Technical Updates

It has been common practice for wholly owned trading subsidiaries of charities to donate all taxable profits to the parent charity and to claim relief for the charitable donations in the year in which the profits arise, so that no corporation tax is payable by the subsidiary. In some cases the amounts donated exceeded the distributable profits of the subsidiary company. This might…

Please download the pdf to view the UK Tax Data Card 2016/17. 

Note: This update was written on 18 March 2016. It is based on the government’s proposals at that point in time which don’t necessarily represent the final legislation.  For that reason, no action should be taken based on this update without taking further advice.  

Under company law, a company may only pay a dividend out of distributable profits. The distributable profits of a company, being the accumulated realised profits less accumulated realised losses, are determined by reference to ‘relevant accounts’. These are usually the company’s last individual annual accounts (rather than group accounts) or, where there are insufficient…

This note provides a brief summary of the PSC rules contained in the Small Business, Enterprise and Employment Act 2015.  From 6 April 2016 unlisted UK companies, LLPs and Societates Europaeae will have to create and keep up to date an additional statutory register with details about its Persons with Significant Control (‘PSCs’). From 30 June 2016 specified information about…

Please download the pdf to view the French Tax Data Card 2016.

The International Accounting Standards Board has issued a new accounting standard on leases, IFRS 16.  The main change introduced by the standard is that all leases will be brought onto the balance sheet, increasing the visibility of companies’ assets and liabilities.  The new standard is effective for accounting periods commencing on or after1 January 2019 for companies…

ADECCO UK LTD V HMRC FTT: TC 04743  This case was brought to appeal a decision by HMRC to reject an application for repayment of VAT charged on the supply of staff. The application had been made following the decision in another First Tier Tribunal (FTT) case brought by Reed employment in 2011 (TC 01069).  Adecco supplies temporary staff to clients. The agency sources…

Note: This update was written on 3 December 2015. It is based on the government’s proposals at that point in time which don’t necessarily represent the final legislation. For that reason, no action should be taken based on this update without taking further advice.  

The requirement to prepare accounts under FRS 102 may give rise to unexpected tax consequences. The move could result in one off adjustments to taxable profits and also have an impact going forward.   

CASE 1 Copthorn Holdings Ltd v HMRC FTT: TC 04585  Copthorn Holdings Ltd (“Copthorn”) operates a business model whereby it acquires land for housing development which it subsequently sells to subsidiary “special purpose vehicles” (“SPVs”).  Copthorn is a member of a VAT group meaning that any supplies it makes to SPVs also within the VAT group are disregarded for VAT…

Please download the pdf to view the UK Tax Data Card 2015/16.