Tax

The application of taxation is an important consideration in any commercial activity. Spectrum can provide access to member firms specialising in all providing commercially-focused tax advice in areas including the following:

Tax Disputes

From time to time taxpayers find themselves in dispute with the tax authorities. In this context:Clients may wish to take confidential, independent advice as to their rights and liabilities. There may be questions as to the precise scope of the powers of HM Revenue & Customs (“HMRC”) to obtain information and/or documents. Issues may arise as to the scope of any penalties that may be chargeable in respect of unpaid tax. Sometimes it becomes necessary to take a matter to a tribunal.

Examples of how our tax member firms can help:

·         Advise on the merits of a case;

·         Advise on the powers of HMRC;

·         Make recommendations as to how to proceed;

·         Assist with Tribunal and Court proceedings.

VAT and other indirect taxes

Value added tax (“VAT”) is a tax on supplies of goods and services.  Generally it is borne only by the final consumer. This is because most businesses can obtain credit for VAT that they pay (input tax), accounting for tax only on the value added. There are important exceptions, however, for businesses in fields such as health and finance.

VAT is governed by European directives as well as by UK law. There are three main categories of taxable supply:

·         Standard-rated supplies, which are charged at the normal VAT rate;

·         Zero-rated supplies, which are charged at zero percent but enable the supplier to recover attributable input tax; and

·         Exempt supplies, where the supplier is not required to account for output tax on its supplies but is unable to recover attributable input tax.

A variety of questions typically arise in the context of VAT, including:

Is there a supply of goods or services for VAT purposes?  Certain transactions are ignored for VAT purposes, including the transfer of a business as a going concern. How much input tax is recoverable in the circumstances of a particular business? Is a supply standard rated, zero-rated or exempt?

Other indirect taxes include customs duty and stamp duties.

Examples of how our tax member firms can help:

·         Analyse situations and advise on the law and official practice.

·         Make recommendations on how to structure transactions in the light of clients’ commercial needs;

·         Advise on cross-border aspects;

·         Liaise with HM Revenue & Customs and others as required.

Corporate Tax Planning

Companies are artificial, not real, persons. Sooner or later they pay dividends and make other distributions to their shareholders. As well as companies’ own tax liabilities one must also consider the tax treatment of such distributions.

There are tax reliefs for groups of companies. These include reliefs for transfers of assets within a group, and for certain types of reorganisation.

Another type of corporate entity is the UK limited liability partnership (“LLP"). LLPs are generally treated as partnerships for tax purposes. In some situations, however, they risk liability to corporation tax.  Care is needed to obtain the benefits of LLPs while avoiding any problems.

Further issues may need to be considered in an international context, for example, if a non-resident company trades in the UK through a permanent establishment it will be liable to UK tax. Even if there is no permanent establishment the company may still be liable to income tax on certain types of income from UK sources.

Similarly a UK company that trades overseas through a permanent establishment may be liable to tax both overseas and in the UK. In these circumstances relief is usually available under a double tax treaty.

In a cross-border situation, where associated companies are involved, complex anti-avoidance rules about transfer pricing and controlled foreign companies may apply. Finally the position of individual shareholders in a cross-border situation must be considered with care.

Examples of how our tax member firms can help:

·         Advise on how to structure transactions, taking into account tax issues and commercial aims;

·         Advise on cross-border issues;

·         Advise on the use of LLPs.

International Tax Planning for Individuals

The tax liability of an individual depends on his or her residence status. The UK has two relevant concepts of residence: these are residence itself and ordinary residence. Strictly, residence and ordinary residence are decided on the basis of complete tax years (6th April to 5th April).  There are, however, situations where the tax year may be treated as split. One such situation is where an employee goes to work abroad for an extended period.

The UK also has a concept of domicile.  This is not the same thing as residence or ordinarily residence. The UK has special tax rules for individuals who are not domiciled in the UK (non-domiciled persons).  Under these rules it may be possible for a non-domiciled person who is resident in the UK to avoid or defer UK tax on certain income and gains and to avoid inheritance tax on assets situated outside the UK. Domicile is also important for certain non-tax purposes.

Tax planning for non-domiciled people coming to the UK frequently involves the use of offshore trusts.

Examples of how our tax member firms can help:

·         Analyse situations and advise on the law and official practice;

·         Make recommendations in the light of the client’s specific circumstances;

·         Liaise with overseas advisers;

·         Liaise with HM Revenue & Customs

To discuss any of the above services, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.