Companies

Prudential Assurance Co Ltd & another v CRC, Chancery Division

Some banks and other financial institutions use inappropriate criteria to decide in which format they report payments of interest, HMRC have warned.

The department’s announcement follows an initial check of data supplied to fellow European Union states under the EU savings directive.

Financial institutions’ declarations regarding payments of interest can be made either under FA 2011 schedule  23 –  by type 17 and type 18 returns – or the UK regulations that implement the savings directive.

Glapwell Football Club Ltd (TC2904)

A director’s loan account was overdrawn by £200,000 at the end of the accounting year and a dividend of an equivalent amount was declared as a repayment. Ffurther loans totalling £180,000 were made subsequently

HMRC have published draft guidance on the above-the-line credit for large companies for research and development expenditure incurred on or after 1 April 2013, to run alongside the current scheme until it ends on 31 March 2016.

The credit discharges corporation tax that a profit-making company would have to pay, while allowing businesses with no corporation tax liability to receive an immediate benefit either through a cash payment or a reduction of tax or other duties due.

HMRC have published an amended technical note on compensating adjustment rules, following a recent consultation.

The transfer pricing rules are designed to mainly avoid double taxation between individuals and connected companies on international transactions, but they also apply to transactions within the UK. An increase in the taxable profits of one party gives rise to a right of the counterparty to claim a corresponding tax reduction known as the compensating adjustment.

A one-man limited company made a substantial donation to Better Together, the organisation promoting the continuation of the UK. Is this allowable as a deduction in the company accounts?

Changes to the code of practice on taxation for banks are set for Finance Bill 2014, following a consultation on strengthening regime

The key changes:

Two shareholders own two companies, but unequal shareholdings. They wish to go their separate ways and are willing to carry out a share swap to each achieve independent ownership of one of the companies

Warning: there can be adverse consequences to breaking new regulations on loans to participators

A company had a plan for a new business venture, but required an injection of capital to progress. The shareholder’s wife loaned money to the company and is being paid interest. Is this allowable and what happens if the project does not proceed?

R Baker (TC2790)