Welcome from the editor, February 2016

Although the Rangers case concerned employee benefit trusts (EBTs), with the Court of Session finding that the arrangements to ‘pay’ players by way of loans did not work, of greater importance to most people will be how the decision may affect plans that involve salary sacrifice or funding of trusts. Stephen Woodhouse and Charlotte Fleck consider the wider impact in Plan B for the Light Blues.

After HMRC’s victory in the Court of Session, the CIOT raised a point with HMRC relating to flexible benefit arrangements and the court’s acceptance of HMRC’s argument on redirection of earnings, Matthew Brown explains in Flexible benefit arrangements: a redirection of earnings?

Another example of the wider impact that a verdict in case can bring is found in Southern Aerial. HMRC issued determinations on a company charging Class 1A National Insurance contributions and raised discovery assessments charging two individuals to income tax on the basis that cars had been made available and fuel provided to them ‘by reason of their employment’ with that organisation. In Double whammy, Ian Walker and Prathab Jagajeevanram explain that the case interpreted ‘by reason of employment’ as having a wider application than ‘from an employment’.

Flag it up!

Tax advisory firms, small and large, are at risk of falling victim to criminals who operate what are, at first glance, legitimate businesses. So it is paramount to recognise the warning signs and deal with clients who raise even the slightest doubts. Charlotte Ali explains the steps advisers should take to flag up potential money laundering.

Are you going to be, Revenue, fair?

HMRC has a duty to treat taxpayers fairly and not to discriminate between them. Hely-Hutchinson considers HMRC’s revised guidance in 2009 that prevented relief for Mansworth v Jelley losses in a few cases. Keith Gordon discusses the High Court’s decision which centres on the concept of legitimate expectation.

21st century tax

We will be monitoring developments of HMRC’s digitalisation project this year as it starts to have a big impact on our relationship with our clients. Perhaps the January rush will become a thing of the past but might this be replaced with January, April, July and October peaks as well? Both ATT and CIOT are actively considering this subject and, following on from CIOT president Chris Jones’s welcome last month, Ralph Pettengell provides the ATT view.

Bill Dodwell also considers the impact of the introduction of digital tax accounts. Bill highlights an important point that practitioners need to be aware of, that tax agent access to digital tax accounts is not available and is expected to lag behind the introduction.