Nichola's SME Tax W-update 1 July 2021

Hello,

We have a new version of our freeview reorganisations and reconstructions index out this week. This now contains a planner which aims to help you decide what you want to do and how to do it. We can then direct you to the right guides and tools to complete the job. Of course, if it’s too much for you then contact our sister service, Virtual Tax Partner support.

HMRC’s clearance section has also decided that it’s a good idea to let taxpayers know what they want to see in tax clearances. They have shared this information with the CIOT.  We have links to clearance templates in our various case studies.

According to the House of Commons Public Accounts Committee (the PAC), fraud and error cost the taxpayer over £51 billion in 2018-19. This massive figure is estimated and is expected to increase in 2020-21 due to the scale of the government's COVID-19 support schemes. The PAC is critical of government departments for their poor fraud detection systems and standards, and provides recommendations to the Cabinet office.

Making Tax Digital (MTD) for Income Tax and VAT is designed to reduce some of that multi-billion pound headline figure, by reducing the rate of taxpayer error. We are counting down until the 2022 start. Do check our Index and Timeline for this topic.

Our poll on ‘Shall we change the tax-year-end' is open for one more week. At present it’s a close-run result, with most people opting for ‘Yes, let's go for 31 March’, although many seem to like 31 December too. Votes are coming in from around the world which is fascinating to see.

The latest version of the Coronavirus Job Retention Scheme (CJRS) starts today, with employers now paying 10% of the 80% of furloughed employees usual wages.

Advanced Warning: essential maintenance. We are planning a major update to the back-end of our site on 10 July. The site may be down for 2-3 hours overnight.

Lots more news and updates below so do read on. 

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

Investigations into COVID-19 support schemes: 12k and counting
HMRC have undertaken over 12,000 interventions relating to claims made under the government's package of Coronavirus business support schemes. 

September enforcement deadline for bad debt collection
HRMC have published its policy document, 'Collecting tax debts as we emerge from coronavirus (COVID-19)'. It warns that should companies or individuals ignore HMRC, the agency would initiate enforcement action after a September 2021 deadline.

COVID-related tax fraud costs us billions says PAC
The Parliamentary Accounts Committee (PAC) has published a report 'Fraud and Error', warning that government actions “significantly increased” UK taxpayers' exposure to a loss of billions of pounds through fraud and error in administering Coronavirus support packages.

New Checklist for making Statutory Clearance applications
HMRC have shared a helpful new statutory clearance checklist with the Chartered Institute of Taxation (CIOT) which sets out in some detail all the information that HMRC require to consider a clearance application.

CGT: reporting & payment
The ICAEW has pointed out that if you have overpaid CGT due to having, say made a trading loss, you need to either amend your 30-day CGT return or otherwise phone HMRC in order to receive a refund. 

Editor's Pick  

An Index to Reorganisations, Demergers & Share transactions (Freeview)
NEW: Reorganising a business or its share capital? What process do you need? Start here to find out and link to practical tax guides, checklists, case studies and tax clearance templates.

Reorganisations & Reconstructions
NEW: What is a company reorganisation or reconstruction? What tax reliefs apply to a company reorganisation or a share for share exchange or a reconstruction?

Guides and Updates (subscribers) 

Self Assessment

Making Tax Digital: Index & timeline
When does Making Tax Digital (MTD) apply? What does Making Tax Digital really mean? How will it affect you? Does MTD mean quarterly reporting? Is my business exempted from Making Tax Digital?

MTD: Toolkit for accountants
What is the current timetable for Making Tax Digital (MTD)? How will it work? Which clients will be excluded? What planning needs to be undertaken?  

Directors

Dividends (how to pay & process): Step-by-step guide
UPDATE: A step-by-step guide to paying and processing dividends for companies and their owners.

Share capital: What's an ordinary share?
UPDATE: What is an ordinary share?  Why is it important?

Employers

Employer's What's On: June 2021
NEW: Finance Act 2021 received Royal Assent on 10 June 2021. The National Insurance Bill 2021 is currently going through Parliament. This update includes measures from both as well as considering other topical issues for employers and employees.

Private client & Estate Planning

An index to Capital Gains Tax reliefs
UPDATE: A guide to which of the key CGT reliefs apply, when and where.

IHT: development land
UPDATE: When is the development of land a business for the purposes of Business Property Relief (BPR)?

Land & Property

Dealing in or developing UK land
UPDATE: A guide to the rules which replaced the old transactions in land provisions and extended UK taxation to all profits from trading in and developing UK land, regardless of residence.

Tax Cases 

HICBC is not income under the Discovery rules
In HMRC v Jason Wilkes [2021] UKUT150 the Upper Tribunal (UT) agreed that the High-Income Child Benefit Charge was not income to be Discovered under s29 TMA 1970. HMRC had interpreted s29 too broadly and could have used other powers to collect the tax due.

Costs of claiming against an employer are not taxable earnings
In Keith Murphy v HMRC [2021] UKUT152, the Upper Tribunal (UT) treated the costs of an employment claim settled by the employer as non-taxable. They were not earnings derived from the taxpayers’ employment, they were necessary costs of making the claim.

VAT News & Guides

COVID-19: Option to tax deadline extended
HMRC have announced that, due to the Coronavirus pandemic, they are again extending the deadline for notifying them about an option to tax on land and buildings to 90 days.

R & C Brief 10 (2021): Repayment of VAT to overseas businesses not established in the EU and not VAT registered in the UK 
HMRC have published Revenue & Customs Brief 10 (2021): ‘repayment of VAT to overseas businesses not established in the EU and not VAT registered in the UK’, announcing a further deadline extension to the overseas VAT refund scheme, following continued difficulties faced by some businesses in obtaining a certificate of status. 

Reconcile your output VAT to your turnover
This is a freeview 'At a glance' guide to reconciling your output VAT to your VAT returns.

Making Tax Digital: VAT (Subscriber guide)
What is Making Tax Digital (MTD) for VAT? What is VAT 'functional compatible' software? What do you need to report their VAT? Are there penalties for making mistakes?  

VAT Cases

New build: no planning permission no VAT zero-rating
In CMJ (Aberdeen) Ltd v HMRC [2021] TC8140, the First Tier Tribunal (FTT) dismissed an appeal against assessments to standard-rate the supply of a new build dwelling. It could not be zero-rated as it did not have valid planning consent when the construction works commenced.

Tax Toolkits 

Tax Tools
Be a winner with our game-changing tax diagnostics tools for Business Asset Disposal Relief, SDLT & annexes/subsidiary properties, Company reorganisations, R & D Zone and TAAR on winding up. Sign up now!

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

More at CPD Index

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Nichola's SME Tax W-update 24 June 2021 

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