Recently in Tax Law Category

Large retail companies that have operations based in the Channel Islands will no longer benefit from relief from VAT on products costing less than £15, meaning they will not be able to sell cheaply on the mainland in future.

Internet retailers such as Amazon, Play.com, Moonpig , HMV and Tesco have distribution warehouses in the Channel Islands. This enables them to take advantage of the tax relief and sell their products far more cheaply than smaller competitors.

However, since the number of companies distributing goods from the Channel Islands increased "dramatically", the relief now costs the Government around £140 million a year.

The Supreme Court yesterday ruled that international businessman Robert Gaines-Cooper will have to repay taxes dating back to 1976, when he tried to escape UK taxes by relocating to the Seychelles.

HM Revenue & Customs argued that Mr Gaines-Cooper did not lose his UK residency because he had not left "permanently or indefinitely" and had maintained social and domestic ties with the country such as a house in Henley-on-Thames. He had also returned regularly between 1993 and 2003 for events such as Royal Ascot and for shooting parties.

However, Mr Gaines-Cooper countered that he had stayed away from the UK for the number of days specified in the HMRC's residence guidance booklet IR20.

A Yorkshire ex-policeman has admitted his involvement in a £300 million VAT fraud, believed to be the biggest case of its kind in UK history.

Nigel Cranswick, formerly of the South Yorkshire Police, had set up a company called Ideas 2 Go (I2G) of which he was the director. It purported to trade in mobile phones and software from a small office in a Sheffield business park.

Mr Cranswick claimed that his company traded £2 billion worth of goods in the eight months it was in business. However, the trades had all been fabricated in order to generate paperwork that recorded the fake deals and the VAT they incurred.

The mention of Swiss bank accounts conjures up images of criminals and the super-rich squirrelling away vast amounts of money, anonymous, safe and tax-free, but a new agreement between the UK Government and Switzerland will mean that tax evaders can no longer hide behind Swiss banking secrecy.

The Government plans to tackle offshore tax-evasion will kick off in 2013 and is expected to bring in billions of pounds of unpaid taxes to the UK.

David Gauke, Exchequer Secretary to the Treasury, said: "This historic agreement will enable us to collect billions of pounds from those who have for too long evaded their responsibility to pay UK tax by abusing Swiss banking secrecy. The message is clear: there is no hiding place for tax cheats." 

A woman in Germany saved a small fortune in loose change found in public toilets but is now being investigated by tax officials for not declaring her earnings.

The woman operated a cleaning service for 50 public toilets in Germany. She employed cleaners and paid them only minimal wages and forced them to hand over any loose change they found while cleaning.

In total, she collected €40,000 (£34,880) before a disgruntled employee squealed to the state prosecutor.

David Gauke, a Treasury minister, revealed that nearly 10,000 people have had their tax debts wiped out after they were sent a tax demand from HMRC in September 2010.

HMRC experienced severe problems with the PAYE system which meant it got millions of tax bills wrong. It then sent tax demands to around 1.4 million people asking for a total of £3.8 billion in unpaid tax.

Accountants at the time advised those who had received a demand to apply to have the debt cancelled under the extra-statutory concession A19.

Today is dealine day for anyone who still has not submitted their self-assessment tax return online.

The HMRC expect to issue a £100 penalty to around 900,000 people who will miss the deadline. The UK has a total of 9 million people in the self-assessment system.

With the deadline looming, taxpayers who have waited until the last minute to deal with their returns may now be too late to get the appropriate login information together to file on time.

UK tax inspectors are clamping down on some of the Premier League's highest-earning footballers over a controversial tax avoidance scheme.

Players are exploiting income tax charges by taking advantage of loopholes in the UK's complex tax system.

Leading newspapers have claimed the full amount saved by the stars could be costing the Treasury as much as £100m.

The UK's supreme court has ruled that the Department of Work and Pensions cannot sue UK benefits claimants who have been overpaid but were not at fault.

The case comes after the government department wrote to more than 65,000 claimants between March 2006 and February 2007, warning them they would be sued for not returning overpaid benefits.

The court also ruled that no more benefit fraud letters can be sent out.

The battle to reign in the excesses of international corporate tax avoidance moved to New Delhi this week as the Indian government demanded Vodafone cough up £344m as a down-payment to settle a long-running tax dispute.

Manmohan Singh's government has given Vodafone three weeks to lodge the money with the Indian Supreme Court as it bids to wrestle £1.6bn from the company.

MSPs have voted unanimously in favour of a new law covering the sale of alcohol in Scotland.

The Alcohol Bill contains a number of provisions, including a ban on discount drinks promotions, such as 'buy one, get one free', discounted cases of beer, and promotional material in alcohol display areas.

Last week, David Cameron set out an ambitious plan to transform East London into ;a hi-tech hub to rival Silicon Valley in California.

He revealed that Google, Facebook and a number of other cutting-edge companies have committed to invest in the Olympic Park area in Stratford, apparently enticed by the prospective of generous tax breaks.

UK video game developers have slated the 'Silicon Marshes' plan, however, because the high-tech tax incentives are restricted to London and won't be rolled out nationally.

Anti-tax avoidance campaigners are planning to ramp up their fight against Vodafone another notch this weekend by blockading more stores across the UK.

The activists claim that Vodafone evaded around £6bn in UK tax by using Luxembourg as a routing location for their £112bn (Ä180bn / $183bn) acquisition of German mobile phone company Mannesmann in 2000 and subsequent "profit stashing".

They also allege that the government settled the £6bn claim against Vodafone for just £1.2bn recently. The settlement has been criticised as rather "cosy" in some quarters, particularly since Vodafone's financial director, Andy Halford, is a key adviser to chancellor George Osborne on corporate tax.

Consumers are preparing for a hike in airfares next week as new flight taxes or 'air passenger duty' rates come into effect on 1st November for all routes out of the UK.

Air passenger duty was introduced in 1994. Initially, costs were calculated according to whether travellers were flying long-haul or short-haul.

Since 2009, however, these costs have changed to fall into four distance bands -- A, B, C and D, where D is the most expensive.

A petition and Twitter campaign calling on Vodafone to pay a reputed £6bn in unpaid tax were launched last week. The e-petition already has over 1000 signatories and the Twitter campaign was averaging a tweet every 2-3 minutes yesterday evening.

The petitioners claim that Vodafone evaded the tax by using Luxembourg as a routing location for their £112bn ($183bn) acquisition of German mobile phone company Mannesmann and subsequent profit "stashing". The deal was signed in 2000 and at the time it was the biggest corporate merger in history.

Recent press reports, however, indicate that HM Revenue & Customs boss Dave Hartnett allegedly let Vodafone forgo £4.8bn when he settled a longstanding tax dispute with the company.