This year we celebrate ‘Halloween’ in our virtual world, which has the advantages of being both COVID-19 and plastic free. We do have quite a number of tricks and treats for you. Which is trick and which is treat? You decide.

The Insolvency Service has announced that there will be a mandatory scrutiny of future pre-pack sales. As the Office for National Statistics (ONS) warns of growing numbers of potentially insolvent businesses, this will be welcome news for many creditors who will note that it seems unfair for a director or shareholder, who may have been partly responsible for the running down of a business, to see any profit in the dispersal of its assets under the terms of a pre-pack. 

After something of a lull in published First Tier Tax Tribunal (FTT) decisions we have quite a topical selection of cases this week. Ones of real interest include a case on the tax treatment of compensation paid on bank mis-selling of interest rate swaps. A useful case to bookmark, being the sort of case that appears on your desk on 29th January just when you think that you have dealt with all outstanding issues in tax returns. We have also summarised a tax scheme settlement case which you might have missed from August. This involved a company paying a dividend to a scheme provider who then settled the dividend on trust for the director. You just know that this kind of scheme is not going to end up too well: why would you let a third party subscribe to your shares and then pay them a dividend if you were not going to benefit from the arrangement? It seems highly probable that this decision will be appealed on to the Upper Tribunal. As all the cases featured look that way, it is worth tracking them and staying up to date.

Thinking of trackers, we have been further updating our COVID-19 support tracker and both the Employment and Self Employment support grant pages. We also have a new Employer Update for subscribers, with much more in terms of updated guides and essential reading.

If you have any tax-specific queries, please do post them up to our sister site: www.VtaxP.co.uk

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

Mandatory scrutiny of pre-packs
The Insolvency Service has announced that new laws will require mandatory independent scrutiny of pre-pack administration sales where connected parties are involved in the purchase.

Agent update October/November 2020
HMRC have issued the Agent Update for October/November 2020. We have summarised the key content for you with links to our detailed guidance on the topics covered.

Job Support Scheme
The Job Support Scheme comes into effect on 1 November 2020. Changes to the scheme were announced 22 October 2020. How does the scheme work? What can be claimed? When can claims be made? 

COVID-19: Self-Employment Income Support Scheme (SEISS)
UPDATED: Grant Extension from November 2020 to the Self-Employment Income Support Scheme (SEISS). Support for the self-employed during the Coronavirus crisis.

COVID-19: Employer support tracker
An index to pages outlining support and relaxations available to employers during the Coronavirus pandemic. 

Editor's Picks

Employer's What's On: Sept/Oct 2020
NEW: Our employer update for advisers and their clients.

Directors' Tax Planning Update: October 2020
Our topical update on issues affecting directors, tax planning tips and potential problem areas. 

Stamp Taxes News: October 2020
A summary of recent developements in SDLT and Stamp Duty.

Guides and Updates (subscribers)

Capital Gains Tax reporting
How to report Capital Gains under the new 30 day rules. How the new rules interact with self asessment reporting. When to report a gain.

Replacement of Domestic Items Relief
Residential property landlords are prohibited from claiming capital allowances on their expenditure on assets such as plant and machinery and fixtures used by their tenants. How does Replacement of Domestic Items Relief assist? What assets does it apply to?

Investors’ Relief
Investors’ Relief provides for a 10% rate of Capital Gains Tax on certain share disposals. What disposals does it apply to? What are the qualifying conditions?

Annual Investment Allowance (AIA)
What is the Annual Investment Allowance? What are the limits? What expenditure qualifies?

AIA & WDA: Rules where there is a change of rate
How do you apply hybrid rates when there are changes in the rate of allowances? How does this work for Writing-Down Allowances (WDA) or Annual Investment Allowances (AIA)? 

Cases

Compensation taxable as income not capital
In Darren Wilkinson v HMRC [2020] TC7861 the First Tier Tax Tribunal (FTT) considered the tax treatment of compensation paid by Barclays Bank PLC as a result of the mis-selling of interest rate swaps.

CGT relief given for large garden
In Leslie and Catherine Phillips v HMRC TC7859, the First Tier Tax Tribunal (FTT) allowed a claim for Private Residence Relief for a house with a larger garden than the area set within the tax rules.

Diver's fitness training an allowable expense
In Robert John Osborne v HMRC [2020] TC7851, the First Tier Tax Tribunal (FTT) allowed a self-employed diver's claim tax relief for the cost of extreme fitness training.

Tax-free dividend scheme was a settlement
In Mark Dunsby v HMRC [2020] TC7755, a tax scheme designed to transfer tax-free cash out of an owner-managed company fell foul of both the settlements and transfer of assets abroad rules.

VAT

R & C Brief 16 (2020): VAT liability of payroll services
Revenue & Customs Brief 16 (2020): ‘VAT liability of payroll services’ explains HMRC’s position following the decision by the Cheshire Centre for Independent Living to concede in the Upper Tribunal.

Partial Exemption & Input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?

Virtual Tax Partner Toolkits (freeview)

Virtual Tax Partner © Tax Toolkit© Tax Toolkits
NEW: be a winner with our game-changing tax diagnostics tools. Sign up now.

  • Business Asset Disposal Relief: Sole traders: sale of a business, incorporation, sale of assets
  • Business Asset Disposal Relief: Company owners: rules for sales pre 29 October 2018, sales between 29 October 2018 and 5 April 2019 and after.
  • TAAR: closing your Personal service company? Will your final dividends be taxed as income?
  • Salary or dividend, or a mixture of both. Better to claim the Employers' Allowance?
  • Making Tax Digital for VAT: when do you need to join.

Tax Queries?

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. 

CPD for lunch 

Byte-sized chunks of CPD for subscribers

NEW

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 22 October 2020

  • Stamp Taxes News: October 2020
  • Criminal investigations into UK tax evasion
  • OTS report on simplifying claims and elections
  • COVID-19 Government Support Tracker
  • Herd basis: Farming
  • Farming: Overview
  • COVID-19: CCAB supplementary AML guidance
  • AML: CCAB issues draft updated guidance for the accountancy sector...More

 

SME Tax Monthly Summary September 2020

Links to all of September's newswires...More 

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