Tax Update - 17 September 2012

1. General news

   1.1. Autumn Statement

   The Chancellor will make his Autumn Statement on Wednesday 5 December 2012 at 12.30pm.

   1.2. Financing capital infrastructure - speech by the Chief Secretary to the Treasury

   On 10 September the Chief Secretary to the Treasury the Right Honourable Danny Alexander MP, delivered a speech on financing capital infrastructure at the London Stock Exchange Centre forum. While there was acknowledgement of the receipt of many representations on this area and comment on progress on various infrastructure projects, there was no indication that capital allowances were being considered for extension to infrastructure projects that do not otherwise qualify.

   www.hm-treasury.gov.uk/speech_cst_100912.htm

   1.3. DOTAS

   HMRC has updated its list of withdrawn DOTAS scheme reference numbers (SRNs) where there is no longer a duty to notify HMRC. The relevant extract is as follows:

   Notices under S312(6) and S312A(4) FA 2004 - promoters and clients

   Clients and parties who have received these SRN no longer have a duty to notify the SRN to HMRC on their tax returns or on form AAG4 from the date shown below.

   From 4 November 2008: 38761513, 72309880, 97965110.

   From 13 January 2009: 04770813.

   From 18 November 2011: 83962302, 63617726, 37528580, 81010479, 03985775.

   From 28 August 2012: 59985782.

   Notices under S312A(4) FA 2004 - clients only

   From the date shown below clients who have received these SRN no longer have a duty under S312A FA 2004 to notify the SRN to other parties to the arrangements. They still have a duty under S313 FA 2004 to notify the SRN to HMRC on their tax returns or on form AAG4 if they are themselves party to the arrangements.

   From 9 December 2009: 41527653.

   www.hmrc.gov.uk/aiu/srn.htm

2. Private Clients

   2.1. Gift Aid Small Donations

   Draft regulations under the Small Charitable Donations Bill, and a technical note have been published for consultation. The draft regulations set out the general administrative framework for the Gift Aid Small Donations Scheme, which is due to be introduced from 6 April 2013. Most of the draft regulations will apply the administrative provisions of the Taxes Acts that are used to administer Gift Aid claims.

   Currently in order to qualify as a donation under Gift Aid, donors must give the charity or CASC a Gift Aid declaration, including their name and address. The new Scheme removes the requirement for charities to obtain a Gift Aid declaration from individual donors in order to claim a payment from HMRC. It applies to donations of £20 or less, up to an annual total of £5,000 of donations per charity. Removing the need for a Gift Aid declaration breaks the link between the donor's tax record and the payment to the charity and means that payments under the Scheme will be classified as public spending. This means the Scheme cannot be legislated through the annual Finance Bill process and use the tax code already in place, but must be legislated for separately. However the intention is that the new Scheme should be administered under a similar legislative framework to Gift Aid.

   www.hmrc.gov.uk/drafts/small-donations.htm

   www.hmrc.gov.uk/drafts/donations-regs.pdf

   www.hmrc.gov.uk/drafts/donations-technote.pdf

   2.2. HMRC High Net Worth unit brings in an extra £500m in tax

   HMRC has issued a press release commenting that in 2011/12, the tax yield from the HNWU intervention work hit £200 million, up from £162 million in 2010/11 and £83 million in 2009-10. http://hmrc.presscentre.com/Press-Releases/Tax-targets-deliver-extra-500-million-67ff0.aspx

3. Business tax

   3.1. Loss relief involving cross border issues

   The group and consortium relief rules are now set out in CTA10 part 5. In relation to consortium relief the rules were changed following Finance (No 3) Act 2010 so that with effect for accounting periods beginning on or after 12 July 2010 if the link company in a consortium group relief claim is not UK related (a UK resident company or a UK trading PE of a non-UK resident company), it can be established in the EEA, provided it is a member of the same group of either the claimant company or surrendering company and that group relationship is not derived through a company not established in the EEA (see CTA10 s133 and s143A). This followed an announcement made in the March 2010 Budget to permit such relief, that also announced an intention to "ensure that access to Consortium Relief is...