Avoidance & evasion

A record £253m was recovered by HMRC last year from small and medium businesses that exploit legal tax avoidance strategies.
Times

While smaller companies will sometimes back down because they can’t afford to argue, it is also true that many avoidance schemes fail in the detail of their execution, especially if they are implemented by people who do not fully understand the way they work.

Business

The chief secretary to the Treasury, Danny Alexander, is urging government colleagues to extend the £250,000 tax-free allowance for capital investment by companies for at least another year.
Times

The annual investment allowance began at £50,000. It was increased to £100,000, cut to £25,000, and then put up to to £250,000 for two years – which is unlikely have much effect on the economy given the reduction to £25,000 was on the basis 95% of UK businesses spent less than the amount each year. Much more problematic is what happens to firms with accounting periods spanning the changeover dates: ones that find they have extremely small qualifying sums for expenditure in the critical one or two months of pre- or post-change.

Income

The deputy prime minister, Nick Clegg, is pushing for a £500 addition to the personal tax allowance, in a move that would see it rise to £10,500 by April 2015.
Guardian

The Sunday Times recently reported that around 37% of British households receive more in direct cash benefits, including state pensions, than they pay in tax. An increase in the personal allowance will mean more of the tax load is transferred to a shrinking section of society. The 10% tax rate fiasco and the coalition agreement mean the personal allowance will have more than doubled in the ten years to 2015, anyway. The Institute for Fiscal Studies recently recommended that future relief be directed to increasing the point at which National Insurance starts to be paid.

VAT

The public purse could benefit from hundreds of thousands of pounds of extra VAT next year following an EU shake-up of tax rules concerning cross-border sales of telecoms, broadcasting and digital services.
Financial Times

The place of taxation for the affected supplies will be determined by the location of the consumer from 1 January 2015, instead of the supplier. The change will require the supplier to ensure it has appropriate information about the customer for VAT reporting.

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