Tax update 21/08

Keep up to date with the key announcements made this past week.

HMRC has produced updated guidance on disguised remuneration settlement terms

HMRC have updated a number of their guidance pages on disguised remuneration tax schemes. The changes relate to those made to the loan charge in the Finance Act 2020.

The updates come as a consequence of the recommendations made by Sir Amyas Morse’s independent review. Further details of the changes announced in the Finance Act 2020, can be found in our previous article.

The disguised remuneration guidance update include information on those who made a voluntary restitution that will, as a consequence of the Finance Act 2020 changes, now not be subject to the loan charge. The updated guidance can be found here.

If you have outstanding disguised remuneration loans that are not subject to the loan charge you can settle them under the August 2020 terms.

The pre-existing settlement terms from November 2017 will be available until 30th September 2020, after this point only the August 2020 terms will apply.

Further guidance is set to be published in autumn of 2020 for those who are looking to settle liabilities in relation to loans still subject to the loan charge.

HMRC retighten timeframe for reporting and paying capital gains tax on UK property

HMRC have updated their guidance for capital gains tax (CGT) on UK property.

The update confirms that, as a result of the coronavirus pandemic, HMRC will not be issuing late payment penalties for transactions completed between 6th April- 30th June 2020.

The updated guidance also confirms that late filing penalties will occur were the sale of UK property is not reported. Late payment penalties will also apply on any CGT not paid within 30 calendar days for transactions taking place on or after 1st July.

They will also be charging interest on any payments made after for all transactions including those from 6th April-30th June.

Coronavirus self-employment income support scheme

New guidance to assist people on deciding if they can claim via the self-employment support scheme grant has been published by HMRC. Claims may be made where a taxpayers business has been adversely affected by the coronavirus pandemic.

Whilst there is no minimum threshold over which a business’ income or costs need to have changed, any individuals wishing to make a claim will have to keep records of how and when their business was adversely affected.

Capital Gains Tax simplification review

The Chartered Institute of Taxation (CIOT) have written to the Office of Tax Simplification regarding the call for evidence on the Capital gains tax simplification review. In the letter the CIOT have raise three high-level areas of concern:

“1.We were puzzled at how the line of enquiry fits into the OTS’s statutory remit of simplification when it appears to move into areas of tax policy;

2. We thought there should be more recognition of the contrasts between income regularly arising and capital gains, especially from long held assets; and

3. Departing from the current rebasing for CGT purposes on death, whatever its other merits, would introduce elements of complexity”

Stamp Duty Land Tax Housebuilders relief

The CIOT have also written to the HM Revenue & Customs regarding Stamp Duty Land Tax (SDLT). The purpose of the letter is to seek clarification, following the court of appeal’s decision in the Pollen Estate case.

They question whether partial relief would be available where members of the LLP, or the partners in a partnership, consist of qualifying and non-qualifying house building companies.

CIOT comments on HMRC’s call for evidence on Data and Transparency

Following HMRC’s call for evidence on data and transparency the CIOT have published their response to the four questions HMRC asked.

Included in the CIOT’s response are;

  • Ideas on how HMRC can improve the visibility and access to the data HMRC publishes.
  • Ideas for how publishing further data may improve understanding of how HMRC uses its powers.
  • Ideas on important information HMRC should publish to improve trust and transparency and;
  • How it believes the suggestions would help improve trust and transparency if HMRC implemented them.

Source – Lexis Nexis via Tolley Guidance