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Personal tax and capital gains post June 2010

Making the tax system simpler is an admirable aspiration but it does not necessarily make it fair. The recent changes in the capital gains tax rules, or at least in calculating the charge to capital gains tax demonstrate this amply.

As expected and as heralded well in advance by the Coalition, the rates of capital gains tax were increased. Although effectively for basic rate taxpayers the main rate stayed at 18%, for the majority including the basic rate taxpayers deemed to go into the higher rate threshold by dint of … Continue Reading

Capital gains and wild exaggerations

We now know that the “Emergency Budget” will be on 22nd June. In the interim we will have further flapping about the headline rate of capital gains tax going up to the highest marginal income rate (40 or 50%), as opposed to the 18% flat rate we currently have for non-business assets and an effective 10% rate for business assets.

Well hang on, isn’t that what we had up to April 2008, only two years ago? The rate then was effectively 10% for business assets … Continue Reading

Unfair and unreasonable!

With effect from April 2010 HM Revenue & Customs are taking away a long established concession or non-statutory arrangement known as “Equitable Liability”. Not a lot of people know about its existence, even professional advisers, perhaps because it does not come up too often.What is Equitable Liability? Well, it is a practice which helped out a group of people you may not feel too sorry for; those who did not submit their Tax Returns for quite a number of years. When Tax Returns have not been submitted, HMRC is entitled under statute to estimate the tax which might … Continue Reading

Amateur tax avoidance

I am not sure how people dream up ideas as to how they can avoid tax and then just do what they think is necessary without talking to a professional adviser. Very often their “cunning plans” can be very costly indeed.I have dealt with a client who arranged for his father to give away his parents’ house to him to avoid inheritance tax. Firstly, it did not work from the IHT point of view because his parents and then his mother after his father’s death continued to live in the property. After his mother died he sold the … Continue Reading

HMRC attacks construction industry workers

Towards the end of July HM Revenue & Customs published one of their famous consultation documents. I say “famous” because we have had quite a number of them in the past couple of years, and for the most part HMRC takes little or no notice of the opinions of tax professionals and other interested parties before doing for the most part what they always intended to do. The exception to all this was the major changes in the taxation treatment of trusts from April 2008, where HMRC should have had a consultation, but chose not to, blind-siding everyone with an … Continue Reading

HMRC Roadshow Essex

The headline billing of the event I attended last week was as above, but upon arrival I was handed a brochure in which HM Revenue & Customs welcomed me to their Business Advice Open Day. The venue chosen, the Five Lakes Hotel was excellent, with plenty of room downstairs for the various stands as well as excellent conference rooms for the seminars going on throughout the day. We will gloss over the catering for which one cannot hold HMRC responsible.I had heard on the grapevine that the roadshow was coming to Essex, but booked online using the information … Continue Reading

Casualties in the tax world

It seems there are a considerable number of people in the accountancy and tax world who have lost their jobs, and many more who will fear the axe. I was surprised to hear of a quite senior person who had left his Big Four job at a regional office having moved house and uprooted his family to move there. No matter what “leaving package” he has been given, the reality is that if he does not find another post soon his standard of living will fall and he and his family will have to draw in their horns. There are … Continue Reading

Tearing my hair over small company housekeeping

Like others in the profession I try to drum into my clients that they should practice good housekeeping in their businesses, remember that their company’s money is not their own and to ask me before doing anything out of the ordinary. This is the time of year when we tend to find that some clients have ignored our advice and painted themselves into a corner from which even I with my skills and long experience have difficulty getting them out in a painless fashion. There are some golden rules in running a company and I am not normally into quoting … Continue Reading

Recession blues or an opportunity?

The tax world is not immune from the current economic problems and already many tax department employees of larger UK firms such as KPMG have been made redundant, most particularly in the corporate sector. The financial press has reported employee shedding by KPMG during much of 2008 and we must assume that other firms are also making their staff redundant. These are strange times and it will be shattering for those who suddenly do not have a job and may have difficulty finding a position anywhere given the surfeit of people suddenly on the market.One supposes that whilst … Continue Reading

Gordon in Wonderland

The BBC reports the Downing Street reaction to the comments of Peer Steinbruck, the social democrat German finance minister but The Times reports the comments with less spin.

I would not have thought the remarks were that controversial. I expressed similar views in this blog on 28th November, and I was not alone.

“You are old, father Gordon,” the young man said,”And your hair has become very grey;And yet you incessantly stand on your headDo you think, at your age, it’s the way?

“In … Continue Reading