The Taxpert Topslicer Tool gives a quick, easy and accurate way of checking the HMRC calculation of top slicing relief (TSR) on chargeable event gains.
HMRC use a simplified and outdated method to calculate top slicing relief. In many cases they under calculate TSR by tens of thousands of pounds.
The Taxpert Topslicer Tool performs the calculations set out in s535 ITTOIA 2005 to calculate the correct amount of TSR and then compares the result to the HMRC calculation. The Taxpert Topslicer Tool shows full workings which can be used to support a submission to HMRC.
This means you can:
1) Make historical checks on your client’s tax liabilities to see if there is a difference between what they paid and what they should have paid. The software highlights, where appropriate, how much they may have overpaid.
2) Use the Topslicer Tool as a tax planning aid to reduce future CEG tax liabilities.
Who says so?
Tim Good (founder and MD of Absolute Accounting Software Ltd) has spent over thirty years explaining complicated tax issues to tax professionals. His first article setting out the theory behind the Topslicer Tool was published in Taxation magazine in September 2017. At that time HMRC acknowledged that they needed to consider the implications of Tim’s analysis.
In April 2019, Tim’s thoughts on this matter were 100% confirmed in the Silver case which saw Mrs Marina Silver successfully argue that HMRC had overcharged her to the tune of nearly £20,000.
What does HMRC say?
Based on Tim’s original article in Taxation Magazine, HMRC responded in detail and as expected they disagreed with Tim's analysis. Please click here to read HMRC’s response in full.
However, we were encouraged in that they did not appear to have identified any error in Tim’s analysis but simply disagreed with his interpretation of Step 2 of s536. The First-tier Tribunal agreed entirely with Tim’s interpretation, but HMRC have now appealed that decision to the Upper Tribunal.
The ramifications of the Silver case
The Silver case has highlighted the importance for accountants and relevant professional services firms of double checking their tax calculations for any client (including deceased estates) that have a CEG, to see if they have a possible claim. CEGs arise on investment bonds or single premium non-qualifying life policies, which have been widely sold by the investment industry over recent decades.
This case could have major implications for your clients, who could now reclaim hundreds if not thousands of pounds in overpaid or over-calculated tax.
HMRC have appealed against the Silver decision, with the appeal hearing scheduled for late March/early April 2020.
HMRC do not yet accept that our calculations are right and theirs are wrong. Pending an Upper Tribunal hearing, we would recommend submitting returns and amendments based on the Taxpert Topslicer Tool calculations to protect the taxpayer’s position.
That judgment could hardly have been a stronger endorsement of our longstanding argument that HMRC’s calculator is wrong and our Topslicer tool is right. HMRC have refunded the taxpayer £19,000 as a result. But at the same time they have appealed to the Upper Tribunal and we are supporting the taxpayer in that appeal. The Tribunal Service have listed the appeal for 31 March 2020, so we should have a final decision in the Spring.
Single user licence - £299 + VAT for one tax year (unlimited clients or scenarios)
Subsequent tax year data - £149 + VAT per additional tax year
So if you wanted the Topslicer Tool for say 2018-19 and 2019-20, a single user licence for both years would cost £448 + VAT and allow you to enter and save details for as many examples as you like.
Multi-user licences – please contact us for more details.
We will only provide the TopSlicer Tool to accountants, IFAs and other relevant professional services firms who have clients whose circumstances will trigger TSR.
If you would like to see if you meet the criteria please register your interest here and we will contact you to discuss your eligibility.