"Where, as in this case, the taxpayer has included information in his tax return but has left it to the Revenue to calculate the tax which he is due to pay, I think that the Revenue is entitled to treat as irrelevant to that calculation information and claims, which clearly do not as a matter of law affect the tax chargeable and payable in the relevant year of assessment," said Lord Hodge in his leading judgment. "Matters would have been different if the taxpayer had calculated his liability to income and capital gains tax by requesting and completing the tax calculation summary pages of the tax return. In such circumstances the Revenue would have his assessment that, as a result of the claim, specific sums or no sums were due as the tax chargeable and payable for 2007/08. Such information and self assessment would in my view fall within a 'return' under [the TMA] as it would be the taxpayer's assessment of his liability in respect of the relevant tax year," he said. HMRC welcomed the "important" ruling, which it said could save the UK £500 million once the amount owed in around 200 similar cases was settled. However, tax expert Jason Collins described the verdict as "a deft bit of judicial engineering". "Whilst a sizeable victory for HMRC in this case, it does leave open the possibility that taxpayers engaged in avoidance are still able to retain the possession of the cash if they carry out their own tax calculations," he said. "HMRC has in recent years consulted on amending its rules to take the 'cash flow advantage' away - including an aborted attempt to exact heavy penalties for failed planning. Whilst that initiative was put on the back burner, HMRC is now pushing to impose penalties if taxpayers do not give the cash back where related litigation goes against them at any stage of appeal in the courts and the scheme is ultimately found not to work." "Perhaps HMRC might now be thinking that it would be simpler to build on this decision and overhaul all its collection rules to give it broader powers to collect payment or suspend a repayment wherever tax avoidance is alleged. If they were to do this, clear safeguards would need to be put in place to narrow the remit to cases of proper avoidance," he said.
Employment status when providing services through a limited company
26 November 2013
Is an individual who provides services to an end user through a limited company protected by the Equality Act 2010?
No, holds the EAT in Halawi v World Duty Free .
Daniel Barnett reports:
The EAT held that a contract personally to do work was required for the Equality Act to apply. On the facts, no contract had been entered into by Ms Halawi with either of the Respondents. Furthermore, an unfettered right of substitution existed, which Ms Halawi had exercised on occasion. The Respondents' lack of control over Ms Halawi, and the absence of any direct evidence that she was economically dependent on them, also led the EAT to conclude that an employment relationship of subordination had not been established. The EAT expressed its unease at the fact that Ms Halawi could have been subjected to discrimination and yet had no right to complain to the employment tribunal, but said that the legal tests had to be satisfied.
CIPP Policy News Journal
16/04/2014, Page 126 of 519
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