TaxCorporate TaxEnd of year rush for CGT clearance

End of year rush for CGT clearance

Businesses have swarmed to get clearance for their capital gains tax arrangements in the last three months of the tax year, it has emerged

The government has released figures showing the spike in applications ­ and
warned businesses that they should not rely on the spike to claim they could not
get clearances before the year end.

Applications were turned round within eight days, the taxman told
Accountancy Age this week, rather than the permitted 30 days, for the
first three months of the year, meaning businesses have no excuse.

Figures show the taxman processed around 1,000 more applications for
clearance between January and March. There were 3,178 attempts to get
CGT plans signed off
this year, compared to just over 2,000 for the same period in the previous two
years.

‘There were suggestions we were being swamped. Actually we noticed the
increase and moved resources accordingly,’ said Chris Tailby, head of
anti-avoidance at HM Revenue & Customs.

Businesses can apply for clearances for complicated schemes. The applications
are often put in by large privately-owned companies.

These kinds of arrangements can involve tax of up to £20m, or sums as low as
£100,000, according to Eric Gardner, statutory clearances team leader at HMRC.

The rush this year was due to the changes in taper relief, after the
government overhauled CGT. The new flat rate of 18% meant those holding
‘business assets’ for more than two years now pay up to 80% more in tax.

‘There is no reason for businesses not to comply with the anti-avoidance
legislation. We are not going to look kindly on people invoking backlogs at HMRC
to do that,’ a spokesman for the department said.

Tailby described suggestions that there were delays as merely ‘idle
speculation’.

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