.png)
.png)
KEY POINTS
- A review of the tax year.
- Changes to powers, and questions about how they will work.
- Offshore disclosure and the two opportunities
- Taxpayers charter and equitable liability
Each year, Taxation enters a team into the CIOT London Branch quiz.
Each year, although we enjoy ourselves tremendously, we end up near the bottom of the table.
This year we have made this easier for the organisers by calling our team And in Last Place, expecting to hear, ‘And in last place it’s And in last place’.
Anyway the quiz is a general knowledge one set by Keith M Gordon, and every year I vow to pay attention during the year and remember the things that he might set as quiz questions for the ‘what happened this year’ round. And then every year I forget.
So today, hours before getting the train for the quiz, I’m looking at the Wikipedia entry for 2009 and trying to remember facts and figures, while at the same time looking back at what happened in tax during the year.
Winter
That’s the wonder of Woolworths... oh. The recession finally catches up with one of the high street’s best loved names. In the tax world, the rate of interest on overpaid tax falls to 0%.
In a masterpiece of mistiming, HMRC announce that they are opening a High Net Worth Unit to handle the affairs of the wealthiest 5,000 taxpayers, and find that they are castigated for offering them special attention. Do the media not realise that ‘special attention’ from HMRC might not be wholly welcome?
But the biggest shock horror of the month has to be that the Taxation editorial team finds the online filing system so easy to use that at least two of their tax returns are submitted more than a full day before the deadline of midnight on 31 January, despite our normal practice of leaving it until the last minute (almost literally).
February, and Britain is snowed in for a week. What we need is a nice cup of tea to keep us warm, which makes it all the more pleasing to see Marks & Spencer win their final victory over zero rating chocolate-covered teacakes: a full rebate of the VAT paid is due, with no deduction for unjust enrichment (which itself sounds like a good brand name for some wickedly extravagant chocolate biscuits).
February also sees our call for the date of the Budget to be fixed, following the first rumours that it might be in April rather than March. Although the reasons being given concern the G20 finance ministers meeting, it is hard to avoid the conclusion that the April date subsequently announced is chosen to prevent further forestalling against the pension changes for higher-rate taxpayers.
March, and swine flu is beginning to spread from Mexico and the USA to other countries. You won’t, however, catch any viruses from the brand new Taxation website (and if you think that pun was bad, I advise you to not bother reading Chris Williams's festive article this week).
Meanwhile, Mike Thexton and Neil Warren reveal the surprising outcome of a meeting they had with HMRC to discuss the VAT flat rate scheme – HMRC believe that buy-to-let income, sales of capital assets and bank interest on business accounts should be included within the turnover on which the flat rate is charged.
Spring
April, and Alistair Darling’s Budget confirms and extends the first increase in an income tax rate for 30 years, with the announcement of a 50% rate from April 2010.
Our very own Taxation hound, Rufus, likens the Chancellor to a friend of his who has lost the use of his back legs and now rolls around the park with them supported by a couple of wheels:
‘In my mind, then, the Government is just like Rex. Running about, desperately still trying to keep things on an even keel, upsetting a few people… but not realising that the wheels are about to come off.’
April also sees the end of that much-loved institution, the General Commissioners, as the tribunals system is reformed and tax cases go to the First-Tier tribunal with an appeal to the Upper-Tier tribunal.
When the Supreme Court is introduced in October, the only judicial body hearing tax appeals which remains the same is the Court of Appeal.
Taxation covers both the abolition of the old, with a fond farewell to the General and Special Commissioners, and also the introduction of the internal review system, an alternative method of resolving conflicts.
May, and the tsunami of The Daily Telegraph’s revelations about their expenses breaks over MPs.
Taxation is still concentrating on the new powers regime, with Kevin Slevin asking whether the internal guidance goes far enough and Andrew Hubbard saying that we need to make the new regime work.
Meanwhile, Paddy Harty gives us a taste of the future ‘name and shame’ policy for tax evaders, explaining how the system has worked in the Republic of Ireland.
Taxation also gives an overview of the CIOT’s Green Tax Report, launched as a website. It looks at the economic rationale behind green taxes and at the alternative option of cap and trade.
May also, of course, saw the Taxation Awards, where John Whiting won the Lifetime Achievement award, and Chris Davidson from HMRC won Tax Personality of the Year. As always, a great night was had by all, with the winners celebrating and the other nominees drowning their sorrows.
If you want to see pictures of the night, go to TaxationAwards.co.uk, where you can also download details of the 2010 awards. Who knows, maybe next May it will be you appearing in those winners’ photos.
June, and MPs’ expenses is still dominating the news, with Kitty Ussher resigning as Financial Secretary to the Treasury over her use of the only or main residence exemption.
Richard Curtis’s article on the subject raises the more radical suggestion that either the three-year exemption rule should be abolished in such cases, or perhaps that the whole main residence exemption should go, subject to the introduction of a rollover relief.
The Budget is still a major subject of discussion, especially once the proposal to abolish equitable liability is found, hidden away in the small print. An article by Arthur Hook explains the problems which it would cause, especially for some of the people helped by TaxAid (where he then was, on secondment from KPMG).
Summer
This proposed abolition of equitable liability is taken up as a campaign by Taxation in July, pointing out that the opposite of equitable liability is inequitable liability, and surely HMRC don’t intend to argue for that? It quickly becomes clear that the full impact of abolishing it has not been fully appreciated.
The already much-trailed New Disclosure Opportunity (NDO) is finally announced, with a deadline for notifying an intention to use it originally set at 31 October, although it later gets extended to 4 January.
Disclosures can be made by post or online, but the experience of the swine flu advice website, which also launches in July, is not encouraging – it crashes within hours of its launch due to overwhelming demand.
Fortunately the NDO website is not overwhelmed – which, of course, only leads to stories about the lack of response to the NDO.
August sees England winning the Ashes in a series which swings one way and then the other before the final decider at Lords. The Aussies are also the subject of an article about equitable liability, as we look at the comparable Australian system for dealing with writing off unconscionable tax debt.
Meanwhile the position for offshore disclosure becomes decidedly more complicated as the Liechtenstein Disclosure Facility (LDF) is announced.
The differences between the NDO and LDF are immediately remarked on, particularly the difference in the number of years for which income has to be disclosed (20 years for the NDO but only 10 for the LDF).
Autumn
By September, the taxpayers charter has survived a distinctly dodgy start to the year, with a draft that gave taxpayers a ‘right’ to be ‘relentlessly pursued’ if they engage in tax avoidance. Now there is a much more sensible draft, based (as we and many others had suggested) on the Australian model of a series of short and simple statements backed up by more detailed explanations.
The campaign on equitable liability continues, with Keith Gordon arguing that it is well within HMRC’s current collection and management remit. Meanwhile HMRC take a sideswipe at employee benefit trusts, arguing that contributions made by close companies are often to be treated as transfers of value.
The postal strike in October only brings home the importance of having your free subscriber’s log-in to Taxation.co.uk sorted out: email your subscription details to additionalusers@lexisnexis.co.uk.
It also brings a confirmation from HMRC that having a VAT return arrive late because it is stuck in a sorting office will be a ‘reasonable excuse’.
Meanwhile we are the first to get clarification from HMRC that, while the NDO is the last disclosure opportunity for customers of offshore banks that have a UK presence, they are still talking to other offshore jurisdictions about deals similar to that with Liechtenstein.
November brings the judgment of the Court of Appeal in Grace: the case is remitted to the tribunal for rehearing, but with no order as to costs, which seems unfair on Mr Grace. Meanwhile we await the decision in Gaines-Cooper.
The 2010 Taxation Awards are launched with a call for entries included in our 12 November issue.
And finally December brings the pre-Budget report, and yet another change to the once-simple rules for pensions. It also confirms that equitable liability will be retained.
Contestants ready
So there I was, primed and ready for the ‘events of 2009’ round. And what did we get? An ‘events of the ten years to 2009’ round.
Drat.
Never mind. We came a respectable fifth equal, though I think this time we may have just been edged out of our normal claim to be the undisputed noisiest table at the quiz.
