Weekly tax brief | 1 December 2020

Are thousands of trustees about to incur HMRC penalties due to deficient HMRC systems?
Aysha Marley
Trustees must re-register with HMRC under the Trust Registration Service and complete an annual declaration by 31 January, but the system is fraught with difficulties and is preventing trustees from fulfilling their obligations. In addition, some trustees may not even be aware that the declaration is a requirement. As a result, thousands of UK trusts may be inadvertently heading for HMRC penalties.

HMRC calls upon allies in the fight against tax avoidance
Holly Walmsley
For many years HMRC has been cracking down on tax avoiders. With taxpayers already facing significant tax bills for taking part in tax avoidance schemes, HMRC calls upon allies to help turn the focus to promoters, who are misleadingly luring in the public.

Why does HMRC send so many nudge letters? Why not go after the real tax criminals?
George Bull
Hardly a week seems to pass without HMRC launching another nudge letter campaign, writing to taxpayers they already know about to ensure that they are complying with their tax obligations. However, with the hidden economy, criminal attacks and tax evasion now costing the UK £11.7 billion per year, people are beginning to ask why HMRC doesn’t seem to be going after the real tax criminals.

What is a reasonable excuse? HMRC tries to explain a spreadsheet error
Sarah Saunders
Are spreadsheet errors becoming a regular government problem? The Public Accounts Committee questioned HMRC about a £1.2 billion error in its spending estimates. It is not certain HMRC’s excuses would have been as effective if used by a taxpayer in a tax enquiry.

Lockdown divorcees could pay a high tax price
Chris Etherington
As the strain of lockdown takes its toll on relationships, many married couples will be looking to separate permanently and start divorce proceedings. What they may not realise however is that the clock is ticking to avoid penal capital gains tax charges. Those separating this year could be in for a nasty shock, particularly if the Chancellor increases capital gains tax rates in the next Budget.

HMRC scores own goal in football pitch VAT debate
Sarah Halsted
As the nation emerges from its second coronavirus lockdown, many of us will be looking forward to safely resuming outdoor sporting activities. News of a possible VAT saving will be welcomed by those who play in managed five-a-side football and netball leagues, but organisers and providers of facilities should be wary of VAT recovery pitfalls.


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