1. General

1.1 OTS final report on 'Sole Enterprise with Protected Asset(s)' (SEPA)

The OTS has issued its final report on its investigation into the potential for a new simple trading vehicle to offer a simpler route in tax and related areas for small business ventures. It has concluded that a vehicle offering 'SEPA' status would be helpful for sole traders seeking liability protection while retaining the simplicity of operating as a sole trader.

SEPA is a vehicle that does not have a separate legal identity, but is obtained through registration by a sole trader. One of its main benefits would be to offer an element of limited liability without the need for the extra administration required by creating a company or limited liability partnership.

While the report recognises introducing a new trading vehicle does present issues, mainly around bank lending and the position of creditors, the OTS do not see any of them as insurmountable. The OTS work indicated the assets that should receive limited liability protection through SEPA would be the trader's main residence and possibly the individual's pension fund, although see the note at 1.5 below regarding the recent Horton v Henry decision.

www.gov.uk/government/uploads/system/uploads/attachment_data/file/563407/SEPA_final_report_271 016.pdf

1.2   Tax investigations arising from the Panama papers

HMRC has issued an update on the Panama Papers Taskforce.

Amongst the points highlighted are the following:

  • civil and criminal investigations into 22 individuals suspected of tax evasion have been opened;
  • nine potential professional enablers of economic crime have been identified, all of whom have links with known criminals;
  • 43 wealthy individuals have been placed under special review while their links to Panama are further investigated;
  • HMRC has seen individuals coming forward to settle their affairs in advance of action by the taskforce.

www.gov.uk/government/news/taskforce-launches-criminal-and-civil-investigations-into-panama-papers

Download >> Weekly Tax Update - 14 November 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.