Speaking at the VCT and EIS Investor Forum on Tuesday 26th November, Lord Flight, Chair of the EIS Association (EISA) for the past eight years, has highlighted the need to improve the attractiveness of approved EIS funds – something he referred to as the "Cinderella" of the EIS world. Currently, HMRC approved EIS funds must invest 90% of monies raised across a minimum of four companies within 12 months of the investment opportunity closing in order for investors to benefit from the associated tax advantages. In addition, all investments have to be pro-rated across all investors. The advantage of an HMRC approved fund is that tax relief is given to the investor on investing into the fund but the consequences of missing one, or all of these conditions (and thus succumbing to 'clawback' and/or deferral of relief) means that few approved funds have ever been launched. The market is made up, therefore, largely of unapproved EIS funds. It will be interesting to see how HMRC, and the industry at large, responds to Lord Flight's call.

This week, HMRC has begun a new open consultation on two issues relating to tax avoidance. The 42-page consultation document, entitled ‘Raising the stakes on tax avoidance’, proposes two things: first, a new set of obligations for high-risk promoters, their intermediaries and users; and secondly, encouragement to users of avoidance schemes to settle their tax affairs after similar cases have lost in court or tribunal. Views on a proposed extension to the prescribed information to be provided under the Disclosure of Tax Avoidance Schemes (DOTAS) rules are also being sought by the Government.

April 4th, 2013: HMRC has announced that, for financial year 2013/14 onwards, all sleeping partners and limited partners will henceforth be liable to class 2 and class 4 national insurance (NI) contributions. For 2013/14, class 2 is levied at a flat rate of £2.70 per week but is subject to various exceptions, while class 4 is levied at 9% on tax profits between £7,755 - £41,450, and 2% thereafter. Previously, the view has been that - as these types of partner are not involved in the running of a partnership - they were not self employed earners and so not within the remit of national insurance.

Thompson Taraz's tax director, Gerald Atwell, met with HM Revenue & Customs officials on 12th March 2012 to discuss proposals to simplify the tax administration of exempt unit trusts following his earlier feedback on the Revenue's discussion document in September 2011. The Government is expected to issue a further consultation paper in April 2012, setting out the detailed proposals for change.