Hello

Late-payment interest increases, problems with P11D car benefits, a bizarre NICs calculator, a new Agent update and the First Tier Tribunal (FTT) appear to provide some DIY-builders with a new planning opportunity, all in all, just another week in tax!

If you run a company, have you ever issued shares of different classes? If so, do you regularly review the potential tax issues surrounding those shares? Do you understand what your Articles mean? Can you use different share classes more efficiently? We have been updating our notes on ‘ABC’ shares in an effort to explain all these things to you, plus we have been adding some more top tips for company owners who are thinking of stepping down or bringing on employee-shareholders.

A recent FTT decision has provided some taxpayers with what seems to be a favourable reading of the Private Residence Relief (PRR) legislation. There is an anomaly, which has always been there - another one of those Donald Rumsfeld's ‘known unknowns’. Potentially this provides a planning opportunity for some self-builders, see Case reports, below.

As inflation increases so do interest rates. Late tax payment interest rises to 3.75% from 5 July 2022. If you are required to make a tax payment on account this 31 July 2022: pay on time to avoid an interest charge too.

We are now in the middle of ‘P11D season’ and we gather from the ICAEW that HMRC’s online car forms calculations are making errors. I am unsurprised: it's tricky to check these calculators and a number of websites show the wrong figures.

Finally, HMRC has created a National Insurance contributions (NICs) calculator which apart from containing some hilarious caveats, cunningly compares your earnings July-July instead of the tax year (April 6 to April 5). We could speculate that this is for 'propaganda purposes' (to hide the NICs levy rises), but instead we recommend that you use our calculators to find the actual position.

Lots more exciting content and updates 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) 

HMRC increase late payment interest rate again 
Following the Bank of England’s recent announcement increasing the base rate, HMRC have announced that their late payment interest rate will also increase by 0.25%, to 3.75%, from 5 July 2022.

HMRC release NIC tool     
HMRC has released a National Insurance Contributions (NICs) tool which claims to provide an estimate of how changes to the NICs Primary Thresholds from 6 July 2022 will affect the amount of NICs that individual taxpayers will pay. 

Call for loan charge evidence from professional advisers 
The All-Party Parliamentary Loan Charge and Taxpayer Fairness Group (APPG) has launched a call for evidence from advisers with clients affected by the loan charge.

P11D/P45 (car) online form issues for electric cars   
The ICAEW has issued a warning over potential inaccuracies in the Benefit In Kind (BIK) charge as calculated by HMRC's online P11D and P46(car) forms. HMRC calculators are incorrectly allocating high CO2 emissions and issuing charges that are higher than the correct figures.

Consultation: Draft legislation: Energy (Oil and Gas) Profits Levy Bill 
HMRC has issued draft legislation for consultation for the new temporary Energy (Oil and Gas) Profits Levy which was announced last month.

Editor's Pick (Freeview)

Agent Update: June 2022 
HMRC have issued their Agent Update for June 2022. We have summarised the key content for you with links to our detailed guidance on the topics covered. 

Penalties: P11Ds
UPDATE: What are the deadlines for P11D returns? What penalties are due for late or incorrect returns?

Editor's Pick (Subscribers)

ABC shares: setting up share classes with different rights
UPDATE: Can you set up different classes of shares? What are the rules in giving different classes of shares to directors and employees? What planning can a company founder undertake using different share classes?

Guides & Updates (Subscribers) 

Land & property 

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? With tips on profit extraction and other planning points, case studies and links to further guidance.

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

Self-employed

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? 

Companies & Shareholders

An Index to Reorganisations, Demergers & Share transactions
What is a company reorganisation or reconstruction? What tax reliefs apply to a company reorganisation, a share for share exchange, reconstruction or other transaction involving shares?

Employment-Related Securities: Reporting 
UPDATE: 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 by 6 July following the tax year-end.

Employers 

Cycles & cyclist's safety equipment
UPDATE: What tax breaks are available to you and your staff if you provide your workforce with eco-travel solutions?

Exemption for paid and reimbursed expenses
UPDATE: What exemptions apply for paid and reimbursed employee expenses? What are the rules?

Penalties & Compliance 

Closure notices
UPDATE: When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights? 

Discovery Assessments
UPDATE: When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences?

Tax Cases (Freeview)

Goodwill was not acquired from retiring partner
In Beadnall Copley Ltd v HMRC [2022] TC8508 the First Tier Tribunal (FTT) denied corporation tax deductions for the amortisation of goodwill. It had not been acquired from the sole trader’s partner prior to incorporation and was pre-2002 goodwill.

SEIS: film production company meets risk to capital condition
In Cry Me A River Limited v HMRC [2022] TC08507, the First Tier Tribunal (FTT) held that the production of a single film and engaging sub-contractors did not stop the appellant from meeting the SEIS risk to capital criteria. 

Favourable PRR decision: new planning opportunity?
In Gerald and Sarah Lee v HMRC [2022] TC 8502, the First Tier Tribunal (FTT) allowed an appeal for Private Residence Relief (PRR) for a replacement property. The calculation of the relief was by reference to the ownership of a dwelling house rather than the land on which it was built.

VAT Cases & Guides 

Capital Goods Scheme
UPDATE: What is the VAT Capital Goods Scheme (CGS)? When do I use it? How does it work?

Cash accounting
UPDATE: What is cash accounting for VAT? What are the benefits? What are the conditions? 

Tax Tools 

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 16 June 2022

  • Joint letter to HMRC: What on earth is going on?
  • R&D Tax Credit payment delay update
  • UK delays global minimum tax rate 
  • Employer Bulletin: June 2022 
  • The benefits of www.rossmartin.co.uk : An inside view
  • Company Articles disrupt shareholder dispute
  • Tax Data Card 2022-23
  • Pension tax charge discovery invalid    
  • No CGT deduction for loan repayment 
  • One share short for £1m Entrepreneurs’ Relief 
  • De-enveloping Property
  • Incorporation of a property business
  • Freeports: Tax breaks
  • MTD: Data required by HMRC
  • Employment-Related Securities: Reporting issues
  • What expenditure qualifies for plant & machinery allowances?
  • Structures & Buildings Allowance (SBA)
  • Penalties: Errors in Returns and Documents (subscriber version)
  • Energy-Saving Materials
  • Is voluntary VAT registration worthwhile?
  • Agents and principals
  • CPD: VAT update 2022
  • CPD: Change of Basis Periods Part 2. Transitional rules ...More 

 

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