Hello,

This week we review the new consultation documents on corporate re-domiciliation and change of basis periods, we have warnings that 'cuckoos' are using accountants' office addresses for company registration, and there are signs that HMRC has been using its data-gathering powers to trawl cryptocurrency exchanges for details of customers with a large transaction history.

We also have a new guide this week on the topic of Joint & Several Liability of Company Directors. Last year, HMRC obtained new and wide-ranging powers that allow it to ‘pierce the corporate veil’. It is very important to be aware of the extent of these powers as they create a major change in company law.

Directors, shadow directors, participators and LLP members can now be made jointly and severally liable for the tax debts of insolvent companies or LLPs. As you may appreciate, if you do VAT, HMRC already has powers to transfer company VAT penalties to directors. Under these new powers, HMRC can serve a joint and several liability notice for any of the taxes, in four different situations. While this legislation is primarily designed to stop company owners from profiting from the use of failed tax avoidance schemes, the powers contained in these rules actually extend much further than to stop marketed tax avoidance schemes. HMRC may serve a joint and several liability notice in any case where it considers that there is a serious possibility of insolvency and non-payment of tax debt. This means that if you have neglected to file a company return, or not made a tax payment and your company becomes insolvent, you potentially can become jointly liable for its tax debts. In my experience it appears to be very easy to neglect tax when you are struggling to keep a company afloat. Company owners will need to ensure that they seek professional advice before they decide to neglect tax obligations in favour of any other potential insolvency obligations. 

Lots more news, updates and CPD 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)

Misuse of registered office
The Accountancy AML Supervisors’ Group (AASG) have issued a warning on the emerging threat of the misuse of registered offices. Professional body supervisors have noted cases where the address of an accountancy firm is used as the registered address for fraudsters' companies.

Furnished Holiday Letting: further COVID guidance 
HMRC have updated the Property Income Manual to provide further COVID-19 related guidance on meeting the Furnished Holiday Letting (FHL) conditions in 2020-21.

HMRC warning crypto investors about their CGT obligations
HMRC have recently started writing to UK domiciled taxpayers and their agents about Capital Gains Tax (CGT) where HMRC have third party information that indicates they hold or have held, investments in cryptoassets.

Dormant company? Inform HMRC online
HMRC have released updated guidance which explains how companies can inform HMRC that they are dormant for corporation tax purposes through their online service.

Basis period reform: Consultation responses  
HM Revenue & Customs (HMRC) have released the responses to their consultation covering the proposed changes to the basis period rules which affect unincorporated businesses. The proposal to align the tax and accounting years for unincorporated businesses will be included in Finance Bill 2022.

Consultation: Corporate re-domiciliation 
As announced in Autumn Budget 2021, the government has launched a consultation on a proposed new regime for corporate re-domiciliation. 

Editor's Pick 

Joint & Several Liability of Company Directors etc
When can Company Directors or LLP Members become jointly and severally liable for company or LLP tax liabilities and penalties? Finance Act 2020 has provided HMRC with wide-ranging new powers. 

Overseas Workday Relief (OWR) 
UPDATE: HMRC are seeking stakeholder views on the operation of the relief through their Expat Forum.

Guides and Updates (subscribers)  

Self Assessment 

Accounting periods and tax basis periods
UPDATE:  We review Finance Bill 2022 draft legislation for Basis period reform.

Land and Property  

SDLT: Stamp Duty Land Tax, start here
What is SDLT? What are the SDLT rates? What is exempt from SDLT? What reliefs are available? When are returns due? When can you amend a return?

Directors & Companies   

Non-resident directors: earnings, expenses and reporting requirements
UPDATE: Do non-resident directors have to complete a UK Self Assessment return? When and how is their remuneration taxable in the UK? What expenses can they claim?

Travel rules for owner-managers
When are travel costs allowable? What the temporary workplace rules and what is a permanent workplace? What other expenses can be claimed? 

Employers

Official rate of interest
UPDATE: This is a freeview 'At a glance' guide to HMRC's Official Rate of Interest (ORI).  

Employers: Who is an employer for PAYE and NI purposes?
This note provides useful ‘crib-notes’ and summaries of the relevant legislation in the event that there is a dispute with HMRC as to who is an actual employer.

Private Client & Estate Planning

Married couple v. unmarried couple (taxation of couples)
UPDATE: What differences are there in how married couples are taxed compared to unmarried couples?

CGT: Date of acquisition or disposal
UPDATE: When is the date of acquisition or disposal of an asset for Capital Gains Tax (CGT) purposes? When do special rules apply? Why does it matter?

Tax Cases  

Late pension protection notification refused 
In The Executors of David Harrison (deceased) & Anor v HMRC [2021] UKUT 0273, the Upper Tribunal (UT) dismissed an appeal against HMRC's refusal to accept a late notification of Fixed Protection 2012 for pension purposes. The UT found that the First Tier Tribunal (FTT) did not have jurisdiction to consider HMRC’s exercise of discretion.

Sky Sports presenter was an employee  
In Little Piece of Paradise Limited v HMRC [2021] TC08300, the First Tier Tribunal (FTT) dismissed the appeal of the Sky Sports presenter Dave Clark against the application of IR35 to his SKY contract and the subsequent PAYE and Class 1 NICs liability of £281,048.

VAT Cases & Guides 

Sale of storage pods to investors is exempt supply  
In Harley Scott Commercial Ltd v HMRC [2021] TC08299, the First Tier Tribunal (FTT) allowed the taxpayer's appeal. The supply of Store Pods to investors was the exempt supply of a building and not the supply of storage facilities which would have been standard rated.

EU court rules learning to swim is not education
In Dubrovin & Tröger GbR – Aquatics, VAT case C‑373/19 the European Court of Justice (CJEU) ruled that a business operating as a swimming school was not providing education similar to that provided by a university or school. Its supplies were not exempt and had to be standard rated.

Cambridge rowers beat HMRC in VAT case 
In Cambridge University Boathouse Limited v HMRC [2021] TC08304, the First Tier Tribunal (FTT) decided the beneficiary of a lease to a boathouse was the rowing club rather than the rowers themselves.  The sporting exemption did not apply to the supply and VAT could be reclaimed.

Sport and physical recreation
When does the VAT exemption apply to sport? What is an eligible body for the VAT exemption? What is a sport?

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

Missed last time's Web-update?

Nichola's SME Tax W-update 4 November 2021

  • No accommodation tax relief for temporary HGV drivers
  • File a 2019-20 return or repay SEISS grants 
  • IHT reporting requirements to be eased  
  • Residential Property Developer Tax consultation responses 
  • Autumn Budget 2021: Extensions to Creative Tax Reliefs
  • UK abandons Digital Services Tax
  • SDLT avoidance scheme fails 
  • SME R&D relief allowed: Investor was a Venture Capital company
  • Dishonest agent prevents Discovery assessments 
  • Supply was of medical staff, not medical care, and was not exempt
  • Consultation on the new alcohol duty system 
  • Business Rates Review: Final Report 
  • Finance Bill 2022: tax update and rolling planner 2022-23
  • Influencers: what expenses can I claim?
  • Adviser's Guide: Property Business, profits and losses
  • Do I pay a salary or dividend? 2021/22
  • R&D Tax Relief: Overview
  • Apprenticeship levy (employers' briefing) ...More 

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