News

PAC also critical of reliefs cost data

Plan revived to tackle offshore evasion

Employment experts have accused HMRC of misleading businesses about the operating cost of IR35.

Statistics released by the department yesterday suggest UK firms spend an annual total of £16m on administrating the controversial anti-avoidance measure, which is aimed at ensuring freelancers working through their own limited companies pay income tax and National Insurance at a levels similar to those of regular employees.

Promoters of tax avoidance arrangements could be forced to publicise the fact they are monitored by HMRC, under new rules set to come into force later this month.

The FA 2014 (High Risk Promoters Prescribed Information) Regulations 2015 will allow the Revenue to issue conduct notices to scheme promoters identified by the department as high risk. 

Parties that do not comply with directions to alter their behaviour will receive monitoring notices and be expected to make their circumstances clear to prospective customers.

HMRC have published more details on the information that employment intermediaries will be obliged to provide from next month.

Staffing agencies and similar firms will have to submit an online report to the Revenue every three months, providing details of supply workers for whom they do not operate PAYE on payments.

The first report is for the period 6 April to 5 July, and must reach HMRC by 5 August. A template is included in the official guidance, along with instructions on how to complete the form.

HMRC have taken legal steps to clampdown on plant and machinery sale-and-leaseback transactions designed to avoid tax.

The Revenue said it recently became aware of leasebacks that purported to create substantial capital allowances on assets that previously entitled the owner to no allowances.

Legislation is set to be introduced in Finance Bill 2015, with effect from 26 February 2015, to ensure an entitlement to capital allowances cannot be created by leaseback or connected party transaction when an asset is acquired without incurring expenditure.

Revenue addresses evasion controversy

HMRC have published updated guidance on the general anti-abuse rule (GAAR), effective from 30 January 2015.

The new information replaces the 15 April 2013 version and includes documents setting out the changes, with updated links and statutory references and corrections to typographical. Substantial alterations include:

Audit office praises department’s approach to recommendations

A new consultation from HMRC looks at how to deter taxpayers using what the department considers to be abusive tax planning schemes.

The document, Strengthening Sanctions for Tax Avoidance, suggests removing the economic benefit of avoidance, and increasing the reporting requirements of those who enter into legal tax-dodging arrangements.

Charities have been issued with stern government guidance on the right way to take advantage of tax breaks.

The Charity Commission’s document explains that reasonable use of fiscal reliefs and tax planning is necessary and sensible, but urges trustees to have regard to their duty to act prudently in the best interests of their charity and not enter into arrangements that could damage the reputation of the organisation.

So-called pay-day-by-pay-day (PDPD) provisions continue to be used by low-paid agency workers to obtain tax relief for travel costs, despite HMRC deeming such schemes non-compliant, according to the Low Income Tax Reform Group (LITRG).