Although some trustees are technically only liable to basic rates of income tax, it has been announced that the CGT rate for all trustees will be 28% for gains on or after 23 June 2010 (except where entrepreneurs' relief applies). This is also the case for personal representatives of deceased persons.
Below are some key upcoming tax deadlines that you may need to consider. These dates cover the period June – August 2010.
19 June 2010 - PAYE and NIC due for the month ended 5th June 2010. Submit Construction Industry Scheme return for the month ended 5th June 2010.
5 July 2010 - Final date for agreement of 2009/2010 PAYE Settlement Agreements.
6 July 2010 - Final submission date for returns of expenses and benefits (forms P11D and P9D) for the year ended 5th April 2010. Relevant employees to be provided with copies of forms P11D and P9D.
6 July 2010 - Submission date for annual share scheme returns (form 42) for the year ended 5th April 2010.
14 July 2010 - Deadline for submission of forms CT61 and payment of any associated income tax for the quarter ended 30th June 2010.
19 July 2010 - PAYE and NIC due for the month ended 5th July 2010. Quarterly PAYE and NIC due for the quarter ended 5th July 2010 for qualifying small employers. Due date for payment of Class 1A NIC arising on relevant benefits in kind for the year ended 5th April 2010. Submit Construction Industry Scheme return for the month ended 5th July 2010.
31 July 2010 - Second payment on account due in respect of 2009/2010 personal tax. Second penalty of £100 applied where 2009 self-assessment tax return has not yet been submitted. Second 5% surcharge applied where 2008/2009 tax has not been settled in full by this date.
2 August 2010 - Submission date for forms P46 (Car) for changes during the quarter ended 5th July 2010 to car or fuel benefits provided to employees.
19 August 2010 - PAYE and NIC due for the month ended 5th August 2010. Submit Construction Industry Scheme return for the month ended 5th August 2010.
Another key date that everyone is waiting for with anticipation is Tuesday 22 June 2010. Chancellor George Osborne has confirmed that the new Conservative-Liberal Democrat coalition government's emergency budget will be unveiled on this date.
We will be blogging on SME Plus Blog and Tax Plus Blog on Budget day. If you do not already subscribe to our blogs click here for SME Plus Blog or here for Tax Plus Blog to ensure you get our comment and analysis as and when it happens.
Barry Hallam is a senior manager at Mercer & Hole. If you would like to discuss the contents of this post with Barry you can call him on 020 7353 1597.
Cathy Corns author on our sister blog SME Plus has highlighted some tax policies which have been announced following the formation of the Conservative-led coalition government - the key issues are highlighted below.
I will also be posting further blog posts as the detail becomes clearer. In the meantime, if you would like to discuss these and other tax planning opportunities available to you, please do not hesitate to contact me.
Tax planning opportunities in uncertain times
We are living in interesting and uncertain times. We do now know who is governing Britain and that we will have a Budget within the next 50 days. There is a lot of speculation, but tax is going to change.
Some measures announced in the 2009 Pre Budget and the (first) 2010 Budget have not yet hit the statute books, so there is uncertainty over which will be retained. The coalition agreement makes specific mention of some tax policies which may affect you.
Capital Gains Tax
This tax is about to change again with CGT rates being aligned with income tax rates on non-business assets. The end result could be significantly more tax for higher earners, but with, possibly, extended entrepreneurs’ relief. Where this relief is not available, now may be a good time to look at realising gains to take advantage of the current rate of 18%. It is important though to consider all angles balancing earlier tax payment with the benefit of a lower rate of tax. It is not clear whether the change will be introduced from the date of the emergency budget or next 6 April.
Pension contributions
There are already rules to restrict the amount of higher rate relief that anyone earning over £130,000 can claim on pension contributions. The Lib Dem manifesto proposed the removal of all higher rate relief on pension contributions. I do not know when or if this measure will be introduced, but if you planned on making contributions in the current tax year, now may be a good time to do this.
Other changes
The inheritance tax threshold is not now going to be increased significantly in the short term at least but there will be an increase in personal allowances. These points will have a bearing on how your family organises its financial affairs in the round.
As Budget Day approaches, there has been speculation that the Chancellor is thinking about reintroducing some form of apportionment for close companies. In my opinion, an additional charge on dividends and other sources of investment income would be a much more effective way of dissuading owner managers from their present low salary high dividend regime.
In 1989, the then Conservative Government under Margaret Thatcher abolished the so-called close company apportionment rules which had been around since the 1920s. These provisions were intended to ensure that, where the directors of a successful family company decided not to distribute a substantial part of their post-tax trading and investment profits, they were deemed to have done so, subject to the retention of a reasonable sum for the working capital requirements of the business.
Given that the Chancellor of the Exchequer, Nigel Lawson, had recently harmonised income tax and capital gains tax rates at a maximum of 40%, it was considered that a measure designed to ensure that taxpayers should not benefit from a lower (or nil) rate on capital gains when the money could have been distributed as more highly taxed income in the form of a salary or dividend was now redundant.
In recent months, there have been rumours emanating from the Treasury that the present Chancellor is considering the possibility of re-enacting this former legislation. Presumably, the thinking is that, with effect from 6 April 2010, a high income individual will be taxed at up to 50% on his salary or 36.1% on his dividends, but that he only faces a capital gains tax charge of 18% (or sometimes 10%) on the disposal of his shares. Although it seems almost certain that capital gains tax rates will have to rise in the next year because of the gap between the top income tax and capital gains tax rates, the Government would probably wish to retain the present modest charge for those who qualify for entrepreneurs’ relief.
Accordingly, a tax scenario which encourages the retention of profits in owner-managed businesses – which is presently the case – is likely to be stopped. And one way of doing this might be to introduce a Mark II version of the close company apportionment regime.
Another consideration is that, with the impending introduction of higher rates of income tax, many existing unincorporated businesses will be turning themselves into limited companies in order to try and shelter profits at lower rates of tax than would be possible had they remained sole traders or partnerships. In other words, there will be a rush to incorporate not dissimilar to that which occurred in the early 2000s so that taxpayers can enjoy the advantage of extracting business profits via dividends more tax-efficiently than would otherwise be possible.
My own view is that the reinstatement of an apportionment procedure for close companies would have little or no effect on this latter situation other than perhaps forcing some business owners to distribute more profits than they were otherwise minded to do. Nor would it deal satisfactorily with the problem of the disparity between income tax and capital gains tax rates.
Although I do not personally like the idea (nor would many of my clients!), there is no doubt in my own mind that the most effective approach to discouraging owner-managed companies from pursuing the low salary high dividend routine which has been widely practised in the past is to introduce an additional levy on dividends and other forms of unearned income similar to the investment income surcharge which was abolished by the Finance Act 1984. A charge of, say, 15% on investment incomes above a specified threshold would almost certainly put a stop to tax planning of this sort.
This year's budget will be held on 24 March 2010. Commentary from Robert Jamieson, partner with Mercer & Hole and past President of the Chartered Institute of Taxation.
The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Robert you can contact him at robertjamieson@mercerhole.co.uk or call 020 7353 1597.
We will be blogging on Tax Plus Blog andSME Plus Blog on Budget day. If you do not already subscribe to our blogs click here for Tax Plus Blog or here for SME Plus Blog to ensure you get our comment and analysis as and when it happens.
Even before the Chancellor’s Pre-Budget Report 2009 on 9 December the Conservative Party has indicated that they will have an 'emergency' Budget within fifty days of winning the general election next year.
Highlights of their proposals are:
It remains to be seen whether the Pre-Budget Report picks up on any of these ideas.
We will be blogging on SME Plus Blog and Tax Plus Blog on Pre-Budget Report day. If you do not already subscribe to our blogs click here for SME Plus Blog or here for Tax Plus Blog to ensure you get our comment and analysis as and when it happens.
Barry Hallam is a senior manager at Mercer & Hole. If you would like to discuss the contents of this post with Barry you can call him on 020 7353 1597.
Chancellor Alistair Darling has confirmed that he will make his Pre-Budget Report statement on Wednesday 9 December 2009. We will be providing full analysis of Pre-Budget Report announcements on the day.
We will be blogging on SME Plus Blog and Tax Plus Blog on Pre-Budget Report day. If you do not already subscribe to our blogs click here for SME Plus Blog or here for Tax Plus Blog to ensure you get our comment and analysis as and when it happens.
Lisa Spearman is a partner at Mercer & Hole. If you would like to discuss the contents of this post with Lisa you can call her on 020 7353 1597.
Although I think the 2009 Pre-Budget Report will not contain any shockers ahead of the General Election next year, I do feel that the tax take has to be increased somehow and this could lead to 'tweaks'. My own 2009 Pre-Budget Report prediction could be a change to the tax rule on 'flipping second homes' to mitigate Capital Gains Tax (CGT). This rule was widely publicised in the press earlier this year, following the criticism of MPs and their expenses, but actually is available to everyone with two or more homes and not just MPs!
Broadly speaking, a main residence (sometimes referred to as a Principle Private Residence) is CGT-free on a disposal provided the property was not purchased for the sole reason of making a profit and the dwelling was an individual's only or main residence throughout the period of ownership. Exemption also extends to gardens and grounds of up to half an hectare. The last 36 months are also always exempt. All fine so far but what happens where you have two or more main residences? The rules allow you to secure at least the last 36 months of any gain tax-free by flipping your main residence election to your second home for 1 month. You lose the benefit of 1 month of relief on one property but gain 37 months relief on another. This can represent a real tax saving.
If another residence is acquired, you have an opportunity to make an election for which property you wish to be covered for which periods otherwise the Revenue will choose for you. The election must be made within two years of the date the new situation arose and if one house is replaced then a new two year period begins. You must actually reside in both properties, for some time at least, and any period of ownership not elected as the main residence will be chargeable to CGT. There are also rules relating to the fact that a husband and wife, or civil partnership, can only have one main residence between them.
Please get in touch if you would like to know more about whether you can take advantage of these rules.
We will be blogging on SME Plus Blog and Tax Plus Blog on Pre-Budget Report day. If you do not already subscribe to our blogs click here for SME Plus Blog or here for Tax Plus Blog to ensure you get our comment and analysis as and when it happens.
Helen Mckie is a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Helen you can call her on 01727 869141.
Once upon a time a long time ago , well 2003, anyway, there was a rather odd tax case on share options which led to the situation in which, on the exercise of share options, subject to income tax, followed by a sale of those shares, there was an effective double counting of the base cost. This meant that the fortunate taxpayers realised capital losses on the sale for tax purposes (although not suffering a commercial loss). The sums involved were often large and although questions were asked at the time, HMRC was insistent that this was the correct treatment.
Unexpectedly, HMRC has now received legal advice that its previous guidance was wrong and issued new guidance on this subject. This can be checked at http://www.hmrc.gov.uk/briefs/cgt/brief3009.htm. The first statement was so unhelpful that a further Q&A was issued at http://www.hmrc.gov.uk/briefs/cgt/brief6009.htm.
To summarise the position, there are two limbs to this new guidance. Firstly, any future transactions of this type will not realise a capital loss, but that is perhaps less important than the second limb which affects losses previously claimed but not yet used. There are many of these losses around as some of the sums involved were very substantial and there is now a serious question mark over whether they can be used in the furture. HMRC are firmly of the view that the answer is no.
The key point is that anyone who thinks they have such losses brought forward from earlier years should review their position to ensure that they do not end up with unexpected tax bills should they realise a gain in the future.
Comment on this blog in the space provided below. Lisa Spearman is a Tax partner at Mercer & Hole.
Income tax increase
Currently income is taxable at either the basic rate of 20% on taxable income up to £37,400 and the higher rate of 40% applies to taxable income over that level.
Today’s budget has announced an additional higher rate of income tax of 50%, effective from 2010/11 for individuals with taxable income above £150,000.
Not only is this higher than the 45% tax rate initially announced in the 2008 pre Budget report but it will come into effect one tax year earlier than was expected.
The increase affects all income and therefore dividends otherwise taxable at the new 50% will be taxable at the new rate of 42.5%. The rate increases apply also to income of trusts and therefore the trust tax rate will increase to 50% and trust dividend rate will be 42.5%.
Loss of personal allowance
The basic personal allowance which provides an amount of tax free income will be gradually eliminated where a person’s total ‘adjusted net income’ is more than £100,000 by reducing the allowance by £1 for every £2 that the income limit is exceeded. Therefore, if the adjusted net income is £105,000, this exceeds the £100,000 limit by £5,000 and £2,500 of personal allowance would be lost.
Comment on this blog in the space provided below. Barry Hallam is a Senior Tax Manager at Mercer & Hole.
With less than a week until Chancellor Alastair Darling’s second Budget statement the speculation as to what may be announced on Wednesday 22 April 2009 is mounting.
Political commentators such as www.politics.co.uk suggest that on one hand it should be a neutral Budget, but on the other hand spending is now part of the Government’s DNA. The British Retail Consortium (BRC), is reported in The Telegraph as saying that, “the high street is in need of some retail therapy”.
The Times reports that, “the Budget will make or break renewable energy” and the BBC is giving its own predictions here.
From a tax perspective much has already been announced in respect of the current tax year, but there may be changes announced for later years. Those dealing with the taxation of non-domiciled UK residents would welcome some simplification of the horrendously complex new rule introduced in Mr Darling’s first Budget last year.
As usual, we will just have to wait and see!
We will of course be blogging on SME Plus Blog and Tax Plus Blog, providing analysis on the key highlights next Wednesday.
If you do not already subscribe to our blogs click here for SME Plus Blog or here for Tax Plus Blog to ensure you get our comment and analysis as and when it happens.
The Chancellor will make his Budget statement on Wednesday 22 April 2009. We will be providing analysis of Budget announcements on the day.
HMRC Revenue & Customs announced yesterday that they are taking steps to close a “highly contrived” tax avoidance scheme. The arrangements involve complex structures including both companies and trusts (possibly offshore). Some details can be found on the HMRC website and a ministerial statement will be made in Parliament today.
Maybe this will help plug the shortfall in tax receipts discussed in The Times on Saturday. The article indicates that HMRC are stepping up there investigations into Self Assessment Tax returns. The returns for the year to 5 April 2009, if not already filed, are due by the end of the month.
In a recent posting on sister blog SME Plus, it was highlighted that effective from 9 December 2008 taxpayers can settle their self-assessment tax bills by credit card (for an extra fee of 1.25%).
There are 8 Consultation documents issued alongside the PBR documents which are to a greater or lesser degree related to the new powers and penalties regime which comes in from 5 April 2009. The documents refer to the proposed new customers charter (reference the previous taxpayers charter of the 1990s) and there is also particular attention paid to ensuring that returns are filed and tax is paid on time…slightly at odds with the 2 pages of FAQs on the HMRC website offering support to distressed businesses. We will review the consultation documents and respond to them in detail as necessary.
Chancellor Alistair Darling has announced in his Pre-Budget Report that the top rate of income tax is to be increased to 45% - but not until April 2011 and only on income over £150,000. This applies to income other than dividend income which will be taxed at 37.5% (up from 32.5%)
This is part of a package of proposed tax increases to help fund the short term measures announced elsewhere in his report.
One of the Press notices confirms that the rules on income shifting will NOT now be introduced in Finance Act 2009 despite their deferral from the 2008 Bill. The income shifting rules had been proposed as a method of dealing with the Arctic Systems type situation where a lower rate paying spouse benefits from the earnings of a higher earning spouse. The matter is being kept under review which – it is to be hoped – is code for being forgotten about….
The High Court has overturned a Special Commissioners decision in the case of Commissioners of Revenue & Customs v Grace. According to Taxation magazine this is the first time in 100 years that the court has overturned a Special Commissioner’s ruling.
The case involved an airline pilot who claimed he was non resident in the UK as he had settled in South Africa even though he returned to the UK regularly to carry out the duties of his UK employment.
The case bucked the trend in recent resident cases in that the taxpayer won in front of the Special Commissioners, and he represented himself. Mr Justice Lewison ruled in the High court that that the Special Commissioner (Dr Nuala Brice) had “made errors in arriving at her decision” adding that “the only possible conclusion” was that Mr Grace was resident in the UK.
HM Revenue have confirmed to the Chartered Institute of Taxation, and other members of the Compliance Reform Forum, that there will be a second Offshore Disclosure Facility, or “opportunity” as it now being referred to as, some time next year. The exact details have yet to be agreed and HMRC are enlisting the help of the CIOT and other professional bodies to make a contribution to the design of the new opportunity”
The HMRC statement on this can be found on the CIOT website. There may be a more public announcement in the Pre Budget Report.
This is a general reminder that the period in which repayment claims can be made is to reduce from 6 years to 4 years. The Irish revenue have issued a reminder for their purposes and it is important that UK claims for older years are made as soon as possible to avoid missing the cut off date in the UK.
Back in July we reported that a second “Tax Amnesty” was being seriously considered by HM Revenue & Customs. Since then we have heard nothing further until a report in Accountancy Age which confirms that HMRC are still considering this but are looking for a high profile prosecution to act as deterrent but are apparently having difficulty finding one.
With a new Chief Executive, Lesley Strathie, in charge at HMRC a second amnesty might be one of her first announcements. Alternatively it might turn up in the 2008 Pre Budget Report which is now expected to be in mid November.
If you find yourself in the position of having undisclosed income (overseas or UK) it probably makes sense to approach HMRC before they come to you. You should seek professional advice on this subject as a disclosure (and the subsequent enquiry by HMRC) needs to be managed carefully and can be fraught with difficulties.
A new penalty regime is being introduced which, in some circumstances, is much tougher than previously. It is unlikely that a prompted disclosure under the new regime would incur a penalty of less than 35%. If HMRC have already written to you about an offshore account they may take the view that you have been prompted!
It has always been a worry that those who buy holiday homes abroad through a company could be liable to a tax charge as a benefit in kind. In the 2007 Budget it was announced that the Government would introduce legislation to remove this possibility provided that there was no tax avoidance involved and all that the company did was hold the property.
The legislation has finally made the statute book in the Finance Act 2008 and provided the conditions are met the exemption is deemed to have always had effect. H M Revenue & Customs have indicated that if tax has been paid in the past on such a property then a claim for a refund can now be made.
Details of how to make a claim can be found here.
According to the Sunday Times HM Revenue & Customs are planning another go at trying to persuade those with undeclared overseas bank accounts to come forward. This time they are not expected to be as generous as the first time and in some cases they will be tough. Dave Hartnett, the acting Chairman of HMRC is quoted as saying:
“Some people will go to jail — I have no doubt about that, for example where they have lied to us during a previous investigation. We do not tolerate that at all.”
There are no details as yet of the mechanics of the new arrangements but if you have something you think should be disclosed you should contact your professional adviser before HMRC contact you.
HM Revenue & Customs (HMRC) have warned of a number e-mail scams inviting people to provide credit card details in order that a tax refund can be sent to them. The latest example includes an official looking form requesting full details of a credit card with the instruction that it must be returned within 2 days or the tax refund will be declined!
It even covers the situation where you do not have a credit card by inviting you to provide details of a nominee.
As HMRC say on their website:
HMRC would not inform customers of a tax rebate via email, or invite them to complete an online form to receive a rebate of tax.
Do not visit the website contained within the email or disclose any personal or payment information.Email addresses used to distribute the tax rebate emails include:
service@hmrc.gsi.gov.uk
claims@hmrc.direct.gov.uk
notice@hmrc.gov.uk
hmrc@hmrc.gov.uk
admin@hmrc.gsi.gov.uk
info@hmrc.gsi.gov.uk
no-reply@hmrc.gsi.gov.uk
HM Revenue & Customs (HMRC) does not send out emails using these email addresses.
This year’s Finance Bill is close to gaining Royal Assent and the Chartered Institute of Taxation (CIOT) has already submitted its “wish list” for the 2009 Budget. One of the suggestions put forward is that income tax and National Insurance Contributions (NIC) should be merged into one tax. Failing that “radical” change, the CIOT suggests that there should be further alignment between the two taxes.
The wish list forms part of a submission by the CIOT to Dave Hartnet the acting head of HM Revenue & Customs. Other items on the wish list include:
Full details of the CIOT’s submission can be found here
Please find below a blog which you might find of interest from my colleague Cathy Corns, who writes for our sister blog SME Plus...
HMRC has published new guidance on the new penalty provisions that will apply from April 2008.
HMRC states that it has designed the new penalties so that:
The new penalties initially apply to VAT, PAYE, National Insurance, Capital Gains Tax, Income Tax, Corporation Tax and the Construction Industry Scheme.
Further information can be found at:
http://www.hmrc.gov.uk/about/new-penalties/penalties-leaflet.pdf
http://www.hmrc.gov.uk/about/new-penalties/faqs.htm
It is not often that the worlds of taxation and sport coincide but every now and then they do. Many years ago there were tax cases about whether the proceeds of benefit matches for cricketers were taxable and in 1991 England Goalkeeper Peter Shilton was the subject of a case relating to signing-on fees. More recently we have had a case involving Andre Agassi relating to sponsorship. Earlier this month the decision in a case before the Special Commissioners was published which concerned a professional Rugby Union player.
Simon Emms formerly of Llanelli Scarlets and Bath claimed income tax relief for almost £13,000 in respect of additional food and nutritional supplements that he needed to maintain the…
“required level of physical fitness for his employment as a professional rugby union prop forward”
It is a long established rule that for an expense to be allowable against employment income it must satisfy four conditions, namely it must be expended
Unsurprisingly Emms’ appeals against income tax assessments for 1999/2000, 2000/2001 and 2001/2002 were rejected on all four counts by the Special Commissioner. Full details of the decision can be found on the Tax Tribunals website.
Please find below an interesting blog from my colleague Cathy Corns who writes for our sister blog SME Plus Blog...
You may well recall that the Chancellor announced some changes to personal tax from April next year, the main one being the reduction in the basic rate from 22% to 20%. Whilst the latter may seem to be nothing but good news there is unfortunately a knock-on effect on charities. At present if you are a higher rate taxpayer and give £100 to a charity it can reclaim basic rate tax at 22/78 increasing the value of your gift to £128 in its hands. The cost to you, after higher rate tax relief, will reduce to £77.
Continue Reading...The immediate reaction to the Chancellor’s speech is that much of what he said was smoke and mirrors – The Inheritance Tax doubling of the nil rate band is not quite what it seems – 2 x 300,000 is still 600,000 so far as I know…
The capital gains tax simplification represents a significant increase in tax in a number of cases and if you are non UK domiciled and UK resident then keep checking this page. We are writing frantically as I type and a more detailed and coherent response will follow shortly….
As mentioned on my colleagues SME plus blog , The Chancellor of the Exchequer, Alistair Darling, will be presenting his 2007 Pre-Budget Report and the outcome of the Comprehensive Spending Review on the afternoon of Tuesday 9th October.
Cathy Corns will post details of important announcements here shortly after the end of his speech.
It was reported yesterday The Observer , and in both The Guardian and The Independent today that The TUC has joined the campaign to abolish the current tax rules for those resident but not domiciled in the UK.
The Sunday Times on the other hand ran a report about a poll that suggested that “two people in every five are either planning to move abroad or have seriously considered doing so”.
Maybe the new Chancellor will touch on this in his first Pre-Budget report next month.
Continue Reading...HMRC have tightened up their interpretation of rules which can enable employers to pay for taxis for late working employees without incurring a tax liability.
If an employee works later than usual at night it is not uncommon for an employer to pay for a taxi home. Is this a taxable benefit? In general – Yes – but there is an exemption in certain circumstance provided by the tax legislation (section 248 Income Tax (Earnings and Pensions) Act 2003).The circumstances are:
You may recall that earlier this week Cathy Corns, Corporate Tax Partner at Mercer & Hole wrote an article on the Jones v Garnett case for her SME Blog. Following on from this piece Cathy has submitted an additional blog on the topical "Arctic Systems Ltd" case.
The House of Lords issued their judgement in the case of Jones v Garnett (also known as the “Arctic Systems Ltd” case) on 25 July 2007. To much rejoicing the case was decided in favour of Mr and Mrs Jones. However, the Revenue is a bad loser.
On 26 July a written Ministerial statement was issued by the Exchequer Secretary to the Treasury, announcing the intention to change the law.
Using the standard “the Government is committed to maintaining fairness in the tax system” statement the Government now believes it needs to do something to “ensure that there is greater clarity in the law regarding its position on the tax treatment of income splitting”. Actually, in my opinion, the law is now clear – it may not say what the Revenue wants it to, but that is unfortunate (for them) rather than unclear.
Cathy Corns, Corporate Tax Partner at Mercer & Hole wrote this article for her SME Blog earlier today.
Continue Reading...This all seems to have been going on for so long you may need reminding of what all the fuss is about; so
- Mr and Mrs Jones ran a small IT company of which Mr Jones was the sole director. They each owned one share in the company took a small salary and extracted the majority of their required funds by way of dividend. These, of course, were paid in line with the shareholdings, on a 50:50 basis.
It has been announced that the House of Lords Judgement on the case of Jones v. Garnett will be released on 25 July. I had been expected that this would not be available until after the Summer recess.
Watch this space for further details next week.
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There has been further press coverage in the The Times online newspaper over the weekend about the taxation of non domicilaries in the UK. The debate was sharpened when the director of the CBI, Richard Lambert, raised questions about the fairness or otherwise of the UK’s tax laws.
The long running tax case of Jones v, Garnett has reached the House of Lords today. The story so far is summarised in the Times and a more technical summary can be found on accountingweb. I will keep you informed of developments in what is sure to be a landmark judgement either way.
There has been much press coverage recently about HM Revenue & Customs targeting residential landlords particularly those in the Buy-to-let market. This originated from a piece in The Times which was picked up by several other papers.
There is nothing new in this which serves to highlight the need for landlords to seek professional advice to establish their tax liabilities. The Chartered Institute of Taxation have received a “message” from the Revenue stating that there was no intention of having a “crackdown” on landlords as implied by The Times. The message stated:
'By way of background, HMRC is not planning a tax crackdown in the way implied by the Times article. HMRC is planning to take a concerted approach to helping landlords of all descriptions (not just in the buy to let market) to understand and comply with their tax obligations in what they recognise to be a complex area. In taking this approach the explicit presumption will be that the majority of landlords want to make a correct return but that many may need some help to understand exactly how to do so.”
The full text can be found on the CIOT website. As pointed out in The Times article if someone has undisclosed tax liabilities they can currently take advantage of the special disclosure facility but action must be taken by 22 June.
Today – 1 June 2007 - Is Tax Freedom day
- that point in the year when the average taxpayer has finally earned enough to cover all their taxes and at last can start earning for themselves.
Each year the Adam Smith Institute calculates when Tax Freedom Day falls and this is becoming later every year. More details can be found here.
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