John T Newth

JOHN T NEWTH FCA, FTII, FIIT, ATT provides some light relief at the festive season.

THIS YEAR'S SEASONAL selection commences with two items which have at least some relevance to tax work, both having appeared on AccountingWEB during the year. After that, like all good Christmas parties, we shall digress far and wide with some schoolboy howlers and other frivolities. We must not be too hard on the perpetrators of these; even Taxation once noted that a Finance Bill had received Royal Ascent!

Two cases on VAT avoidance schemes: Blackqueen Limited (17680); and The University of Huddersfield Higher Education Corporation (17854).
Dodgy motor scheme?
A case of some notoriety at the VAT Tribunal, made available last summer, concerned a convoluted tax avoidance scheme entered into by a group of companies within the motor trade. The purpose of this scheme was to enable the group to obtain full input tax credit for VAT purposes on purchases of vehicles, but to account for output tax only on the profit margin.

JOHN T NEWTH FCA, FTII, FIIT, ATT explains the increasing threat of inheritance tax to the small estate and offers some straightforward solutions.

RECENT PRESS REPORTS have highlighted the fact that more and more relatively small estates are threatened by the imposition of inheritance tax. While one welcomes the increase in the inheritance tax exemption to £250,000 in the 2002 Budget, this means very little to people living in the South East.

JOHN T NEWTH FCA, FTII, FIIT, ATT reports on a successful conclusion to an employment status case.

THE QUESTION AS to whether a worker is employed or self employed is a perennial problem. There is no definition of employment and self employment in statutory law and the ever-increasing list of cases tends to confuse rather than resolve the situation. It is understood that the role of status Inspector in a Taxpayer District Office is just about the most unpopular job in the office. This is a record of a case that I dealt with during the past few years.

JOHN T NEWTH FCA, FTII, FIIT, ATT reminds readers that some income is exempt from taxation.

JOHN T NEWTH FCA, FTII, FIIT, ATT summarises a case recently heard by the Special Commissioner.

IN 1988 MRS S settled a 95 per cent interest in a house on trust to pay the income to her husband for life. After his death, trustees were to hold the capital and income on discretionary trusts for a class of beneficiaries which included the donor, with default trusts in remainder.

An interest in possession

The trustee of a testator who died in March 1981 appealed against a notice of determination regarding clause 3 of the will. The terms of this clause were that a Mr Fred Harrison and his wife had the right of occupation of 1, Seacroft Square, Skegness during their lifetime and had the use of the furniture.

The testator, Mr Rupert Charles Adams, died in March 1981, then Mrs Harrison died and Mr Harrison died in August 1998.

JOHN T NEWTH and ALLISON PLAGER summarise some recent cases heard by the Special Commissioners.

Relief in redundancy

The appellant company had carried on manufacturing businesses from various sites and through different divisions in Scotland. However, in August 1997 the entire share capital of the company was purchased by Fullarton Computer Industries Limited.

JOHN T NEWTH FCA, FTII, FIIT, ATT highlights yet another complication for self-employed individuals.

The Inland Revenue is very keen to 'recategorise' workers as employees who have previously enjoyed self-employed status. Other individuals may move from employment to self employment or resume employment on a career change.

The direct tax consequences of such changes are well known, complicated enough in themselves and beyond the scope of this article. Here, the writer seeks to highlight little-known National Insurance regulations.

JOHN T NEWTH FCA, FTII, FIIT, ATT highlights a disturbing development in communications between the Inland Revenue and the taxpaying public.

IN CURRENT PARLANCE we are all now 'customers' of the Inland Revenue. Taxation staff who visit Somerset House for press and other occasions receive a most friendly welcome, along with other guests and visitors for such events.