Churchill Tax Advisers Close A Dispute Relating To Tax Residence And Double Taxation

Churchill Tax Advisers Close A Dispute Relating To Tax Residence And Double Taxation

This case came to us following a recommendation. The client was dual resident between the UK and another European country and HMRC were seeking to charge his non-UK income to UK tax on the basis that he was tax resident in the UK. This was a complex matter involving Double Tax Treaty between the two countries and various tests of tax residence. Our team of tax specialists took on the case and were soon able to conclude the matter in our client’s favour. In summary, in light of the Double Taxation Treaty the client had made a number of trips to the UK for reasons that were outside the scope of tax residence and had comparatively small economic ties to the UK. After detailed discussions, HMRC accepted that according to the Double Tax Treaty our client was “treaty non resident” in the UK and hence the taxing rights were retained by the other country. Accordingly, non-UK income was not taxed in the UK. We are grateful to the tax inspector and the technical team at HMRC for taking a pragmatic approach on this case and bringing the matter to a swift conclusion.

Our analysis: Tax residence and application of Double Taxation Agreements can be a complex area. There are a number of individuals that need to travel to the UK for reasons other than becoming tax resident. However from HMRC’s perspective, the facts need to be presented in a manner which is in line with the relevant legislation and the Double Tax Treaties. Seeking specialist advice at the outset can save time and money.

Deadlines for The EU Settlement Scheme

Deadlines for The EU Settlement Scheme

Free movement for European nationals will come to an end on 31 December 2020 and
from 1 January 2021, EU/EEA/Swiss citizens who wish to move to the UK to work and study will have to meet the requirements of the new points-based immigration system, unless they have already established UK residency and/or have acquired status under the EU
Settlement Scheme.

– EU nationals currently outside the UK, whose usual place of residence is in the UK, can make an application under the EU Settlement Scheme for indefinite leave to enter, or limited leave to enter, providing they meet the eligibility requirements and satisfy the genuine residence requirement in the UK.

– The deadline for making pre-settled or settled status applications under the EU
Settlement Scheme is 30 June 2021, however, EU nationals and their relevant family members, have to be lawfully and genuinely resident in the UK by 11pm on 31 December 2020, in order to be eligible to apply.

– From 1 January 2021 to 30 June 2021, an EU national can enter the UK with their EU
passport and EU ID card, however, they may be asked to prove their residency in the UK (prior to 31 December 2020) in order to still be eligible to apply under the EU Settlement Scheme. If they cannot prove this residency or their status under the EU Settlement Scheme, the new Rules will apply to them, and they may then need to make an application under the new points-based immigration system.

© Statham Gill Davies, November 2020
NB: This guidance is of a general nature only and is subject to change and further clarification. It should therefore not be relied on in the absence of specific advice which Statham Gill Davies will be happy to provide once formally instructed and retained to do so.

For further information and specific advice regarding this area or any other UK immigration or Nationality application, please contact: –
Mark Barnett
Head of Immigration and Notary Public
Statham Gill Davies Solicitors
0207 317 3228
Mark.Barnett@sgdlaw.com

Churchill Tax Advisers Advise On Complex Business Asset Relief (Entrepreneurs’ Relief) Claim

Churchill Tax Advisers Advise On Complex Business Asset Relief (Entrepreneurs’ Relief) Claim

This client came to us from London and needed advice in relation to Entrepreneurs’ Relief on the disposal of his shareholding in a limited company. The technical issue with the case was that on the face of it, Entrepreneurs’ Relief was not applicable as our client had not been an employee or officer of the company during the last twelve months. This would have meant that the client was expecting to pay substantial capital gains tax on disposal of his interest in the company. We discussed in detail the client’s background and his history of involvement in the company and were able to propose a solution in light of several Tax Tribunal cases and applicable legislation which allowed our client to claim Entrepreneur’s Relief on the disposal of his shareholding. This meant that our client would only pay tax at 10% on the disposal and achieved a substantial tax saving.

Our analysis: This was a fairly complex matter and required a considerable amount of technical research including going through detailed judgement commentaries of Tax Tribunal cases. Without the right technical advice, our client would have ended up paying a substantial tax bill. Obtaining the right advice from an experienced tax specialist firm might seem slightly pricey at the outset but can bring substantial tax savings that far outweighs the initial cost.

Working From Home Tax Relief Claims Spike Since CoVid

Working From Home Tax Relief Claims Spike Since CoVid

On 14 October 2020, HMRC boasted that in the space of 11 days almost 55,000 individuals made a claim for tax relief on expenses incurred as a result of being required to work from home during the Covid-19 pandemic. These claims could well rise in the coming weeks as more people are required to work from home again due to the current lockdown.

An online portal was set up on 1st October to process tax relief on additional expenses for employed workers who have been asked to work from home by their employer to help stop the spread of coronavirus.

Employers have been able to pay employees up to £6 a week tax-free to cover additional costs since the 6th April, if they have had to work from home. Employees can apply to receive the tax relief from HMRC.

If you are eligible, 20% basic rate tax payers, can claim tax relief on £6 a week meaning they would receive £1.20 a week in tax relief (20% of £6 a week) towards the cost of their household bills.

Higher rate taxpayers can also receive £2.40 a week (40% of £6 a week). Over the course of the year, this could mean taxpayers can reduce the tax they pay by £62.40 or £124.80 respectively.

If your application is approved, the online portal will adjust an individual’s tax code for the 2020 to 2021 tax year.  You will receive the tax relief directly through their salary and will continue to receive the adjustment until March 2021. If you apply once the 2020/21 tax year has ended you can apply for a lump sum.

You do not need to prove your bills have increased unless you are claiming above the flat rate of £6 per week, in which case evidence of the increased costs may be required.

Self Assessment Deadline Is 31st January 2021

Self Assessment Deadline Is 31st January 2021

Every year, approximately 11 million people complete a self assessment tax return. Taxpayers can complete their 2019-20 tax return at any time up to the deadline but HMRC recommends completing it early to allow them time to pay their tax bill or set up a payment plan.

The majority of people choose to complete their tax return online, which provides an immediate calculation of any tax owed.

If you are completing a paper tax return have until 31 October 2020 to send their completed form to HMRC.

Taxpayers must complete a self assessment return if:

  • they have earned more than £2,500 from renting out property;
  • they have received, or their partner has received, Child Benefit and either of them had an annual income of more than £50,000;
  • they have received more than £2,500 in other untaxed income, for example from tips or commission;
  • they are a self-employed sole trader whose annual turnover is over £1,000;
  • they are an employee claiming expenses in excess of £2,500;
  • they have an annual income of over £100,000; or
  • they have earned income from abroad that they need to pay tax on.