Nichola's SME Tax W-update 23 March 2023

Hello,

This time we have a slightly unusual case study in personal tax, we consider the effect of making a mistake in a COVID-19 support payment claim, we look at tax refunds, and tax agents and the courts have been busy with VAT appeals.

We provide a commentary on the personal tax data provided by the Prime Minister. He is obviously far too busy to prepare his own tax returns, but if he did we can see that our tax guides would have saved him a bob or two in professional fees! We take you over the what we know.

By way of balance, the leader of the opposition, Keir Starmer, says that he will shortly be releasing his tax return data, so we have also published a new guide to barrister's tax which he might find useful.

Tax agents will have noted that in his Spring Budget announcements, the Chancellor changed the rules, with immediate effect, to ensure that no taxpayer can assign their tax refunds to an unscrupulous tax refund company. Some of you might have overlooked the small print in HMRC's policy impact assessment. This observes that the rule change does not affect a taxpayer's ability to nominate a refund to a genuine tax agent, or to anyone else for that matter. It might well sound like a question of semantics, however the legal difference is that you can easily revoke nomination; you cannot always do that with an assignment.

What happens if your accountant made a mistake in preparing your Coronavirus Job Retention Scheme (CJRS) claims? The answer is that it's bad luck; but if a claim is incorrect, it's incorrect and there is no defence of reliance on an adviser. The tax tribunal has considered the issue and we have summarised the judgment for you.

Looking at other cases this week, a VAT Option to Tax case has reached the Supreme Court. This is an interesting decision for property developers and concerns the disapplication rules. We also note an Upper Tribunal VAT decision which looks at the timing of VAT invoicing.

That's all for now, 

Back soon, 

Nichola Ross Martin FCA CTA (Fellow)
Tax Director

www.rossmartin.co.uk

Your Virtual Tax Partner® online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.

Quick News (Freeview)  

Rishi Sunak's Tax returns explained
How is a Prime Minister taxed? We compare Rishi's income and gains to our tax guides, which ones will help him shave a quid or two off his tax adviser's fees for next year?

Budget 2023: Voiding assignments of Income Tax
Taxpayers can no longer legally assign their Income Tax repayments to a third party such as a tax agent. Tax agents can breath a sigh of relief, as this does not prevent a client nominating the income to their Agent.

Budget 2023: At a glance
Catch up on what's hot or not for SME owners and their advisers from the accompanying documents and policy papers.

Consultation responses on Audio-visual tax relief  
Spring Budget 2023 has seen the release of the summary of responses to the Audio-visual tax reliefs: consultation.  The Government will release draft legislation for stakeholder comment as part of L-day.

Taxation of ecosystem service markets and extension of APR consultation 
HM Treasury has opened a new consultation on the Taxation of environmental land management and ecosystem service markets and the potential expansion of Agricultural Property Relief (APR).

EMI call for evidence response summary
HM Treasury has published a summary of responses to its earlier call for evidence ‘Enterprise Management Incentives’. Feedback on the scheme was generally positive, but additional support for high-growth companies is proposed, along with administrative easements.

Budget 2023: Restriction of Charitable Reliefs 
The Chancellor announced a restriction on charitable tax reliefs so that they apply only to UK charities and Community Amateur Sports Clubs (CASCs).

Editor's Pick 

Foreign income and residency pages: FAQs
What foreign income is taxable in the UK? How, and what foreign tax credit relief is available? How does this interact with the Statutory Residence Test (srt) and tax treaties?  The best place to start is here!

Barristers: Tax Overview 
NEW: How are barristers taxed? What expenses can barristers claim for tax purposes? What are the VAT rules for barristers? This is the next in our ongoing series of Tax Overview guides for different trades and professions.

Tax Tools 

Full details of our tax calculators
We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes. 

Salary or salary plus dividend combinations calc
Calculator of the week: This week's calculator works out whether to pay a small salary with a dividend or not. What is the optimal salary to pay in 2022-23  or 2023-24? What is the advantage of claiming the Employers' NICs allowance? Compare payment of a salary to payment of a dividend, compare payment of dividend to payment of a dividend with also a small salary.

Tax Tools
FREE add-on for subscribers, or available separately

Calendar of tax deadlines and new tax measures
UPDATE: This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax significant events.  

Guides & Updates

Self-Employed 

Farming: Tax Overview
UPDATED: What is farming? What are the tax consequences and tax considerations of farming? What are the features of agricultural tenancies?

Land & Property

Buy-to-let ownership: personal v. company?
What is the most tax-efficient option to own buy-to-let property? Personally or via a company? What are the income and Corporation Tax, CGT, IHT, ATED, SDLT or VAT issues? With tips on profit extraction and other planning points, case studies and links to further guidance.

Different ways of taxing UK property
This guide summarises the different ways of taxing income and gains in respect of the exploitation of UK property.

Employees 

Accommodation benefits
When is accommodation a taxable benefit? What are the exemptions? How is the benefit calculated? Can accommodation be claimed as part of business travel?

Directors & Companies

Dividend index
How do you tax a distribution or dividend received from a company? What are the rules for non-residents? What are the company law requirements for a valid dividend?

Private Client & Estate Planning

CGT: Share-for-share exchanges
NEW: Is there tax relief for a share-for-share exchange? When is relief available? How do the share exchange provisions work? Are there anti-avoidance rules to consider?

Estates: Income Tax and Capital Gains Tax
UPDATE: How do executors deal with income and capital gains arising on the deceased’s estate? What allowances and reliefs are available?

Overseas & Residents

Dividend taxation for non-UK residents
This guide considers how the introduction of the dividend taxation legislation from 6 April 2016 affects non-UK residents who are in receipt of dividends from UK companies.

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Acting for a UK trust: Start here...
• UPDATED: CPD: CGT Reporting and payment deadlines
• CPD: Taxation of couples in 2022-23
• CPD: Associated Companies

More at CPD Index

Tax Cases (Freeview) 

Accountant's error costs taxpayer COVID-19 support  
In Luca Delivery Limited v HMRC [2023] TC8752, the First Tier Tribunal (FTT) found Coronavirus Job Retention Scheme (CJRS) was not due and could be reclaimed by HMRC. That the failure to meet the conditions was the responsibility of the taxpayer’s accountant did not allow the claim to be validated.

VAT Cases & Guides 

Option to tax not disapplied, seller was not a developer 
In Moulsdale t/a Moulsdale Properties v HMRC [2023] UKSC12 the Supreme Court held that the seller of an opted-to-tax property did not meet the provisions allowing him to disapply the option to tax. He was not a developer, the sale was not exempt and VAT should have been charged.

VAT due on services invoiced after supplier leaves group 
In HMRC v The Prudential Assurance Company Limited [2023] UKUT 54, the Upper Tribunal allowed an appeal by HMRC against a decision that no VAT was due on services provided whilst the parties were members of a VAT group that were not invoiced or paid until after the supplier left the group.

Tax Queries?

UK Agent for registration of Overseas Entities
Do you require assistance in the registration and verification of an overseas entity that owns UK land or property?

Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a very wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more.  

Missed last time's Web-update?

Nichola's SME Tax W-update 16 March 2022

• Budget 2023: At a glance
• Budget 2023: Full list of freeview articles and guides
• Budget 2023: Live Speech Highlights
• Expanding the cash basis: consultation
• Extending VAT energy-saving materials relief
• Just how are our taxes raised and spent? 
• CoA: confidential information can be disclosed to another taxpayer   
• CoA: Sub-sale avoidance scheme ineffective  
• UK Agent for registration of Overseas Entities
• Tax Update 2023 and Rolling Planner 2023-24
• Tax Update 2022 and Rolling Planner 2022-23
• Business Asset Disposal Relief Sole Trader
• Stamp Duty Land tax (SDLT) & annexes
• VtaxP: Re-organisation toolkits  ...More

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