Hello,
This time we feature some detailed analysis of the potential consequences of an 'upstream' loan in a management buyout. We also note that HMRC has some unusual wording in some tax enquiry letters, there is an update on the new identity verification process that will soon be required by Companies House and another useful selection of cases from the tribunals.
In Patrick Rodney Boden & Anor v HMRC [2024] TC09181, the First Tier Tribunal (FTT) found that a partnership could not use the cash basis to exclude nearly £1m of unpaid sales from tax. HMRC’s discovery assessments were valid.
The Chartered Institute of Taxation (CIOT) has recently highlighted concerns about the application of loan to participator rules and their potential 'unfair' effect on legitimate tax planning, such as where an 'upstream loan' is made to fund a management buyout.
In John Douglas Wardle v HMRC [2024] TC09213, the First Tier Tribunal (FTT) allowed a claim for Entrepreneurs' Relief (now renamed Business Asset Disposal Relief (BADR)). for the disposal of a Limited Liability Partnership (LLP) interest. Mr Wardle's successful appeal comes after losing two previous appeals on similar grounds for a disposal of an interest in the same partnership.
In Michael Saunders v HMRC [2024] TC09129, the First Tier Tribunal (FTT) found that a Long Term Incentive scheme payment made after an employee had left the UK was taxable because it was general earnings attributable to work done in the UK whilst still resident.
In Philip Cox and Deborah Cox v HMRC [2024] TC09198, the First Tier Tribunal (FTT) found that the taxpayers' incorrect claim for Entrepreneurs’ Relief (now known as Business Asset Disposal Relief) was made carelessly. The taxpayers failed to obtain appropriate professional advice and were liable to penalties of 15% of the Potential Lost Revenue (PLR).
Draft amendments to the Companies Act 2006 will see stringent identity verification procedures introduced for those setting up, running or controlling companies. It aims to stamp out money laundering through fake identities.
There are some curious typos in a HMRC Income from Property information request letter which is combined with an evident misunderstanding of HMRC's powers. Upon closer inspection, it looks suspiciously like the work of ChatGPT, or is it just human error?
Hello
This week we look at the 'tax gap', report on a rare victory for a taxpayer in a Stamp Duty Land Tax (SDLT) appeal, learn a little bit more on the unallowable purpose rule in loan relationships and have news on NICs refunds. All in all another interesting week in tax!
HMRC have published their annual estimates of the 'tax gap'. Ignorance of tax law as in 'failure to take reasonable care' by small businesses is blamed for a large percentage of the tax gap primarily through a lack of Income Tax and Corporation Tax receipts.