Weekly Tax Update - Monday 26 September 2011

1. General

   1.1. Measuring the Tax Gaps

   HMRC has published the estimates of the tax gaps for 2009-10. Overall the total tax gap is estimated to be £35 billion in 2009/10. This equates to around 8 per cent of the estimated total tax liability for 2009/10.

   The estimates show a decrease in the tax gap of £4 billion from 2008/09 to 2009/10. This decrease is mainly due to reduction in the VAT gap since 2008/09 following the reduction in the standard rate of VAT from 17.5 per cent to 15 per cent between 1st December 2008 and 31st December 2009.

   www.hmrc.gov.uk/stats/measuring-tax-gaps.htm

2. Business tax

   2.1. The validity of SDLT information notices

   The case of Katherine and Ralph Weber ([2011] UKFTT 437 TC01290) considered whether an information notice issued by HMRC in February 2009 (the information notice legislation at the time was FA03 Sch10 paras 12 & 14) was properly given where the taxpayer asserted that they never physically received the original notice of enquiry.

   HMRC had issued the notice of enquiry to the taxpayers and their solicitor in June 2007 (within the nine month enquiry period) and received an initial response to that notice from the solicitor in December 2007. The Tribunal concluded that as the solicitor's response had indicated the solicitor had been in contact with the client about obtaining the relevant information, it was clear the taxpayer had been notified of the enquiry.

   HMRC's information and inspection powers for SDLT have been governed by FA08 Sch36 since 1 April 2010 (e.g. see FA08 Sch36 para 21A). Where a taxpayer has submitted a land transaction return under FA03 s76, information notices can be issued in any of the following instances: a notice of enquiry has been given and the enquiry has not been closed; or an office of HMRC has reason to suspect that an amount of SDLT has not been assessed, or has been insufficiently assessed, or a relief from SDLT may be or has become excessive; or the notice is given for the purpose of obtaining information or documentation that is required for the purpose of checking a taxpayer's position regarding a tax other than SDLT. www.bailii.org/uk/cases/UKFTT/TC/2011/TC01290.html 2.2. The UK's position in the G20 corporate tax ranking for 2011

   The Oxford University Centre for Business Taxation (OUCBT) has produced a report evaluating how close the Government is to meeting its aim of creating the most competitive tax system in the G20 (which has 19 constituents excluding the EU). The...