Hello,

Increasing the rate of Council Tax on second homes has found favour in Wales as a method of addressing a shortfall in local housing. Judging by reports on the news last night, this approach appears to be garnering support in other holiday locations around the country.

One way of avoiding an extra Council Tax charge might be to ensure that your property qualifies for Furnished Holiday Letting (FHL) status. I am curious to know how councils can adequately discern whether a property is actively being run as a FHL or not. It would seem that the council will have to inspect a taxpayer's Self Assessment record. The requirements to demonstrate qualifying FHL are quite stringent and so this is something that second home-owners will need to bear in mind if they seek to change to FHL status.

With the chancellor's Spring Statement now less than two weeks way, we have been scurrying around our webservice and updating tax guides for the next tax year. It's always interesting what you find in the updates! One of our team's finest achievements this year has been the development of our 'Index to Reorganisations, Demergers & Share Transactions'. This demystifies many of the complexities of tax. If you want to do anything involving a company's shares I would recommend that you start there.

I am also a huge fan of our Rolling Planners (subscriber content) and Start-ups guides (freeview). Do check out our freeview guides, as they provide a good picture of what we are about. If you are not already a subscriber, then why not? It's the best value-for-money webservice available. Because of the numerous and well-publicised financial pressures coming down the line, we will be increasing our prices next week so now is a great to time to subscribe.

More news, views and CPD updates below, 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 (Freeview) 

Bulk filing for late filing penalties back for 2020-21 
Late filing penalties will soon be issued for the 1.3 million taxpayers who failed to file their returns by 28 February 2022. Continuing the concession introduced last year, HMRC will be allowing bulk appeals, where the reasonable excuse is COVID-19.

Companies get a faster loss claim online
A reminder that companies taking advantage of the extended three-year carryback loss relief and claiming relief of £200,000 or less, should use the online form in order to reduce the risk of a delay in any repayment due.

Wales increases second home tax by 300%  
The Welsh Government has announced, from April 2023, new Business Rates qualifying conditions for holiday lets and an increase to the maximum amount of Council Tax which can be charged on second homes. This follows changes to Business Rates criteria for self-catering accommodation previously being announced in England and Wales. 

Film scheme QC eludes negligence claims
In David McClean and Others v Andrew Thornhill QC [2022] EWHC 457 (Ch) the High Court found that a tax barrister did not owe a duty of care to participators in a failed film partnership tax avoidance scheme upon which he had provided counsels opinion. He had not been negligent.

Editor's Pick (subscribers)

Finance Act 2021: Tax Update and Rolling Planner 2021-22
What's hot in tax this year? Catch up with the key tax developments for businesses and their owners and families in the last 12 months

Finance Act 2022: Tax Update and Rolling Planner 2022-23
With the chancellor's Spring Statement now less than two weeks away we have plugged in the data that we know so far.

Editor's Pick (freeview)

Calendar of tax deadlines and new tax measures
UPDATE: This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax significant events. 

A new business? Start here!
Starting in business? Our 'At a glance' guide takes you through the key steps in getting started for tax, with links helping you drill down for more detail

A company start-up? Start here!
Our 'At a glance' freeview guide is essential reading for anyone thinking about starting up a new company.

Guides & Updates (subscribers)  

Reorganising the business? Start here!
What is a company reorganisation or reconstruction? What tax reliefs apply to a company reorganisation or a share for share exchange or a reconstruction or other transaction involving shares? You can reorganise or separate company activities and different subsidiaries using a variety of different methods.
The super-practical tax guides in this index provide an outline of the tax treatment together with step guides and tax clearance templates.

Self Assessment   

Conditionality: taxi, private hire vehicles and scrap licenses
Update: You can now apply for a tax check through the Government Gateway.  Our guide explains the information you will need.

Record-keeping & tax: What, how and until when?
How long do your need to keep your books and records for tax? Record-keeping for Income Tax, VAT, Corporation Tax. What if you lose your records?

Directors & Companies 

Losses: Trading and other losses
When can a company offset its losses? What restrictions are there? How are loss claims made?

Companies: compliance review
Company accounts, tax return and payment compliance checklist

Companies & shareholders: Year-end tax planning review
Year-end (shareholder) tax review and planner

Patent Box
UPDATE: What is the Patent Box regime? When does it apply? What are the benefits?

Employers

Vans and Commercial vehicles
UPDATE: What is the benefit in kind charge if you drive a company van? What is the van fuel benefit? What is the tax on zero-emissions vans?

Employment-Related Securities: Reporting issues
If an employer gives shares to an employee or sets up a tax-advantaged share or share option scheme, the benefit is taxed within the Employment-Related Securities (ERS) regime. The employer will then have a requirement to register a share scheme with HMRC and file an annual return.

Private Client & Estate Planning 

 Accelerated Payments & Follower Notices
UPDATE: What are Accelerated Payments and Follower notices? What action is required? What are the penalties for non-compliance? Is there a right to appeal?

Promoters of Tax Avoidance Schemes (POTAS)
UPDATE: Who is a Promoter? What are the Promoters of Tax Avoidance Scheme rules?  What does this mean for promoters, intermediaries and clients?

Tax Cases 

Despite FTT sympathy ADS not repaid    
In Elvis Ricardo Anthony Mohammed v Revenue Scotland [2022] FTSTC4, the First Tier Tribunal for Scotland (FTT) dismissed the taxpayer's appeal against the refusal to refund Additional Dwelling Supplement (ADS) paid on the acquisition of a second property after the sale of a prior main residence.

No IR35 for broadcaster: it had wider business interests  
In Basic Broadcasting Limited v HMRC [2022] TC08400, the First Tier Tribunal (FTT) decided that while two substantial broadcasting contracts had the features of employment contracts, they made up part of a wider business of Adrian Chiles.  As a result, the IR35 intermediaries legislation did not apply and the taxpayer's appeal was allowed.

VAT Cases & Guides 

Revenue and Customs Brief 5 (2022): Revised guidance on dealing with VAT grouping registration 
HMRC have published Revenue and Customs Brief 5 (2022): ‘revised guidance on dealing with VAT grouping registration’. This replaces guidance issued in November 2021 and explains the actions businesses should now take when filing VAT returns while waiting for a decision on their VAT grouping application. 

Nursing agency falls foul of VAT changes
In First Alternative Medical Staffing Ltd & Anor v HMRC [2022] EWCA Civ 249 the Court of Appeal (CoA) found that a VAT concession relating to nursing agencies supplying staff to third parties could not be relied on retrospectively. 

Other News & Consultations

Consultation on Welsh holiday lets and Business Rates 
The Welsh Government has published 'Consultation on draft Non-Domestic Rating (Definition of Domestic Property) (Wales) Order 2022' which seeks views on alterations to the treatment of self-catering accommodation for Business Rates and Council Tax purposes. 

PAYE: HMRC prioritise improvements
The Office of Tax Simplification (OTS) has published 'OTS Evaluation Note', which evaluates whether its past recommendations to HMRC on the operation of the PAYE system have been acted upon. It notes that there is a lack of evidence of HMRC planning or prioritisation to address the issues previously raised.

OTS review of its approach to simplification 
The Office of Tax Simplification (OTS) has set out the scope for the upcoming review of its approach to and interpretation of ‘tax simplification’. At the same time, it has clarified its aims as an organisation and how it assesses its own progress and success.

OTS update on work on the High-Income Child Benefit Charge
The Office of Tax Simplification (OTS) has released an evaluation note, ‘Update on OTS work on the High-Income Child Benefit Charge and its wider implications’ detailing HMRC’s progress with the recommendations made by the OTS in their October 2019 'Life Events' review and further recommendations to HMRC.

UK owes EU over undervalued Chinese goods, says ECJ 
The European Court of Justice (ECJ) has ruled that the UK had been negligent in allowing criminal gangs to flood EU markets via UK ports with cheap Chinese-made clothes and shoes. The European Commission estimated that the UK owed the bloc €2.7bn in lost duties and VAT.

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 3 March 2022

  • Online Sales Tax consultation
  • Advisory fuel rates from 1 March 2022
  • Chancellor & PM receives honorary fellowship
  • Unpaid student loans set to top £500bn: new repayment structure proposed
  • OTS evaluate tax simplification for tax agents
  • Not so simple: new review of taxation of residential property
  • Sanctions on Russia: guidance for accountants and advisers
  • £84 million Discovery Assessment valid 
  • Accountant's personal leisure complex was not a trade
  • Upper Tribunal rules on VAT grouping conditions 
  • Revenue and Customs Brief 4 (2022): End-customer claim refunds of VAT wrongly charged 
  • MTD: Toolkit for accountants
  • Buy-to-let ownership: personal v. company? (Subscribers)
  • Year-end top tips for OMB's 2021/22 
  • Staff Suggestion Schemes
  • How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK? ...More 

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