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Certificates of Tax Residence

HMRC have updated their guidance on how to apply for certificates on tax residence which is applicable for individuals and companies that have overseas income. In order to be taxed in the UK, the overseas tax authority will ask for proof of UK tax residence which is in the form of a “Certificate of Residence” issued by HMRC. Here is a link to the updated guidance on tax residence on HMRC’s website.

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Capital Gains Tax Boston UK

Capital gains tax planning for properties

This client came to us seeking advice on mitigating capital gains tax on a property. We considered the client’s personal and professional circumstances in detail and explored various options allowing for the potential tax liability to be mitigated. We finally developed a strategy using legislation, HMRC’s guidance and extra statutory concessions which if carefully implemented would allow for the majority of the capital gains tax liability to be eliminated.

Our analysis: This was a complex case and required specialist knowledge of the legislation and HMRC guidance on various reliefs and exemptions. Seeking tax advice from a specialist firm may cost a little but the tax savings are very much worth it.

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Tax Investigations and Planning Seminar – 29 November 2018 – Glasgow

We will be hosting a free tax seminar at the Double Tree by Hilton, Strathclyde, Glasgow on 29th November. The following topics will be covered:

  • Tax investigations – latest developments
  • Tax case update
  • Budget 2018
  • Property tax planning

The seminar will provide specialist insight into the above areas. We are expecting bankers, business persons, solicitors and accountants to attend the seminar. The seminar qualifies for CPD points if these are relevant to you.

Refreshments and snacks will be provided.

If you would like to attend, please send an email to  seminar@churchilltaxconsultants.com to book a place.

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Budget 2018

Here are some of the selected key budget announcements from a tax adviser’s perspective:

Annual Investment Allowances (AIA): AIA have been increased from £200,000 to £1 million from 1 January 2019. This increase is being allowed for a period of 2 years. The AIA gives 100% tax relief on plant and machinery in the year of acquisition instead of the normal capital allowances that reduce each year. Transitional rules will apply for periods spanning 1 January and any periods ending after 1 January 2019 will receive a proportionate increase. This relief can be very useful for companies that invest in plant and machinery each year or are planning to incur significant costs in the coming two years.

Entrepreneur’s Relief: There will be two important changes to Entrepreneur’s Relief:

a. The qualifying period of 12 months ownership has been extended to 24 months from 1 April 2019. Entrepreneur’s relief allows individuals to be taxed at a reduced rate of 10% instead of the         normal capital gains tax rates on disposal of an interest in a business or shares in a trading company.

b. To qualify for the relief, an individuals must be an employee or a director of company and own 5% or more of the voting rights and share capital of the company. From 29 October 2018, they must also be entitled to 5% of the company’s distributable profits and net assets.

Principal Private Residence Relief: There will be two important changes to PPR relief with effect from 6 April 2020

a. Currently, the final 18 months of ownership of a property which had previously been used as a main residence were deemed as the period of residence. The final period of deemed residence will now be restricted to 9 months

b. The letting relief which allows up to £40,000 of the gain (relating to a period the property was let) to be exempted will be restricted to the periods where the owner jointly occupies the property

Non resident landlords:

a. Currently non resident landlords are chargeable to capital gains tax on sale of residential properties only. This will be extended to commercial properties from 6 April 2019

b.Non resident corporate landlords will be subject to corporation tax at 17% instead of the normal 20% from 6 April 2020

Research & development tax relief:

Currently small and medium businesses that are not paying any tax can surrender their tax losses to HMRC in exchange for an unrestricted cash credit. Under the proposed changes, this cash credit will be limited to three times the PAYE and NICs liabilities of the business for the accounting period in which the qualifying research and development cost has been incurred. This change is proposed to come into effect from 1 April 2020.

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Corporation Tax Boston UK

McFarlane [2018] TC 06512 – Tax Tribunal case lost for deliberate behaviour

The First Tier Tribunal judge found in this appeal that there was a valid discovery and the appellant’s actions were considered deliberate. The appellants agents FTR Accountants Company Limited had made a series of mistakes and errors in the appeal process and did even turn up to the hearing with the excuse that they had got their diaries wrong. This case demonstrates the importance of cooperating with HMRC from the outset and to ensure the formal appeal process is adhered to by the agents as any mistakes could prove to be costly.

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VAT Boston UK

Tax fraudster jailed for VAT repayments

David Handley, aged 43, from Leicester has been jailed for four years for VAT repayment fraud. Mr. Handley was the mastermind behind a gang of 18 people using forged identities to set up businesses and claim more than three hundred fraudulent VAT refunds. In his supervision, Mr. Handley had set up almost 46 illegitimate businesses purely to claim tax from HMRC. Read more…

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Accountant Boston UK

Football agent loses tax avoidance case

Jerome Anderson, a former football agent has finally lost his tax case of £1.2 million against HMRC. The Upper Tribunal concluded that Mr Anderson and eight other individuals failed in using this scheme which involved investing in recruiting young players in South Africa. Mr. Jerone Anderson was trying to use this investment to claim a bogus loss of £3 million in order to significantly reduce his tax liability. Read more..

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Corporation Tax Boston UK

Code of Practice 9 tax investigation closed

This client came to us from London after he was referred to our firm by his accountants. This Code of Practice 9 ( COP 9 ) tax investigation case was being dealt with by a forensic accountant in Wales who decided to close his business and do a runner after taking a large fee upfront. The case involved undisclosed income from various sources over 13 years and involved complex transactions. Our team of tax experts took on the case and after thoroughly investigating the facts and meeting with HMRC officers, were able to reach a settlement that was acceptable to our client and HMRC. The case was closed and our client thanked us for our efforts to bring his life back to normal.

Our analysis: Code of practice 8 and code of practice 9 tax investigation cases are very complex. With Code of Practice 9 cases, there is immunity for making a full disclosure. If however, the tax payer does not make a full disclosure, there is a risk of prosecution by HMRC. There have been numerous cases of tax payer being sentenced to prison for not making a full disclosure during the Code of Practice 9 enquiry. Our team of tax specialists have extensive experience in dealing with Code of Practice 8 and Code of Practice 9 investigations and negotiating best possible settlements for the clients.

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