This summer the government has announced its proposals to crack down on tax cowboys. So, how can you spot a tax ‘cowboy’ and do higher earners really care whose tax scheme they are using?
Archived SME tax news
The government has announced new proposals to crack down on the promoters of contrived and aggressive tax avoidance schemes in order to save billions in tax.
In Coopers v HMRC [2012] UKFTT 439 (TC) TC 02120 a partnership was set up to provide cars to a company owned by the partners, who were also its directors in an arrangement aiming to avoid car benefit charge. The Tribunal found that the partnership was "little more than an extension of the company set up and operated in order to avoid or reduce income tax and a National Insurance charge for the company." In paying the partnership to provide cars which were used by the directors, the company was indirectly providing cars and fuel "by reason of employment" and so a tax charge resulted for the directors with Class 1A for the employer.
See Tax masterclass: running an LLP & Co structure for guidance on how to avoid a similar charge.
Graeme Nuttall, the government’s adviser on employee share ownership has published a report recommending that the UK should encourage more “John Lewis” type employee owned companies.
Journalists from The Times have been undercover exposing the tax avoidance industry. Even comedian Jimmy Carr took part in a Jersey tax saving "strategy" to pay just 1% in tax.
The Treasury has published a consultation which explores the demand for a new Disincorporation Relief.
Following its Digital by default consultation, HMRC has decided that it will not be increasing the amount of XBRL tagging required in company accounts after all.
A new consultation “The Taxation of Controlling Persons” seeks to tackle what the Government sees as a growing problem: people working in senior positions in both the public and private sector but using personal service companies to disguise employment.
The limit on qualifying Enterprise Management Incentives (EMI) options rises from £120,000 to £250,000 on 16 June 2012.
Chief Secretary to the Treasury, Danny Alexander has informed MPs that some 2,400 senior civil servants are working via their personal service companies to save tax.