New 200% Penalty Rate

The maximum penalty for failure to disclose income or capital gains has traditionally been 100% of the underpaid tax.

HMRC have recently published a list of more than 50 jurisdictions. Taxpayers will face penalties of up to 200% of their tax liabilities for non-disclosure of income or gains of assets invested in these countries.

The level of penalty is based on the perceived transparency of the jurisdiction and their willingness to share information. HMRC have categorised The Isle of Man and Guernsey as more transparent than Jersey or Gibraltar, for example.

This change in the maximum rate of penalties makes the ongoing Liechtenstein Disclosure Facility (LDF) even more attractive given that it attracts a fixed penalty rate of 10% – which could make a significant difference compared to a 200% penalty.

Please see our latest newsletter for further details on the LDF by clicking the link or by visiting our website directly.

ESC A19 – HMRC Acting Late

2010 saw HMRC in a high profile exercise to gain more tax from individuals in the PAYE system.

There is evidence of assessments now being raised by them in order to claw back tax which the PAYE system hasn’t managed to collect.

If you receive a bill now, then a couple of checks are relevant:-

1) Is the assessment correct, based on your actual income and reliefs for the tax year in question
2) Is it possible for a review to be requested under ESC A19, that HMRC acted on information too late

We dealt with a case recently where HMRC acted late on receipt of form P46 from the individual’s employer.

Call Eaves & Co on 0113 2443502 for a free initial consultation

Changes to ESC C16

Extra Statutory Concession  C16 has long been an extremely beneficial and straightforward way to deal with the tax implications of the striking off of a company.

Under the concession, Capital Gains Tax rather than Income tax, is payable and the cost of an expensive liquidation is avoided – as long as conditions are met.

However, a proposed amended law sets out the new condition that any payment at the time of the dissolution will be liable to income tax if it exceeds £4,000.

So  the favourable tax implications of ESC C16 are going to be heavily restricted. If you are conisdering striking off your company to release capital and assets it is better to do it sooner rather than later.

If you are considering potential liquidation of your company please get in touch for a no cost initial discussion.  

Company Restructuring

We have recently been dealing with a project in our Leeds office involving a company restructuring.  The client was required to reduce his shareholding in the company as part of the arrangement for a seperate sale of shares in another company.

The situation was complicated by the fact that the company’s other shareholder did not want to obtain outright control of the company.

We proposed a restructuring that would enable the shareholdings to be equalised at 50:50 between the shareholders, thus achieving the desired reduction and commercial objectives.  Importantly, we received clearance from HM Revenue & Customs for the proposed transactions and as such they should be achievable at a very low rate of tax with a significant saving over any other options for restructuring.

Eaves and Co Specialist Tax Advisors can help you with advice tailored to your specific needs.