Tax update - April 2019

In this month’s update we report on (1) HMRC’s guidance on self-reporting failure to prevent the facilitation of tax evasion; (2) HMRC’s consultation on secondary preferential creditor status on insolvency of a business; and (3) a Parliamentary Select Committee’s call for a public register of beneficial ownership in each British Overseas Territory.

We also comment on three recent cases relating to (1) the concept of “staleness” in discovery assessment appeals; (2) a failed DOTAS application brought by HMRC; and (3) the extra-territorial reach of HMRC information notices.

News items

HMRC publishes guidance on self-reporting failure to prevent the facilitation of tax evasion

On 21 February 2019, HMRC published guidance explaining how and when a representative of a company or partnership should self-report the organisation’s failure to prevent the criminal facilitation of UK tax evasion. The guidance sets out the information that must be submitted to HMRC. Read more

HMRC consults on secondary preferential creditor status for employee and customer taxes on insolvency of a business

On 26 February 2019, HMRC launched a consultation entitled “Protecting your tax in insolvency”, on the government’s proposal to make HMRC a secondary preferential creditor for taxes paid by employees and customers (the new powers are contained in the proposed Finance Bill 2019-20). Read more

Select Committee calls for public register of beneficial ownership in British Overseas Territories

Case reports

Beagles – when does delay by HMRC render a discovery assessment invalid?

In Clive Beagles v HMRC [2018] UKUT 380 (TCC), the Upper Tribunal (UT) has held that a delay of nearly two and a half years between HMRC discovering that a taxpayer’s self-assessment tax return was insufficient and issuing an assessment, was too long as the discovery had become “stale” and the assessment was therefore invalid. Read more

Curzon – contractor loan scheme notifiable under DOTAS but scheme administrator not a “promoter”

In HMRC v Curzon Capital Ltd [2019] UKFTT 0063 (TC), the FTT has held that a contractor loan scheme was a notifiable arrangement for the purposes of the disclosure of tax avoidance schemes (DOTAS) regime, but that the administrator of the arrangements was not a promoter. Accordingly, HMRC’s application for an order that the arrangements were notifiable was dismissed. Read more

Jimenez – information notices have extra-territorial reach

In R (oao Jimenez) v HMRC [2019] EWCA Civ 51, the Court of Appeal has confirmed that HMRC can issue an information notice to a taxpayer under paragraph 1, Schedule 36, Finance Act 2008 (FA 2008), even if the taxpayer is non-resident. Read more