The top stories this week are Rangers' Big Tax Case EBT win and MPs' findings on the taxation of multi-nationals Starbucks, Amazon and Google.
I confess to finding both quite gripping because they centre on structuring one's affairs within the law to pay the least amount of tax. However this means that Rangers' employees and players benefited from £47 million tax free, and the multi-nationals, well I would not even try and guess the amount that escapes UK tax. Looking forward, the disguised remuneration rules in Part 7a of ITEPA 2003 go a long way to solving the EBT problem but taxing multi-national internet companies is not so easy. I suggest "Mouse tax" - they pay in the country where we click. The beauty of this is that we already have the software to track this data.
Moving on, we have some new VAT guides and updates, new toolkits and checklists for private clients and directors and a whole lot more to interest you.
Best wishes
Nichola
Nichola Ross Martin FCA
Tax Director
www.rossmartin.co.uk
Your online Virtual Tax Partner®: practical support for accountants, tax advisers and their clients
News round up:
Rangers wins huge EBT case, but...
£47 million of payments to players were loans, but are they now repayable to the liquidator?
Multi-nationals and 'mouse tax'
A summary of MPs' findings into the activities of Starbucks, Amazon and Google, considering some of the options available for taxing multinationals.
NIC repayments on motoring allowances
A repayment opportunity? Total People: motoring allowances paid to staff do not constitute earnings for NICs after all.
Investigations and compliance
HSBC Jersey: UK account holders named
A whistle blower has just provided HMRC with a list containing the names of over 4,388 HSBC bank account holders.
The Lagarde List
Back in 2010 HMRC was given a list of 6,000 HSBC bank account holders in Switzerland. To date HMRC has made one conviction, and investigated 500 cases.
UK/Swiss Agreement
From January 2013 Swiss banks will operate withholding tax on UK resident account holders unless disclosure of Swiss assets is made to HMRC. Account holders are also expected to pay outstanding tax liabilities. Most account holders must respond to their banks by December.
HMRC has a new spotlight on Property business loss relief schemes. Apparently some scheme promoters are continuing to sell Income Tax side-ways loss schemes despite changes introduced in Finance Act 2012 to curb the abusive use of agricultural expenses see Property profits and losses.
Legal Advice Privilege case update
The Supreme Court considers whether Legal Advise Privilege should extend to non-lawyer tax advisers.
Consultation update
Employee Owner Status consultation
This very short consultation has closed, we summarise the proposals. Reaction to the Chancellor's pet project to give employees CGT free shares seems to have been unfavourable amongst professionals.
Don't miss
(Freeview)
Tax planning for income at marginal tax rates
Strategies to avoid unexpected tax charges: from 2012/13 following the introduction of the High Income Child Benefit Tax Charge (HICBC) many tax payers have to navigate the effects of several different tax bands when tax planning. Marginal tax rates can be as high as 70% of income.
Directors' loan accounts: toolkit
HMRC's instruction to its staff is that they examine directors' private expenditure during the course of an enquiry into a close company's books and records.
Essential reading
Subscribers only (locked content)
Editor's choice
Private client tax planning for the 2012/13 year-end
UPDATE: more topical tips on dealing with proposed changes in 2013. This is pending any surprises announced by the Chancellor in his Autumn Statement.
Directors' tax planning toolkit 2012-13
UPDATE:read this in conjunction with the Private client tax planning checklist above.
Property profits & losses: toolkit
UPDATE: our toolkit covers the points made in HMRC's version but adds a great deal more information about what you can and can't claim.
Controlled Foreign Companies (CFC)
NEW: an introductory summary for SME owners and advisers.
VAT Update
How to claim back VAT on business expenses incurred in the EU
NEW: HMRC updated its guidance in October.
VAT Restriction of non-established taxable persons
From 1 December 2012 business visitors from abroad will have to register for VAT before making taxable supplies in the UK. We say "likely to affect French and German markets held in the UK in the run up to Christmas".
Reverse charge & place of supply
NEW: don't forget to account for reverse charge services when considering taxable turnover for registration. This is important for UK businesses with exempt turnover who are sourcing services from abroad.
Transfer of a Going Concern - properties
HMRC announces a change of practice where a seller grants a new interest in a land and property business, this follows the Robinson Family Company case. Some scope for repayments of VAT and SDLT.
VAT: trading in the EU and abroad
UPDATE: a mini-guide to explain the basics.
Recent guides and updates
Losses
UPDATE: what's what with side-ways loss relief and update on anti-avoidance measures.
Finance Act 2012: index & summary
What's new and where to find it.
Clothing and work wear - self employed
HMRC recently re-wrote some of their Business Income Manual - we explore 'what's new'.
Disincorporation
NEW: a briefing explains the key issues for directors.
PAYE late payment penalties buster
UPDATE: this guide is essential reading if you are having cashflow problems or do not understand these penalties.
Tax masterclass: running an LLP & Co structure
Sample our Masterclass guide to business combinations. This one is ideal for trading companies and professional practices.
NICs on dividends
Key issues for those in tax schemes.
How do you tax ABC or alphabet shares?
For share awards outside family companies, see:
For a run down on the basic rules on taxing awards of shares and securities see:
If you are dealing with family companies and shares are being issued to family members, see:
Furnished Holiday Letting
Including examples on Averaging and Period of Grace reliefs.
Retirement: purchase of own shares
Menu and summary.
Capital reduction: tax treatment
This guide examines the position where a capital reduction is used to return excess share capital or capital reserves to shareholders and trading is ongoing. Not to be confused with a purchase of shares out of distributable reserves.
Valuation (of goodwill) on incorporation
Guidance and examples, including for small & lifestyle businesses.
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