Tax [and that includes VAT] is imposed by law. If the law, as supported by the Tribunal, allows someone who is neither an accountant/bookkeeper nor a management consultant to claim that he or she is entitled to register under the FRS as 'other', that is the end of the matter. There is no separate provision of cost analysis. If HMRC want to change this, they need to change the categories set out in SI1995/2518 para. 55K(4). To do this a new Statutory Instrument will be required, and the likelihood of this in the near future is somewhat remote in the post Brexit world
Hitler would have been thrilled if he could have accessed information in the 1930's from secretive Swiss banks.
It is not only individuals who are evil or corrupt, but governments can be as well.- particularly in relation to oppressed minorities.
Be careful of what you wish for.
Negligence in the Brave New World aka1984
What will be the legal consequence of incorrect entries in quarterly returns.?
When do the words which bind the taxpayer bite? Just pressing a key? On whose software?
Will income tax continue to be an annual tax?
How will accruals be factored into quarterly returns?
We can all add to the practicalities which HMRC seem to have overlooked.
It's the same the whole world over !
Watch IHTA s98 as well
Where the company concerned is not a trading company[ ie where BPR cannot apply], there is a risk of IHT applying on the grounds that there is an alteration to the rights applying to one or more class of shares where a decision is taken to pay dividends differentially. A sting in the tail is that this cannot be a PET[see s.98(3)].
I have also seen it suggested that the structure itself is a "settlement" for IHT purposes by virtue of IHTA s43
What about IHT ?
If domicile is to be ignored for tax-implied but not stated in EM's populist proposals- how will IHT be applied to immigrants and emigrants. When will a Brit emigrating escape the UK IHT net?
Red Leader, the Swiss Forfait system [being scrapped in some Cantons] allows a fixed Swiss Federal and Cantonal tax bill for foreigners moving to Switzerland, and has much in common with the taxation of non-doms in the UK, but without the remittance basis.
For example, it excludes from exemption Swiss source income. If the individual enjoys treaty protected income , that too can be taxed in Switzerland if it exceeds the figure on which the Forfait is based.
Without some method of taxpayer 'sign off', if data only income and gains are collected directly how does the taxpayer claim relief for losses, be they CGT or trading losses. And how about the allocation EIS CGT relief, , allocation of Gift Aid to previous years etc. etc.?
I reiterate that the system looks like an extension of PAYE, not a full system to deal with the myriad circumstances with which we all have to deal
Income tax is an annual tax.
Even the creaking PAYE system with code numbers recognises that, so that all calculations are automatically annualised- hence the wonders of a system where barely 25% of taxpayers submit a tax return.
Leaving aside the practicalities of CGT being calculable only an annual basis, if the taxpayer is to be responsible for paying the correct amount of tax, he or she has to be in control-which means signing [in some way] his or her approval of the figures..
Denmark for example splits its taxpayers between :-
1]those where the Revenue compute the tax, and it is up to the taxpayer to object[a bit like our coding notices if you think about it]
2] Those who have to complete a full return , which includes the self-employed and those with investment property.
All we have been told appears to be to allow those who don't complete a tax return[ that 75% ?]to see their tax details on line. Not very interesting !
Beyond that, we are removing responsibility from the taxpayer- what price negligence in the future?
Franchise tax revisited
California collected "franchise tax" on a realistic basis in the past, by establishing four figures
What proportions of your Group
b)Real Estate and tangible assets
c)number of employees
are respectively in California?
d] What are your world wide profits
2] tax that proportion of world wide profits - in California.
How you combine a, b and c can be argued .
If UK said that such a rule would apply to all companies not having a DTA with the UK, and if necessary selectively giving notice of termination of DTA's say with Luxembourg and Ireland -I know EU rules would give problems! - multiunationals would be paying an objectively determined liabilty in the UK. Multi nationals would complain that this methodology potentially imposes tax on more than their world wide profits, but that is better than the current methodology which taxes in aggregate less than their world wide profits.
Tax havens would no longer help in tax planning, and intergroup transfers would be ignored everywhere.
How the scheme works for mining and oil companies and banks is also problematic , but morality or the " proper amount of tax" fall away as questions for argument.
In practice traditional 'Central management and control' and identifying the existence of a
" Permanent Establishment" to determine the tax liabilty of multi nationals will come to an end. sooner or later anyhow, and the sooner the better.
As Dennis Healey so accurately said, the difference is the thickness of a prison wall- and that covers cash transactions.
Is paying your builder in cash conspiracy to cheat the public revenue?
On morality and tax planning, either we are taxed by law or by confiscation.
If by law what if we abuse that law- or as HMRC express it, use the law"in a way Parliament did not intend". Given the ridiculous volume of tax law, how can anyone know what Parliament intends?
The Courts struggle with badly drafted laws all the time, but only in very rare cases do they seek to address the question outside the words of Statute ie Pepper v Hart.
There are good practical reasons not to abuse tax laws, as failure can be extraordinarily expensive, but either what is done is lawful or it is not.
"Equity and taxation are strangers"