From 1 December overseas businesses which are not established in the UK will no longer be able to rely on the VAT registration limit of (currently) £77k to avoid registration. Instead they will have to register as soon as they make any taxable supplies in the UK (as determined by the place of supply rules).

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As most of the Budget had either been announced in advance or “leaked” there was little for the newspapers to get excited about so they focussed on the so called “granny tax”.

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The balance of public and private benefit - tribunal decision shifts the scales

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Self-assessment taxpayers have recently experienced an unexpected outbreak of reasonableness from HM Revenue & Customs.

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As foreshadowed in the Autumn Statement (7 December 2011), and despite extensive lobbying since on behalf of the small business community, winding up of companies from 1 March 2012 to achieve a satisfactory tax profile for shareholders will in many cases become more complex and expensive. It is thus disappointing that, against its stated ambitions to reduce red tape, H M Government have enacted (on 30 January 2012) a longstanding extra statutory concession in a manner designed to inhibit, rather than prevent, an abuse that is more imagined than real.

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When first announced the Seed Enterprise Investment Scheme (“SEIS”) seemed a welcome development for start ups. However on review of its draft legislation one feels that the SEIS (if enacted as originally drafted) is a missed opportunity and falls short of what is really needed to help start ups flourish to support the Government’s growth agenda for UK Plc.

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HMRC has decided to challenge a tribunal ruling which was critical of HMRC’s approach to imposing penalties.

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The prospect of PAYE pooling has been raised again in a recent Consultation document. PAYE Pooling was first mooted in the 2009 Pre Budget Report but was put on hold while Real Time Information (RTI) was developed. PAYE Pooling would allow organisations who operate multiple PAYE schemes, such as groups of companies, to consolidate all their schemes under one reference.

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Prior to 6 April 2011, Venture Capital Trusts (VCTs) have proved generally more popular than Enterprise Investment Schemes (EIS) for those seeking an alternative to pension funding once the reduced income tax relief limits on pension contributions have been reached. Now that the EIS income tax reduction available has been increased from 20% to 30% of the amount subscribed to match that for VCTs, this preference is less obvious.

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The decision of the Upper Tribunal on 8 November 2011, dismissing Mr Richards’ appeal against that of the First Tier Tribunal in December 2009, reminds us of how investment under the Enterprise Investment Scheme (EIS) can go wrong, with HMRC minded to follow a strict approach. Through no fault of his own in terms of expectations when he made his investment in December 2001 of a further £1.5m in Skye Inns Limited (two earlier subscriptions for shares in the same company having duly achieved their intended tax deferral), Mr Richards is now facing a CGT liability, on capital gains he realised during the 1998/99 tax year, of around £600,000 plus interest, the funds to pay it very possibly no longer being readily available. It is not known if this case will reach the Court of Appeal but this seems unlikely.

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Where a charity engages in fundraising activity but the proceeds are not exempt from tax, it will commonly form a non-charitable subsidiary company to carry out the activity. Although the subsidiary company would itself be taxable on the profits from its “non exempt” fund raising, it is able to claim tax relief (under Gift Aid) for the donations that it makes to charity. Where all of the profits are donated within nine months less one day following the end of the year, no tax liability should arise for either entity.

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HMRC’s recent consultation proposing significant (and mainly adverse) changes to the capital allowances regime for fixtures seem certain to be implemented. These changes, particularly as they affect the position of historic spend, are of concern-----and action will need to be taken now by property owners to mitigate their effect.

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Auto enrolment in now only some twelve months away. It will commence in late 2012 for larger employers and in stages thereafter for all others, completing in 2016.

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It's over a year now since the PAYE late payment penalty regime came into force in April 2010. In short, if an employer's payments of tax and NIC to HM Revenue & Customs are late an automatic penalty will be imposed.

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An historic agreement was reached last week with the Swiss tax authorities which means for the first time tax will be deducted at source from savings and investments held in Switzerland by UK citizens.

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After a lengthy consultation period the Finance Bill 2011 finally introduced measures intended to simplify the Substantial Shareholding Exemption (‘SSE’) and the de-grouping charges arising on, typically, the sale of a group company.

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The second payment on account of the 2010/11 tax was due on 31 July 2011 and our clients would have been advised in good time of the payment due. HMRC has in the past issued around 2 million statements to taxpayers in the weeks leading up to the payment date so that the tax can be paid in good time.

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Since April 2009 HMRC’s approach to deciding which individuals with overseas connections are resident in the UK has been unpredictable and unsatisfactory. We see the major changes in HMRC’s published guidance – HMRC6 replacing the longstanding IR20 – as fraught with uncertainty.

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