Mark McLaughlin Associates

An unfortunate effect of the recession has been an apparently increasing number of capital losses on assets. A negligible value claim (under TCGA 1992, s 24) is a useful mechanism to realise an allowable capital loss. In cases involving qualifying shares, the loss can be converted to an income tax loss and offset against general [...]

The issue of whether a worker is employed or self-employed is often unclear. This uncertainty has resulted in a number of Court cases over the years. From those cases various indicators have been established, pointing towards either a contract of service (employment) or a contract for services (self-employment). Treating a worker’s employment status correctly is [...]

Taxpayers understandably want certainty about their tax affairs, and demand finality when submitting their tax returns, that HMRC will be unable to make a ‘discovery’ outside the normal enquiry window. Unfortunately, there is invariably uncertainty when submitting returns about whether disclosures in it (normally in the ‘white space’) are sufficient to bring about the required [...]

The use of management charges between related businesses is a relatively popular and well-known tax planning technique. Management charges are often considered if, for example, companies are ‘associated’ for small companies’ relief purposes to minimise tax liabilities by ensuring that more profits are subject to a lower rate of corporation tax overall.  There is some degree [...]

In this edition of Practice Update: 1. Management charges – Tax problems with non-commercial charges between businesses. 2. Employment status – How the Employment Status Indicator Tool can help in a dispute. 3. Negligible value claims – Avoiding a common pitfall for asset owners. 4. Discovery assessments – What is an adequate level of disclosure to avoid a ‘discovery’ [...]

HMRC seems determined to adopt a ‘policing’ role in respect of tax agents. A further HMRC consultation document (‘Working with Tax Agents: The Next Stage’) was published with the Pre-Budget Report 2009. There are two main categories of tax agents; those who are affiliated to a professional body, and those who are not. HMRC’s first consultation [...]

It is no secret that HMRC is taking a tougher line against tax avoidance. Indeed, there is a degree of openness about the type of tax planning arrangements that HMRC regards as unacceptable, or which are not considered to work as intended. HMRC has an ‘Anti-avoidance Group’ section on its website, which sets out HMRC’s strategy [...]

When dealing with small and owner-managed companies, it can often be difficult to ascertain the number of associated companies. For small companies relief purposes, the lower (£300,000) and upper (£1.5 million) ‘relevant maximum amounts’ are divided between active associated companies in the accounting period. The small companies’ rate of 21% applies to profits up to the [...]

The ability of companies to reduce share capital has been simplified following changes introduced in Companies Act 2006 from 1 October 2008. The capital reduction procedure (in CA 2006, ss 641-657) was discussed in my article ‘Don’t wind me up’ (Taxation, 5 February 2009), in the context of winding up companies using Extra Statutory Concession C16. As [...]

In this edition of Practice Update: 1. Reducing share capital – The tax effect of the Companies Act 2006 procedure. 2. Associated companies – The rules for small companies’ relief purposes are about to get easier. 3. Regulating tax advisers – HMRC’s consultation on working with tax agents. 4. Tax avoidance schemes – HMRC’s online warnings about certain tax [...]