Tax update October 2018

In this month’s update we report on HMRC’s Spotlight 45 on umbrella company avoidance schemes, an update to HMRC’s Venture Capital Schemes Manual; and call for evidence on HMRC powers.

We also comment on three recent decisions relating to the validity of determinations under section 100, TMA  HMRC’s power to remove Gross Payment Status from sub-contractors and notices to file tax returns.

News items

HMRC publishes Spotlight 45 on umbrella company avoidance schemes

On 23 August 2018, HMRC published Spotlight 45 in which they provide guidance on what taxpayers should do if an agency or umbrella company offers to reduce their tax liability. Read more.

HMRC updates its guidance on VCTs

HMRC has updated the guidance in its Venture Capital Schemes Manual on venture capital trusts (VCTs) to reflect changes made by Finance Act 2018. Read more.

Call for evidence on HMRC powers

The House of Lords Economic Affairs Finance Bill Sub-committee has invited written contributions for its inquiry on the draft Finance Bill 2018. The Sub-committee is considering developments in the balance of powers and safeguards between HMRC and taxpayers. Read more.

Case reports

Expion – No valid determination of penalties

In Expion Silverstone Ltd v HMRC, the First-tier Tribunal (FTT) has held that no valid determination was made by an officer of the board under section 100, Taxes Management Act 1970 (TMA), in respect of penalties issued following the failure to file Employment Intermediaries returns. Read more.

J P Whitter – HMRC not obliged to consider impact of cancellation of Gross Payment Status on business

In J P Whitter (Water Well Engineers) Ltd v HMRC, the Supreme Court has confirmed the view of the Court of Appeal that HMRC has the power to remove “Gross Payment Status” from sub-contractors under the Construction Industry Scheme, without an obligation to take into account the impact on the tax-paying business. Read more.

Groves – A notice to file must be given by an identified HMRC officer

In Groves v HMRC, the First-tier Tribunal (FTT) has allowed an appeal against penalties issued by HMRC pursuant to Schedule 55, Finance Act 2009, for the late filing of a tax return as the notice to file was not signed by an “Officer of the Board” and in any event, the notice was invalid as it was not given by HMRC for the purpose set out in section 8, Taxes Management Act 1970 (TMA) and therefore any penalties issued for late filing of the return were invalid. Read more.