Happy New Tax Year!

We are going through a fairly rapid period of change in tax at the moment and the 2016 Finance Bill has been tweaked following last month's budget. HMRC are slowly publishing responses to various consultations and updating necessary guidance.  

We have updates on Entrepreneurs' Relief, the Employers' NICs allowance and also we have updates on the new rules for taxing certain company distributions as capital. HMRC have started to create new guidance as to what constitutes Supervision, Direction and Control, this guidance is essential for anyone who is facing the new restriction in tax relief for travel to a temporary workplace, e.g. workers trading via intermediaries, as well as being useful in determining employment status.

Finally, you cannot have failed to have noted the story of the Panama Papers, another database of offshore accounts details will now available to HMRC. We have updated our notes on penalties in relation to offences involving offshore assets accordingly. 

Scroll down for Case updates and the Editor's choice.

See you soon

Nichola Ross Martin FCA Tax Director


Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers

Quick news (freeview)

Panama Papers: HMRC
HMRC has responded to the press coverage this week about the leaked data relating to the law firm Mossack Fonseca.

HMRC updates: Supervision, Direction or Control
Following the 6 April 2016 changes to the travel expenses for intermediaries, HMRC have published updated examples and guidance on the meaning of supervision, direction or control (SDC).   

Distribution consultation: HMRC response
Responses published to consultation on company distributions: minor amendments to Finance Bill 2016. Subscribers: see Transactions In Securities note below for full summary of the new measures.

OTS Tax Simplification reviews: HMRC response
HMRC responds to the OTS Company Taxation review, rejecting the consolidated tax model but commissioning further work on a look through approach which could see shareholders taxed directly on company profits.

Case update

Entrepreneurs' Relief Denied
In Alan Castledine v HMRC [2016] UKFTT TC04930 the FTT decided that deferred shares fall within the meaning of ordinary shares for Entrepreneurs’ Relief.  As a result Mr Castledine had only 4.99% of the ordinary share capital and was denied relief.

Quality of occupation insufficient for Private Residence Relief
In Mitesh Kothari v HMRC [2016] UKFTT TC04915 the FTT decided that the occupation of a property was not sufficient to qualify it as a residence.

Director fails to secure EIS tax relief
In Nigel Bell v HMRC [2016] TC04969 a director failed to secure EIS relief: some shares were not issued in time. Another case where HMRC failed to make a valid discovery assessment.

Updates (freeview)

Company distributions: measures from April 2016 (freeview)
A summary of the Finance Bill 2016 proposals.

Budget 2016: Capital Gains Tax
Our at a glance guide to the proposed changes to CGT and Entrepreneurs' Relief.

Agency Workers (freeview)
UPDATE: A guide for employment intermediaries with links to HMRC's latest guidance on supervision, direction and control.

Practical tax guides & updates 

Entrepreneurs' Relief
UPDATED: Our new-look guide now includes a detailed review of the 2016 Finance Bill proposals.

Penalties: offshore income and CGT
UPDATED: For the proposals included in the 2016 Finance Bill to introduce new civil and criminal penalties for tax evaders and those who assist them.

Transactions in Securities
UPDATED: To include a detailed summary of the 2016 Finance Bill proposals and their impact.

Employer's NIC allowance
UPDATED: Following publication of draft legislation and HMRC guidance.

Dividend tax: Trusts
NEW: A quick guide to the impact of the new dividend tax regime on trusts and their beneficiaries.

Agency Workers: employment intermediaries rules
UPDATED: A guide for employment intermediaries with links to HMRC's latest guidance on supervision, direction and control.

Editor's choice   

Directors: tax planning toolkit 2016/17
Do you pay a salary or dividend, what combination, what about the Employers' NICs allowance, the savings allowance and dividend allowance. What now for company purchase of own shares and company sales? This guide summarises the key issues for you.

Directors' loan account toolkit
Don't overlook the rules on bed and breakfasting.

Dividends: formalities for companies
When is a dividend treated as paid? Do you vote a final or an interim dividend. Your FAQs answered.

Missed last time's update?

Nichola's SME Tax Update 24 March 2016


  • Budget 2016: at a glance
  • PSC contractor update
  • Pension contributions: personal or company?
  • Alphabet shares and family companies

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