What’s new in our plethora of tax online services? Steve Savory summarises the highlights.
- The new 2018/19 edition of Tax Planning is particularly welcome at a time when it seems that tax practitioners are beset by an onslaught of technical and procedural change. As General Editor Mark McLaughlin remarks in his Preface to the new edition, ‘Finance Act 2017, Finance (No 2) Act 2017 and Finance Act 2018 being introduced in relatively quick succession. In addition, tax practitioners, accountants, solicitors, independent financial advisers, etc have had to contend with secondary legislation, tax cases and other new developments. This has happened against the backdrop of the government’s continued drive to clamp down on tax avoidance and what it regards as unacceptable tax planning.’
A nice example of the coverage of some recent changes occurs in the chapter on termination payments – a notoriously fiddly subject at the best of times:
‘It is important to note that, in respect of employments that end on or after 6 April 2018, in considering the availability and application of the £30,000 threshold, the starting point is to take into account all the chargeable residual termination payments received on the termination of an individual’s employment. Do not just consider certain types of chargeable payment (eg a PILON) within the residual category. The total chargeable amount is sub-divided into the earnings and non-earnings components of the aggregate residual termination payments. This means that chargeable payments other than PILONs (such as gifts made on termination) may be treated as the employee’s or former employee’s deemed earnings and taxed accordingly. It is also important to note that the amount of either component may be nil; it all depends on the results of the application of the computational rules that determine the amount of the earnings component.’
- The latest edition of Robert Maas on Taxation of Employments also went live on BPRO during August. Readers familiar with his lucid style will welcome his updated coverage of employment tax issues. Staying with termination payments, for example, here are his notes on the Tottenham Hotspur case:
‘In Tottenham Hotspur Ltd v HMRC  STC 81, the player’s contract contained a provision that the contract could be terminated with the mutual consent of both parties. HMRC contended that the effect of this was that the compensation paid on such a termination constituted earnings as the contract provided for mutual termination. Both the FTT and Upper Tribunal disagreed. ‘In our view the authorities show that the relevant distinction is between cases where the entire contract of employment is abrogated in exchange for the termination payment (as in Henley) and cases where the payment is made in pursuance of a pre-existing obligation to make such a payment arising under a contract of employment (as in Dale and EMI). This case falls squarely into the first category.’ The reality of this case is that the termination was actually mutual only in the sense that Tottenham told the player that if he did not agree to leave he would never play in their first team again!’
- Finally, another recent publication going live during August was the new edition of Partnership Taxation, by David Whiscombe. What better topic to round off a newsletter with than partnership disputes? Here is the coverage of the main issue in Morgan and Self.
‘It may happen that a partner believes that the figure of profit that is allocated to him or her on the partnership return is incorrect. This may be either because there is disagreement as to the quantum of the partnership profit for tax purposes or because there is disagreement as to how the partnership profit is allocated for tax purposes. On the face of it this puts the partner in an impossible position: TMA 1970, s 8(1B) requires him to include on his return ‘each amount which, in any relevant [partnership] statement is stated to be equal to his share of any income [etc]’ but TMA 1970, s 8(2) requires him to include on his return a declaration that it is to the best of his knowledge correct and complete.
This was the quandary before the Tribunal in Morgan v CIR; Self v CIR  UKFTT 78 (TC). In the event the Tribunal held that the figures allocated to the relevant partners on the partnership return were correct. But the Chairman expressed (albeit as obiter dicta) the view that where a partner disagreed with the accuracy of the figure of taxable profit allocated to him or her on the partnership statement the correct procedure was for the partner to self-assess on the basis of the amount believed to be the correct figure but also to disclose in the return the amount shown in the partnership statement.’