business in common with a view of profit’. Chris Thorpe explores some aspects of running a business through a partnership.

The married persons allowance (MPA) is not an allowance; rather it is a tax reducer enabling the reallocation of 10% of the annual personal allowance from one person in the marriage (or civil partnership) to the other. The claim is for £1,250 as a lower amount cannot be transferred, and as such the maximum tax reduction benefit is (£1,250 x 10% =) £250. Jennifer Adams looks at the married persons allowance and the mechanics of a transfer between spouses or civil partners.

With the economy hit hard by Covid-19, many businesses will make losses this year. If a business is operated as a company, those losses are stuck within the company; they cannot be used against the owners’ personal income. Kevin Read reminds readers of the options available for relieving losses in unincorporated businesses.

Capital gains tax (CGT) relief for loans to traders (TCGA 1992, s 253) may be used to establish a capital loss; however, unless there is an immediate or anticipated practical use for the relief there is, perhaps, a danger of a claim being overlooked. Ken Moody explores capital gains tax relief for loans to traders and points out that there may be forgotten claims out there waiting to be made.