Hello
Lots of goodies this week. We compare the different submissions to the Making Tax Digital penalty condoc, we look at the Ranger's EBT case and actual actions v written contract terms and there is much more.
The Rangers football club EBT tax case was finally decided by the Supreme Court this week. It has cost UK taxpayers a small fortune and raises some fascinating issues on multiple levels.
The players were employed but the terms of a side letter promised them non-repayable loans paid via the club's Employee Benefit Trust (EBT). Loans were paid into sub-trusts for the benefit of players and their families. The Court of Session and then the Supreme Court overturned earlier decisions and decided that these loans were disguised remuneration. 'The man on the Clapham Omnibus' would probably look at the player's pay package and quickly conclude that a non-repayable loan is simply a cash handout. The case has some similarities to the IR35/employment law case of Autoclenz v Belcher, where again it was up to the Supreme Court to have the final say. In that case an employment contract said one thing however as the workers and employer worked in a different way it was held that the unwritten terms prevailed. Now that we have two Supreme Court decisions on this theme perhaps it is time for a careful analysis of why the lower courts don't think in this way. Perhaps this should affect the way we make laws?
It is unlikely that HMRC will recover any PAYE or NICs as the club has long since gone into liquidation and there is a debate on-going on Twitter as to whether HMRC can make Reg 72 determinations, ie. to recover tax directly from players. In terms of other EBT users, those employers who have been holding out and waiting for the decision will now be wanting to settle with HMRC.
The Government seems to be leaving a Summer Finance bill a tad late, although we have seen Finance bills passed in a few days on previous occasions. I am hopeful that Making Tax Digital will be postponed for unincorporated business, and news of a new rates relief for broadband suppliers only serves to show that a large number of taxpayers are still digitally excluded and will therefore by exempt from MTD (as proposed) so maybe better to postpone until we are all Superfast.
A final note on MTD, we have summarised the representations made by the different tax bodies and compared them (also to our own) and interestingly no one is in any agreement! On reflection, in our own submission (that's us at www.rossmartin.co.uk) we recommend a mixture of the points based system, with a review and possible suspension. With hindsight this is actually pretty similar to the systems that we currently have for late filing and if you think about it, we arrived at today's systems following extensive consultation back in the early 1990s. Is that system broken already, and why do we keep trying to reinvent the wheel? I will leave you with that conundrum.
If you have any tax queries please do try out our Virtual Tax Partner support portal at www.VtaxP.co.uk
Enjoy the guides and updates and the news is below.
Back 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)
Employment Related Securities returns: deadline extended
File your returns whilst on holiday! Our least favourite returns for this year now have a 24 August deadline.
Auto-enrolment fines: case study
The Pensions Regulator have issued a case report relating to Johnsons Shoe Company and a £40,000 fine for failing to comply with their auto-enrolment duties.
New Money Laundering Regulations
On 26 June 2017, The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 replaced the Money Laundering Regulations 2007 and introduced some important changes.
IOM Beneficial Ownership Database
IOM company owners now have a duty to disclose who beneficially owns shares. The new database went live on 1 July 2017
100% rate relief for broadband suppliers
The government has announced that a new Telecommunications Infrastructure Bill will allow100% business rates relief for operators who install new fibre on their networks and the Bill will incentivise operators to invest in the broadband network
IHT: worth £5.1bn
Latest figures revealed that £5.1bn of IHT was collected in the year ended 31 May 2017.
Case Update (freeview)
Swiss Levy non-refundable
In Karen Vrange v HMRC [2017] EWHC 1055 a taxpayer who ignored warnings about the Swiss bank levy was unable to claim back the levy paid under the UK/Switzerland cooperation agreement following disclosure of her offshore bank accounts
Loss carry back and self assessment liability
In R (on the application of James Derry) v HMRC [2017] EWCA Civ 435 , the Court of Appeal agreed with HMRC a carry back share loss claim did not reduce a previous tax year’s liability: it reduces current year tax by an amount equal to what would have been saved in the previous year.
Supreme Court dismisses Rangers EBT appeal
The Supreme Court has issued its judgement in RFC 2012 Plc (in liquidation) (formerly The Rangers Football Club Plc) v Advocate General for Scotland [2017] UKSC 45 and has agreed with HMRC that the EBT loan scheme was subject to tax and NIC.
Editor's Choice (subscribers)
HMRC Information powers: at glance
NEW: client briefing looking at HMRC's statutory and non-statutory routes for obtaining information about your clients.
Negligible value claims and share loss relief
If a company goes under, income tax relief is available to an individual shareholder for a loss made on the disposal of those shares provided that the shares qualified for EIS or SEIS relief or it was a qualifying trading company.
Designing Employee share schemes
Record numbers of companies are giving employees a stake in their businesses. Which scheme is most suitable for your clients?
Tax-free childcare or childcare vouchers?
The new tax-free childcare scheme began on 21 April 2017 and will be extended to cover older children by the end of the calendar year. Who will be most interested in the new scheme?
Practical Tax Guides and Updates (subscribers)
Capital Taxes Update: June 2017
All the latest news and cases
Registering for VAT
UPDATE: It is possible to claim exemption for registration for businesses with largely zero-rated supplies.
Money Laundering Regulations: Accountants' Registration
UPDATE: What are your responsibilities under the new Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Money Laundering Checks: know your client
UPDATE: Updated to include the factors the new regulations suggest you should consider as part of your 'know your client' risk assessment.
IHT: Inheritance Tax Rates and Allowances
UPDATE: We still do not know what is happening with non-doms, but we do know that IHT receipts increased by 9% for the 12 months to 31 May 2017. Remind yourself of the rates and allowances and have a look at the links to our Estate planning checklist.
VAT
What constitutes a valid VAT invoice?
UPDATE: Added the conditions for a valid credit note.
Prompt payment VAT discount changes
UPDATE: Added reference to other discounts, such as unconditional and contingent discounts and how the VAT treatment varies.
Making Tax Digital
Undecided! Responses to HMRC's consultation on MTD penalties
We compare responses made by the ICAEW, CIOT, ATT and us.
CPD Webinars
Missed last time's update?
Nichola's SME Tax w-update 30 June 2017
Features:
- Advisers' Penalty Planner
- Entrepreneurs' Relief
- CGT: Private Residence Relief
- Garden: selling and developing CGT and income tax
- Buy to let: personal or company ownership
- Surplus cash and striking off a company
- Non-resident Capital Gains Tax
Come and join our Cloud
Subscribe (and UNLOCK the whole site) A single user annual subscription is £365 (+ VAT).
What do you get?
- We keep YOU up to date in SME tax.
- FULL access to www.rossmartin.co.uk: your firm's personal TAX INTRANET containing over 2,500 actively maintained tax guides, briefings, toolkits and checklists.
- Want to know more? Commission your own articles and checklists.
- Structured CPD: our detailed SME tax updates "for Advisers Only" provide topical summaries and planning notes & our NEW webcasts provide you with structured CPD at your desk.
- Regular client tax briefings: these cover the latest business and employment tax issues and are designed to assist you plan meetings and improve your client services.
- Nichola’s regular SME tax news web-update: we do the reading and cherry pick the best of the taxpress, magazines and websites for you.
- You can also commission guides and checklists for your own practice, post comments and upload your own articles.
- Access to the Virtual Tax Partner ® service provides subscribers with FREE quick calls and a discount of on phone, email and tax support and mentoring.
