What’s new in the world of Tax?

The Accountant tops US box office 18.10.16

Ben Affleck’s latest film, The Accountant, topped the US box office on its opening weekend. The crime drama took $24.7m (£20.3m).

See, we told you we were exciting!

Bye bye baby? Chancellor considers dropping Autumn Statement

Philip Hammond is considering returning the Autumn Statement to its original function of fiscal forecasting, reining back the Treasury to focus it on tax and spending decisions in the spring Budget.

A plaintive cry is heard from tax advisers who have had to assimilate every single tax change made at the Autumn statement for the last few years: “yes please, that would be nice!”

Paying tax and NIC is not enough to avoid jail: accountant gets jail sentence for beauty parlour exploits

An accountant from Stockport has been given a six month suspended jail sentence after admitting running a brothel used for prostitution, although the court was told the business from which it operated paid all income tax and National Insurance contributions due (paying your taxes is not a mitigating circumstance for illegal activity then!)

The accountant appeared before Stockport magistrates court after his business had been raided following a tip off to police by his wife. While it operated as a legitimate beauty salon offering a range of therapies, the court was told the accountant also managed a number of women from the premises who provided sexual services.  The court heard that the accountant took a cut of 30% to 50% from the women, and was also said to provide advice to those who wished to set up their own business.

We all like to go the extra mile for our clients, but this is not what we mean!

You just keep me hanging on!

angry-office-worker-509970_lYes we have used this heading before in Taxing Times but it is just so relevant…this time the First Tier Tribunal has found that a taxpayer had a reasonable excuse for late payment of VAT when his agent made numerous attempts to call HMRC before the deadline to request time to pay but was unable to get through because the lines were permanently engaged.  The tribunal rejected HMRC’s argument that the taxpayer should have expected the lines to be busy around the quarterly payment and submission date.  The Tribunal considered that it was HMRC not the taxpayer who should be expected to know which periods were particularly bust and make arrangements to deal with increased demand at peak times.  As if…!

A small victory but we will take what we can.

Knock knock! – Taxman increases property raids  26.9.16

HMRC has increased the number of property raids they carry out as part of criminal investigations into tax evasion by 28% in the last year. A total of 761 premises were raided, up 53% on five years ago. Paul Noble, tax director at Pinsent Masons, which collated the figures, said: “Criminal prosecutions for tax evasion can be notoriously difficult to bring to court, so raiding property is a vital way for HMRC to get hold of the crucial evidence it needs.”

Rooney and Southgate face tax avoidance bills

David Sanko-2Wayne Rooney is facing a £3.5m tax bill after HMRC challenged investments he had made in a film investment partnership. The footballer used Invicta 43 to shelter £12.5m, which he borrowed, to avoid tax legally on his then £4m annual salary at Manchester United for three years. Separately, Gareth Southgate has also been hit by a tax demand after investing in partnerships set up by investment firm Ingenious, which is considering whether to contest a recent tribunal decision and the resulting £620m tax bill. The final decision on what tax might ultimately be payable could be years away as both HMRC and the scheme providers are likely to consider onward court appeals.

Have I got news for you….BBC stars face tax probes!

HMRC has revealed that over 100 BBC stars are being investigated for alleged tax avoidance having used personal service companies to minimise their tax bills. BBC newsreaders Tim Willcox and Joanna Gosling are two such stars. The pair are appealing against a ruling by HMRC that they failed to pay enough tax during years in which they claimed they were not employed by the corporation, and were instead paid via their personal service companies. Jennifer Henderson, the BBC’s head of global mobility and employment tax says the “appeals are likely to be the first cases to test the freelance model in the broadcasting industry against the IR35 legislation.”

This may be an interesting case on the “disguised employment” and “fake freelancers” that HMRC are so keen to crack down on.  Watch this space…….

Cherie Blair’s challenge to buy-to-let tax judicial review fails

3898651_xxlCampaigners, led by Cherie Booth QC, say they will continue to fight against changes to taxation of buy-to-let income after their application to launch a judicial review of the new law was refused. Cherie said: “The Government does not have the right to deprive British citizens of their hard-won property rights in a discriminatory way.”  On the other hand, Timothy Brennan QC, representing the Government, said that Parliament had the right to change tax law how it wished, and that it was normal for individuals and companies to be taxed differently. Residential Landlords’ Association policy director David Smith said: “By implementing a policy that will increase rents and choke off the supply of homes to rent, the Government is making it more difficult for tenants to save for a home of their own”. But Betsy Dillner, director of renters’ rights group Generation Rent, said the group was in favour of the changes: “For too long the tax system favoured people who bought homes to make a profit over people who just wanted somewhere to live”.

This is a change which affects a reasonably small number of taxpayers, is unlikely to be changed but is definitely contentious and polarises opinion. 

And finally…..French taxman’s grave mistake

A demand for property tax has been sent to the grave of a deceased woman in the Brittany town of Sarzeau.  The local mayor said he was “dumbfounded” by the demand from the regional tax office, which was addressed to “Grave 24, Row E, Cemetery Road”!!

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Nov 20

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