SME Tax News

The Chancellor of the Exchequer confirmed in a Written Ministerial Statement on 10 March that Budget 2010 will take place on Wednesday 24 March at 12:30pm.

The highlight of the week for the tax obsessed is that the Budget is set for 24 March. We expect new Transactions in Securities rules - designed to scupper those who abuse ESC C16? But, what about close company loans? I note HMRC has been updating its guidance.

From 1 April HM Revenue & Customs (HMRC) is permitted to publish the details of taxpayers where it is established that they have committed certain serious tax offences. It already has powers to do this in connection with Tax Agents.

Two changes to simplify the partial exemption de minimis rules that take effect from 1 April 2010:

  • simplified tests
  • annual test

The de minimis limit remains the same (£625 per month on average) but the changes should make it easier and less time-consuming for businesses to confirm their de minimis status.

The changes are optional and businesses can benefit from them without seeking approval from HM Revenue & Customs (HMRC).

Further information

Further information can be found in VAT Information Sheet 04/10

In the Trustees of Nelson Dance Family Settlement v HMRC [2009] EWHC 71 (Ch) a transfer of land by a sole trader qualified for IHT business property relief: on the loss to donor principle the transfer reduced the value of the business even though the land itself would otherwise only attract agricultural property relief.

There has always been uncertainty as to the tax treatment of dividends which are paid out of newly distributable reserves as a result of a capital reduction. A capital reduction is now made easier following the enactment of the Companies Act 2006, section 641.


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