Weekly tax brief | 17 November 2020

Could HMRC red tape tie up vaccine trials?
Sarah Halsted
HMRC’s recent confirmation that importers are not entitled to recover import VAT on goods they do not own creates yet another Brexit trip hazard for businesses importing goods from the EU after 1 January 2021.

Home sweet tax-exempt home – but how long do you have to live there?
Sarah Saunders
To qualify for the principal private residence (PPR) exemption from capital gains tax the property must have been occupied as a permanent home by the taxpayer. There is a long-running debate about how long this period is. In addition, people in the construction sector are regarded as unlikely to be able to claim PPR for a property held for a short time after development. A recent tax case may change that.

Don’t ignore the true impact of the automatic filing deadline extension for accounts
David Barton and Jackie Hall
The temporary extension of accounts filing deadlines was good news for companies and limited liability partnerships – but the knock-on effect on filing tax returns on time should not be forgotten. If HMRC won’t defer the deadlines, it should at least automatically waive any late-filing penalties for a period of time.

HMRC targets multinational companies in transfer-pricing crackdown
Suze McDonald
HMRC remains concerned that the British businesses of multinational companies are transferring untaxed profits out of the UK. The latest round of nudge letters may produce a short-term boost to UK tax revenues, but does it risk companies relocating significant people and profitable operations outside the UK in the future?

Is this the end of employee share schemes?
Fiona Bell and Kate Aitchison
The Office of Tax Simplification (OTS) has questioned the Government’s approach of treating certain employment share value growth as capital, suggesting instead that it should be treated as employment income as a reward for ‘personal labour’.

When is a holiday lettings business not a business? Tax case shows that Parliament must resolve inconsistency
Elaine Shiels
An 81-year-old passed away having ran a holiday letting business in which he took great pride. Despite the business being treated as a trade for income tax and capital gains tax purposes, his daughter was denied inheritance tax relief on the basis that it was an investment business. This inconsistency in the law proves that reform is required. 

 

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