1 GENERAL NEWS

1.1 Guidance on implementing automatic information exchange on CRS

The OECD has published a handbook on implementing automatic information exchange on common reporting standards (CRS). It specifies which of the CRS´s options are granted under the EU Directive and identifies areas for alignment with FATCA. The guidance is not legally binding but could contribute to a more uniform application of the CRS if implemented consistently.

HMRC's update of its guidance on FATCA and CRS is awaited.

www.oecd.org/ctp/exchange-of-tax-information/implementation-handbook-standard-for-automatic-exchange-of-financial-information-in-tax-matters.pdf

2 PRIVATE CLIENT

2.1 Ingenious Media Holdings leave to appeal

Ingenious Media Holdings has been given leave to appeal to the Supreme Court in the case in which Ingenious claims that the head of HMRC had breached the Commissioners for Revenue and Customs Act 2005 s.18 provisions on confidentiality by discussing the group's affairs with a journalist.

www.supremecourt.uk/docs/permission-to-appeal-2015-0607.pdf

3 BUSINESS TAX

3.1 Change in annual investment allowance limit

The annual investment allowance limit reduces from 1 January 2016. For accounting periods straddling that date, the timing of expenditure qualifying for the allowance can have a significant effect on the amount of allowance that can be claimed. Those considering capital expenditure that will qualify for the annual investment allowance should bear in mind the implications of the timing of that expenditure.

Subject to any change that might be made to the current Finance Bill, the table below summarises examples of the maximum qualifying expenditure that can be claimed as annual investment allowance depending on when the expenditure is incurred.

Note that there are two straddle rules for a straddle period. The first restricts the overall amount by treating the part of the period up to 31 December 2015 and the part of period after that date as two different periods and the allowance is the sum of the two periods. The second rule is that the second period is further restricted to the actual allowance for that second period. There is no carry over of unused allowance from before 31 December 2015. The first period is not restricted in this way.

The figures have been calculated on a daily basis:

4 VAT

4.1 What is a disproportionate VAT surcharge?

The Upper Tribunal (UT) has reversed a First-tier Tribunal (FTT) decision that a surcharge of £70,909 was disproportionate, and reinstated the surcharge in full.

The FTT had previously discharged the penalty in full on the basis that this surcharge for making a £3.5m VAT payment one day late was disproportionate. The UT agreed with the previous UT comments in Total Technology (Engineering) Ltd ([2012] UKUT 418 (TCC)), that the surcharge regime, viewed as a whole, is a rational scheme. In the circumstances of the case of Trinity Mirror plc, the UT concluded the £70,909 surcharge was not disproportionate.

In the absence of any financial limit on the level of surcharge, the UT commented that individual cases may arise where the level of penalty may be considered disproportionate. However they could not readily identify common characteristics of a case where such a challenge to a default surcharge would be likely to succeed.

www.bailii.org/uk/cases/UKUT/TCC/2015/421.pdf

We have taken care to ensure the accuracy of this publication, which is based on material in the public domain at the time of issue. However, the publication is written in general terms for information purposes only and in no way constitutes specific advice. You are strongly recommended to seek specific advice before taking any action in relation to the matters referred to in this publication. No responsibility can be taken for any errors contained in the publication or for any loss arising from action taken or refrained from on the basis of this publication or its contents. © Smith & Williamson Holdings Limited 2015