A recent Tribunal case focused on the question as to whether legal fees were deductible by the taxpayer company. In 1991 the company had been granted outline planning permission for an open-air market. A further planning application was approved in 1994 but with trading limited to weekends. By 1996, the compnay was also operating on bnak holidays and in the days leading upto Xmas. The Council invited the company to seek further permission to regularise the position. In 1997 the Council granted permission for the company to trade on ten weekdays a year, as well as weekends, but the company breached these terms by trading every Wednesday in 2001. In 2003 the council issued an enforcement notice, against which the company appealed. The company also appealed the decision to the High Court and applied for permission to go on to the Court of Appeal; this was not allowed.  The company incurred professional fees in connection with its planning appeals and claimed a total of almost £180,000 as a deduction fo...

HMRC together with the Department for Work and Pensions (DWP) have launched a new scheme on a trial basis which will allow individuals to make repayments due to HMRC by way of a reduction in their DWP benefits.  The trial, participation in which is voluntary, will allow individuals to reduce their tax credit overpayments and /or self assessment debts. HMRC have confirmed that individuals asked to participate in the trial will only be contacted by letter (not by telephone).  If the trial is successful it is likely that more individuals with monies owed to HMRC will be offered the opportunity to make repayments by an agreed deduction in their DWP benefits.  Any queries in relation to the scheme should be directed to HMRC on 0151 703 8075.

HMRC have published new draft guidance on company residence.  The guidance specifically concerns the circumstances in which HMRC will not normally review a company's residence status. The guidance includes 8 short examples of scenarios where HMRC would not usually seek to establish that a company is UK resident for the purposes of  determining whether it is subject to UK corporation tax. The guidance also includes a ninth example which is designed to illustrate a typical case where an enquiry may be necessary to review a company's residence status.  The ninth example reads as follows "The majority of directors habitually perform a significant part of their duties in the UK, merely leaving the UK to attend board meetings. HMRC may wish to examine all relevant factors in such a case to determine whether or not the company should be regarded as resident in the UK".

A new online filing system for trust and estate tax returns took effect from 1 July 2010.  The new system is expected to reduce the amount of time it takes for HMRC to process any tax repayments as well as shortening the time taken to deal with queries relating to the return. Prior to this change, tax return submitted online were printed out and input manually by HMRC creating the potential for transcription errors!

Families and individuals who receive tax credits should renew their claims by 31 July 2010.  Claimants who do not renew on-time may have their payments stopped. Claims should be renewed by completing the renewals pack sent by HMRC earlier this year.  HMRC need to be notified where there have been changes to the family size, child care costs, number of hours worked and salary.  Details of previous year’s income also need to be completed on the form to allow HMRC to check if the correct tax credits have been paid. Any further changes which take place during the year should be notified to HMRC immediately, such as significant changes in salary or the birth of a new child. Any families or individuals who receive a ‘nil’ award or only the full family element of the child tax credit do not need to take any further action once the details included on the statement from HMRC are correct.  These claims will be automatically renewed.