In Peter Hemingway v HMRC [2023] TC 08929, the First Tier Tribunal (FTT) agreed that an amount paid to compensate an employee for the cancellation of stock options was taxable. The Employment-Related Securities (ERS) legislation overrode the £30,000 exemption for a change in his employment rights.
SME Tax News
HMRC have highlighted a flaw with their software and the submission process when filing an R&D tax relief claim. The issue is affecting companies claiming both the Research & Development Expenditure Credit (RDEC) and the SME tax credit.
HMRC have published 'Statistics on trusts in the UK October 2023'. Three-quarters of those trusts registered with HMRC signed up between 1 April 2022 and 31 March 2023 as a result of the new Trust Registration Service rules. Capital Gains Tax payable by trust increased by 27% in the tax year ending 5 April 2022 when compared to the previous year.
As the 31 October 2023 deadline for submitting a paper tax return for the 2022-23 tax year approaches, HMRC have relented on a previous policy and advised that they will accept a properly completed, downloaded copy of the reference Self Assessment tax return available from GOV.UK.
HMRC have issued 'Tax-free savings newsletter 9 - October 2023' which primarily clarifies their view that fractional shares cannot be held in ISAs. This means that taxpayers who hold investments in this way may have to sell their holdings and pay tax on any resulting gains.
HMRC have published their Employer Bulletin for October 2023. We have summarised the key content for you, with links to our detailed guidance on the topics covered.
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We have a diverse collection of cases and guides this week. Some of the cases warrant a close read.
In HMRC v Gerald and Sarah Lee [2023] UKUT 242, the Upper Tribunal (UT) found that Private Residence Relief applied to the entire gain on a main residence built on the site of a previously demolished property. The dwelling house existed for a quarter of the time that the land had been owned, but the period of ownership test related to the house only.
Following the 2015 changes to public sector pensions, from 1 October 2023, certain younger members of public service pension schemes can use the McCloud remedy to benefit from the same annual and lifetime allowance protections as older retiring scheme members.
HMRC have updated their Employment Income Manual to reflect a change in policy. This impacts employers who reimburse employees for the cost of electricity used to charge company cars and vans at home. A Benefit In Kind no longer arises on reimbursement.