Weekly Tax Update - 8 August 2016

1. General

   1.1 Plastic bag 'tax'

   DEFRA has published a note of the results and impact of the plastic carrier bag charge of 5p per bag that large shops were required to charge from 5 October 2015. For the first six months, the impact seems to have been to reduce the issue of single-use carrier bags by the largest seven retailers to 1.1 bn, or 1/6 of the figures in 2014. In addition, at least £29.2m of the proceeds was donated to good. The drop in use is greater than the government anticipated, which was 80% for supermarkets and 50% for other high street shops.

   https://www.gov.uk/government/publications/carrier-bag-charge-summary-of-data-in-england-for-2015-to-2016/single-use-plastic-carrier-bags-charge-data-in-england-for-2015-to-2016

   https://www.gov.uk/government/publications/single-use-plastic-carrier-bags-why-were-introducing-the-charge/carrier-bags-why-theres-a-5p-charge

2. Private client

   2.1 Ingenious tribunal decision

   As we go to press the First-tier Tribunal (FTT) has published the decision in the long-running Ingenious Film case. The decision, which runs to over 340 pages and even includes contents pages to help navigation, covered the appeal of Ingenious Games LLP, Inside Track Productions LLP and Ingenious Film Partners 2 LLP against HMRC. The outcome, which has been reported as a victory for all parties, appears to be mixed: the partnerships were held to be trading, which differentiates these investments from certain avoidance schemes, but the FTT has required a disallowance of some of the expenses incurred.

   We plan to study the case over the coming days or weeks.

   www.financeandtaxtribunals.gov.uk/judgmentfiles/j9245/TC05270.pdf

3. PAYE and employment

   3.1 Spotlight 32: Managed service companies avoidance schemes

   HMRC has issued Spotlight 32 in which it highlights the managed service company (MSC) legislation following its success at the First-tier Tribunal (FTT), against a tax avoidance scheme involving unpaid PAYE and Class 1 National Insurance contributions on employment income.

   In Christianuyi Ltd & Ors v Revenue and Customs UKFTT 272 (TC) (21 April 2016) HMRC successfully argued that the MSC legislation applies to arrangements established and run by a third party.

   https://www.gov.uk/government/publications/spotlight-32-managed-service-company-legislation-tax-avoidance-scheme-involving-unpaid-paye-and-class-1-national-insurance-contributions

   http://www.bailii.org/cgi-bin/format.cgi?doc=/uk/cases/UKFTT/TC/2016/TC05045.html

4. ...