SME Tax News

The government has published draft legislation for the Residential Property Developer Tax. The legislation will be open for technical consultation until 15 October 2021.

The Institute of Fiscal Studies (IFS) has published 'The tax tribunals: the next ten years'. A review the past ten years of operations of the First Tier Tribunal (FTT) reveals that there is still a backlog of cases which is caused by staff shortages and a lack of judge's time.

In Grangewood Enterprises Limited/Anthony Marsden v HMRC [2021] TC08264, a director transferred an intangible asset to his company for £4m, to clear his outstanding director's loan account. Finding no evidence of such a valuable asset the First Tier Tribunal (FTT) confirmed HMRC assessment of a penalty and Personal Liability Notice (PLN) on the director, personally. The company had deliberately submitted inaccurate accounts and CT600 with the director's knowledge. 

The House of Commons' Finance Bill Sub-Committee has issued a call for evidence seeking views on the draft legislation published in Finance Bill 2021-22 for the Reform of Basis Periods and the Uncertain Tax Treatment provisions.

In HMRC v Redbox Tax Associates LLP [2021] TC8235, the First Tier Tribunal (FTT) held that a loss scheme should have been notified under the Disclosure of Tax Avoidance Scheme (DOTAS) rules. There were arrangements, premium fees were charged and it was a standardised tax product.

In Shinelock Ltd v HMRC [2021] TC08261, the First Tier Tribunal (FTT) dismissed the taxpayer’s appeal contending that a payment to a non-resident director shareholder was an allowable non-trading loan relationship deduction in computing the profits of a company.  Properly documenting the loan relationship or a deed of trust that was intended to keep beneficial ownership with an individual could have avoided a tax liability.

 

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