Hello
As we head towards 31st January, don’t forget to put in a Time to Pay agreement with HMRC if you are unable to settle your tax bill. We have updated our guides to ‘Reasonable excuse’ and ‘Insufficiency of funds’ this week. It is probably best to review these before the end of the month if it is likely that you or your clients are going to have any potential filing or late payment tax failure.
Our case reports this week, cover a range of popular topics, including company car benefits in kind, Entrepreneurs' Relief (now BADR), Research & Development Relief (R&D) and VAT. Common to all the direct tax cases is the issue of poor underlying record-keeping. By record-keeping, I am not referring to records in terms of the debits and credits of day-to-day bookkeeping, rather to the range of other types of records that are required to evidence particular areas of tax compliance and which also provide vital evidence of your tax claim to the tribunal. It is overly simplistic to think that once you have set up your online accounting system you are compliant. Record-keeping obligations take many different shapes and form, and now maybe a good time to review those with your accountant or tax adviser.
We have also summarised the Disguised Remuneration Cartref judicial review and have further details on spreading the Loan Charge. Do visit our Disguised Remuneration Zone for full details of our guidance on these topics.
If you have any tax-specific queries, please do post them up to our sister site: www.VtaxP.co.uk.
Back soon
Nichola Ross Martin FCA CTA (Fellow)
Tax Director
Your Virtual Tax Partner® online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
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Guides and Updates (subscribers)
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No CGT Entrepreneurs' Relief for former director
In Peter Kennedy v HMRC [2021] TC7987, the First Tier Tribunal (FTT) dismissed a claim for Entrepreneurs’ Relief by a shareholder was not an employee or officer of the company for the year prior to the share disposals.
R&D claim fails key criteria
In Hadee Engineering Co Ltd v HMRC [2020] TC07969, the First Tier Tribunal (FTT) upheld the appeal in part for closure notices regarding R&D claim enquiries. In the main, the appellant failed to meet the qualifying criteria.
Sports show cars were available for private use
In Tim Norton Motor Services v HMRC [2020] TC7973, the fact that a Maserati and Ford GT40 had a Statutory Off-Road Notice (SORN) and management permission was required for any private use, were not sufficient as restrictions to prevent private use and a taxable car benefit applied.
Judicial Review: Loan Charge not in breach of Human Rights Act
In Cartref Care Home Ltd & Ors, R (on application of) v HMRC [2020] EWCA Civ 1744, the Court of Appeal refused permission to appeal against a judicial review that found that imposition of the loan charge on outstanding loans did not breach the Human Rights Act 1998.
Non-domiciled taxpayer did not transfer assets abroad
In HMRC v Andreas Rialas [2019] UKUT 0140, the Upper Tribunal (UT) dismissed an appeal by HMRC, finding the Transfer of Assets Abroad rules did not apply to dividend income as Mr Rialas was not the transferor, or sufficiently involved in the transfer, of shares acquired from his former business partner by his family trust.
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VAT cost-sharing exemptions limited to same-state entities
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No VAT deduction if importer not owner
In Weindel Logistik Service (Weindel) VAT case C-621/19, the European Court of Justice (CJEU) ruled that there is no right to deduct import VAT if the importer of record is not the owner of the goods.
ECJ allows input VAT for goods/services on abandoned projects
In ITH Comercial Timişoara (ITH) VAT case C-734/19, the European Court of Justice (CJEU) ruled that the right to deduct input VAT on goods and services acquired with a view to carrying out taxable operations is maintained when the investment projects initially planned have been abandoned due to circumstances beyond the control of the taxable person.
VAT (subscribers)
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Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a very wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more.
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Missed last time's Web-update?
Nichola's SME Tax W-update 7 January 2021
- Budget 2021: representations wanted
- Just how are our taxes are raised and spent?
- COVID-19: £4.6bn new grants
- COVID-19: Government Support Tracker
- 10% cumulative preference shares were not fixed in dividend rate
- No excuse: soft drinks industry levy filing fail
- Jersey SPV managed and controlled by UK parent
- R & C Brief 1 (2021): The introduction of the zero rate of VAT for Women’s Sanitary Products
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- VAT penalty for cash accounting dismissed
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SME Tax Monthly Summary December 2020
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