Tax Insider 3 x Newsletter Bundle 

Employing family members and settlements legislation 

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.

Partnerships – Tips and traps

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. 

VAT and loyalty schemes

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.

What are the common errors on tax returns that mean a taxpayer may not receive the SEISS grant?

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.

Case law can give employees a temporary headache!

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.

Hold on! Gift relief in action

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.

Escape from POAT!

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. 

Q&As with Arthur Weller

What’s new? Company car changes from April 2021

Various changes to the company car tax rules came into effect from 6 April 2020, including a new way of measuring carbon dioxide (CO2) emissions and changes to the taxation of low emission cars. One year on, there are further tweaks affecting the 2021/22 tax year.

Sarah Bradford looks at some changes to the company car tax rules taking effect from 6 April 2021.

Should the 'other half' be involved in the business?

A time honoured and straightforward way of reducing your tax bill on a business’s profits each year is to move a slice of the profits, by one means or another, to a member of the household who is paying tax at a lower rate. Very often this is a spouse – and throughout this article, where I use the word ‘spouse’ you can freely substitute the words ‘civil partner’ because the rules are the same. 

Alan Pink highlights the merits and dangers of involving spouses and ‘significant others’ in a business to save income tax.

Tax when providing company assets for private use

Companies frequently provide assets for the private use of their directors and employees, ranging from mobile phones, computers, cars, bicycles, living accommodation to more exotic assets such as yachts, planes and helicopters.

Peter Rayney explores how benefits are calculated on company assets provided to directors and employees.

Nice try by HMRC!

Taxpayers must play by the rules. HM Revenue and Customs (HMRC) enforces its vast powers to ensure this is so. Fortunately, those powers invariably also give taxpayers some degree of protection. 

Mark McLaughlin points out that HMRC must stick to the rules in exercising their powers when seeking information from taxpayers. 

Q&As with Arthur Weller

Ownership of investment property by spouses or civil partners

When a couple are looking to invest in property, they will often own the investment property jointly. Where a buy-to-let property is owned jointly, the tax implications depend on the relationship between the parties. If the joint owners are married or in a civil partnership, there are special rules to be aware of. 

Sarah Bradford explores some tax implications of owning property with your spouse or civil partners.

Covid-19: Tax issues for landlords

The government’s advice is clear; landlords are not required to stop charging rent during the pandemic. Great efforts and huge financial grants have been made by the government to ensure that all tenants are able to pay their rent, including the furlough scheme for employees and the self-employment income support scheme for those running their own businesses. 

Meg Saksida looks at how landlords might be suffering in 2020/21 and how to deal with the tax effects of it.

Property development (2): Changing your mind

The next case study continues the saga of Bill and Benita. It considers the implications of developing a dwelling for re-sale, and what happens if you change your mind part-way through.

In his second article in the series, Lee Sharpe compares two aspiring property developers in case studies.

How not to sever a joint tenancy!

It is relatively common for certain assets (e.g. a property) to be jointly owned. A property can be owned either as ‘joint tenants’ or ‘tenants-in-common’ (this article applies to property ownership in England and Wales). If a property is bought equally, it will be held as joint tenants unless the owners direct otherwise. 

Mark McLaughlin points out that failing to execute the severance of a joint tenancy properly can have unfortunate consequences.

Q&As with Arthur Weller