Tolley Dec_3

30 November 2021

Also in this edition

Will it be a safe landing?

30 November 2021

Karen Eckstein considers the risks and opportunities you may not have thought of when buying or selling a professional services firm

The professional indemnity insurance market is currently very hard, and many professionals are struggling to find insurance cover on affordable terms. There is a limited number of insurers who are prepared to insure tax advisors, as there is a perception in the market that the work carried out by tax advisors is inherently risky. Insurers have been extremely wary of anybody who has a history of introducing tax schemes to clients.

30 November 2021

Crystal Randles-Mills and Claire Millard consider KSM Henryk Zeman and how it relates to arguing legitimate expectation in the First-tier Tribunal

One of the longstanding issues in tax appeals concerns the jurisdiction of the First-tier Tax Tribunal. In some cases, taxpayers wish to claim that the tax authority, HM Revenue & Customs, has acted contrary to public law. Public law covers the conduct of public authorities when acting in public functions. The most common claims made in tax matters are either that HMRC has not made a decision properly or that the taxpayer had a legitimate expectation that their affairs would be dealt with in a particular way.

30 November 2021

Glyn Fullelove shares his views on the crucial role of the tax charities and what we can all do to support them

The complexity of the tax system was brought home to me (again) when completing my own tax return recently. I now earn rather less than I did a few years ago, but last year I had two sources of current employment income, some deferred income from a previous employment and some self-employed income.

I had a wealth of resources and my own professional experience, as well as some very good software, to help me navigate the preparation of my return. However, at various points I found myself wondering which box to tick and spent some time working out why my HMRC Personal Tax Account didn’t match with my own records.

29 November 2021

Hui Ling McCarthy QC considers the different types of decision that can be made by a First-tier Tribunal, and whether advisers can benefit from unpublished decisions

A recent question from a CIOT m ember to the Tax Tribunal User Group prompted a discussion about the different types of decision that the First-tier Tribunal might release. This in turn raised issues about the publication of decisions, confidentiality and the extent to which others might rely on unpublished First-tier Tribunal decisions. This article addresses decisions which finally dispose of the appeal (different rules apply in relation to case management directions).

Different types of decision

First, it is useful to set out what the First-tier Tribunal (Tax Chamber) Rules (SI 2009/273) tell us. Rule 35 deals with decisions.

29 November 2021

Jonathan Schwarz considers the significance and idiosyncrasies of the US-UK tax treaties

The importance of tax treaties between the UK and the United States cannot be underestimated.

The US has been the single largest source of foreign direct investment into the UK for decades and the UK is similarly the second biggest direct investor into the United States. The US is also the UK’s second largest trading partner.

As with all tax treaties, these treaties are best understood in the context of the tax and legal systems of the two countries. Double tax treaties between these two countries date back to 1945. The 1945 comprehensive income tax treaty was first replaced in 1975, and subsequently with the current treaty on income and capital gains that was concluded in 2001 and amended by protocol in 2002.

29 November 2021

Gary Ashford considers the various taxati on issues that may arise in the fast evolving world of cryptocurrency

Many of those reading this article will have read about crypto and bitcoin, and may well have a strong opinion that this is a ‘fad’. However, I believe that crypto is definitely not a fad, but will in fact form a very important part of the future fabric of our financial universe – although it may look quite different to the unregulated world we see at the moment.

Since the introduction of bitcoin in 2009, there has been a proliferation of cryptocurrencies. At a recent count, there are over 8,000! Sir John Cunliffe, Deputy Governor for Financial Stability at the Bank of England, confirmed on 13 October 2021 that cryptoassets have grown by roughly 200% in 2021, from just under $800 billion to $2.3 trillion today. Five years ago, the market was just $16 billion.

29 November 2021

Keith Gordon considers the Upper Tribunal’s decision in a case looking at the employment status of a member of an LLP

It is probably a sign of my advancing years, but I still consider the advent of limited liability partnerships (LLPs) to be a relatively recent development in the world of work and the taxation of earnings. In fact, LLPs are just a few months short of their 21st birthday (April 2022), meaning that they will have been around for some 70% of my tax career so far. Despite the fact that LLPs are therefore an established and widely used form of business structure, some fundamental issues remain. This article concerns the question about the employment status of LLP members.

29 November 2021

John Messore and Peter Moroz consider the potential pitfalls of leasing company cars to employees, as demonstrated by the case of Smallman & Sons

On 24 August 2021, the First-Tier Tribunal released the decision in Smallman & Sons Ltd v HMRC [2021] UKFTT 300 (TC) (see bit.ly/ 3C4PvBH). This is one of a long line of tax cases on company cars and follows on from recent cases such as Apollo Fuels v HMRC [2016] EWCA Civ 157 and Harrison Solway Logistics Ltd v HMRC [2019] UKFTT 72.

The basic facts in these cases are very similar. Instead of employees leasing their own personal cars directly, those cars were leased by the company which onward leased them or recharged them to drivers at the same amount paid to the leasing company.

29 November 2021

Nick Bustin and Dinesh Pancholi review the impact of extending IR35 to the private sector

The introduction of the off-payroll working legislation in the private sector from 6 April 2021 meant that medium and large businesses became responsible for determining the deemed employment status of workers engaged via an intermediary. As a result, businesses need robust controls, processes and governances in place to comply with their new responsibilities. Businesses need to understand the steps they should take to remain compliant and how HMRC is likely to police these rules.

Background

29 November 2021

In the third part of his series on farming tax, Michael Steed looks at the opportunities available by diversifying into renewables

This is the third and final part of my Back to Basics articles on farming tax and I want to review some of the tax effects of farmers diversifying into renewables. So what’s on offer for farmers seeking diversification into renewables? Let’s start with some bad news. There have been some UK government incentives for producers of renewable energy in the near past, but these have now reduced to a trickle.

29 November 2021

The festive season means that many businesses will either be hosting Christmas parties or giving gifts to staff and clients. Neil Warren considers the VAT treatment of these expenses

The relaxation of the lockdown rules hopefully means that staff and customers will be able to get together for a decent Christmas party this year. Hurrah! And for those businesses that have traded profitably, there will probably also be some decent gifts given away to reward hard work and customer loyalty. In this article, I will consider the VAT treatment of entertaining expenses and business gifts.

Entertaining costs

29 November 2021

A review of the key points from the Autumn Budget 2021

Personal tax

Tax rates and allowances for 2022/23

As already legislated for, the personal allowance of £12,570 and the basic rate limit of £37,700 are frozen up to and including 2025/26. Basic rate, higher rate and additional rate income tax will remain at 20%, 40% and 45% respectively for 2022/23. The additional rate threshold will remain at £150,000. The capital gains tax annual exempt amount will remain at £12,300 up to and including 2025/26. Capital gains tax rates are unchanged for 2022/23.

29 November 2021

Bill Dodwell considers the changes announced in the October Budget and Spending Review

Chancellor Rishi Sunak delivered his third Budget on 27 October, combining it with announcing the results of Spending Review 21, which sets departmental budgets for three years up to 2024/25. This article highlights some of the changes.

Investing in HMRC

29 November 2021

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