HMRC’s position with regards to the taxation of of cryptocurrencies or cryptoassets (such as Bitcoin, XRP/Ripple, Ethereum) has been an evolving area, as the wide range of forms and uses of these assets can make it difficult to determine the nature of a transaction, and therefore how a transaction should be taxed. Previous guidance on the matter provided that the taxation of cryptoassets very much depended on the circumstances of the transaction in question. Whilst the same is still true, HMRC has recently issued more detailed practical guidance for individuals, which may provide more clarity going forward. What is a Cryptoasset? HMRC has confirmed that they do not consider cryptoassets to be currency or money. In a report undert...

Often when making a donation, a charity will ask whether Gift Aid can be claimed on the donation. There are certain tax advantages and reliefs to making Gift Aid donations, which are explained in more detail below. Basic Operation of Gift Aid Gift Aid is a tax incentive that allows UK registered charities (and charities registered in other EU member states, Norway, Iceland, and Liechtenstein) to claim the basic rate tax (currently 20% in 2018/19) back on the donation from HMRC. For example: Assume a taxpayer wishes a charity to receive a total of £100. The taxpayer will actually give the charity £80 and the charity will then claim back the £20 from HMRC. Tax Relief – Higher Rate/Additional Rate Taxpayers Further tax reli...

Ultra low emission vehicles could offer attractive benefits for employers looking to provide their employees with tax efficient remuneration packages. New salary sacrifice rules would normally remove the tax advantages of offering employees the use of company cars instead of cash, however ultra low emission cars are exempt from this treatment. The Salary Sacrifice Rules The optional remuneration arrangement rules (a.k.a. the “salary sacrifice rules”) were introduced from 6 April 2017 to counter tax and NIC avoidance on certain types of non-cash benefits. Class 1 NICs for employees and employers are normally due on cash earnings from employment. However, certain benefits (like car benefit) are not subject to Class 1 NICs a...

Click here to download Issue 8, 2017 of the Intelligent Tax Newsletter. In this issue:  The "Big Tax Case" - Final Score: HMRC 1, Rangers 0 Are Directors Required to File Tax Returns? Impact of Cash Surpluses on Entrepreneurs' Relief Changes to Salary Sacrifice

Following the substantial reduction of the Finance (No. 2) Bill 2017 ahead of the June election, the Government has now published a new Finance Bill 2017 and has said that it intends to introduce it "as soon as possible after the summer recess". The effect of the new Bill will be to implement policies that were previously dropped from the Finance (No. 2) Bill 2017, including: The extension of inheritance tax to UK residential property held through offshore structures by non-UK domiciled taxpayers and trusts. The abolition of permanent non-dom status for individuals who have lived in Britain for at least 15 out of the preceding 20 years. A reduction in the money purchase annual allowance from £10,000 to £4,000 for individua...

Update -  the proposed changes to class 4 National Insurance for self-employed individuals have now been dropped. See here for further details.  A summary of some of the changes anounced by the Chancellor of the Exchequer in the 2017 Spring Budget, published on 8 March 2017. Income and Personal Tax Personal Allowance and Higher Rate Threshold The personal allowance is increasing from £11,000 in 2016/17 to £11,500 in 2017/18. The basic rate band will increase from £32,000 for 2016/17 to £33,500 in 2017/18. Individuals will therefore be able to earn up to £43,000 before paying higher rate tax. Dividend Allowance Reduction The current tax free allowance of £5,000 for dividend income is to be reduced to £2,000 fr...

The IR35 Intermediaries legislation was introduced in April 2000 to prevent individuals from providing employment services to clients through an intermediary (e.g. limited company or partnership) in order to reduce or avoid PAYE and National Insurance contributions (NICs). The intermediary will come under the scope of IR35 where the worker would be treated as an employee of the client but for the existence of the intermediary*. IR35 is therefore designed to catch ‘one man’ companies who work almost exclusively for one major client. When IR35 applies, the income of the intermediary is regarded as the worker’s earnings from employment, and the intermediary will be required to operate PAYE and the worker will be subject to income ...

Pension contributions can be a tax efficient way of accruing wealth for the future.  However, consideration should be made as to the potential tax consequences that could arise as part of pension planning. Benefits on Retirement Most schemes will allow an individual to take 25% of their pension pot tax-free upon retirement, subject to the lifetime allowance (£1m for 2016/17).  Therefore, a taxpayer could receive up to £250,000 (25% of £1m) of their pension pot tax-free upon retirement, with the remaining funds being liable to income tax.  Taxpayers should discuss the most effective options for drawing these funds with a qualified independent specialist. The government’s Pensions Advisory Service (TPAS) is available to taxpay...

In the case of Terrance Raine v HMRC, the First-Tier Tribunal considered whether the taxpayer (Raine) was the sole legal and beneficial shareholder in a company, or whether he had transferred a 50% interest in his shares to his long-term partner (Hamilton). Background Raine acquired an ‘off-the-shelf company’ to work through from an accountancy firm. The firm was responsible for the accounting, company secretarial requirements, and payroll of the company. Raine claimed that he and Hamilton were advised that they would be appointed as director and company secretary respectively, with each allocated one share each. It later transpired the accountancy firm never completed the paperwork to allot the shares. The accountancy fir...

The Finance Bill 2016 will include legislation relaxing the rules with respect to when non-residents will be required to notify HM Revenue & Customs of disposals of UK residential property . From 6 April 2015, non-resident individuals have been liable to capital gains tax on the disposal of UK residential property. Normally, a non-resident must report a disposal to HMRC and pay any tax due within 30 days of completion, although where the taxpayer is already registered for self assessment, the deadline for tax owed is extended to the normal due date (i.e. 31 January following the end of the tax year in which the disposal is made). Under the new rules, the submission of a non-resident capital gains tax return will be optional f...