The House of Commons Treasury Committee (Treasury Committee) has published its second report, ‘Economic impact of coronavirus: the challenges of recovery’ which focuses on the medium-term issues that have arisen as the UK has sought to emerge from lockdown.
SME Tax News
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Given the current resurgence of coronavirus, it came as no surprise today when the Treasury announced that this Autumn's budget has been cancelled. This announcement was later followed by an economic statement, the 'Winter Economy Plan', made by the chancellor, Rishi Sunak.
The Chancellor Rishi Sunak has announced a package of new measures to support the economy during the Coronavirus pandemic including a new job support scheme, continuing reduced VAT rates, and additional time to pay deferred taxes.
In Centrica Overseas Holdings Limited v HMRC [2020] TC7683, the First Tier Tribunal (FTT) denied Corporation Tax deductions for fees incurred on the disposal of a subsidiary business by an investment company. The decision to sell was not made by the company but by its ultimate parent.
In Neil Pickles and Sharon Pickles v HMRC [2020] TC07681, goodwill was overvalued on the incorporation of a farm and then credited to the directors’ loan account without declaring Capital Gains Tax (CGT). Was this a distribution? The First Tier Tribunal (FTT) struggled with the issues.
In Paul Newey (T/A Ocean Finance) v HMRC [2020] TC07844, the First Tier Tribunal (FTT) held that the offshore transfer of a business to avoid incurring irrecoverable VAT was not abusive.
In HMRC v Cheshire Centre for Independent Living [2020] UKUT0275, the Upper Tribunal (UT) ordered HMRC to pay the taxpayers costs despite HMRC’s case being successful. It had acted unreasonably in introducing new grounds of appeal.
In Miroslaw Pawlikowski v HMRC [2020] TC7584, the First Tier Tribunal (FTT) dismissed the taxpayer’s appeal against HMRC’s denial of tax credits for 2016/17 in respect of certain CIS deductions. The taxpayer failed to keep adequate records to support his claim.
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We have our usual eclectic mixture of news and features this week. Mostly, our updates are inspired by the queries coming in to our sister Virtual Tax Partner service.
In AHK Recruitment Ltd v HMRC [2020] TC7718, the First Tier Tribunal (FTT) denied claims of SME Research & Development (R&D) relief. The conditions for relief were not met as there was no evidence of an advance in science or technology.