Private Client Issue Edition Six
TAX MATTERS THE DEVIL IS IN THE
Vincent looks at the importance of using a professional to assist with the preparation of your self assessment tax return and how this can save money in the long run.
THERE'S NO BUSINESS LIKE NON-BUSINESS
PULLING YOUR CRYPTO INTO SHAPE – Compliance work in the crypto space
GLOBAL MOBILITY
- UK tax considerations as travel takes off again
Your Tax Return is not a Tax Review Completing your regular tax return is no replacement for a comprehensive review of your personal tax situation – especially if you suspect that you have overpaid or that your tax situation is complex. Whatever your tax concerns, our team of tax specialists can provide bespoke advice to minimise your tax liabilities.
To discuss how ETC can help you plan your tax affairs efficiently call the team on 0161 711 1320 or email enquiries@etctax.co.uk
Making the complex simple
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Contents
June 2022 Edition
First word
" I wonder what it would be like to live in a world where it was always June." - L.M. Montgomery
Features
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o, it has been ice lolly’s all around here at ETC HQ; keeping the team cool during the heatwave has been top priority!
The Devil is in the Detail – The importance of using a professional to assist with the preparation of your self-assessment tax return
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As the new tax year is now not so new, attention turns to the matter of tax compliance and why it is both important and beneficial to start looking at your tax affairs sooner rather than later. We have a variety of content this month, and please take some time to read the latest edition of Tax Matters that Matter! This month we bring you…
Pulling Your Crypto into Shape – ETC Tax’s experience of compliance work in the crypto space
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Global Mobility – An insight into UK tax considerations as travel takes off again
• The Devil is in the Detail – Vincent Costello looks at the importance of using a professional to assist with the preparation of your self-assessment tax return. • There’s no Business-like Non-Business – Our VAT Specialist Keith Miller considers the difficulties faced when establishing whether activities are business activities or non-business activities (for VAT purposes).” • Pulling Your Crypto into Shape – Alexander Wilson discusses ETC Tax’s experience of compliance work in the crypto space and considers some of the pitfalls and workarounds. • Global Mobility – Amie Manchester gives us an insight into UK tax considerations as travel takes off again. • Case of the month this June is about checking our clients are treated fairly in a tax investigation by ensuring HMRC are made to act fairly. • This month we have put Amie Manchester, our Tax Manager, under the spotlight. As always, we have our usual round-up of the goings-on here at ETC Tax. Many thanks to Sarah Aston and all the contributors who made this edition happen. If you have any queries, comments or observations, then please let us know. We’d love to hear from you. Best wishes
Regulars
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In the spotlight Bulletin
Chris Watts Associate Director chris.watts@etctax.co.uk 3
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THE DEVIL IS IN THE
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June 2022 Edition
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Vincent Costello looks at the importance of using a professional to assist with the preparation of your self assessment tax return and how this can save money in the long run. 5
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You could give me a ton of bricks and ask me to build a house, but I’m not a builder so whilst I may think I can build a wall as I’ve seen someone else do it, chances are the cement will be mixed wrong and the wall won’t be straight so it will fall!
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ost people (including professional advisers) can have a go at preparing a tax return… you just hand over your tax return information to someone so they can put together your tax return – it’s that easy, right? Wrong. You could give me a ton of bricks and ask me to build a house, but I’m not a builder so whilst I may think I can build a wall as I’ve seen someone else do it (the how hard can it be syndrome), chances are the cement will be mixed wrong and the wall won’t be straight so it will fall! I think the same principles apply to personal tax compliance. On the face of it there is nothing more than filling in some boxes on a form, in reality if you get these wrong it can have bad consequences.
Enjoying this article, but need more advice on any of the topics covered? To discuss how ETC can help with your tax questions call the team on 0161 711 1320 or email enquiries@etctax.co.uk 6
A good example of how a competent tax compliance professional can add value by doing the fundamentals right relates to EIS investment. I have been involved in lots of compliance work over the years where some of my wealthiest clients have invested significant amounts of money into EIS portfolios. They often give you a general investment amount and ask you to claim the appropriate tax relief and get some tax back for them.
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Ignoring the fact that you can’t make an EIS claim until you have the appropriate certificate, I have seen occasions where an adviser will simply include the an amount in a blanket claim to maximise the income tax relief with no care or consideration as to what the right steps are and what the consequences could be if they get it wrong. In one return I came across, my client thought they had missed out on income tax relief and capital gains tax deferral relief simply because whoever did their tax return in the previous tax year hadn’t looked at the paperwork in any great detail. They saw a £500,000 EIS investment on one date but didn’t think to see how that money was invested and more importantly when it was invested. After a thorough review of the prior year’s tax return I was able to obtain income tax relief on the entire investment and to defer a pretty big proportion of that’s years capital gains tax liability. The client received a big cheque back and the firm got a decent fee for the work I had done.
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Vincent Costello Senior Manager vincent.costello@etctax.co.uk
Future proofing yourself as best you can A lot of people we talk to believe that giving HMRC information in a return is a bad thing and are scared to provide anything other than a vanilla submission of income, profits and gains as anything more will potentially raise red flags with HMRC and open tax returns up for enquiry. That is not always the best way to approach things when dealing with tax compliance, or in fact with HMRC generally. The right balance is to provide HRMC with the right information at the right time by making a good quality disclosure (often ‘white space’ disclosure) in their tax returns. By including a well prepared disclosure in your tax return you are in fact minimising HMRC’s opportunity to look at your tax return at a later date as you are restricting what HMRC can discover once the tax return enquiry window has closed, this is usually 12 months after the date of submission. This is because HMRC can only make a discovery assessment about something which they could not have not have known about from the return. Should HMRC find errors, they can issue penalties and charge late payment interest on any tax liabilities that arise from the corrections. These have been covered in detail across previous newsletters so I will not go into detail with them here. Suffice to say, the cost of professional fees to ensure the tax return was correct in the first place both gives peace of mind to the taxpayer that is has been done correctly, but also reduces the potential for penalties and interest being charged should HMRC enquire into the tax return.
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Get your return done early I can probably give you a list of clients I will be doing tax returns for in January, such is life, we are all guilty of putting off today what can be done tomorrow. That said, I still advocate getting your tax return done as soon after 5 April as is possible. The benefits of doing so can be as simple as knowing what your January tax liability is early and providing you with a cashflow advantage, for example, your projected payments on account could be too high or you may be due a refund. It can also mean that discussions on potential tax savings for the current tax year can be discussed and implemented in good time before 5 April. Often where information is received close to the filing deadline of 31 January, the review aspect of a person’s tax affairs can end up being a rushed affair, especially where an unexpectedly high tax liability prompts the taxpayer into seeking ways to mitigate it using reliefs which can be carried back but need to be in place before 5 April. In summary Tax compliance plays an important role for wealthy individuals, it is your annual opportunity to minimise your tax exposure by maximising reliefs. A carefully constructed and considered tax return is a useful way of having a proactive strategy to defend yourself against HMRC investigation; they sometimes say that attack can be the best form of defense.
TAX
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There’s No Business
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You might imagine that deciding whether or not an activity is a business activity would be quite straightforward. You might imagine that, but if you did so, you would be very wrong indeed, certainly if you were trying to establish what a business activity was for VAT purposes.
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lthough HMRC have recently announced that they are changing the tests that they will apply to determine whether or not an activity is a business activity, the topic remains a very troublesome one, as a closer look at some other recent HMRC changes and the contrasting approaches taken by HMRC and the European Court of Justice (‘ECJ’) will demonstrate. The VAT Act 1994 (the primary UK legislation on which our VAT rules are based) states that ‘business’“includes any trade, profession or vocation.” Apart from clarifying that the provision of facilities to club members and entrance to premises for a consideration are both business activities, that’s about all you get in the UK VAT legislation regarding what constitutes business. The EU VAT Directive on which the UK’s VAT legislation is based, although no longer bound by, talks of ‘economic activity’ rather than business activity: “Any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, shall be regarded as economic activity. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.” Because the legislation is so general when it comes to the definition of business/economic activity, HMRC have long relied on tests that have emerged from cases that were heard in the VAT Tribunal or higher courts.
The two most influential cases over the years have been Morrisons Academy (1978) and Lord Fisher (1981), from which emerged the 6 tests that have typically been the basis for resolving other cases These 6 tests are: • I s the activity a serious undertaking earnestly pursued? • I s the activity an occupation or function that is actively pursued with reasonable or recognisable continuity? • Does the activity have a certain measure of substance in terms of the quarterly or annual value of taxable supplies made? • Is the activity conducted in a regular manner and on sound and recognised business principles? • Is the activity predominately concerned with the making of taxable supplies for a consideration? • Are the taxable supplies that are being made of a kind which, subject to differences of detail, are commonly made by those who seek to profit from them?
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... it can already be seen that applying tests such as these often fails to deal with nuances, so are often never enough to provide a satisfactory conclusion.
However, HMRC have announced that their approach has now changed, and that although the 6 tests that arose from Morrisons Academy and Fisher can still be used “as a set of tools designed to help identify those factors which should be considered” they will no longer be used by HMRC to determine whether or not an activity is a business activity. Instead, HMRC will take the approach that was developed in the cases of Longridge on the Thames (2016) and in particular Wakefield College (2018). Their two new tests are as follows: 1) Does the activity result in a supply of goods or services for consideration? HMRC explain that there needs to be a legal relationship between the supplier and the recipient, so the first step is to consider whether a supply is made for a consideration. An activity that does not involve the making of supplies for consideration cannot be business activity for VAT purposes. 2) Is the supply made for the purpose of obtaining income therefrom? HMRC explain the second test by stating that if there is a direct or sufficient link between the supplies made and the payments given, the activity is regarded as an economic activity. The Court in Wakefield College made a distinction between consideration and remuneration. Simply because a payment is received for a service provided does not itself mean that the activity is an economic activity. For an activity to be regarded as an economic activity, it must be carried out for the purpose of obtaining income (remuneration) even if the charge is below cost.
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We wait to see what the outcome of the new tests will be, but it can already be seen that applying tests such as these often fails to deal with nuances, so are often never enough to provide a satisfactory conclusion. For example, HMRC recently reviewed the VAT treatment of compensation payments following some high profile ECJ cases relating to payments due on the termination of phone contracts (Vodafone Portugal and MEO). In the past, HMRC had treated such termination payments as being outside the scope of VAT as compensation payments. After Vodafone Portugal and MEO, HMRC announced that such termination payments would now become subject to VAT as further payment for supplies made under taxable phone contracts. Interestingly, when HMRC previously treated these payments as being outside the scope of VAT, they didn’t think that this meant that the phone companies carried out any ‘non-business’ activities, just that outside the scope income was received in the course of carrying out business activities. Contrast this with HMRC’s position on Parking Charge Notices (‘PCNs’) issued by parking operators. Not only do HMRC consider PCNs to be outside the scope of VAT, they also consider the activities carried out by parking operators in issuing and enforcing PCNs to be ‘non-business’ activities, so VAT incurred on related costs must be treated as irrecoverable. PCNs are issued when a motorist contravenes a car park’s terms and conditions and HMRC’s current policy is that PCN revenue is outside the scope of VAT for the parking operators issuing the PCNs because the PCN payment made by the errant motorist is neither payment for goods nor payment for services, but effectively a payment to compensate the parking operator for breaching the parking terms. This appears sensible, as does the argument that because PCNs are issued as a deterrent measure to prevent car parks from being abused, the issue of PCNs by a parking operator is a necessary part of the parking operator’s business activities.
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Keith Miller Associate VAT Director keith.miller@etctax.co.uk
However, HMRC’s current approach is to treat the issue and enforcement of PCNs as a separate, distinct ‘non-business’ activity for parking operators (separate from the taxable business activity of operating/managing a car park). Also contrast this with the position of the ECJ, who in the recent case of Apcoa Parking Danmark ruled that not only was the issue and enforcement of PCNs an economic activity for VAT purposes, PCN payments were subject to VAT at the standard rate.
Enjoying this article, but need more advice on any of the topics covered? To discuss how ETC can help with your tax questions call the team on 0161 711 1320 or email enquiries@etctax.co.uk
HMRC will have been aware of the Apcoa Danmark case when carrying out their review of the VAT treatment of compensation payments, and although the UK is no longer bound by ECJ decisions, they do remain persuasive. So, in their revised VAT policy document on compensation payments, HMRC specifically state that if a PCN is “substantial and punitive and is designed to deter a breach of the terms and conditions of parking it will be outside the scope of VAT as the reciprocity needed to link it to the supply is lacking. If on the other hand it is effectively an additional charge for occupying a space, then it would be a standard rated supply. The level of the fee for breaching the parking terms in comparison to the standard parking fee may be indicative of which category a particular fine would be in.”
HMRC’s last comment about the deterrent value of a PCN is also interesting in the context of the government’s current attempts (via the Private Parking Code of Practice) to reduce the maximum value of PCNs issued for parking contraventions private land, so watch this space for further VAT news if the typical value of a PCN drops to £50 or less. But until HMRC provide much clearer legislation and guidance, particularly on the extent to which a taxpayer’s activities can be split into separate business and non-business activities, no number of tests will provide answers to all the questions.
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Pulling Your Crypto into Shape Alexander discusses ETC Tax’s experience of compliance work in the crypto space and considers some of the pitfalls and workarounds.
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C
ompliance in crypto most often means calculating the tax on the profits of buying and selling different cryptocurrencies. There are various software packages around that claim to calculate the taxable profits and losses on crypto transactions and even split them between those chargeable to income tax or capital gains. So, it’s as easy as uploading the data and downloading the report and plugging the figures on to a Tax Return? Well, just as Vincent explained earlier, not quite! Weighing the Cost There is a myth that cryptocurrencies aren’t ‘real’ somehow and so that until one converts some BTC or ONE to fiat, there is no tax implication at all. We have seen many cases where crypto traders have operated in blissful ignorance for years. Of course, the reality is that the exchange of one asset for another will give rise to an event for CGT as a matter of basic principles. So, if ETH purchased at £10,000 is disposed of for something else (let’s say DOGE) worth £11,000 at the time of disposal, then there is a gain of £1,000. Moreover, the terms of the capital gains tax legislation mean that the share pooling rules (same day pool > 30 days pool > s.104 pool) apply to all fungible assets which includes BTC, ETH, DOGE et al. Unfortunately, the volume of trades often means that calculating the gains in accordance with the share pooling rules is impracticable without software (our record is 750,000 transactions). Thankfully, software tools have been developed to deal with this issue. Uploading data to the software is usually straightforward. You can download a spreadsheet of transactions (usually a .csv file) from your platform or blockchain explorer and upload that. Or you can give your software an API key for a Centralised Exchange (CEX) or the public key from the blockchain and the software will draw the data automatically and directly from the source. Services such as koinly.io, recap.io and cryptotaxcalculator. io and many others are all very good and available to provide reports for a fee. However, in our experience it is common for them to throw out errors or alerts for transactions that aren’t recognised. Further, transactions may be miscategorised without any indication. In one case, we were dealing with a client and the software we were using at the time calculated that they had a tax liability of over £200 trillion, enough to wipe-out the national deficit and more. Unfortunately for Hector, we spotted this small discrepancy and tracked down the problem; the software had identified BUNNY tokens as… BUNNY tokens. Searching various sources revealed that there were at least three different tokens using that code and each was worth a very different amount. 13
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Unfortunately, the volume of trades often means that calculating the gains in accordance with the share pooling rules is impracticable without software.
Unregulated Choice As crypto technology has developed, more and more types of transactions are being developed, often by decentralised exchanges (DEX’s). DEX’s can be set-up by anyone who can write the code and deploy it on the blockchain. The makers could be anywhere in the World and their identity may not be known. This gives rise to an “interesting” variation in the amount of data provided and the format in which it is provided. This can present considerable difficulties in compiling the data (the pooling rules apply to all assets of the same class, whether held together or not). Ideally, your software will be able to recognise the data from different sources but with more exchanges and blockchains emerging all of the time, no platform can promise to recognise them all.
Enjoying this article, but need more advice on any of the topics covered? To discuss how ETC can help with your tax questions call the team on 0161 711 1320 or email enquiries@etctax.co.uk 14
Different Transactions As well as throwing up many different data formats, DEX’s are throwing-up many different forms of transactions. An example of this is liquidity pool staking for cryptocurrency pairs. Let’s illustrate with a BNB/CAKE pool on PancakeSwap: A client would send some BNB and some CAKE (of equal US$ value) to a wallet used by the DEX’s smart contract. In return, the client would be sent some Pancake-LP tokens, representing that deposit. The BNB and CAKE top-up a pool of those assets so other people can exchange one for the other. The client would stake those LP tokens to earn a small cut of each exchange. When the client closes their position, they would unstake their LP tokens and then exchange them for some BNB and CAKE. However, the proportion of the BNB and CAKE in that pool has changed and so the proportion of those assets received back by the client will not be the same as those committed to it. Naturally, these utilities were designed with no thought at all to the accounting or tax compliance needs of the users! In any transaction of this type, consideration will have to be given to what is going on. Are there capital disposals and acquisitions? Do the LP tokens have a value? Can they be exchanged on the open market? Are there any income events? Does staking the LP tokens represent a disposal?
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Alexander Wilson Tax Manager alexander.wilson@etctax.co.uk
Correcting Errors and Resolving Alerts Fortunately, software platforms such as Koinly allow you to change or edit transactions as needed. The software developers simply can’t write the software to correctly recognise every possible transaction, all of them are playing constant catch-up. One of the selling-points of the blockchain is the transparency of the data. All transactions conducted ‘on-chain’ (e.g., anything on a DEX) is recorded on the publicly accessible ledger that is the blockchain. Every single one. (Transactions on CEX’s like Binance, are not done ‘on-chain’, these transactions are dealt with internally by the platform in the same way that a bank deals with your money).
June 2022 Edition
Likewise, there a many free-to-use services which give lots of historical data about different tokens, including historical trading data. These include coingecko.com and coinmarketcap.com. These can be very helpful in resolving issues such as identifying tokens which the software does not recognise or even recognises incorrectly. We have only touched on some of the issues that will arise when dealing with crypto compliance. We have found that ‘handson’ knowledge of crypto is invaluable in understanding the various transactions which can be seen. If you would like further advice or help with your crypto compliance problems, reach out to us!
Most blockchains in use have one or more ‘explorers’ on which the publicly available data can be read. The explorer for the Ethereum blockchain is etherscan.io. These are simply websites that allow you to search for any public key (wallet address) or individual transaction. They are powerful (and free) tools which allow you to get ‘under the bonnet’ of clients’ transactions and work out what is going on if the software can’t.
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Global Mobility UK tax considerations as travel takes off again
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If you are working somewhere other than your home country, even for a short period of time, you could be exposed to additional tax implications. Tax can seem daunting and can quickly fall to the bottom of the agenda, which comes with a huge risk. With the world of travel opening back up, we are seeing lots of individuals decide to travel once again, especially for work purposes. When working in more than one jurisdiction, tax can seem complex and we are here to help. There are different issues from a UK tax perspective to consider whether you are leaving the UK to work, or coming to the UK. In this first article, I look at what considerations are required if a UK resident leaves the UK. 17
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Leaving the UK to work overseas
Factors such as whether the individual has property available to them in the UK, whether they have family living in the UK and how many workdays they spend in the UK per tax year can all be applicable to determining their tax residence status.
Notifying HMRC When leaving the UK to work overseas, HMRC must be notified of the departure. If the individual is registered for Self-Assessment, notification can be made via a UK tax return for the year of departure, otherwise, HMRC can be notified by submitted a P85 form. Notifying HMRC is important to ensure the amount of tax being paid is correct and to determine whether a repayment is due. UK tax residence status An individual’s UK tax residence status will be determined using HMRC’s Statutory Residence Test (SRT). If leaving the UK for a short period of time or spending substantial time back in the UK (for either work or personal reasons), a person may not necessarily break UK tax residence. A detailed review is required to determine whether or not tax residence will be broken, and whether the split year rules can apply. Split year treatment can be tax advantageous for an individual departing the UK and therefore it is important to determine whether the rules apply. Factors such as whether the individual has property available to them in the UK, whether they have family living in the UK and how many workdays they spend in the UK per tax year can all be applicable to determining their tax residence status. If considered domestically resident in two jurisdictions with a double tax agreement in place, the agreement can be reviewed to determine where the individual is considered treaty tax resident. This will help minimise any potential double taxation and decide which country will have primary taxing rights on their income. A foreign tax credit can then be claimed via Self-Assessment to offset any overseas taxes paid against UK taxes, reducing the liability.
Amie Manchester Tax Manager amie.manchester@etctax.co.uk 18
June 2022 Edition
UK income following departure Individuals may continue to receive income from UK sources following their departure. The treatment of this income will depend on the source and can vary. As a rule of thumb, any UK sourced income will remain subject to UK tax, regardless of an individual’s residence status. A non-UK tax resident is no longer able to contribute to an ISA. If the ISA was opened pre-departure, the account can remain open, however further contributions cannot be made for the period the individual is overseas and considered non-resident. If the individual is spending time working back in the UK, these duties may be subject to UK tax and we would be required to review whether or not they can be classed as incidental or substantive. A UK tax return may be required to report these duties to HMRC and ensure the correct tax is paid. Where UK property owned by a non-UK resident is rented out, this will remain subject to UK tax. An application can be made to HMRC to receive rental income without any tax deductions (NRL1). In the absence of this form, the letting agent should deduct tax at 20% and pay this over to HMRC. HMRC introduced this recently as they found a number of British nationals were leaving the UK, renting out their property and not paying any tax. With this scheme in place, this helps prevent and minimise the potential loss of tax for HMRC. Tax reliefs Similarly to an individual coming to work in the UK for a short period of time, where a person leaves the UK to work overseas, there are various potential tax relief available. Relief may be available on travel and subsistence costs where the individual is leaving the UK for a period of less than 24 months, or spending less than 40% of their time working overseas. Relocation expenses can also be reimbursed tax free, similarly to someone relocating to the UK. There are additional reliefs available for individuals working outside of the UK. The specific relief available will depend on whether the individual is spending all of their work duties outside of the UK, or just a portion of them. Interim visits by the individual’s spouse and family can also be exempt if various conditions are met, set out in the legislation.
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UK National Insurance Unless covered by a reciprocal agreement, after leaving the UK, automatic National insurance contributions will come to an end. Without continuing contributions, an individual may end up with gaps in their National Insurance record, which may in turn have a knock on effect to their state pension. It is possible to pay Voluntary National Insurance to bridge any gaps in your record (using form NI38), and these can be backdated by 6 years. The rate at which voluntary contributions are payable will depend on an individual’s circumstances but this will either be class 2 or 3. The rates for these are below: The rates for the 2022 to 2023 UK tax year are as follows: • £3.15 a week for Class 2 • £15.85 a week for Class 3
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Temporary non-residence rules Anti-avoidance rules were introduced to prevent formerly UK tax residents from leaving the UK for a short period of time to sell an asset and escaping capital gains tax. These rules apply where an individual has been tax resident for at least four out of the previous seven tax years prior to departure and are overseas for less than five years. Under the anti-avoidance measures, if an individual meets the criteria set out in the legislation, sells an asset during the period of absence and then becomes a UK tax resident again, any gains made in the intervening period will become taxable in the year of return. This means that any gain made in that period will only escape UK tax if the taxpayer remains outside of the UK for five complete tax years. The rules are slightly different depending on whether an individual is considered UK domiciled or not and will only apply to assets held prior to departure. Any assets purchased following an individual’s departure and subsequently sold whilst out of the UK will not be subject to UK tax.
To discuss how ETC can help with your tax questions call the team on 0161 711 1320 or email enquiries@etctax.co.uk 19
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Case Case ofofthe the month month
We didn’t just help him through the disclose process and ease his fears, we were also able to reduce his tax liability by being able to advise him on what expenses he could claim tax relief.
June 2022 Edition
HMRC case successes It is always pleasing to see how our experienced team of tax advisers continue to ensure our clients are treated fairly in a tax investigation by ensuring HMRC are made to act fairly. Two cases recently have meant the clients have had initial penalty notifications significantly reduced following challenges to HMRC. A summary of these are below. Our client (despite registering for SelfAssessment) came to us having never submitted a tax return after becoming self-employed (cameraman) straight from university and wanted our help to bring his compliance affairs up to date.
As part of an ongoing PAYE investigation, HMRC sought to charge penalties for careless behaviour on a number of separate aspects, but chose to suspend penalties on only a small amount of these, meaning large penalties would become payable.
We didn’t just help him through the disclosure process and ease his fears, we were also able to reduce his tax liability by being able to advise him on what expenses he could claim tax relief. Once we had done our calculations, using the Digital Dislcosure Service we made a submission in early March with a supplementary letter providing HMRC with a good quality summary of how the failure occurred and our view on the client’s behaviour, this helped when we put forward our penalty proposition which was based on full mitigation.
The use of suspended penalties is to encourage a client to change how they approach their tax obligations to ensure no future errors will occur. This approach is used to educate rather than penalise a client with the benefit of a penalty not being collected if the client demonstrates they have changed their ways.
HMRC came back with full agreement to our clients offer and all that was left for us to do was negotiate a Time To Pay agreement, where we managed secure a 24 month payment plan.
We disputed the partial suspension, arguing that all the penalties should be suspended as HMRC had accepted there was no deliberate conduct and that satisfactory measures could be put in place to avoid the same errors repeating themselves. HMRC eventually agreed to this following our representation, saving the client a significant immediate payment.
If you are in dispute with HMRC and wish for assistance then please contact Vincent Costello who would be pleased to discuss your case. Chris Watts Associate Director chris.watts@etctax.co.uk 20
vincent.costello@etctax.co.uk +44(0)161 711 1320
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In the spotlight: Amie Manchester Tax Manager
Amie joined ETC Tax in May 2022 as a Tax Manager. Amie advises on an array of tax enquires and will deliver tax advice to ETC’s varied client base. At present, she endeavours to progress her tax career here at ETC.
What is your position here at ETC Tax? I am a Tax Manager at ETC Tax. What do you enjoy the most about your role? I enjoy the problem-solving element that comes with my role, along with helping individuals and businesses out along the way. There is always something new to learn and the job can be very rewarding. No two days are the same and this means I am constantly challenging myself. What is your area of expertise? I have worked in Global Mobility since starting my career in tax, nearly 8 years ago now. This means dealing with individuals either leaving or coming to the UK for work purposes. I have recently qualified as a Chartered Tax Adviser and studied a broad range of tax areas during this.
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What was the career path that brought you to ETC Tax? I joined a Big 4 firm as an Apprentice straight after finishing sixth form, where I completed my Association of Taxation Technicians (ATT) qualification. After two years, I then moved to another of the Big 4 firms where I continued to progress through the ranks and studied to become a Chartered Tax Adviser. Since qualifying, I have continued to strengthen my knowledge and skills, which brings me to where I am today. Why a career in tax? Tax is an everchanging area which keeps me on my toes. There is always something new to learn and the job can be very rewarding. I am also known to be a chatterbox, so I enjoy the opportunities to meet with new people.
ETC Tax
Your newsletter on tax matters ... that matter for our private clients
June 2022 Edition
“ I am also known to be a chatterbox, so I enjoy the opportunities to meet with new people.”
Tax…. Why do you love it so much? I find that working in tax challenges me daily and I love the problem-solving element. I also enjoy working with a large number of people, both colleagues and clients, and meeting new people which comes with a career in tax.
How do we get in touch with you if we need Tax Advice?
When all the tax tasks of the day are solved how do you spend your time? I am a big foodie, so I enjoy creating and cooking new recipes. I also love taking my 18-month-old Cavapoo for long walks and going to the gym.
Tell us about a recent case you worked on and how you made a difference? Since starting at ETC Tax I have been helping clients out with various expatriate tax issues. When working in another country or coming to work in the UK, tax can seem complex and fall to the bottom of people’s priorities, especially with so many other worries that come with moving country. Being able to help clients and make the complex seem simple is something I really enjoy, and I feel that really makes a difference for our clients.
Feel free to drop me an email at amie.manchester@ etctax.co.uk or call the office on 0161 711 1320 23
ETC Tax
Your newsletter on tax matters ... that matter for our private clients
Bulletin:
The latest news round-up from the ETC team
June 2022 Edition
The Report
Happy 1 Anniversary st
Let Olivia tell you about her first year at ETC Tax! Our monthly case review and activity report • P roviding technical advice on the tax implications of transferring UK property out from a Panamanian Foundation to a non-UK domiciled individual • A report advising on whether an individual’s crypto transactions were sufficient for the activities to be treated as a trade • R eview of an individual’s domicile status, taking into account their early life history, current tax residency status, global movements and plans for later life “Well, I have officially been working at ETC Tax for over a year now! This year has provided me with so many valuable opportunities, to name a few: • I have developed my knowledge and skills in all various areas of tax, including: Tax Compliance, Property Investment / SDLT, CGT, Inheritance Tax, Residency and Domicile, R&D, VAT and Crypto! • I studied and submitted my first ATT exam. • Contributed articles for the newsletter. • D eveloped trusting relationships with clients and took on more responsibilities as my confidence grew. • Attended my first ever networking event (and more afterwards) • Attended many social events with my colleagues. Special thanks to Angela Wood for taking a chance on me and all my colleagues for the support, I really do believe ETC Tax are the employer who you can trust to help you develop your professional career and support you every step of the way”!
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ETC Tax
Your newsletter on tax matters ... that matter for our private clients
June 2022 Edition
Did you know? Gingerbread men are classed differently according to their decorations. If a gingerbread man has two chocolate spots for eyes, then there’s no VAT on it, but any other chocolate decorations and VAT applies. Do you have a VAT query? Why not drop Keith an email keith.miller@etctax.co.uk
NetWalking…
We are recruiting! Looking for a change, or maybe you want to take the next step in your career.
The perfect way to meet local businesses!
June saw Angela and Amie head out with Altrincham BID for a wander round the local area, accompanied by the Mayor of Trafford. “A great net-Walking event with Altrincham BID , commented Angela, so nice to meet some of those who work or run business' in and around Altrincham. It was a good excuse to get some fresh air, take a break from your desk and get your steps in. I really look forward to meeting more businesses at future events”. Tell us about some great networking events you have been to by emailing in at comms@etctax.co.uk.
Check out our latest role: Senior Manager – Altrincham We are looking for a Senior Manager to help drive our property tax offering, as well as support and help grow our business more widely. Whilst you need not be a property tax specialist, and your role may well involve other aspects of tax advisory, you must be able to confidently advise clients across a wide range of property tax matters. Want to find out more? Click here 25
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