Highlights this month include:

• A rare Entrepreneur’s Relief decision.

• HMRC’s latest Trusts & Estates Newsletter.

• The withdrawal of an important VAT concession for student accommodation.

• A new ‘strict liability’ offence for offshore tax evasion

• The amended EU Savings Directive. Ian Maston

Monthly Tax Review

Gabelle MTR Ltd

A Periodic Update for Professional Advisers

May 2014 (Copy Date 2 May 2014)

May 2014 1

CONTENTS

1. CAPITAL GAINS TAX 1.1 Entrepreneur’s Relief: was the Vendor an

Employee? (Corbett) 2. INHERITANCE TAX 2.1 Upper Tribunal Overrules High Court in

Trust Income Dispute (Gilchrist) 2.2 Commission Consults on Tackling Tax

Obstacles to Individuals' Cross-border Activity

2.3 Highlights from HMRC’s Trusts & Estates April Newsletter

2.4 IHT Manual Updated 3. STAMP TAX 3.1 AIM and Other Shares Now Exempt from

Stamp Duty 3.2 Lib Dems Back Away from Mansion Tax 4. PERSONAL INCOME TAX 4.1 Pensions Update 4.2 HMRC Publish Further Guidance on

Payments of "Trail Commission" 4.3 Treasury Prepares Fine Detail of Scottish

Income Tax Rate 5. BUSINESS 5.1 Company's Share of LLP Loss can be Offset if

Company has Amount at Risk in LLP (Hamilton & Kinneil)

5.2 Business not Conducted on a Commercial Basis (Murray)

5.3 What is a Debenture? (Fons HF (in Liquidation))

5.4 CIS Update 6. EMPLOYMENT 6.1 Restricted Securities Scheme in Court of

Appeal (UBS And Deutsche Bank) 6.2 Salary Sacrifice Arrangements did not Work

(Reed Employment) 6.3 Employment Related Securities Update 7. NATIONAL INSURANCE 7.1 Onshore Employment Intermediaries: NICs

TAAR 7.2 Tax and NIC Mismatch for Entertainers to

End 8. VAT & CUSTOMS DUTIES 8.1 Withdrawal of Concessions for New Student

Accommodation and Dining Halls 8.2 Assistance with Electronic Filing 8.3 VAT Deregistration of Insolvent Businesses

9. COMPLIANCE 9.1 Carried-back Loss Relief Claims: HMRC Right

to Enquire into Later Returns and Cotter Distinguished (De Silva and Dokelman)

9.2 Information Notice Set Aside for Lack of Clarity (R D Utilities)

10. ADMINISTRATION 10.1 First-tier Tribunal Discusses Binding Effect of

Lead Case (General Healthcare Group) 10.2 New Strict Liability Offence of Offshore Tax

Evasion 10.3 HMRC Announce Second Income Campaign 10.4 Charities News Roundup 11. EUROPEAN AND INTERNATIONAL 11.1 Amending EU Savings Directive Published 11.2 Meeting on Tax Fraud and Tax Evasion 11.3 Company Ownership Register will Name

'Controlling' Trust Beneficiaries 11.4 Guarded Response to UK Lead on

Ownership Registries 11.5 FATCA Round-up 12. RESIDUE 12.1 Nil Rate Band Legacy/BPR (Brooke) 12.2 Trusts (Capital and Income) Act 2013 - STEP

Guidance APPENDIX

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1. CAPITAL GAINS TAX 1.1 Entrepreneur’s Relief: was the Vendor

an Employee? (Corbett) The facts Mr Corbett was a senior executive employed by Optivite International Limited (“Optivite”), and was involved in negotiations for the sale of the company to Kiotech International Limited (“Kiotech”), which took place in October 2009. Mrs Corbett was employed by Optivite, providing secretarial duties to her husband, for which she received a salary of £14,000 a year. Kiotech had a strict policy of not employing spouses of senior executives, and in order to forestall any problems with negotiations for the sale Mrs Corbett was removed from the company’s payroll and received her P45 in February 2009. However, she continued to work for her husband, whose salary was increased by £1,200 a month to compensate them for the loss of her salary. Mrs Corbett’s tax return for 2009/10 showed a disposal of 1,500 shares in Optivite on which she claimed ER. HMRC issued a closure notice in December 2012 disallowing the claim for ER, and this was upheld by a formal internal review issued in February 2013. HMRC’s arguments HMRC argued that when Mrs Corbett received her P45 in February 2009 her employment ceased. After that date she was not employed by the company, as without remuneration there can be no employment. The fact that Mr Corbett received an amount that equated with his wife’s previous salary was not relevant – the increase could have been a salary increase to recognise the extra work he was doing in connection with negotiations for the sale of the company. Mrs Corbett’s arguments Mrs Corbett argued that she had remained as an employee of Optivite until October 2009. As the company operated a computerised payroll the only way of removing her was to produce forms P45 and P14, but this did not mean that her duties changed. She continued to do the same work as she had done previously. HMRC’s manuals confirm that remuneration is not required for eligibility to ER in CG64110. Indeed, it could be argued that because Mr Corbett’s salary

was paid into a joint bank account, Mrs Corbett continued to receive her salary. The tribunal’s decision Evidence was provided by Optivite’s financial controller, Mr Butlin, who confirmed the position described by Mrs Corbett and her advisers. The tribunal found that he was a credible independent witness, as it made no difference to the company whether she succeeded in her claim for ER. They were satisfied that, on the balance of probabilities, the company continued to remunerate Mrs Corbett by directing her salary to Mr Corbett and paying it into their joint bank account. The tribunal therefore allowed Mrs Corbett’s claim for ER in respect of the sale of shares in Optivite. Why it matters In order to claim ER on the sale of shares the shareholder has to be a director or employee of the company throughout the period of one year up to the date of sale. Where spouses or civil partners own shares in a trading company, and only one qualifies for ER, the usual advice is that, before the sale, the non-qualifying individual should transfer their shares to the individual that qualifies. The decision in the case is surprising, and turns on facts that were corroborated by a credible witness. It is not a case that should be used as part of planning for ER. (Susan Corbett v HMRC, First-tier Tribunal (2014) TC 3435, reported on Gabelle website 11.04.14 http://www.gabelletax.com/search/corbett) Additional commentary The decision, although fact-specific, is a useful one for taxpayers because the tribunal accepted that an arrangement established to deal with the commercial terms of an acquisition did not interfere with the availability of the relief. However, one might also consider the case as a warning that HMRC may scrutinise employments and offices. As the taxpayer noted, HMRC accepts that there are no specific requirements regarding either working hours or the level of remuneration and that the condition in section 169I(6)(b) is simply that the individual be an officer or employee. It is arguable that the basic terms of the legislation lend themselves to a purposive interpretation, in which case employments and offices should have substance. It remains to be seen whether HMRC

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takes that approach in the future and amends its guidance to the same effect. (Reported in Practical Law Tax 10.04.14)

2. INHERITANCE TAX 2.1 Upper Tribunal Overrules High Court in

Trust Income Dispute (Gilchrist) The Upper Tax Tribunal has ruled that it is not bound by precedent set by the England & Wales High Court. In doing so, it accepted HMRC's plea that the prior case Pierce v Wood was wrongly decided in the High Court, and therefore the Gilchrist discretionary trust's disposal of scrip dividend shares is liable to the ten-year inheritance tax charge. (Gilchrist v HMRC (2014 UKUT 0169 TCC) STEP UK News Digest 24 April 2014)

2.2 Commission Consults on Tackling Tax Obstacles to Individuals' Cross-border Activity

The European Commission invited applications from experts wishing to join a group that will look principally at how personal income taxation and inheritance taxation (IHT) affects individuals' cross-border activity. The group may also look at other taxes that affect the mobility of persons, such as the taxation of vehicles and the taxation of e-commerce. The IHT consultation follows the Commission's December 2011 recommendation that member states give unilateral relief to avoid IHT double taxation. The consultation and the establishment of the expert group follow the earlier reviews to identify discriminatory tax rules in member states. The Commission states that, as work progresses on combating cross-border tax evasion via closer co-operation between tax administrations, there must now be a corresponding effort to combat cross-border double taxation and compliance burdens. The consultations close on 3 July 2014. (Europa press releases: Taxation: Reinforcing the Single Market for citizens (IP/14/416), reported in Practical Law Tax weekly e-mail to 15 April 2014)

2.3 Highlights from HMRC’s Trusts & Estates April Newsletter

The Swiss Agreement and Inheritance Tax accounts HMRC Trusts & Estates is aware of some instances where the beneficiaries or executors of an estate have paid the ‘one-off charge’ under the 2011 Tax Agreement between the UK and Switzerland. The payment satisfies historic tax liabilities in respect of assets held in Switzerland. Anyone who has made such a payment, will have received a clearance certificate from the relevant Swiss bank confirming that they cease to have any further liability for, amongst other taxes, Inheritance Tax in relation to the assets detailed on the certificate for charges arising before 1 January 2013. However, the Swiss asset still forms part of the deceased’s estate and may affect the Inheritance Tax that is payable on any other assets in the free estate and any aggregable fund, for example, settled property. It is clear from the cases HMRC have seen, and from some comments on internet forums, that the consequences of making the ‘one-off’ payment are not fully recognised. If the Swiss asset was not declared in the IHT400 or IHT205, and either the nil rate band was already exceeded or the additional Swiss asset (for which a clearance certificate is now held) means that the nil rate band is now exceeded, then HMRC Trusts & Estates must be told about the Swiss assets. Whilst the IHT attributable to the Swiss assets is covered by the ‘one-off’ charge, the tax payable in respect of the Free Estate or other aggregable property remains payable. Please also provide a copy of the clearance certificate from the Swiss bank. Changes to the 2013-14 Trust and Estate Tax Return The main changes to the 2013-14 Trust & Estate Tax Return are: SA900 – main part of the return The special trust rates have been reduced to the trust rate of 45% and the dividend trust rate of 37.5%. Page 3 – Q5. The reporting limit for capital gains has been increased to £43,600. Page 3 – Q8 – boxes 8.15 and 8.16. The text in brackets has been changed to clarify the meaning of a discretionary trust – it now says ‘for example, you have discretion about paying income to beneficiaries’.

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Page 6 – Q10A. Relief for patent royalties has been withdrawn and there are now 3 new boxes 10.5A, 10.6A and 10.7A for these payments. SA950 – notes on the SA900 Since the Statutory Residence Test (SRT) has come in to effect as from the 2013-14 tax year, all references to ‘ordinarily resident’ and ‘ordinary residence’ have been removed except in relation to the FOTRA income to be excluded at Q9 – see below. Page 9 – Q5 – capital gains. The annual exempt amount and reporting limit have been increased to £10,900 and £43,600 respectively. Page 12 – Q9 – trust or estate income not already included on the supplementary pages. Exclude income from FOTRA securities in a non-bare trust where all the beneficiaries are not ordinarily resident in the UK and where the securities were acquired before 6 April 2013. Include disguised interest. Page 21 – boxes 10.5A, 10.6A and 10.7A. There are new notes to support the new boxes. The previous notes also included here about unauthorised unit trusts (UUTs) have been amended to explain how the abolition of relief for patent royalties payments affects UUTs and the ‘trustees’ income pool’ (formerly ‘uncredited surplus’). Page 27 – Business Premises Renovation Allowance (BPRA). A previous error has now been corrected - the cap on the qualifying expenditure for a single project is €20 million and not £20 million. Telling HMRC about amendments to an IHT400 Trusts & Estates are keen to reduce the amount of correspondence that is sent dealing with minor amendments to IHT400s. Over the last few years, they have looked at a number of ways that would reduce the burden of this work and have worked with some of our customers to test these. As a result, from 01 May 2014, and in certain circumstances, it will not be necessary to tell HMRC every time you find out about a new amendment to the value of an estate. Instead you will be able to tell us about all the amendments to an estate in one go. They can do this by sending HMRC form C4 Corrective Account or C4(S) Corrective Inventory when they believe that these are the final amendments to the value of the estate, or 18 months has passed since the date of death, whichever is earlier.

Taxpayers or their agents will be able to do this on a purely voluntary, case by case, basis. They do not need to tell HMRC whether they are choosing to save up amendments and this is open to all cases providing they do not fall within the following criteria:

HMRC have written to the personal representatives to tell them that HMRC are starting a compliance check, in which case HMRC would expect any amendments to be reported as identified.

The deceased's estate on death includes:

— a qualifying interest in possession in settled property, or

— a gift with reservation of benefit.

There is an overall change in the value of the estate of more than £50,000 - before any exemptions or reliefs are deducted.

The amendments relate to changes in the value of land or buildings or unlisted shares.

The amendments relate to a claim for loss on sale of land or shares.

Assets have been sold on which tax is being paid by instalments.

If the estate has not been settled within 18 months clients and their advisers will need to start telling HMRC about amendments as they arise, again. HMRC will still charge interest on any unpaid tax on cases where you decide to save up your amendments. If you want to stop interest from accruing on any unpaid tax, you can send us a payment on account. We have updated the Inheritance Tax manual to reflect this practice including a new page at IHTM31023 that provides further information. Trusts & Estates will be contacting the customers that they believe will benefit most from these practices. But HMRC would also encourage everyone who feels they will benefit from adopting this practice to do so. (Reported on HMRC Website - http://www.hmrc.gov.uk/cto/newsletter-090414.pd)

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2.4 IHT Manual Updated HMRC updated various sections of its Inheritance Tax Manual (IHTM) on 22 April 2014. The chapter on assessing liability to IHT (chapter 31) has been substantially rewritten to reflect HMRC's current practice and a number of new worked examples of how to calculate the IHT due on a deceased's estate have been added (see IHTM31000 - Assessing: contents: Examples of calculations). Other changes include:

New guidance on when to notify HMRC about amendments to a form IHT400 (IHTM31023).

New and updated guidance on recent amendments to the excepted estates regulations necessitated by the Finance Act 2013 changes that restrict the liabilities that can be deducted from the value of an estate when calculating how much IHT is due (see, in particular, IHTM06028).

An amendment reflecting the four-year time limit (introduced by the Finance Act 2009 with effect from 1 April 2011) for claiming IHT relief in respect of a loss on the sale of shares (IHTM34032; see also section 179(2A) of the Inheritance Tax Act 1984 and HMRC: IHT35: Claim for relief: loss on sale of shares).

(Practical Law Private Client 1 May 2014)

3. STAMP TAX

3.1 AIM and Other Shares Now Exempt from Stamp Duty

Purchases of shares traded on 'growth markets' are exempted from stamp taxes as from 28 April this year, as announced in the 2013 Budget. HM Revenue & Customs has now published a list of stock markets entitled to the exemption.

Alternative Investment Market

Enterprise Securities Market (ESM)

GXG Markets A/S

High Growth Sector

ICAP Securities and Derivatives Exchange Limited (ISDX)

(HMRC’s “Stamp Duty Reserve Tax: recognised growth markets” published on 28.04.14)

3.2 Lib Dems Back Away from Mansion Tax Senior Liberal Democrat politician Danny Alexander, currently Chief Secretary to the Treasury, has announced that the party has changed its position on taxing high-value residential property. Instead of an annual 1 per cent levy on properties valued over GBP2 million – the so-called 'mansion tax' – a Liberal Democrat government would introduce an extra council tax band for the most expensive properties (STEP UK News Digest 10 April 2014)

4. PERSONAL INCOME TAX 4.1 Pensions Update HMRC have published a number of guidance notes on the pensions changes that came into force from 6 April 2014 and those announced in the budget. The key points in these and the pensions newsletter (also published in April 2014) are set out below: Guidance on the ability to take advantage of the pension flexibility introduced in FB 2014 People who have recently taken a tax-free lump sum from their defined contribution pension will be given 18 months rather than 6 months to decide what they wish to do with the rest of their retirement savings, and will not be put at a disadvantage should they wish to wait to access their pension savings more flexibly. This follows an announcement on 27 March that confirmed that the government would take action to ensure that people do not lose their right to a tax-free lump sum if they would rather use the new flexibility this year or next, instead of buying a lifetime annuity. In addition, new guidance has been published which provides more information to help people who want to use the new flexibility, see (http://www.hmrc.gov.uk/pensionschemes/pensionflexibility.htm) (HMRC website What’s New? 09.04.14) Guidance on Individual Protection 2014 The level of the standard lifetime allowance was reduced from £1.5 million to £1.25 million with effect from 6 April 2014 onwards. As a consequence two new forms of transitional protection were

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made available, fixed protection 2014 (‘FP 2014’) and individual protection 2014 (‘IP 2014’). HMRC have published guidance on Individual Protection. This gives an overview of the provisions, the eligibility criteria, how to apply, how to value pension savings and the impact of taking pension benefits. In summary: ‘If you are a member of a registered pension scheme and/or a relieved member of a relieved non-UK pension scheme you can have IP 2014 provided that:

on 5 April 2014, your pension rights in such schemes are valued at more than £1.25 million, and

you do not have valid primary protection on 5 April 2014, and

your application for IP 2014 is received by us by 5 April 2017 at the latest.

If you successfully apply for IP 2014, you will be given a protected lifetime allowance equal to the value of your pension savings on 5 April 2014 subject to a maximum of £1.5 million. If you want to apply for IP 2014 you will need to meet certain conditions. The conditions are that:

you have one or more “relevant arrangements” (eg you are a member of a registered pension scheme) on 5 April 2014, and

your relevant amount on 5 April 2014 is more than £1.25 million, and

you do not have primary protection. To apply for IP 2014 you will need to complete the application form APSS240. The application form will be available on the HMRC website when the supporting regulations have come into force. This is likely to be around the middle of August 2014. You will be able to complete the form on screen and submit it to HMRC online or you can complete it on screen then print off a copy of the form to send to HMRC. The form must be received by HMRC before 6 April 2017’. (HMRC Pensions: Individual Protection 2014 guidance note)

4.2 HMRC Publish Further Guidance on Payments of "Trail Commission"

On 15 April 2014, HMRC published further guidance on payments of "trail commission" passed onto investors in collective investment schemes. The guidance contains answers to common questions received by HMRC following publication of its business brief 04/13. Business brief 04/13 stated that payments of "trail commission" paid by fund managers to their intermediaries and passed back to investors should be taxable as annual payments in the hands of the investors and subject to withholding tax, subject to certain exceptions. The additional guidance clarifies the type of payments that are annual payments, what legal obligation must exist for a payment to constitute an annual payment, the circumstances in which tax must be withheld on annual payments and whether intermediaries or fund managers can pay tax on behalf of investors. The additional guidance also contains an example illustrating when an annual payment may arise. This provides that payments made by intermediaries to investors that will, or could, recur pursuant to an oral or written agreement will be annual payments. However, the following will not constitute annual payments:

Payments to intermediaries.

Lower fees charged to investors where intermediaries also receive remuneration from fund managers (unless the payment is made to the investor's cash account and used to offset the fee).

Payments that an investor is subject to tax on under another provision of the tax legislation.

Separate guidance in relation to collective investment scheme investments held within life insurance policies was also published. (Reported in Practical Law Private Client 17.04.14)

4.3 Treasury Prepares Fine Detail of Scottish Income Tax Rate

Clause 289 of the Finance Bill 2014 paves the way for secondary legislation to deal with some consequences of the special Scottish rate of income tax, in particular the treatment of income from

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trusts and the rates of relief for charitable giving and pensions. A consultation will be held when the secondary legislation is introduced later this year. (Reported in Step UK News Digest 10.04.14)

5. BUSINESS 5.1 Company's Share of LLP Loss can be

Offset if Company has Amount at Risk in LLP (Hamilton & Kinneil)

The facts Hamilton & Kinneil (Archerfield) Ltd (HKAL) was owned as to 50% by Archerfield Estates Ltd (Estates) and 50% by H&K Enterprises Ltd (Enterprises). Estates was owned by the trustees of the "A" fund of the 14th Duke of Hamilton's 1947 Settlement and Enterprises was wholly owned by the trustees of the "B" fund of the 14th Duke of Hamilton's 1947 Settlement. HKAL was a member of an LLP set up to develop and run a golf course and associated hospitality business at the Archerfield Estate in East Lothian. The other member of the LLP, representing the interests of an American group of investors, was Invest Archerfield LLC (IALLC), a Delaware limited liability corporation. Under an arm's length agreement between the members dated 1 April 2005, the initial cash contribution to the LLP, amounting to US$8 million (£4,432,134), was made exclusively by IALLC but the members' shares (their interests in the net capital of the LLP) were set in the proportions of IALLC 66.66% and HKAL 33.34%, and profits and losses were to be allocated in those proportions. The LLP made substantial trading losses in its early years. For its accounting period ended 29 February 2008, HKAL claimed trading losses relating to the LLP of £806,058 and for its accounting period ended 28 February 2009, it claimed trading losses of £835,351, the majority of which, in both years, it surrendered to Estates and Enterprises. HMRC disallowed the loss claims on the basis that HKAL had made no cash contribution to the LLP. HKAL appealed to the First-tier Tribunal.

The decision The First-tier Tribunal held by majority decision (the judge having the casting vote) that although HKAL had made no initial contribution, it had, as a result of the LLP members' agreement, an amount at risk equal to its share in the net capital of the business that would be available to creditors on a winding-up. For that reason, the tribunal upheld the appeal. The debate hinged around the interpretation of section 118ZC(3) and (4). The majority of the tribunal found that the terms "contribute" and "liable to contribute" should be given their ordinary meanings. Therefore, while dismissing the appellant's argument that "contribute" included "putting at risk", the tribunal also dismissed HMRC's argument that section 118ZC(4) covered only additional amounts to be paid in on the occasion of a winding-up. The tribunal found it arbitrary and irrational to interpret the provision as meaning that the extent of the contribution should be the greater of two mutually exclusively amounts when the member's exposure was to the sum of the two (as was clear from the explanatory note to section 118ZC(3)). The tribunal unanimously dismissed the proposition that section 118ZC was ambiguous, even though the constituent members disagreed as to its interpretation. Therefore, the tribunal found it unnecessary to refer to Hansard or to subsequent legislation and explanatory notes to interpret it. (Section 60(1) of CTA 2010 clearly states that it is the sum of the initial contribution and any contributions made on a winding-up). In his dissenting opinion, Richard Law found that the mere fact that an interpretation of the legislation that treated the initial contribution and contribution on a winding-up as alternative, rather than cumulative, amounts to be considered gave an illogical result did not necessarily mean that it was incorrect. He remained firmly of the view that the explanatory note was not a correct interpretation of the legislation and corresponded to a version of the legislation that had been contemplated but rejected as open to abuse. In his view, although HKAL's share was at risk on a winding-up, it was part of the original capital of the LLP requiring no further action and, as such, did not qualify as a contribution on a winding-up. Why it matters It is extremely unusual for members of a First-tier Tribunal to disagree and for a dissenting view to be published. The current version of the legislation is

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considerably clearer as to how the total contribution is quantified and accords with the interpretation favoured by the tribunal judge that it is the sum of the initial and subsequent contributions. Nevertheless, it makes no provision for the treatment of a capital sum assigned by one member of an LLP to another, so that what is meant by a contribution on a winding-up remains open for debate. It therefore seems likely that HMRC will appeal this decision, although, as it sets no precedent, failure to act should not be taken to indicate acceptance of the interpretation. (Hamilton & Kinneil (Archerfield) Ltd v HMRC, First-tier Tribunal (2014) TC 3485, reported in Practical Law Private Tax 25.04.14)

5.2 Business not Conducted on a Commercial Basis (Murray)

The facts Mr Murray claimed losses in relation to a race horse breeding and trading business, which totaled about £130,000 over a three year period. HMRC had denied the claim on the basis that the taxpayer did not carry a commercial activity with a reasonable expectation of profit (ITA 2007 s 66(2)). The tribunal considered that the taxpayer may have had a reasonable expectation of profit at the outset of his business, however that hope must have ‘evaporated’ when losses were realised in three consecutive tax years. Furthermore, there was no evidence that Mr Murray had attempted to quantify the losses or to reduce them by producing a business plan. Finally, Mr Murray’s comment that the viability of his horse breeding business depended upon his obtaining tax rebates on his other incomes confirmed that his view was not commercial. Why it matters In uncertain economic times, this case may be a warning to other loss making businesses. A hope that things will eventually get better may not be enough for trading losses to be allowable. (Richard Murray v HMRC, First-tier Tribunal (2014) TC 3474, reported in Tax Journal 22.04.14)

5.3 What is a Debenture? (Fons HF (in Liquidation))

The facts In this case the Court of Appeal was asked if the definition of "Shares", in a charge over shares, included the chargor's right to be repaid under two shareholder loan agreements. Shares were in this case defined to include: "all shares (if any) specified in Schedule 1 and also all other stocks, shares, debentures, bonds, warrants, coupons or other securities" The case turned on whether the shareholder loan agreements constituted "debentures". Patten L.J. examined the case law in which the term debenture had been defined and concluded that, in this case, debentures had the "ordinary meaning of an acknowledgement of debt recorded in a written document". The definition was not, he said, limited by the inclusion of the term "other securities". Although "securities" could be used as a general term for defining investments, it could also simply mean a debt or claim secured by a charge or guarantee. The court therefore unanimously overturned the first instance decision and held that the shareholder loan agreements were subject to the share charge Why it matters Brian Cain, senior associate at Taylor Wessing commented: ‘The result is surprising in many respects because most lawyers had thought a loan agreement was not a "debenture" in the technical sense that it did not create or acknowledge a debt – there being no debt until drawdown. That argument has now been firmly rejected by the Court of Appeal. The take home point when acting on transactions involving the creation of security over shares is to make sure that the benefit of shareholder loans (when acting for the security provider) is not inadvertently charged by this rather oblique route. A definition of Shares which casts the net too wide as in this case should be amended to carve out any shareholder loans made or to be made specifically. If one were acting for a shareholder putting additional money into an investment it might be prudent to check whether any existing share security would catch the benefit of such loans. When acting for banks – where they do not already have an assignment of the benefit of such loans – this might give them a

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chance to assert control over the benefit of the loan if the definition of Shares in the relevant document is inadvertently drafted in a manner similar to that in the case. Having such control could alter the dynamics of the negotiation on a restructuring, for example. (Fons HF (in liquidation) and another v Pillar Securisation S.a.r.l and another (2014) All ER (D) 215 C 3485, reported in Practical Law Private Tax 20.03.14)

5.4 CIS Update CIS Repayments to be made faster HMRC have refined the way they handle construction industry scheme (CIS) repayments, following work by joint initiative on the tax authority’s service delivery. The Revenue aims to process CIS repayment claims within 25 working days or less from the date of receipt, provided the information sent – by mail or online – matches that held by the department. Part repayments will be made based on verified amounts while mismatches are discussed with the taxpayer company. HMRC will set off a firm’s CIS repayment against a corporation tax or VAT debt as long as the reimbursement covers the full amount outstanding, and the company tells the Revenue team chasing the debt that a claim for repayment has been issued. The taxman will stop the recovery of a debt if both conditions are met, to allow time to process the repayment claim and allocate it to the debt. (Reported in Taxation 22.04.14) Mainstream and deemed contractors HMRC have changed the way they interpret the rules in Section 59(1)(a) and 59(1)(l) Finance Act 2004 on the definition of contractors within the Construction Industry Scheme (CIS). This means that, from 6 April 2014, payments made by businesses for construction work relating to their own business where construction is not the core activity, including utilities and those previously excluded, will not be within CIS.

Repayment claims for limited company subcontractors HMRC have updated the guidance that sets out how subcontractors that are limited companies should reclaim any deductions they've had taken from their payments under the Construction Industry Scheme. This focuses on the procedure that should be followed when making a reclaim. (HMRC News for Construction Industry Scheme (CIS), April 2014)

6. EMPLOYMENT 6.1 Restricted Securities Scheme in Court of

Appeal (UBS And Deutsche Bank) The facts Deutsche Bank (DB) and UBS both implemented incentive arrangements designed to avoid income tax and NICs using restricted securities. Although the two arrangements were structured differently in some respects, they were generally similar: both schemes were designed to take advantage of an exemption to a charge under the restricted securities rules. Since both sets of planning were implemented the law has been changed so that the specific exemption does not apply if there is a tax avoidance motive, but there are a number of points of principal that flow from these cases which are of continuing importance. Both arrangements involved incorporating a new company (in each case referred to as the “SPV”) to issue shares to employees (in some cases via a nominee) and, in each case, the majority shareholder was a third party. In order for each of the schemes to succeed, it was important that both:

The shares beneficially acquired by the relevant employees were restricted securities within the meaning of Chapter 2 of ITEPA 2003.

The exemption in section 429 of ITEPA 2003 was available. This in turn depended on the employing company not being an "associated company" of the company whose shares were being used, because the section 429 exemption required that the shares should not be held by

May 2014 10

or for the benefit of "employees of any associated company".

In both cases, it was argued that the principle established in the line of anti-avoidance cases starting with WT Ramsay v Inland Revenue Commissioners (1982) 54 TC 101 (the Ramsay principle) applied and brought the arrangement outside the charging provisions of Chapter 2 of ITEPA 2003. Decision: UBS HMRC appealed the Upper Tribunal's decision in UBS on four grounds, and sought permission to appeal on a further two grounds. The six grounds of appeal were as follows: The "broad Ramsay point" HMRC argued that the Ramsay principle should apply to the arrangements as a whole. The scheme should be treated as an arrangement for the delivery of cash bonuses. The Court of Appeal pointed to the fact that the shares issued to the employees did not give fixed, foreseeable proceeds to the employees and the assets of the company could not be turned into liquid funds at the whim of their holders. This contrasts with the facts in the case of Aberdeen Asset Management plc v Revenue & Customs Commissioners [2013] CSIH 84, which was decided last year, in which shares in a “cash-box” company were awarded to employees; the value of the shares was fixed, the employees were able access the cash in the company in a variety of ways and could force the immediate realisation of the cash-box company’s assets. In the UBS case, the concrete reality of the shares and their terms and conditions could not be ignored and the specific tax legislation in part 7 ITEPA governing employment related securities would determine how the shares should be taxed. The "narrower Ramsay point" HMRC went on to argue that the forfeiture restriction (which provided that shares were forfeitable for 90% of their market value) had no commercial purpose and should therefore be ignored, which would mean that the shares did not benefit from the deferral of tax provisions provided for in S425 ITEPA 2003. The court held that, if there is a genuine possibility of the forfeiture provisions being triggered (which

the FTT found, as a fact, there was), it is not possible to ignore the forfeiture provisions simply because the scheme as a whole was motivated by tax avoidance. The securities were genuine restricted securities, governed by the tax provisions set out in Chapter 2. Section 18 of ITEPA 2003 When UBS applied the cash equivalent of employees' allocated bonuses to subscribe for shares, this was a payment of an employee's money earnings "on account" and therefore taxable at that time under Rule 1 of S18 ITEPA 2003. The court refused HMRC permission to appeal on this point. Having held that employees were provided with real shares (not money), section 18 was not relevant, since it applied only to money earnings. A valuation argument For securities to be restricted securities, one of the conditions that must be met is that a person "will not be entitled on the transfer, reversion or forfeiture [of the securities] to receive in respect of the employment-related securities an amount of at least their market value (determined as if there were no provision for transfer, reversion or forfeiture) at the time of the transfer, revision or forfeiture." (S423(2)(c), ITEPA 2003.) The forfeiture provisions in UBS' scheme provided that where shares were forfeited, employees would receive 90% of the shares' market value. The UBS scheme also included a hedging arrangement, which meant that on a forfeiture employees would receive only 90% of the value of the shares, but the value of the shares would have increased so that employees would still receive approximately 100% of the unhedged value. HMRC argued that when determining the market value "as if there were no provision for transfer, reversion or forfeiture", it was also necessary to ignore the hedging agreement. The court found there was no scope to read extra wording into section 423(c), the meaning of which was, in the opinion of the court, plain. In any event, even if it were possible to ignore the hedging agreement in calculating the market value of the shares, employees were still only entitled to receive 90% of whatever the market value was.

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Section 429 of ITEPA 2003 HMRC sought to argue that the conditions of the exemption in S429 of ITEPA 2003 had not been met because UBS controlled the SPV, via the third party majority shareholder. This argument failed, as it flew in the face of a finding of fact by the First-tier Tribunal. Uncommercial articles A provision in the SPV’s articles of association removed all voting and dividend rights from the shares at any time a UBS group company held them, which further strengthened the argument that UBS did not control the SPV. HMRC argued that the provision should be ignored because it had no commercial purpose (which would, in turn, mean that UBS did control the SPV). The court noted that the First-tier Tribunal had found, as a fact, that the relevant article was genuine. UBS intended to be bound by the arrangements set out in the articles, and there was no finding of a sham. The court found there was no basis on which the article could be disregarded. Decision: Deutsche Bank In addition to the Ramsay points already considered in the UBS case, HMRC argued that DB controlled the third party shareholder of its SPV, because both parties had agreed to follow a series of pre-ordained steps. Lord Justice Rimer giving judgement on behalf of the court disagreed with this submission "...if A Ltd proposes to B Ltd, an unconnected and independent company, a co-ordinated course of action with a view to achieving a commercial end to the benefit of both, and B Ltd agrees to the proposal and co-operates in its implementation, it is beyond my comprehension why such a state of affairs should be thought to justify the inference that, in playing its own part in the operation, B Ltd is to be regarded as being 'controlled' in what it does by A Ltd." (Paragraph 139.) Comment HMRC will be disappointed with this decision, particularly as the Court of Appeal did not accept that the Ramsay principle could be applied to the arrangements, even though all parties accepted that the purpose of the arrangements was to avoid tax. Although the court did accept that, in some circumstances, schemes designed purely to deliver

bonuses in cash (as happened in the Aberdeen case), it would be open to the court to find that employees had received money, not shares, it was not possible to do so in this case. In this case, the court found that the provisions of Chapter 2 were prescriptive, and the court was not prepared to effectively read extra wording into Chapter 2 so as to disapply its prescriptive provisions when the purpose of an arrangement is tax avoidance (although subsequent changes to the legislation introducing purpose tests do mean that the main point of interest in this case is the clear way in which the court has disposed of the idea that an award in a form of properly constituted shares can be recharacterised as a cash payment). This case is another example of the limitations of the Ramsay principle to prevent tax avoidance schemes that exploit the prescriptive legislative provisions. Rimer LJ's comments regarding control are also interesting, and may be of comfort to professional trustee companies. The court was not prepared to find that UBS effectively controlled its third party shareholder, which was a professional trustee, and, in the case of DB, it found that an independent company that agrees to take part in arrangements which involve a series of pre-ordained steps cannot be said to be "controlled" simply because it performs those steps. (UBS AG; DB Group Services (UK) Ltd v HMRC, (2014) All ER (D) 159, reported in Practical Law Tax 22.04.14)

6.2 Salary Sacrifice Arrangements did not Work (Reed Employment)

In this case the UT confirmed the decision of the FTT that salary sacrifice arrangements implemented by Reed to avoid income tax and NIC liabilities totalling £158m were not effective. The facts Reed’s employment business employed a number of people whom it supplied as temporary workers to its clients. The temporary workers were not employed by Reed during periods in between temporary assignments. Reed intended to benefit from the reliefs available for travel and subsistence payments by entering into contractual arrangements with its employees

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that essentially treated part of their salary as being such payments. There were three key issues identified with the arrangements:

The salary sacrifice was ineffective: the new arrangements amounted to little more than the re-labelling of salary payments; based on Heaton v Bell [1970] AC 728 ‘a mere re-labelling of a part of an employee’s salary is insufficient’ to constitute a salary sacrifice – the UT concluded that whilst employees had agreed to be paid in accordance with the scheme, they had not accepted a reduction in salary; the UT was also critical of the fact that the benefit of the arrangement flowed entirely to Reed, while the risks lay with the employees – the UT concluded that the employees would have agreed to enter into the arrangement if they had fully understood the nature of the arrangement.

Reed could not rely on the P11D dispensation that it had agreed with HMRC – if the “travel and subsistence payments” did constitute salary, then they could not be covered by such a dispensation; because Reed had not been fully open with HMRC, the UT determined that it had no “legitimate expectation” that it could rely on the dispensation; and the travel payments could only be treated as payment for “normal commuting”, rather than payment for business travel, and could not be covered by a dispensation in any case.

The employees had no over-arching contract and no continuity of service between work assignments, this meant that they had no “normal place of work” other than the host businesses’ premises – all of their travel amounted to “normal commuting” (this is also a problem with employees on zero hour contracts).

Why it matters Employers wishing to implement salary sacrifice schemes should ensure that the contractual documentation clearly sets out the extent of the salary reduction. The case is also a reminder that a ruling from HMRC can only be relied upon if the taxpayer has made an exhaustive disclosure of the relevant facts. (Reed Employment and 11 others, Upper Tribunal (2014) UKUT 160 reported in Tax Journal 22.04.14)

6.3 Employment Related Securities Update In April HMRC published the 15th Employment-Related Securities Bulletin and the 47th Employer Bulletin. The key points to note are as follows: Reporting employee share transactions Following the end of the tax year, companies have until 6 July to file their share schemes’ annual returns. Filings are required on Form 42 where:

Options are granted, exercised or released for consideration

Shares or other securities are acquired by employees (even if the employees have purchased the shares at market value)

Restrictions on employees’ shares are lifted or varied

Shares or securities are converted into another class or type of security

A return may also be needed if an employee disposes of shares or if he or she has received a benefit from holding those shares.

The reporting obligation applies to options, shares and securities held by current and former employees and directors. A company will also have to file separate returns if it has granted EMI options, or has a Share Incentive Plan (“SIP”), Sharesave (also known as a Save As You Earn plan or “SAYE”) or has a Company Share option Plan (“CSOP”). 2013/14 is the last year that HMRC will accept paper forms. In future, Form 42 and the annual returns for EMI, SIP, SAYE and CSOP will need to be filed electronically. HMRC are empowered to levy significant penalties for non-compliance with these reporting obligations. In practice these penalties are rarely levied, but such failures are factored-in when HMRC are assessing the risk rating of a business and a potential purchasers or investor will ask for sight of any returns as part of their due-diligence process. Now is a good time to begin chasing clients to ensure that they identify whether they have a filing

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obligation and to begin collecting the information needed to file the returns. (Reported on Gabelle website 11.04.14 http://www.gabelletax.com/blog/2014/04/11/reporting-employee-share-transactions/) Share plan registration – a head start for EMI Transactions that took place in the year ended 5 April 2014 will still need to be reported on the existing paper forms, but for tax years starting on or after 6 April 2014 companies must comply with a new online registration and reporting system. Failure to register existing tax advantaged share schemes online can mean that their tax-favoured status will be lost. Registration If an employer implements a new Share Incentive Plan (“SIP”), Sharesave (also known as Save As You Earn or “SAYE”) or Company Share Option Plan (“CSOP”) after 6 April 2014, awards under the plan will not benefit from tax relief unless the plan has been registered: employers have until 6 July following the end of the tax year in which awards are first made to register the plan. Delaying registration will mean that awards made under the plan in the first year that it operates will not have tax-favoured status. Employers who have schemes that were implemented before 5 April 2014, which were formally approved by HMRC, are still required to register their schemes online before the 6 July 2015 deadline. Failure to meet the deadline will mean that new awards will not be tax-favoured and, in addition, existing awards under CSOP will lose their tax-advantaged status. EMI Options In order for options to qualify for treatment as EMI options it is essential that HMRC is given notice when they are granted. There is a fixed 92 day window for this notice to be given; failure to notify HMRC in time will mean that options are not qualifying EMI options and that employees will not be entitled to claim the valuable income tax, NIC and CGT reliefs attaching to EMI options. For all options granted on or after 6 April 2014 it is no longer possible to notify HMRC of EMI options using a paper form, instead notice will need to be given using the online system.

Before notices can be given, the EMI plan itself needs to be registered with HMRC; in effect, the registration deadline is accelerated for companies that grant EMI options in the current tax year, because of the requirement to give notice online of the grant of options. Next steps If you have clients who have EMI plans or have operated “approved” share plans in the past it would be sensible to begin the conversation with them to ensure that they have given the appropriate person access to make online filings and to ensure that they know that they may need to register their EMI plans before 6 July 2015. (Reported on Gabelle website 25.04.14 http://www.gabelletax.com/blog/2014/04/25/share-plan-registration-a-head-start-for-emi/)

7. NATIONAL INSURANCE

7.1 Onshore Employment Intermediaries: NICs TAAR

On 3 April 2014, the government announced that it is to introduce a targeted anti-avoidance rule to combat the avoidance of the new onshore employment intermediaries rules in the context of NICs. The TAAR is to be introduced at the "next available legislative opportunity" and will take effect retrospectively from 6 April 2014. It will mirror the income tax TAAR (new section 46A of the Income Tax (Earnings and Pensions) Act 2003, which applies where a third party not otherwise caught by the agency legislation is interposed between the worker and the end client. In such circumstances, the third party will be treated as falling within the agency rules and having responsibility for tax and NICs. (Reported in Practical Law Tax 08.04.14)

7.2 Tax and NIC Mismatch for Entertainers to End

The government has announced that, with effect from 6 April 2014, the tax and NICs positions for entertainers (actors, singers, musicians and other performers) are to be aligned. This legislative change will repeal the current Social Security (Categorisation of Earners) Regulations 1978 (“the 1978 Regulations”) and the Social Security (Categorisation of Earners)

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(Northern Ireland) Regulations 1978 (“the 1978 NI Regulations”) which deem, in certain prescribed circumstances, that a self-employed entertainer is in receipt of an employed earner’s earnings for the purposes of paying Class 1 National Insurance contributions whilst continuing to be treated as a self-employed person for the purposes of paying tax. From 6 April 2014, all of the above current law will be removed from the Regulations and entertainers will by default (and subject to normal minimum National Insurance thresholds) attract Class 2 and 4 National Insurance liabilities on their self-employed earnings. (HMRC: National Insurance - Changes for entertainers from 6 April 2014 published 08.04.14.)

8. VAT & CUSTOMS DUTIES 8.1 Withdrawal of Concessions for New

Student Accommodation and Dining Halls

Purpose of this brief Concessions affecting:

the construction of new student accommodation

new dining halls and kitchens for students and school pupils

will be withdrawn from 1 April 2015. Who should read this? This Brief should read by those engaged in the construction or provision of new student accommodation which will be supplied to Higher Education Institutes (HEIs), and of new dining rooms and kitchens constructed at the same time as new residential accommodation for students and school pupils. Background The construction of a building intended for use solely for a relevant residential purpose, and the first grant of a major interest in such a building by the person constructing it, are zero-rated. As one of the conditions for zero-rating the user of the building must, before the supply is made, provide a certificate to the builder or developer as

evidence that the building is intended to be used solely (at least 95%) for a relevant residential purpose. In a Technical Note published on 31 January 2014, HMRC announced the withdrawal from 1 April 2015 of two concessions which allow:

Higher Education Institutions (HEIs) to ignore vacation use when determining how new student accommodation is intended to be used

dining rooms and kitchens to be zero-rated as residential accommodation for students and school pupils if they were used "predominantly" by the living-in students

Until 1 April 2015, those affected can choose either to use the concessions or rely on the statutory position. Transitional Rules Following consultation with those affected, HMRC have widened the transitional rules which determine which student accommodation buildings that are not complete as at 1 April 2015 can rely on the concession. The revised rules are set out below. Certificates which rely on the concession to meet the "solely" for a relevant residential purpose test (as student accommodation) will still be valid where:

for construction services, the first supply is made before 1 April 2015 and relates to a meaningful start to the construction of the building by that date, and the works are expected to progress to completion without interruption (demolition or site clearance works will only be accepted where construction starts immediately afterwards).

for the first grant of a major interest in new student accommodation, either:

— a meaningful deposit (for example, on

exchange of contracts) has been paid to the vendor (or their solicitor) before 1 April 2015 (options to purchase will not be accepted irrespective of intention)

— an Agreement for Lease (or purchase)

has been signed with the vendor or landlord before 1 April 2015 and a meaningful start to the construction of the building has taken place by that date,

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and the works are expected to progress to completion without interruption (demolition or site clearance works will only be accepted where construction starts immediately afterwards)

For single developments of more than one block of student accommodation constructed in phases, the above rules apply but:

'meaningful start to the construction of the building' means 'meaningful start to the construction of the first building'

'expected to progress to completion without interruption' means 'expected to progress to completion of all phases without interruption'

Other Points 'Continued reliance on the concession' - There are no changes to the rules set out in the technical note concerning the continued use of the concession for the purposes of the change in use charge. But in order to aid clarity, if you rely on the concession before 1 April 2015 then the concession will continue to apply until the building is no longer susceptible for consideration for a change in use charge (typically ten years from completion). 'Late Certificates' - If you can demonstrate to your supplier that at the time he made his supply, you had the intention that the building will be used in the way certified and that all the other conditions (including transitional rules) for zero-rating were met, then a certificate can be issued later than 1 April 2015 see para 16.6 of Notice 708 on Buildings and Construction. (Revenue & Customs Brief 14/14, issued 07.04.14)

8.2 Assistance with Electronic Filing Following consultation, legislation will be introduced to clarify that telephone filing is an alternative form of electronic filing and will be available to businesses that satisfy HMRC that they meet certain criteria. New Regulations amend Part V (accounting, payment and records) of the Value Added Tax Regulations 1995 (S.I. 1995/2518) to (1) reflect the fact that the Commissioners are to direct a new form of electronic return system (telephone filing) the use of which will be restricted to specified categories of taxpayers that are authorised to use it and (2) provide for an additional category of

excepted persons who will be authorised to use the paper return system. Regulation 4 makes it clear that a person who is required to use an electronic return system must use a form of electronic return system that that person is required or otherwise authorised to use. Regulation 5 amends regulation 25A to provide for an additional category of persons who are not required to make a return using an electronic return system, namely persons for whom the Commissioners are satisfied that it would not be reasonably practicable to make a return using an electronic return system (including telephone filing if they are authorised to use that form of electronic return system) for reasons such as disability, age or remoteness of location. Regulation 6 makes it clear that the Commissioners can issue a direction under regulation 25A(8) that authorises only certain categories of taxpayers to use a specific form of electronic return system such as telephone filing. (HMRC Consultation outcome, published 22.04.14)

8.3 Deregistration of Insolvent Businesses HMRC will no longer allow insolvency practitioners to cancel the VAT registration of insolvent businesses at an early stage following their appointment, but will now keep insolvent VAT registrations open until all trading has ceased and all assets are realised. Insolvency practitioners must render VAT returns and any payment due for each VAT period until the registration ceases. HMRC have in the past allowed insolvency practitioners to cancel the VAT registration of the business they have been appointed over at an early stage and account for VAT on any subsequent supplies using form VAT 833 Statement of Value Added Tax on goods sold in satisfaction of a debt. As part of a review of this process, HMRC have received legal confirmation that a deregistered business can no longer issue a valid VAT invoice. This could result in VAT registered buyers of assets from insolvent businesses being denied claims for input tax on the purchase of the assets in question. Consequently, HMRC can no longer allow such 'early' deregistration of insolvent businesses. Even though trading may have ceased, VAT legislation requires a business to register and remain registered for VAT if that business is making

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taxable supplies above the VAT registration threshold. 'Taxable supplies' in that context would include asset realisations by an insolvency practitioner. Consequently, HMRC will now keep insolvent VAT registrations open until all trading has ceased and all assets are realised (though an insolvent business has the same right as any other business to apply to deregister on the grounds that it is continuing to trade but below the VAT registration threshold, if that situation applies). Insolvency practitioners are required to render VAT returns and appropriate payment, if any, for each VAT period until the registration ceases. HMRC are happy to work with insolvency practitioners to resolve any difficulties which may arise from this approach, particularly in cases where all trading has ceased but the insolvency practitioner is experiencing difficulties in selling a property on which there is an option to tax. Insolvency practitioners should discuss any such cases with the National Insolvency Unit in Liverpool. (Revenue & Customs Brief 13/14, issued 06.04.14)

9. COMPLIANCE

9.1 Carried-back Loss Relief Claims: HMRC Right to Enquire into Later Returns and Cotter Distinguished (De Silva and Dokelman)

The Upper Tribunal has ruled that HMRC followed the correct procedure when it disallowed the claimants' claims to carry back loss relief. The facts The claimants, who were members of various film partnerships, made claims in their personal tax returns to set partnership trading losses expected to arise in future tax years (for example, 1999-2000) against their general income arising in earlier tax years (for example, 1998-1999). They argued that their claims were governed by Schedule 1A to the Taxes Management Act 1970 (TMA 1970). HMRC enquired into the partnership returns for the later tax years. This automatically opened an enquiry into the claimants' personal tax returns for the corresponding tax years (section 12AC(3)(a), TMA 1970). HMRC issued closure notices significantly reducing the amounts of the losses and re-stated each claimant's share in their tax returns (section 28B(4), TMA 1970). HMRC disallowed the

claimants' original claims but allowed claims to the extent of the re-stated losses. The claimants sought to quash HMRC's decision because HMRC had failed to enquire into their claims under Schedule 1A in time. The decision The tribunal ruled that HMRC applied the (or an) appropriate procedure. The claims were not simple Schedule 1A claims but were inchoate claims that required substantive validation (by the claimants confirming their share of the losses in their returns for the tax years in which the losses arose). Further, paragraph 2 of Schedule 1B to the TMA 1970 (claims involving two or more years) treats a claim to carry back losses as a claim for the later year. This showed it was not Parliament’s intention to uncouple the substantive and procedural aspects of claiming partnership losses, which would also cut across the "look-through" principle of partnership taxation. While in Cotter HMRC argued (and the Supreme Court agreed) that a carried-back claim was a Schedule 1A claim, a distinguishing factor was that the taxpayer argued that the enquiry was into the return for the earlier tax year. Further, the Supreme Court accepted that had the taxpayer calculated his own tax liability, the appropriate mechanism for challenging the claim would have been an enquiry into the return rather than into the claim under Schedule 1A. (The Queen (Jorge Manuel De Silva and Bernard Alec Dokelman) v HMRC [2014] UKUT 0170 (TCC), reported in Practical Law Tax 29.04.14)

9.2 Information Notice Set Aside for Lack of

Clarity (R D Utilities) The facts HMRC first raised their concerns with R D Utilities Ltd (the 'Company') in 2009, when they began an enquiry into the Company's 2007 Corporation Tax Self-Assessment Tax Return. In particular, HMRC sought information about the Company's accounts, in which a £700,000 contribution to a Remuneration Trust was shown. Lengthy correspondence between the parties ensued, and in July 2012, HMRC eventually served an Information Notice on the Company, pursuant to their powers contained in paragraph 1, Schedule 36, Finance Act 2008. Under this provision, a HMRC officer can (by written notice) require a taxpayer to provide information, or to produce a document, reasonably required for checking the taxpayer's tax position.

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The Information Notice required the Company to provide two pieces of information and two documents. The Company filed a Notice of Appeal with the FTT in March 2013, and its appeal was heard in February 2014. By the time of the hearing of the appeal, the parties had agreed that Part B of the Information Notice (requiring two documents) had been complied with by the Company. It was only Part A, which requested two pieces of information, that remained in dispute. The information required in Part A was drafted as follows: "Constructive Obligation a. a. Please specify for each year what the

Directors considered to be the pre-existing constructive obligations that arose to their suppliers. In doing this they should:

- explain precisely why they considered there was a constructive obligation

- what the constructive obligation was - why charging the constructive obligation

would benefit their trade

a. b. Do the lists provided with the resolution provided to the Trust provide the suppliers relevant to that year, and, if not, how are the Trustees to know to whom the payments are relevant? For each year please let me have a full list of the potential 'providers', a term used in the Trust deed to describe the class of Beneficiary; the names, addresses, services provided and the total amount paid to each provider by the company for their services".

The Company argued that the Information Notice had been complied with so far as it was possible to do so; the requested documents had been provided, but the requested information could not be provided. The Company went on to claim that the Notice itself was defective in asking for a subjective opinion, which was not lawfully required. Counsel for the Company referred to HMRC's Compliance Handbook at CH23240, which makes clear that an Information Notice may not be used to require the supply of "opinion or speculation", but only the supply of "facts". HMRC argued that the two pieces of information were reasonably required and remained outstanding.

FTT's decision Having heard the submissions made by the Company, and the response of HMRC, Judge McKenna began by making a helpful and general statement on the form, and drafting, of Information Notices: "The Tribunal takes the view that Information Notices should be expressed in clear terms and that it should be a straightforward matter for both parties to know whether an Information Notice has been complied with. That is why HMRC guidance states that the Information Notice should request facts and not opinion". The Judge was of the view that the Information Notice had been drafted with little clarity. She also criticised the built in assumptions on which the requests for information were based, which made it "impossible" for either party to know whether the Notice had been complied with. As a result, the Judge concluded that it was just and fair to set aside the request for information as, in her view, "information that is impossible to supply cannot be 'reasonably required' by HMRC". Comment HMRC have formidable information powers at its disposal and these powers are often used in the context of an HMRC enquiry. It is not unusual for Information Notices to be widely drafted and compliance is often an onerous task involving the recipient of the Notice having to spend a great deal of time in complying with the Notice. This case is a timely reminder that careful consideration should be given to the wording of Information Notices by HMRC. Where a Notice is not expressed in clear terms, or requests opinion, or invites the taxpayer to speculate, then the Notice should be challenged. (R D Utilities Ltd v HMRC [2014] UKFTT 202 (TC), article by Natalie Drew of RPC, reported in Step UK News Digest 01.05.14)

10. ADMINISTRATION 10.1 First-tier Tribunal Discusses Binding

Effect of Lead Case (General Healthcare Group)

The First-tier Tribunal has ruled that the decision in a lead case should be binding on related cases under rule 18 of the Tribunal Procedure (First-tier

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Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273) (rule 18) unless this would create an otherwise unavoidable injustice. Only in such circumstances could related cases be unbound under rule 18(4) (if, for example, the lead case appellant did not appeal the decision but the related case party wished to appeal). This demonstrated the need for care in designating related cases; "lead case" directions should not be made lightly nor routinely be set aside. As lead cases are binding only in respect of common or related issues, these should be clearly recorded in directions. Rule 18 does not provide for related case parties to appeal the lead case decision; a tribunal determination is needed in the related case. Related cases would usually be disposed of under rule 18(5) following the decision in the lead case, and related case parties could then appeal those determinations. The Upper Tribunal would be able to make factual determinations (or remit issues to the tribunal) if, for example, the "lead case" direction related only to matters of law. If there were factual differences, the tribunal could issue the rule 18(5) direction on the basis of the related case facts and the binding decision on law in the lead case. Why it matters Tribunal decisions are generally not binding and rule 18 causes decisions in lead cases only to be determinative of related cases. However, the government is to introduce "follower notices" so this decision may give some clues as to the limits of, and tribunal's approach to, those notices. (General Healthcare Group Ltd v HMRC [2014] UKFTT 353 (TC), reported in Practical Law Tax 30.04.14)

10.2 New Strict Liability Offence of Offshore Tax Evasion

In a speech on Friday 11 April the Chancellor, George Osborne, announced new sanctions to tackle offshore tax evasion. The Government intends to introduce a new “strict liability” criminal offence for failing to declare untaxed offshore assets. This means that HMRC would no longer need to prove that individuals who have undeclared income offshore intended to evade tax, in order for a criminal conviction to be handed down. HMRC would only have to demonstrate the income was taxable and undeclared.

There will be a consultation but it has not yet been published. The announcement provoked mixed reactions but there was considerable concern that these are very tough new powers and need strong safeguards. Paul Aplin, chairman of the ICAEW Tax Faculty’s Technical Committee, said: “As a profession, we are fully behind the Government’s and HMRC’s efforts to tackle tax evasion. However, we have considerable concerns about these new proposals. Should such sweeping powers be introduced, there needs to be strong safeguards to protect innocent tax payers from the risk of mistakes or misuse by HMRC.” Following the announcement, on Monday 14 April HMRC published an update to its offshore evasion strategy which gives more details about this and other proposals. The document ‘No Safe Havens 2014’ details the progress made in tackling offshore tax evasion, the new actions being taken, and how HMRC intend to exploit data sources better and influence behaviour. Specific actions mentioned in the document include: Introducing legislation to implement the new

OECD standard in automatic exchange of information between governments.

Consulting on strengthening the existing civil sanctions, including penalties for offshore tax evasion.

Consulting on the detail of a new strict liability criminal offence for failing to declare untaxed offshore assets.

Paying rewards to whistle-blowers who, in HMRC's view, provide significant information that helps tackle offshore tax evasion.

(STEP UK News Digest 17.04.14)

10.3 HMRC Announce Second Income Campaign

HMRC announced a new voluntary disclosure opportunity on 9 April 2014 for individuals in employment with undeclared additional income. The Second Income Campaign is aimed at any income that is not taxed under PAYE as well as capital gains. Taxpayers must notify HMRC that they

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have undeclared income (no deadline is given for this) and then calculate and pay the tax within four months. HMRC have provided a helpline for the campaign and also gives details of a separate helpline for those who want to make a voluntary disclosure but do not qualify for any campaign. HMRC state that disclosure under the campaign will attract the best possible terms, but penalties appear to be the usual range for unprompted disclosure. However, taxpayers who meet the conditions of the campaign will not have their names published. (Reported in Practical Law Private Client 14.04.14)

10.4 Charities News Roundup Response to digital giving Consultation Document The government has decided not to go ahead, at this point, with its proposals for a shorter and less detailed Gift Aid declaration in return for a shift in liability for over-claimed Gift Aid from the donor to the recipient charity. It has also confirmed that it will not set up a universal Gift Aid declaration database. However, it will publish draft regulations, during the passage of the Finance Bill 2015, designed to give intermediaries a greater role in administering the Gift Aid declaration and setting out the accompanying regulatory framework. Also, it has established a working group on Gift Aid promotion and to explore how the Gift Aid declaration can best be worded and presented to maximise take-up while protecting donors, charities and public funds against claims made in error. (Practical Law Private Client 17.04.14) Consultation on trustees' powers of social investment The Law Commission has launched a consultation on the law governing charity investments that seek to achieve both charitable purposes and financial returns. Currently, it says, some charity trustees fear that they may be breaching their duties or acting outside their powers when making such investments. (STEP UK News Digest 24 April 2014) Opposition to new anti-avoidance rules Charity organisations and professional bodies have strongly criticised HM Revenue & Customs' proposals for new legislation to stop the creation of fake charities purely as tax avoidance vehicles. STEP

said the legislation would give HMRC the power to refuse registration to any charitable foundation and would in any case be ineffective. (STEP UK News Digest 28 April 2014)

11. EUROPEAN AND INTERNATIONAL 11.1 Amending EU Savings Directive

Published Council Directive 2014/48/EU, which amends Council Directive 2003/48/EC on the taxation of savings income in the form of interest payments (Savings Directive) and was adopted on 24 March 2014, has been published in the Official Journal on 15 April 2014. The text of a Regulation or Directive is only official and only has legal force when it is published in the electronic version of the Official Journal. Directive 2014/48/EU entered into force on 15 April 2014. Member states will have to adopt and publish, by 1 January 2016, the laws, regulations and administrative provisions necessary to comply with Directive 2014/48/EU. Details of new Directive On 24 March 2014, the Agriculture and Fisheries Council formally adopted a Council Directive amending Council Directive 2003/48/EC on taxation of savings income in the form of interest payments (Savings Directive). It was adopted without discussion under the consultation procedure, under which the European Parliament (EP) may approve, reject, or propose amendments to a legislative proposal. The changes to the Savings Directive include: Establishing "look-through" procedures to

prevent the circumvention of the Savings Directive by the use of intermediaries. These procedures apply to payments made to entities and legal arrangements (for example, trusts and foundations) established in territories in which the Savings Directive or equivalent measures do not apply. They also apply to treat economic operators as paying agents when making or securing interest payments to another economic operator (including a

May 2014 20

permanent establishment or subsidiary of the first economic operator) established in a territory outside the scope of the Savings Directive.

A new requirement to provide the date and

place of birth of beneficial owners as well as his name, address and, if he has one, his tax identification number.

Replacing the definition of "interest payment"

to extend the scope of the Savings Directive to cover income that is equivalent to interest.

Member states have until 1 January 2016 to adopt the domestic legislation necessary to comply with the amended Savings Directive. (Reported in Practical Law Tax 16.04.14)

11.2 Meeting on Tax Fraud and Tax Evasion On 28 April 2014, Chancellor of the Exchequer, George Osborne attended a G5 finance ministers meeting in Paris to discuss further steps on tackling tax evasion and avoidance. At the meeting, a date for signing automatic exchange of information agreements was agreed between the UK, France, Germany, Italy and Spain. The new global standard of automatic exchange of tax information – which has been developed by the OECD and endorsed by the G20 – will be signed by the G5 at the October Global Forum meeting in Berlin together with other jurisdictions committed to early adoption. To date, 44 jurisdictions have joined the initiative launched by the G5 finance ministers last year for early adoption of the new global standard. These jurisdictions have jointly announced that they will begin to automatically exchange information with each other in 2017, with respect to data collected from 31 December 2015. The G5 finance ministers called on all financial centres that have not yet done so to now join the early adopters’ initiative. In doing so, they stressed that tackling tax evasion is a collective responsibility of all countries and financial centres should take the lead, consistent with their role and responsibilities in the global economy.

The G5 ministers also reinforced their commitment to continue assisting developing countries in building the necessary capacity so they can benefit from these developments as soon as possible. The Chancellor’s attendance at the meeting comes as HMRC begins writing to around 2,000 taxpayers with offshore accounts, data on which has been shared under the EU Savings Directive. (STEP Wealth Structuring News Digest 01.05.14)

11.3 Company Ownership Register will Name 'Controlling' Trust Beneficiaries

This week the UK government published details of its plans for an open registry of company beneficial ownership. A consultation paper sketching out the plans was first published last July by the Department of Business, Innovation and Skills (BIS). At that point, the government had not definitely decided what to do about private companies owned through an express trust. Its provisional view –- in line with the Money Laundering Regulations 2007 -– was that the trustee should always be identified as owner on the central registry, while individual beneficiaries may also have to be disclosed as the beneficial owner in certain circumstances related to disposal of the company's assets. Naming the trustee as owner was fairly uncontroversial, but many objections were made to the idea of naming trust beneficiaries. However, in the event, BIS has decided that the disclosure requirements will be even more burdensome than it originally proposed. The legislation will require that any individual who 'exercises effective control' over the trust's activities must be disclosed on the company’s register of beneficial owners. This could include the settlor, any beneficiary or the protector of the trust. As a sop to those who objected on privacy grounds, BIS notes that this definition excludes individuals who may ultimately benefit from the trust arrangement, but who do not have any control or ownership of the company itself -– such as children, vulnerable adults or individuals unaware that that they are a beneficiary, as in a will trust. The department also notes that imminent revisions to the European money laundering directive will require the trustees of express trusts to hold information on the settlor, trustee, protector and beneficiaries. The UK is supporting this part of the revised directive, but is trying to amend clauses that require all trust beneficiaries to be named. The IFC

May 2014 21

Forum, representing international legal and financial institutions, strongly criticised the proposals as 'damaging' to UK business. 'In the likely event that Asian and US financial markets do not adopt these proposals with the same speed and scope, there is a real danger that significant investment to the UK will be at risk', said its chairman Grant Stein. Moreover, said Stein, the UK registry will be based on unverified self-reporting, which cannot produce a credible system. It will also endanger privacy, unless adequate safeguards are imposed to ensure that publicly available data cannot be misused, he said. (STEP Wealth Structuring News Digest 24.04.14)

11.4 Guarded Response to UK Lead on Ownership Registries

Jersey, Guernsey and the Isle of Man have all given a non-committal response to British PM David Cameron's letter urging them to follow the UK's lead in creating publicly available registries of company beneficial ownership, including companies controlled by trust beneficiaries. The IFC Forum, representing independent international financial centres, roundly criticised the UK's proposals. (STEP Wealth Structuring New Digest 01.05.14)

11.5 FATCA Round-up UK-US Agreement Updated The government (along with France, Germany, Italy, and Spain) and with the support of the European Commission took part in joint discussions with the US government to explore an intergovernmental approach to FATCA, supporting the overall aim to combat tax evasion, while reducing risks and burdens on financial institutions. A model intergovernmental agreement (IGA) was developed and published in July 2012. The UK and the US subsequently signed an IGA - the 'UK-US Agreement to Improve International Tax Compliance and to Implement FATCA' - in September 2012 (see the 'Current documents' section below). The IGA reduces some of the administrative burden of complying with the US regulations, and provides a mechanism for UK financial institutions to comply with their obligations without breaching the data protection laws. Under the IGA, financial institutions pass information to HM Revenue & Customs (HMRC) who will then automatically exchange this information with the IRS.

The IGA has changed since it was signed, in that Annex II has been updated by a mutual agreement entered into between the competent authorities of the UK and the US. The changes result in a wider scope of institutions and products effectively exempt from the FATCA requirements, and provide greater clarity on the categories of institutions which will be non-reporting UK financial institutions that are treated as deemed-compliant under the IGA. Annex II of the IGA was amended by an Exchange of Notes between the two governments dated 3 June and 7 June 2013 (see the 'Current documents' section below). On 12 July 2013 the US announced a delay of 6 months before the commencement of FATCA. The effect of this delay is that there will be no reporting with regard to 2013, and all current deadlines for undertaking due diligence etc will be pushed back by 6 months. (HMRC website What’s New? 22.04.14) Clarification of duties of 'responsible officer' New guidance from the US Internal Revenue Service clarifies that an organisation's 'responsible officer' for compliance with the Foreign Account Tax Compliance Act need not be the same person for all the duties required. It also describes FATCA-related procedures for qualified intermediaries, withholding partnerships and withholding trusts. (STEP Wealth Structuring News Digest 22 April 2014)

12. RESIDUE

12.1 Nil Rate Band Legacy/BPR (Brooke) Facts A testator (Mr H), who had substantial business assets, instructed his solicitor to draft a will and to provide advice on IHT mitigation. He had a partner and five children, some of whom were minors. Although advised about the spouse exemption for IHT he did not intend to marry his partner as he was concerned about the depletion of his wealth on a divorce. The solicitor suggested a discretionary will trust so that trustees could defer distribution of his assets to his children until they were sufficiently mature to deal with a large inheritance. The will that was eventually approved and executed did not reflect this advice. The solicitor used a standard nil rate band discretionary will trust clause taken from the firm's bank of precedents that was designed for

May 2014 22

the straightforward situation where a testator would be survived by a spouse who would receive the residue of the estate subject to the unlimited spouse exemption for IHT. A sub-clause had been used that excluded any chargeable assets from the value of the nil rate band that would pass into the discretionary trust. The majority of the testator's assets benefited from business property relief from IHT at 100%. Because those assets were chargeable (albeit the charge to tax would be calculated according to a value after it had been reduced by 100%) and because their value exceeded the nil rate band, the effect of the clause was that no assets could pass into the discretionary trust on Mr H's death. The executors of Mr H and the trustees of the discretionary will trust applied to the High Court to either construe the will according to Mr H's intentions or to rectify it. Decision The High Court (David Donaldson QC sitting as a Deputy High Court judge) held that the drafting of the nil rate band discretionary trust was sufficiently ambiguous that it was possible to have regard to extrinsic evidence of the testator's intention in interpreting what it meant. It was desirable and appropriate that ambiguity, in the context of section 21 of the AJA 1982, should be interpreted broadly. Looking at the notes of meetings with the testator and related correspondence it was clear that Mr H had intended his business assets to pass to the trustees of the discretionary trust for the benefit of his partner and five children. Although the drafting was sufficiently poor to be classified as a clerical error that could be rectified under section 20 of the AJA 1982 (which, following Marley v Rawlings [2014] UKSC 2, should be interpreted widely), there was no need to have recourse to this remedy as it was a case that fell squarely within section 21 of the AJA 1982. Comment This case shows how dangerous it can be to use precedent clauses without considering whether they are appropriate to a client's particular circumstances and instructions. It also illustrates the difficulties that can arise when drafting a nil rate band discretionary will trust to receive assets that benefit from business or agricultural property relief. These complexities can be avoided if business or agricultural assets are left as a specific gift rather than being confined within a definition that relies on the testator's available nil rate band (see, for example, Standard will clause, Discretionary trust of

business or agricultural property, with drafting notes). It demonstrates that the criteria in sections 20 and 21 of the Administration of Justice Act 1982 are being applied more broadly since the Supreme Court's decision in Marley v Rawlings and suggests that predictions of a flood of similar cases may prove to be correct. (Brooke and others v Purton and others [2014] EWHC 547 (Ch) reported in Practical Law Private Client on 08.04.14)

12.2 Trusts (Capital and Income) Act 2013 – STEP Guidance

STEP’s UK Practice Committee has produced a guidance note to explain the impact on practitioners of the Trusts (Capital and Income) Act 2013. (STEP UK News Digest 14 April 2014)

May 2014 23

APPENDIX HMRC press releases, notes, notices and statements

1. VAT Information Sheet 03/14 (01.04.14) 2. Statutory Instrument SI 2014/488 and Explanatory

Memorandum (01.04.14) 3. Avoid an estimated charge if you've sent the final

2013 to 14 PAYE submission early (01.04.14) 4. Revised Notice 179e (April 2014) (02.04.14) 5. PAYE: What to do if your employee asks why they

don't have a new tax code (02.04.14) 6. Aggregates Levy (02.04.14) 7. Tax Residence Indicator updated (03.04.14) 8. Basic PAYE Tools for 2014 to 15 (03.04.14) 9. Revised Notice 700/63: Electronic Invoicing (04.04.14) 10. PAYE for employers - reminder for employers

operating Appendix 6 arrangements (04.04.14) 11. Toolkits to help minimise common errors – update

(06.04.14) 12. Changes to the 2013 to 2014 Trust and Estate Tax

Return (06.04.14) 13. Change of gender: telling HMRC (06.04.14) 14. Revised Notice 700/56: Insolvency (06.04.14) 15. Unauthorised Unit Trusts - Tax Returns SA900 - Year

2013 to 2014 (06.04.14) 16. Statutory Instrument: SI 2014/654 and Explanatory

Memorandum (06.04.14) 17. Statutory Instrument: SI 2014/649 and Explanatory

Memorandum (06.04.14) 18. Dates of the Personal Pensions (PP) payment runs for

financial year 2014 to 2015 (07.04.14) 19. 2014 Guaranteed Minimum Pension (GMP) increase

and Section 148 orders (07.04.14) 20. PAYE for employers: List 3 updated (07.04.14) 21. Percentage Threshold Scheme ends and introduction

of the Health and Work Service (07.04.14) 22. Individual protection 2014 (IP2014) – guidance

(07.04.14) 23. Pension savings annual allowance - split pension input

periods (07.04.14) 24. Employment related securities - register, self-certify

and file online (07.04.14) 25. Change to HMRC Stamp Taxes operations (07.04.14) 26. Save As You Earn savings arrangements - Increase in

monthly savings limit (07.04.14) 27. Joint Initiative on HMRC Service Delivery (08.04.14) 28. Budget 2014 changes - more guidance on pension

flexibility (09.04.14) 29. Technical Note on the taxation of corporate debt and

derivative contracts (09.04.14) 30. Information about the changes to Gambling Tax

Duties (09.04.14) 31. Employment-Related Securities Bulletin (09.04.14) 32. VAT and businesses supplying broadcasting,

telecommunications and e-services (09.04.14) 33. Summary notes of recent Individuals Stakeholder

Forum (09.04.14) 34. Pensions Newsletter 61 (09.04.14) 35. Revised Notice IPT1 April 2014 (10.04.14) 36. VAT Information Sheet 05/14 (10.04.14)

37. 64-8 helpcard (10.04.14) 38. Corporation Tax on chargeable gains - Indexation

Allowance - February 2014 (10.04.14) 39. National Insurance Contributions regulations in

respect of various matters have been published (10.04.14)

40. Limited Company Subcontractors claiming back CIS deductions (update) (11.04.14)

41. VAT event for businesses supplying digital services (11.04.14)

42. Statutory Instrument: SI 2014/844 and Explanatory Memorandum (11.04.14)

43. Reporting Offshore Funds (14.04.14) 44. Final regulations for Crown Dependencies/Overseas

Territories reporting (14.04.14) 45. UK businesses' income through credit and debit cards

(14.04.14) 46. PAYE for employers: Employer Bulletin Issue 47

(14.04.14) 47. PAYE for employers: correcting a 2013 to 2014 real

time PAYE submission (14.04.14) 48. Overnight subsistence allowances paid to lorry drivers

(14.04.14) 49. Taxation of US to EU supplies of digital services:

seminar 2 June 2014 (15.04.14) 50. Joint Initiative on HMRC Service Delivery:

improvements to CIS repayments (15.04.14) 51. Revised Notice 733: Flat Rate Scheme for small

businesses (15.04.14) 52. Additional guidance for collective investment scheme

holdings (15.04.14) 53. National Insurance contributions: Limited Liability

Partnerships (16.04.14) 54. The Income Tax (PAYE) and the Income Tax (CIS)

Regulations 2014 (16.04.14) 55. List of registered Community Amateur Sports Clubs

(CASCs) (16.04.14) 56. Revised Notice 742A: Opting to tax land and buildings

(16.04.14) 57. Tariff Notice No 13/14 (16.04.14) 58. Software developers: draft CT600 Guide (16.04.14) 59. How to complete the Gift Aid donation schedule

spreadsheet (17.04.14) 60. The Finance Act 2008 (17.04.14) 61. Controlled Foreign Companies (CFC) Rules - Guidance

on Finance Bill 2014 proposed amendment (17.04.14) 62. Agent Update 41 (22.04.14) 63. CTF Bulletin 73 (22.04.14) 64. Avoidance schemes using Total Return Swaps - note

with amended examples (22.04.14) 65. Update to new enhanced SDRT assessment service

(22.04.14) 66. UK issues updates for FATCA guidance and changes in

reporting on charities (22.04.14) 67. ISA Bulletin 58 (23.04.14) 68. Budget changes - pension flexibility and changes to

Finance Bill 2014 – updated (24.04.14) 69. Summary of Responses and technical consultation -

filing of VAT returns (24.04.14) 70. Revised Notice 207 Excise Duty: Drawback (24.04.14) 71. Trusts & Estates Newsletter (24.04.14)

May 2014 24

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London W1G 0PW

Tel: 020 7182 4034 Fax: 020 7182 4142 Email: MTR@gabelletax.com

72. Toolkits to help minimise common errors – update (24.04.14)

73. Revised Notice 708: Buildings and Construction (24.04.14)

74. Qualifying Recognised Overseas Pension Schemes (QROPS) (24.04.14)

75. Guide for completing paper SDLT1 returns (25.04.14) 76. The Guardian's Allowance Up-rating Regulations 2014

(25.04.14) 77. Customs Information Paper (14) 30 (25.04.14) 78. Exempt Unauthorised Unit Trusts - new annual report

form CISC12 (28.04.14) 79. Exempt Unauthorised Unit Trusts - new application

form CISC11 (28.04.14) 80. Revised Notice 162 April 2014: Cider production

(28.04.14) 81. Revised Notice 226 April 2014: Beer Duty (28.04.14) 82. Stamp Duty and Stamp Duty Reserve Tax (SDRT):

recognised growth markets (28.04.14) 83. Revised Notice 236: Customs: Importing returned

goods free of duty and tax (29.04.14) 84. Revised Notice 163: Wine Production (29.04.14) 85. Revised Notice 221 - Inward processing relief

(30.04.14) 86. Revised Notice 708 - Buildings and construction

(30.04.14) 87. Revised Notice 179e - Biofuels and other fuel

substitutes (30.04.14) 88. HMRC working with the new tax agents blog

(30.04.14) 89. Toolkits to help minimise common errors – update

(01.05.14) 90. Agents Strategy (01.05.14) 91. Revised notice 175 (May 2014) (01.05.14) 92. Minutes of the JCCC Modernising Freight

Management Working Group (02.05.14) 93. Employment related securities annual returns

(02.05.14) 94. Corporation Tax on chargeable gains - Indexation

Allowance - March 2014 (02.05.14) 95. Qualifying Recognised Overseas Pension Schemes

(QROPS) (02.05.14)

Revenue & Customs Briefs

1. VAT: deregistration of insolvent businesses. (13/14 06.04.14)

2. VAT: Withdrawal of concessions for new student accommodation and dining halls - widening of the transitional rules. (14/14 07.04.14)

3. Reporting of interest payments - Further information about EUSD returns. (16/14 22.04.14)

4. VAT: outcome of review to consider extending the VAT exemption for education to for-profit providers of Higher and Further education. (18/14 22.04.14)

5. Avon Cosmetics Limited First-tier VAT Tribunal decision on the UK's "party-plan" derogation. (19/14 16.04.14)

The Crown copyright material in this publication is reproduced with the permission of the Controller of Her Majesty’s Stationery Office. The extracts reported from HMRC documents have not been approved by HMRC. For the precise words of the original article, reference should be made to the original publication. The extract should be read subject to the qualifications mentioned therein, to which reference should be made before reliance is placed upon an interpretation. YOU SHOULD NOT ACT (OR OMIT TO ACT) ON THE BASIS OF THIS REVIEW WITHOUT SPECIFIC PRIOR ADVICE. GABELLE LLP PROVIDES A TAX CONSULTANCY SERVICE, OR WE CAN DIRECT YOU TO AN ALTERNATIVE SOURCE OF ADVICE.