HMRC Enquiries: Should I Stay Or Should I Go?
Some issues to consider regarding potential meetings with HM Revenue and Customs in tax return enquiries. A tax return enquiry by HM Revenue and Customs (HMRC) is a possibility for virtually anyone who files a return. A common feature of tax return enquiries (especially for business owners) is that HMRC often request a meeting with […]
Director’s Tax Returns: Don’t Believe Everything You Read!
The majority of owner-managed or family company directors receive a notice to file a tax return from HM Revenue and Customs (HMRC) each year. Most of those directors will regularly extract profits from the company (e.g. as salary and/or dividends). However, in some cases a director may not have received anything from the company, and […]
Director’s Loan Accounts: No Turning Back!
Many company owners have director’s loan accounts (DLAs), and generally understand how they operate. However, there are pitfalls for the unwary. These can sometimes result in tax and National Insurance contributions (NICs) liabilities for the company and/or themselves. For example, an overdrawn DLA can give rise to a tax charge for a closely-controlled company under […]
Company Tax Relief For Shares – A ‘Hidden’ Gem!
Share transactions invariably have tax consequences. For example, when an individual subscribes for shares in their employer company for less than market value, it is generally necessary to consider the income tax (and possibly National Insurance contributions) implications of the share acquisition. A pleasant surprise? However, it is sometimes overlooked that the employer company can […]
Company Tax Relief For Shares – A ‘Hidden’ Gem!
Share transactions invariably have tax consequences. For example, when an individual subscribes for shares in their employer company for less than market value, it is generally necessary to consider the income tax (and possibly National Insurance contributions) implications of the share acquisition. A pleasant surprise? However, it is sometimes overlooked that the employer company can […]
Is HMRC Being Un-‘Reasonable’?
Taxpayers are under threat of penalties if they fail to comply with their various tax obligations. This article focuses on penalties for filing tax returns late. There is an important exception from late filing penalties, which applies if the taxpayer satisfies HM Revenue and Customs (HMRC) (or the tribunals) that there is a ‘reasonable excuse’ […]
Private Residence Relief: When ‘Quality Trumped Quantity’!
Most individuals who dispose of their dwelling-house expect that any capital gain will be subject to private residence relief. Many of them are correct, but unfortunately some are left disappointed. Private residence relief broadly applies to gains accruing to individuals on the disposal of (or of an interest in) all or part of a dwelling […]
Do As We Say – Not As We Do!
The UK tax system can seem harsh, hostile and unforgiving if taxpayers make mistakes when dealing with their tax affairs, such as where tax return errors result in penalties. HM Revenue and Customs (HMRC) also makes mistakes. For example, procedural and administration errors sometimes occur when HMRC opens an enquiry into tax returns. Of course, […]
Gifting The Family Home – An IHT Trap
It is not uncommon for individuals to give away their family home. For example, an elderly widow moving into nursing care may be in the fortunate position of being able to make a lifetime gift of her residence to her adult daughter. This article focuses on a potential inheritance tax (IHT) anti-avoidance pitfall in the […]