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UK-Georgia agreement
A double taxation agreement between the UK and Georgia entered into force on 11 October 2005.
A copy of the agreement and explanatory notes are on the HMRC website at www.hmrc.gov.uk/international/georgia-index.htm.
HMRC website, 25 October 2005
Civil partnerships
HMRC have published draft regulations relating to civil partnerships.
- The Tax and Civil Partnership Regulations 2005 change primary legislation.
- The Tax and Civil Partnership (No 2) Regulations 2005 change the secondary legislation.
The draft regulations and explanatory notes are on the HMRC website at http://www.hmrc.gov.uk/si/
HMRC website, 24 October 2005
Interest on SDLT
As mentioned in Taxation, 15 September 2005, page 654, HMRC have been charging interest on late paid and unpaid tax and penalties for SDLT since 1 December 2003. Interest has also been incorrectly paid when applications for repayments have been made. HMRC will be making repayments of the incorrectly charged interest, together with repayment interest at 2.25% and state that they will be publishing further information as soon as possible.
HMRC have asked customers not to contact them regarding this matter and give the assurance that all customers will have received their repayment by 31 January 2006.
HMRC website, 26 October 2005
New R & D guidance
HMRC have published a new guide to research and development tax relief. The guide contains a flowchart, which a company can use to establish whether a planned project is likely to be eligible for relief, the information that HMRC are likely to require and whether a claim should be made under the large company scheme or the SME (small and medium-sized enterprises) scheme.
The guide also includes advice on preparing the claim and the 'top ten' errors most commonly made in claims. There are also 'tools' to assist in showing that the project is within the R & D definition, a template to calculate qualifying expenditure, and a checklist.
Tax consultants, Chiltern, welcome the guide, but consider that it is 'a bland summary of the rules', which have not changed and remain extremely complicated. A recent survey indicated that over 50% of companies are concerned at the cost of making a claim to R & D tax relief and presumably the issue of the guide shows that HMRC recognise that many firms have difficulty with this issue. Chiltern believes that better training for HMRC officers is required to avoid instances such as the BE Studios case (see Taxation, 4 August 2005, page 492) where the High Court effectively overruled HMRC's acceptance of a claim to the relief.
The guide, Research and development tax relief for small and medium sized companies, is available on the Internet at www.hmrc.gov.uk/randd/guide.pdf.
HMRC website, 24 October 2005
CIS deferred
In reply to a written question from the Liberal Democrat MP, Dr Vincent Cable, John Healey — the Financial Secretary to the Treasury — announced that the Government have agreed with the construction industry to extend the introduction of the new scheme from April 2006 to April 2007.
Mr Healey said that 'during this period, HMRC will step up its level of advice and compliance activity with the industry, including new interactive online software and up to 70 telephone advisers to provide help with employment status from next month'.
HMRC confirmed this announcement on their website on 21 October 2005.
Hansard, 19 October 2005, Col 1106W
