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Author: Robertleach

Chocolate brownie and VAT

A chocolate brownie was held to be a zero-rated cake and not standard-rated confectionery. The product contained no eggs, dairy products or gluten. It was made by compression of ingredients such as dates, cashews, cacao, syrups, grape juice and brown rice bran. The tribunal compared the product with other brownie products such as produced by Mr Kipling and Pret. The tribunal said that the...
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Employee’s new address

An employee had reasonable excuse when HMRC sent correspondence to an old address when it had the current address. A taxpayer registered as a self-employed labourer in 2010. In November 2013, he secured employment and completed from P46 giving his address in the space provided. In February 2014, he moved and notified his employer of his new address. This was passed to HMRC under Real Time In...
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APN and postponement

There was no abuse of power when HMRC issued an accelerated payment notice (APN) after it had agreed to postpone the underlying tax. The Court of Appeal so decided. The taxpayers had entered into a tax avoidance scheme that used an offshore employee benefits trust. This was disclosed under the DOTAS regulations. Initially, HMRC appeared to accept that sums paid to them were loans. Later, HMR...
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Scotland raises tax again

Scotland has again increased tax rates in its second Budget since given greater control on taxation. The rates of income tax for 2019/20 (with 2018/19 rates in brackets): personal allowance: £12,500 (£11,850) starter rate of 19%: £12,501-14,549 (£11,851-13,850) basic rate of 20%: £14,550-24,944 (£13,851-24,000) intermediate rate of 21%: £24,945-43,430 (£24,001-43,400) higher ra...
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QC tax penalty appeal lost

A leading barrister has again lost his tax appeal against penalties. Timothy Raggatt QC appealed against penalties of £9,795 and £3,640 for late payment of income tax. He claimed exceptional circumstances for the years 2012 to 2014, mainly the government's cuts to criminal legal aid which led to cashflow problems for him. Raggatt argued that he had a reasonable expectation that his income...
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Audit practice notes withdrawn

The Financial Reporting Council has withdrawn practice notes 25 and 27 with effect from January 2019. Practice Note 25 dealt with attendance at stock-taking. This is now covered by ISA 501. Practice Note 27 dealt with the audit of credit unions. FRC considers it no longer necessary to provide separate guidance on this small sector. [19.01]
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Designated persons and Companies House

Companies House has said that it is making extra checks on individuals and corporate bodies to see if they are "designated persons" under United Nations (UN) sanctions. Designated persons are under financial sanctions because of their involvement in such activities as terrorism and genocide. [19.01]
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Student loan accounting changes

The Office of National Statistics (ONS) has changed how it accounts for student loans. The change requires student loans that are not expected to be repaid (and will thus be written off by the government) to be accounted for as expenditure. This will add £12 billion to the deficit in accounting terms, even though it does not affect actual cashflows. [19.01]
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IFRS 16 comes into force

International financial reporting standard IFRS 16 on leasing comes into force on 1 January 2019, though it will not affect reported accounts until 2020. The standard requires almost all leases to be regarded as finance leases and thus shown on the balance sheet as an asset. It can have a huge impact on companies which extensively lease assets. The change does not affect taxation. [19.01]
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