Tax tips newsletter for professionals

The general rule in tax disputes is that each party bears their own costs. This means that neither party will have to pay for any costs incurred by the other side in bringing the dispute to a resolution, irrespective of the outcome. Conversely, it also means that the winning side will not receive any support from the losing party with the cost of pursuing the appeal.

David Tipping considers the circumstances in which a taxpayer may be liable to pay HMRC’s legal costs in a tax dispute. 

On death, a person’s estate is distributed according to the provisions of the deceased’s will. In the event that the deceased has not made a will, the person is said to die intestate, and the intestacy rules will then dictate how the estate is to be distributed amongst certain beneficiaries.  

Malcolm Finney explains what a two-year discretionary will trust is and how it operates in practice. 

The purpose of the settlements legislation (in ITTOIA 2005, Pt 5, Ch 5) is explained in HMRC’s Trusts, Settlements and Estates Manual at TSEM4015 as being ‘to prevent an individual from gaining a tax advantage by making arrangements which divert their income to another person who is liable at a lower rate of tax or is not liable to tax.’  

Alex Spencer discusses the ‘settlements’ legislation and considers some common traps and pitfalls. 

The VAT flat rate scheme (FRS) simplifies accounting for small businesses by paying a fixed percentage of turnover to HMRC, rather than calculating VAT on individual purchases and sales.

Andrew Needham looks at some of the pros and cons for small businesses of being on the flat rate scheme. 

Mark McLaughlin reviews two recent important tax cases:

When claiming advertising expenses, no deduction is allowed for expenditure unless it is incurred ‘wholly and exclusively’ for trade purposes (note that the third requirement for employment income expense purposes of being ‘necessarily’ incurred does not apply.  

Jon Golding looks at business advertising methods and whether the costs will be allowable against tax. 

Capital gains tax (CGT) is a tax on the chargeable gain made on the disposal of an asset. It is not necessary to sell the asset; an asset may also be disposed of by giving it away or by exchanging it for something else.  

Sarah Bradford explores how best to use capital losses and the annual exempt amount.