Hello,
There has been plenty going on this week. We have a new HMRC Employer Bulletin, we take a closer look at the reinterpretation of the Business Asset Disposal Relief (BADR) 'substantial extent' requirement, there is a consultation on post-Brexit customs and we have made some more tax tools.
Enthusiasts of Capital Gains Tax, Business Asset Disposal Relief (BADR) will be keen to hear about a recent development in the interpretation of the description 'substantial' when determining the scale of a company’s non-trading activities.
HMRC have published their Employer Bulletin for February 2022. We have summarised the key content for you, with links to our detailed guidance on the topics covered. This bulletin covers essential information for 2021-22 end of year payroll, Benefit In Kind reporting and moving into the 2022-23 tax year.
HMRC has opened ‘Call for evidence: An Independent Customs Regime'; it considers how HMRC can improve the UK’s customs system by simplifying processes for traders and embracing innovation.
In Gunfleet Sands Limited & Ors v HMRC [2022] TC08387, the First Tier Tribunal (FTT) found that studies and project management costs relating to offshore windfarms partly qualified for capital allowances.
In Jones Bros Ruthin (Civil Engineering) Co Ltd and Britannia Hotels Ltd v HMRC [2022] TC08378, the First Tier Tribunal (FTT) ruled a remuneration scheme using a financial derivative product aimed to avoid PAYE and NICs did not work. The arrangement had no commercial purpose and the likely outcome was that the employees received a cash bonus.
There has been an interesting recent development in the meaning of 'substantial' when determining whether a company is trading or not for the purposes of Business Asset Disposal Relief (BADR).
In Dr C Ewan H Crawford v Revenue Scotland [2022] FTSTC3, the First Tier Tribunal for Scotland (FTT) found that two people purchasing their first house together did not meet the conditions for a repayment of Additional Dwelling Supplement as one of them had failed to sell his old home within the right timeframe, ironically they would have met the conditions if they had shared a home pre-purchase.
In Bagri Services Ltd v HMRC [2021] TC08357, the First Tier Tribunal (FTT) confirmed that HMRC could not revoke gross payment status under the Construction Industry Scheme (CIS) on the basis of false information. There was no requirement to notify Companies House that there was a shadow director of the company and the information on which gross payment status was granted was not therefore false.
Many employers have had difficulty reconciling and reporting their coronavirus support payments. HMRC is also having difficulties and 'nudge' letters are being issuedwhere they cannot reconcile Coronavirus Job Retention Scheme (CJRS) payments paid with those declared on the Corporate Tax returns. These letters require a response within 30 days.