Nichola's SME Tax W-update 2 September 2021

Hello

This week we look at an unsuccessful judicial review of an accidently repaid disguised loan charge. We consider changes to the Trust registration service, we look at capital allowances, recent issues relating to COVID-19 grants and we warm up for our very first Virtual Tax Partner conference.

Many who have managed to get away for a 'staycation' are now prowling properties websites in search of their dream holiday home. This is very much a seasonal 'thing' according to an estate agent friend. We all fall in love with our holiday locations. Do potential landlords appreciate the subtle complications of the different capital allowance regimes I wonder? Our guide, Landlord's: Capital Allowances, summarises the key rules.

COVID-19 keeps on 'giving': one resultant effect has been changes in the rate of VAT for the hospitality business. If you are either in or advising a hospitality business, do not overlook the change in the VAT rate from 1 October. You will need to reprogram your till yet again, update your card machine and change the codes on your bookkeeping software. This might be a very good time to upgrade old till equipment to ensure that your till directly links to your bookkeeping software. This is a wise precaution with the coming changes in tax reporting under Making Tax Digital for VAT and Income Tax. 

HMRC has just confirmed that it has corrected the error which had led to it pre-populating SEISS grants with the commercial self-assessment software. Whilst on the topic of grants, the ICAEW’s Tax Faculty has raised some issues over the Coronavirus Job Retention Scheme (CJRS). It may be that some claimants have claimed the Employer’s National Insurance allowance in error.

The Trust Registration Service (TRS) is now open for non-taxable trusts to register, and they must do so by 1 September, 2022. It applies to express trusts only, and places an additional requirement on trustees, many of whom may not have had to think about UK tax obligations for some time other than perhaps signing a nil return prepared by their agent once a year, and Inheritance Tax charges every 10 years. Our Trust guide sets out which trusts need to register and how they or their agent can do so.

Do book now for our Virtual Tax Partner Conference, early birds qualify for our Free Tax Workouts.

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)

Double relief danger with Employment Allowance and CJRS 
Employers claiming the Employment Allowance may have received double relief if also claiming Coronavirus Job Retention Scheme (CJRS) payments due to the pandemic. The ICAEW Tax Faculty has consulted with HMRC to provide clarification.

Scottish digital grant closes in hours
The Scottish government's second funding tranche under the DigitalBoost Development Grant has again closed on the day it opened. The £25m fund is Scotland’s national digital upskilling programme helping businesses to use digital technologies effectively.

Trust Registration Service open for non-taxable trusts
On 1 September 2021, the Trust Registration service became available for non-taxable trusts to register with HMRC. Previously it had only been available to taxable trusts and those non-taxable trusts registered for the HMRC pilot of the service.

Editor's Pick  

Virtual Tax Partner Practical Tax Conference
Get tax-fit with our Virtual Tax Partner pre-conference tax workouts! Our first ever Virtual Tax Partner 'VtaxP' practical tax conference takes place over two half-days on 12-13 October 2021. Buy your early bird tickets now to gain access to our pre-conference tax workouts.

Landlords: Capital Allowances
UPDATE: Can I claim Capital Allowances in my rental business?  What capital allowances can be claimed by a landlord?

Calendar of tax deadlines
UPDATE: This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines. 

Guides and Updates (subscribers)  

Self Assessment

Self Assessment: when to register for tax?
UPDATE: Registration is essential if you wish to make a claim or an election, or if you have untaxed income to report.

Accounts: Tax health check (self-employed)
UPDATE: This is a checklist that will provide you with a lot of pointers to key areas of discussion with sole trader clients. 

When does a partnership exist?
UPDATE: When does a partnership exist? Why does it matter? What are the implications for different taxes?

Directors & Companies

Loan Relationships
How are loans made to and by a company taxed? What are the rules when loans are written down? What is the difference between a trading and non-trading loan relationship? What are the rules for connected party loans?

Directors' Loan Account: Toolkit
HMRC do a toolkit for advisers. This is our enhanced version with planning points. 

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

Employers

PAYE Codes: Starters/leavers & 0T code
What tax code should be used for new starters and leavers? Can I use a P45 tax code from a previous tax year? How should payments on leaving employment be taxed? 

Private Client & Estate Planning

CGT: Reporting, How to report CGT?
UPDATE: HMRC have advised where paper filing has been used to report a UK property disposal the payment deadline will be 30 days from the issue of the demand to pay. 

Trust Registration Service
UPDATE: Non-taxable UK express trusts can now register with the Trust Registration Service (TRS). New deadlines apply.

Non-resident Tax Toolkit
UPDATE: This toolkit covers the key UK tax issues for non-UK resident individuals holding UK assets and property and working in the UK.

Land & Property

Furnished Holiday Letting
UPDATE: What is Furnished Holiday Letting? How do you qualify for Furnished Holiday Letting? What are the rules for Furnished Holiday Letting?

Buy-to-let ownership: personal v. company? (Subscribers)
UPDATE: 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?  

Tax Cases 

Loan charge repayments stand, new loans are taxable 
In The Queen (on the application of Iain Clamp and Jeremy Beck) v HMRC [2021] EWHC 2360, the Court of Appeal dismissed an application for judicial review of HMRC’s decision to deny a request to reinstate loans repaid to avoid the Loan Charge and allow them to be redrawn without a tax charge.

Upper Tribunal allows professional fees on sale of Centrica subsidiary
In Centrica Overseas Holdings Limited v HMRC [2021] UKUT 0200, the Upper Tribunal allowed professional fees incurred on the disposal of a subsidiary by an investment company. 

VAT News & Guides

VAT rate change for hospitality businesses from 1 October 2021
The rate of VAT on food, accommodation and entry fees to attractions is scheduled to increase from 5% to 12.5% from 1 October 2021.

R & C Brief 12 (2021): VAT treatment of gaming machines: 6 December 2005 to 31 January 2013
HMRC have issued Revenue and Customs Brief 12 (2021): VAT treatment of gaming machines from 6 December 2005 to 31 January 2013. It sets out how customers with appeals related to the VAT treatment of gaming machines during this period can claim VAT refunds.

Assessments: Best judgement
What is a 'best judgement' assessment for VAT? When can HMRC raise one? What are your rights of appeal? How do you displace a best judgement assessment?

EU VAT: No supply, no onward supply relief
In Scanwell Logistics (UK) Limited v HMRC [2021] TC8207, the First Tier Tribunal (FTT) agreed that Onward Supply Relief was not available to a company acting as an import agent. They had not made a supply of goods.

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

• NEW: CPD: Appeals: How to Appeal a Tax Penalty
• NEW: CPD: VAT: Land and Property
• CPD: Family Investment Companies

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 26 August 2021 

• Stamp Taxes Update August 2021
• Tax bodies urge re-think on timing of MTD for Income Tax
• HMRC update List 3, tax-relief on subscriptions to approved organisations and societies
• Advisory fuel rates from 1 September 2021 
• Film industry snaps up 50% of creative sector tax relief 
• Tax Poll: Should the chancellor increase the £150 annual staff parties (or functions) limit?
• Get tax-fit with our Virtual Tax Partner pre-conference tax workouts!
• Offshore Disclosures: Penalties are coming 
• Uncertain Tax Treatment guidance released
• No SDLT Multiple Dwelling Relief for annexe 
• Interpretation of Nil Rate Band clause reduces legacy to nil 
• SDLT on residential property despite woodland and 15 acres  
• Revenue Scotland asks Tribunal to award expenses to taxpayer 
• Director’s share options were not Employment Related Securities
• R & C Brief 11 (2021): VAT liability of Coronavirus (COVID-19) testing services 
• Just 43 items required to make a PESM proposal 
• Lorry Drivers: What expenses can I claim?
• Sales/turnover: Tax compliance
• Scale rates, bespoke rates and fixed-rate expenses
• Client Briefing: Making gifts & IHT ...More

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