Mercer & Hole’s Business blog - General business

British overseas territories, including Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands, will provide information about bank accounts held in their jurisdictions.  Details will include names, addresses, dates of birth, account numbers, balances, and facts about payments made into the accounts.   ...

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The EC has set up a platform for good tax governance, as part of the ongoing drive against evasion and avoidance. Interested parties, including national tax authorities, businesses, academics, and non-governmental organisations, will monitor member states’ progress in tackling aggressive tax planning and clamping down on tax havens.   The first meeting of the platform is provisionally planned for 10 June 2013.   ...

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One key issue from HMRC’s guidance is that taxpayers are no longer free to reduce their tax bills by any lawful means as previously held by the Courts. The GAAR ‘rejects the approach taken by the courts in a number of old cases to the effect that taxpayers are free to use their ingenuity to reduce their tax bills by any lawful means’.  Several examples given in the guidance support the principle that ‘abusive use’ of what would otherwise be lawful transaction will now not work, including: the use of structures (such as...

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HMRC has published updated guidance on the GAAR.  This guidance now covers the purpose of the GAAR and provides examples that aim to cover the following broad categories: • Situations covered by law where Parliament has given taxpayers a choice, such as the main residence section – which are fine. • Long established practice – which is fine. • Situations where the law deliberately sets precise boundaries – which is generally acceptable. • Standard planning with some element of artificiality – which is a grey area. • Transactions demonstrably contrary to the spirit of the law – which will...

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The government has signed a tax international exchange agreement with France, Germany, Italy and Spain as a further attack on tax evaders. Under the agreement, banks in the five countries will have to reveal financial details of foreign clients to that person’s local tax authority.  It is an attempt to co-ordinate international action against tax evasion. ...

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Apparently, MPs on the Commons energy select committee criticised RWE npower after it emerged that the company’s tax liability had been eliminated by tax reliefs for substantial investment in infrastructure.  One MP claimed that observers would be ‘shocked’ to hear that the company believed it should not pay tax. The problem is that it is a well-established principle of UK corporation tax that depreciation charged in the accounts is disallowed for tax purposes and instead capital allowances are given for investment in plant and machinery. This does raise concerns over the quality of public debate...

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The House of Lords economic affairs committee has recently started an enquiry examining whether a new approach is needed to taxing corporations in the current global economy. The committee has said that the recent high profile issues involving multinational firms have raised the profile of the level of tax paid by large corporations.  Apparently it has been suggested that corporation tax has become a voluntary arrangement for such large entities. The inquiry will seek to address some of the key concerns that have fuelled the tax debate, and to assess the extent to which corporation tax has become &lsquo...

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HMRC has (finally) admitted that the introduction of RTI may lead to more costs and problems for business than previously advised.  HMRC said it would monitor the possible burdens and consider whether any improvements are needed during the next few months as businesses get to grips with the new regulations.  HMRC has expressed gratitude to employers that had provided feedback about the impact of the new requirements.  HMRC acknowledges that its estimates on time and costs assume employers currently operate a standard approach to PAYE and that its figures may not take into account bespoke arrangements that...

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Workplace pension law has changed and all employers will be expected to place members of staff who meet certain criteria into a qualifying pension scheme and make contributions. Employers are required by law to automatically enrol all eligible employees into a workplace pension and make a contribution to it. Employers will be given a date by which they must auto enrol their employees – known as a ‘staging date’ – which is determined by the number of employees under a PAYE reference as at 1 April 2012. Should employers have more than one PAYE reference the earliest date will be...

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In a somewhat odd case the Upper Tribunal has ruled that a painting was exempt from capital gains tax as it was ‘plant’ and therefore a ‘wasting asset’. In theory the decision could benefit others with valuable art and antiques as items from their collections may be able to be disposed of without incurring capital gains tax.  However, even if HMRC do not appeal the case we can expect some anti-avoidance rules to counter potential abuse. ...

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