We have previously highlighted difficulties with the application of TIOPA 2010 s259ID income in a December 2019 tax blog. HMRC is taking the opportunity to consult on refining the hybrid and other mismatch rules following publication of the draft Finance...
It’s nearly 20 years since the Freedom of Information Act 2000 (FOIA) was created. The Act was designed to create a public right of access to previously-inaccessible information held by public authorities but over the years concerns have been raised...
For non-resident corporate landlords gains on all UK property (whether residential or not) will be subject to corporation tax on chargeable gains from 6 April 2019. From 6 April 2020 non-UK corporate landlords of UK property will be within the charge...
HMRC’s employment related securities bulletin for October 2019 has a section on annual reporting of net settled share awards. The deadline employers’ annual reporting concerning employment related securities is 6 July following the end of the income tax year. Whether...
Why is this an issue? Have you ever come across the situation where an US company identifies some UK based IT workers that they want to employ? Due to the nature of the work the employees don’t need to relocate...
The First tier Tribunal case of Ano (No1) Ltd is a successful example of a business applying commercial practical solutions to circumvent loss anti-avoidance. It relates to the restriction on the use of brought forward capital losses where a company’s...
In the case of Development Securities plc (DS) the Upper Tribunal (UT) has held that DS’s Jersey incorporated subsidiaries set up on 10 June 2004 were Jersey resident until 20 July 2004, with the result that losses arising from acquisition...
The Upper Tribunal (UT) has disallowed two companies’ alternative bases for allocating profits between accounting periods on the grounds that the bases go beyond what is necessary and sufficient to ensure that the allocations were just and reasonable. This case...
Having achieved good yields from applying diverted profits tax measures, HMRC has launched a new ‘profit diversion compliance facility. This is aimed at businesses that HMRC perceive to be non BEPS compliant with respect to transfer pricing and will include...
Only a year and a half into the new regime for carried forward corporation tax losses, the Chancellor has introduced further changes to the regime which will see capital losses fall into line with the treatment of other forms of...
HMRC’s October 2018 employer compliance bulletin covers a number of areas. Here we highlights two of these. Welsh taxpayer status HMRC will shortly be giving notices out to individuals who they think have Welsh taxpayer status. Currently the rates of...
Included in the draft finance bill legislation issued on 6 July 2018 on those measures affecting tax administration, were provisions relating to extension of offshore time limits for assessing certain taxes, extension of the security deposit regime, and profit fragmentation....
There were a number of direct tax measures announced on 6 July 2018 affecting real estate activities. UK taxation of gains on UK real estate made by non-UK residents (Finance Bill 2018-19 Sch1, having effect for the 2019/20 tax year...
In a backbench revolt on 1 May 2018 the UK Government was forced to back new legislation which will introduce public ownership registers in Britain’s 14 overseas territories. The concept of public ownership registers was originally proposed by David Cameron...
The UK Government has introduced a raft of legislation to address tax evasion and latterly tax avoidance. This has included; The Requirement to Correct legislation which has introduced punitive offshore penalties and extended assessing time limits for Income Tax, Inheritance...
In its pursuit of stamping out tax avoidance HMRC complained to the Advertising Standards Authority (ASA) about misleading tax claims by the promoter, CDP Tax & Wealth Limited, which trades under the name Fiducia Wealth and Tax (FWT). FWT’s website...
HMRC has updated its guidance on the corporate interest restriction rules to reflect expected changes from Finance (No2) Bill 2017-19 (expected to receive Royal Assent in March 2018), and to improve clarity throughout the guidance. Finance (No2) Bill 2017-19 Sch...
The corporate interest restriction rules apply from 1 April 2017 and can restrict interest deductions for tax purposes. The restriction can apply where net tax interest expense of group companies (or singleton companies) within the charge to UK tax, exceeds...
The Upper Tribunal (UT) has held that it is possible for a non-UK resident landlord of UK property (English Holdings (BVI) Ltd), which also had a UK PE undertaking a trade, to offset the loss of the PE’s trade (subject...
HMRC has issued guidance on the quarterly instalment payment rules that will apply to very large companies from 1 April 2019. By way of recap, a company is very large for this purpose if its taxable profit exceeds an annual...
If UK corporation tax returns have been submitted in respect of accounting periods ending between 8 March 2017 and 16 November 2017 on a basis which is not consistent with F(No.2)A 2017, these returns will need to be amended and...
The Government has used the Autumn Budget to again send a clear message of its commitment to tackling tax avoidance and tax evasion especially in relation to offshore structures. The Government will soon be publishing the responses to a consultation document...
Following the introduction in 2015 of a new capital gains tax regime for non-UK resident individuals who dispose of UK residential property, it is perhaps unsurprising that the Treasury published a consultation document as part of the Autumn Budget proposing...
Life companies and friendly societies to be hit by loss of indexation on capital disposals from 1 January 2018. Life companies and friendly societies with taxable business are subject to tax on capital gains on disposal of certain assets. In...
As reported in our previous blog the International Consortium of Investigative Journalists (ICIJ) continues its ongoing campaign to shed the opaque veil that masks offshore financial centres. The ICIJ has received nearly 13.4 million documents from a combination of leaked files...
The recent decision in HMRC v Root2tax Ltd and Root3tax Ltd [2017] UKFTT 696 (TC) has demonstrated yet again HMRC’s determination to challenge promoters of tax planning arrangements who fail to disclose under DOTAS (Disclosure of Tax Avoidance Schemes) schemes...
A UK subsidiary (BUKH) of a US group (Ball group) changed its functional currency for UK accounting purposes from UK£ to US$, resulting in a purported foreign exchange tax loss of £43m without a similar economic loss. BUKH contended it...
The First tier Tribunal (FTT) has directed that HMRC give closure notices in respect of enquiries into the corporation tax returns of four subsidiaries of UK Power Network Holdings Ltd (UKPNH), which had claimed consortium relief amounting to £939m in...
Members of the public have contacted us regarding suspicious telephone phone calls purporting to be from HM Revenue and Customs Fraud Investigation Service. Those contacted are advised that HMRC is raising an assessment against them and if they would like...
There is an old and bad joke that says that the difference between HMRC and a rabid Pit Bull terrier is that, if you batter a rabid Pit Bull Terrier long enough, it might eventually let go, whereas HMRC… But...
It is said that the real sign that a ship is in trouble is not when the rats jump overboard but when the officers abandon it mid-voyage. If that’s the case, HMRC appears to be sinking because a number of...
Background At the Autumn Statement 2016, it was announced that the government was considering bringing non-resident companies within the scope of UK corporation tax on taxable income, but the details at that stage were somewhat vague. At present, non-resident companies...
The Government has announced its intention to carry out a review and consultation into the possibility of bringing all non-UK resident companies into the charge to corporation tax where they receive taxable income from the UK. This is an intriguing...
The review of the Corporation Tax (CT) computation follows up one of the key recommendations in the OTS 2014 Competitiveness review. The terms of reference for the current review were published in May 2016 and preliminary work has been ongoing...
There are a great many skilled and unskilled workers in the UK who have recognised the benefits of trading via a limited company, not least of which is the tax advantage of taking remuneration in the form of dividends rather...
The English Holdings ([2016] FTT 436 case provides a very interesting analysis of the legislation relating to the scope of income and corporation tax for a non-resident company. The company concerned, a British Virgin Island company, had a trading activity in...
On 16 March 2016, the HM Treasury has published a ‘Business tax road map’ which sets out the government’s plans for business taxes to 2020 and beyond. The road map brings to a conclusion several key areas of tax policy...
We consider the impact of the budget on Investor’s Relief and Capital Gains Tax, Flexible use of losses, Directors’ Loan Accounts and the changes Corporation Tax rates. Investor’s Relief and Capital Gains Tax (CGT) The news of reduced capital gains...
Razor wire fences on borders are all the rage currently. HMRC are thinking about one for the boundary between capital and income too. One of the announcements hidden in the Red Book relates to the proposed amendments to the TiS...
Entrepreneurs’ Relief on goodwill transferred to a limited company was withdrawn on 3 December 2014. It’s back – but only where the resulting shareholding is less than 5%. A well used planning technique to effect a 10% tax rate on...
The Chancellor keeps up his attack on banks by restricting the amount of taxable profits which can be offset by losses from 50% to 25%. This will result in banks not only paying more tax than they would have done...
The Chancellor announced that the corporation tax rate would fall to 17% in 2020. The detailed proposals also noted that the implementation of the new QIPs regime for companies with profits of more than £20m would be delayed. The Chancellor,...
It is not a question anymore whether the EU is a strong player at the tax policy field. The question is how strong… In the course of 2016, we expect a series of legislative and non- legislative initiatives to reshape...
The long-running saga that is the Tax Case involving Rangers FC’s use of an Employee Benefit Trust has been given yet another lease of life when, this week, the liquidator BDO who represents Rangers was granted permission to appeal the...
The Office of Tax Simplification (OTS) have issued their report on the review of small company taxation. The main focus of this review is the impact of regulations for micro companies (i.e. those with fewer than 10 employees), which is...
The Supreme Court has released its decision in the case of Shop Direct Group v HMRC, dismissing the taxpayer’s appeal and upholding the decisions of the earlier Courts. Background to the case The case surrounded the corporation tax treatment of...
Although the First-tier Tribunal (FTT) case of Bloomsbury Verlag GmbH v HMRC concerned the ability for the company to set off trading losses against profits in a later year under section 393(1) ICTA 1998 (now rewritten as section 45 CTA...
OK, we couldn’t resist: like kids staring at the goodies under the tree we just had to start opening our draft Finance Bill goodies early. And just like those kids we now just feel disappointed and queasy in about equal...
HMRC have released draft regulations, explanatory notes, technical guidance and a tax information and impact note in respect of the change to bring forward the timing of the payment of corporation tax by very large companies by four months for...
… and the Amazon and the Apple decisions are coming. Although, in the last 12 months, our attention was captured by the G20/OECD BEPS Project today all eyes are on the European Commission’s state aid work. It is undeniable that...
Given the Government’s commitment to remain a major player in international affairs, the Chancellor’s Autumn Statement contained no surprises when it came to international business. It is refreshing to see that there were no negative messages in this area and...
HMRC opened a consultation on the tax deductibility of corporate interest expense on 22 October 2015, inviting responses by 14 January 2016. This consultation follows on from the release of the final report on Action 4 of the Base Erosion...
A last minute amendment to the Summer Finance Bill 2015 has been made to introduce a new rate of corporation tax applicable to restitution interest payments. As the summer Finance Bill has now been substantively enacted, this is effectively already...
HMRC have released four sets of draft regulations for informal consultation in connection with the modernisation of corporate debt and derivatives programme. These draft regulations will amend the four existing regulations listed here, which support the primary legislation regarding the...
The FTT case of GDF Suez Teeside v HMRC considered whether any taxable profits should arise when a UK company assigned a number of contingent debt claims to a wholly owned subsidiary resident in Jersey. Background GDF Suez Teeside (sic)...
One of the most significant announcements at the Summer Budget last week was the withdrawal of corporation tax relief on the amortisation of goodwill and certain ‘customer related intangibles’ acquired on or after 8 July 2015 (unless an unconditional contract...
A major change has been introduced to remove corporation tax relief on purchased goodwill and certain customer related intangible assets. Relief will still be available when the goodwill is sold. The measures will remove the current tax relief which is...
The European Commission presented an Action Plan to fundamentally reform corporate taxation in the EU on 17 June 2015. The Action Plan sets out a series of initiatives to tackle tax avoidance, secure sustainable revenues and strengthen the Single Market...
Commissioner Moscovici highlighted the re-launch of a debate on the Common Consolidated Corporate Tax Base (CCCTB) on 29 April as a part of the EU Commission’s Action Plan. This Action Plan will build on 5 key actions, starting with the relaunch...
The Government has responded to the overtures made in response to its consultation document and the result is far from pathétique. The changes accepted show that whoever is conducting the process is attentive to the critics as most of the...
Auto-enrolment – The key question for FDs: How to fund it and still contain payroll costs? Many companies are still finding that preparing for auto-enrolment is their biggest objective and challenge. Mazars’ Employee Benefits team have recently undertaken a series...
Following on from the debate on Scottish independence, is the Government keeping its promise to look at greater devolution of powers across the constituent parts of the United Kingdom? The Republic of Ireland’s much lower company tax rate makes it...
What started as an anti-avoidance measure has been exploited by companies to their benefit. Consequently the Government is now changing the rules. This affects UK companies which have borrowed funds from connected companies based in tax havens, where the borrower...
Today, Mazars was very pleased to welcome Dr Tom O’Shea and his LL.M in International Tax Law students from the Centre for Commercial Law Studies, Queen Mary, University of London. Dr Tom O’Shea delivered a very interesting guest lecture entitled...
The worldwide debt cap (“WWDC”) rules can restrict UK tax relief for finance cost (such as interest). The rules apply to the parent company and its 75% subsidiaries. The new definition of a group for WWDC will now bring in...
Repayments from tax authorities The first measure relates to repayments from a tax authority made to a person as part of a scheme designed to circumvent the existing legislation. Under the existing provisions, the amount of double tax relief (“DTR”)...
A new provision, s 1305A, CTA 2009, will provide that when, in substance, the profits of a group company are transferred to a different group company and a main purpose of the arrangements is to secure a tax advantage, then...
Targeted anti-avoidance rules that prevent the contrived use of capital losses to reduce income profits are to be amended with effect from 30 January 2014. Targeted Anti-Avoidance Rule no. 3 (“TAAR 3”) in s 184G-I TCGA 1992, is intended to...
UK-resident companies employing internationally mobile employees (IMEs) will benefit from changes in the Finance Bill. A corporation tax deduction will be available in relation to an employee of a non-resident employer that is not within the charge to UK corporation tax, if the employee...
An amendment is being made to rewritten tax legislation to correct a drafting error to ensure that the legislation operates as originally intended. When the intangibles regime was introduced in April 2002, it was no longer possible to obtain chargeable...
Following consultation on the corporate debt rules as a whole, legislation is to be introduced in Finance Bill 2014 which provides tax relief in certain circumstances where a company leaves a group whilst holding loan relationships or derivatives previously transferred...
From 1 April 2014 rules governing the disallowance of tax losses on change of control of a company are to be relaxed in two situations. Intra-group share-for-share reorganisation For corporation tax purposes when there is a change in ownership of...
Anti-avoidance measures will be introduced in the Finance Bill 2014 to restrict claims for double tax relief by companies in two specific situations. The first measure relates to repayments from a tax authority made to a person as part of...
Groups that are within scope of the restriction on tax relief for finance cost under WWDC cannot now reduce or remove their exposure to a restriction by having group members that do not have ordinary share capital. This change applies...
Following consultation on the corporate debt rules as a whole, legislation is to be introduced in Finance Bill 2014 which clarifies and consolidates the rules so far as they apply to companies that are members of partnerships. HMRC first issued...
Rules governing the disallowance of tax losses on change of control of a company are to be relaxed in two situations. Trading losses When there is a change in ownership of a company with trading losses carried forward and: (i) ...
Targeted anti-avoidance rules had previously been introduced to prevent the contrived use of capital losses to reduce income profits. The rules are to be amended to tighten up these provisions. Legislation will be included in Finance Bill 2014 to amend...
Legislation will be included in Finance Bill 2014 to amend the targeted anti-avoidance rule in s184G-I TCGA 1992. There are three TAARs within TCGA 1992 to counter arrangements which seek to obtain a tax advantage through the use of capital...
HMRC are conducting a wide ranging review of the loan relationships rules in advance of making significant legislative changes in FA 2015. Some changes are being made in advance of the major revision of the loan relationships rules next year....
As from accounting periods commencing on or after 1 January 2015 companies, other than those which use the FRSSE, will not be permitted to draw up accounts under existing UK GAAP. Companies will have to choose between one of three...
The time limit to make or change a group relief claim is two years from the end of the claimant’s accounting period or, if later, 30 days after completion of an enquiry into that return for that period. The legislative...
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