Nichola's SME Tax W-update 30 September 2021

Hello,

Research prepared for HMRC on the 'Impact of Making Tax Digital for VAT' seems to have been buried on HMRC’s website. Published in July 2021, it reveals something of a mixed picture regarding benefits that Making Tax Digital (MTD) for VAT can offer businesses.

There is some good news in the findings. According to the research, two-thirds of businesses think that MTD for VAT saves time in checking for errors, inputting data and calculation of tax. There is some barkingly obvious news; most benefits come from using fully functional software, and there is the bad news for productivity; only a third of businesses think that the new system saves them any time.

As you know, the next phase of MTD, MTD for Income Tax Self Assessment (ITSA) has been postponed until April 2024. HMRC has also just published a policy paper on its potential impacts. The thing that I find most curious about all of the impact assessments on MTD is that they seem to really downplay costs. Apparently folks, it’s going to cost you just £3 to file a new MTD quarterly return. This is based on the time that is physically taken to press your send button and not the time it takes you to input your data and work out how to use a new system. If you use an agent, HMRC expects them to check your submission in just 6 minutes! 

Quick VAT update: don't forget the change in VAT rate for hospitality businesses from tomorrow, and if you are pretending that MTD for VAT does not exist and still filing the old way, HMRC is going to turn off its systems to see what happens next. 

Quick COVID-19 update: the furlough scheme ends today. 

We have all been working extremely hard in preparing some amazing new material for our Virtual Tax Partner Practical Tax Conference which is now just two weeks away. This will be a great source of CPD and provide really practical and useable tax know-how. Our pre-conference tax workouts are proving very popular.

Lots more news, updates, CPD and details of our forthcoming Virtual Tax Partner Practical Tax Conference below.

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)

Impact of Making Tax Digital for VAT: new research
Research prepared for HMRC on the 'Impact of Making Tax Digital for VAT' reveals a mixed picture regarding the benefits that Making Tax Digital (MTD) for VAT can offer businesses.

HMRC policy paper on MTD customer costs
Policy paper, 'Customer costs and benefits for the next phases of Making Tax Digital' assesses the costs involved with the next phases of transitioning across to Making Tax Digital (MTD) for both VAT and Self Assessment as well as ongoing annual costs.

New penalty regime for electronic sales suppression tools  
HMRC have released draft legislation covering their proposed new powers to tackle electronic sales suppression.

Scottish budget date set for 9 December 
The Scottish Parliament has announced that its 2021 Budget will be held on Thursday 9 December 2021. This will set the Budget and spending plans for Scotland for 2022-23.

Consultation response: ‘Tips, gratuities, cover and service charges’
The government has published its response to the 2016 consultation ‘Tips, gratuities, cover and service charges’ which set out proposals to make tipping fairer. 

Editor's Pick (freeview)

 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.

COVID-19: Coronavirus Job Retention Scheme (CJRS) from November 2020
Updated to reflect HMRC guidance on declaration in Corporate Tax returns.

Guides and Updates (subscribers)  

Self Assessment

MTD: Toolkit for accountants
UPDATE: 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?  

Penalties: points-based late submission regime
UPDATE: A points-based late submission penalty regime is replacing existing late submission penalties for VAT and Income Tax Self Assessment (ITSA) under Making Tax Digital. 

Partnerships

What's new in 2021-22?
What's new for partnerships in 2021-2022? How are they taxed? What reliefs might apply?

Directors & Companies   

Directors; Tax Planning Toolkit 2021-22
This year's toolkit, like all our maintained guides, is a rolling planner and is updated throughout the year. We will notify you when we make updates. 

Employers

Tips, gratuities and troncs
How are tips, gratuities and troncs taxed? What are the rules for National Insurance (NICs)?  

Private Client & Estate Planning

Rectification of Trustee mistakes
What happens when trustees make mistakes? Can the court rectify them? When will they agree to rectification?

Land & Property 

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

Tax Cases 

High Court refuses to set aside tax avoidance schemes
In Dukeries Healthcare Ltd and Ors v Bay Trust International Ltd, HMRC and Ors [2021] EWHC 2086 (Ch), the High Court dismissed claims to set aside Remuneration Trust arrangements using the equitable doctrine of mistake. There was insufficient evidence of serious mistake and the claimants had accepted the risk the schemes would fail.

VAT News & Guides

Online VAT return facility to be removed for 800 businesses 
In a bid to improve Making Tax Digital for VAT compliance, HMRC will remove the ability to submit online VAT returns for some businesses that should have signed up for it.

VAT appeal time limits did not breach EU law  
In Hampton George Hewitt v HMRC [2021] UKUT 0231, the Upper Tribunal (UT) dismissed the taxpayer's late appeal against HMRC for the cancellation of his farmer's flat-rate certificate for VAT. The EU's 'principle of effectiveness' was found not to require anything more than the existing 30-day appeal time.

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: Business Asset Disposal Relief
• NEW: CPD: Appeals: How to Appeal a Tax Penalty
• CPD: VAT: Land and Property

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 23 September 2021

• Call for evidence: Basis Period Reform and Uncertain Tax Treatment
• Residential Property Developer Tax draft legislation
• Improving tax tribunals for the next ten years
• New Consultation on 'Making flexible working the default'
• Making Tax Digital Index & Timeline
• Ouch! NICs &  Dividend Tax rises hit wider than first thought
• Lack of trust and loan documents lead to avoidable tax liability 
• Are football referees employees? Court of Appeal lets FTT decide 
• Loss scheme is notifiable under DOTAS
• Failure to verify asset was deliberate inaccuracy 
• FTT did not consider whole picture in VAT strikeout 
• HMRC's Customer Charter
• Intangibles regime and partnership interests
• Directors' loan accounts: Toolkit
• Employment status & detailed checklist
• IHT: development land
• Interest on re-mortgaged buy-to-let property
• Opting to tax land and property
• NEW CPD: Business Asset Disposal Relief ...More 

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