Nichola's SME Tax W-update 29 September 2022

Hello,

It has been a week of economic turmoil following last Friday’s mini-budget. We have summaries of the key measures announced in case you missed our Budget Special edition, as well as plenty of non-budget content including a new Employer update for 2022-23, HMRC’s latest Agent update and some interesting tax cases.

If you have clients with overseas interests do have a read of the Upper Tribunal case on double tax relief and treaty interpretation, which highlights the need to check the position where overseas tax has been suffered and to not just assume that unilateral credit relief will be granted by HMRC.

In its agent update, HMRC explains the new process that allows agents to report and pay using the Capital Gains Tax (CGT) UK property disposal online service on behalf of clients who are digitally excluded. This does seem a little complex and time-consuming for what should be a relatively simple task, but at least now there is a process, whereas to date agents have had to find their own workarounds for such clients.

Please bear with us as we update the www.rossmartin.co.uk website for all the fiscal changes announced. Their impact is wide-ranging. We note that the Chancellor has another ‘fiscal event’ planned on 23 November, at the same time as the Office of Budget Responsibility (OBR) issues its next forecast.

Do check out our CPD section of the website, which has new material at least twice a month and where we have a new webinar on Making Tax Digital for you.

More news, updates and cases 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 interest rates rise again 
Following the Bank of England’s rise in base rates to 2.25%, HMRC interest rates will increase by 0.50%, to 4.75% for late payment interest and 1.25% for repayment interest, from 11 October 2022. 

Don’t miss the Self Assessment registration deadline 
The deadline is 5 October after the end of the tax year. Anyone who needs to register for 2021-22 now has less than a week left or they will face penalties.

Abolition of OTS baffles tax bodies
The Chancellor's announcement to abolish the Office of Tax Simplification (OTS) has surprised the UK's leading tax and accountancy bodies who find the decision counterintuitive to his aims of tax simplification.

HMRC suspends tax refunds to Tax Credits Ltd'
Taxpayers who made tax repayment claims through the repayment agent 'Tax Credits Ltd' will now receive their refunds directly from HMRC.

Mini-budget 2022 (Freeview)

Mini-budget 2022: at a glance
A summary of key annoucements for SMEs and their owners

Mini-budget 2022: Devolved taxes  
Does the Mini-budget affect Wales and Scotland?  What are the devolved nation’s responses to the mini-budget?

National Insurance Contributions rise reversed
The rise in National Insurance Contributions (NICs) rate of 1.25% which was introduced on 6 April 2022, will be reversed from 6 November 2022. 

Dividend Tax increase reversed
The rate of dividend tax will be reduced to its pre-April 2022 rate from 2023.

Corporation Tax rate increase cancelled
There has been a reversal of the planned increase in Corporation Tax.

Extension to Annual Investment Allowance
Chancellor Kwasi Kwarteng has announced an extension to the Annual Investment Allowance (AIA).

Reversal of Off-Payroll Working reforms
Workers providing their services via an intermediary will once again be responsible for determining their own employment status 

Stamp Duty Land Tax reductions
The Chancellor has announced changes to thresholds at which Stamp Duty Land Tax (SDLT) applies in his mini-budget on 23 September 2022.

Editor's Pick  

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

Employer’s What’s On: 2022/23 
NEW: A Finance Act 2022 employer update for advisers and their clients. This subscriber guide includes measures from the Finance Act and the Mini-Budget, also considering other topical issues for employers and employees. 

CPD: Making Tax Digital
This CPD session looks at the current status of Making Tax Digital. What's next for VAT? Will I be caught by MTD for Income Tax?

Guides & Updates 

Directors & Companies

Salary 2022/23 (avoiding NICs)
UPDATE: What amount of salary can be paid by an employer to a director or shareholder and avoiding or reducing National Insurance Contributions (NICs)? Is it beneficial to pay a slightly higher salary to claim the Employer's NICs allowance and pay some NICs? 

Do I pay a salary or dividend? 2022/23
UPDATE: This guide explores the tax-planning points and pitfalls of using dividends to create a tax-efficient pay package. 

Personal Service Company (PSC) tax
UPDATE: What is a PSC?  What are the tax implications for a PSC?  

Interest relief: Making a loan to a close company
In certain circumstances, individuals can claim tax relief for interest paid on a loan where the funds are used by a close company or used to buy an interest in a close company. Which loans qualify? What is a business purpose? 

Self-employed

Sole trader v. limited company: Tax differences & savings (2022/23)
UPDATE: Is it better from both a tax and legal point of view to run your business as a sole trader or as a company? Are there tax advantages in running a business as a company? What legal protections apply?  

Land & property  

SDLT, LBTT, LTT: What's new 2022-23
What is new for Stamp Duty Land Tax, Land and Buildings Transaction Tax and Land Transactions tax for 2022-23?  How are they taxed? What reliefs may apply? What has changed? What are the latest cases and developments?

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?

Employers 

Travel (employer's guide)
Following the recent confusion from government about the taxability of payments in excess of the approved mileage rates. our guide has everything the employer needs to know about employee travel costs including the fact that such excess payments are taxable.

Private Client & Estate Planning 

Dividend tax (subscriber guide)
UPDATE: This practical tax guide explains how dividends are taxed on or after 6 April 2016. It includes HMRC's own examples, more detailed examples, including an Owner Managed Business (OMB) section together with tax planning tips.

Tax Cases (Freeview) 

Double taxation relief allowed under UK/US treaty 
In HMRC v Aozora GMAC Investment Limited [2022] UKUT258 the Upper Tribunal (UT) agreed that unilateral double tax credit relief was available for US source interest under the UK/US tax treaty. The terms of the treaty did not expressly preclude relief so UK domestic law could not operate to prevent it either.

VAT Cases & Guides 

VAT deregistration denied, penalties upheld  
In Jagvinder Takhar t/a Golden Fry v HMRC [2022] TC08593, the First Tier Tribunal (FTT) upheld HMRC’s VAT assessment and penalties as the unrepresented taxpayer had not satisfied HMRC that they were below the required limits.

Input VAT: payments must be linked to intention to trade
In Hedge Fund Investment Management Limited v HMRC [2022] TC8596, the First Tier Tribunal (FTT) quashed penalties as it found that the taxpayer had an intention to trade and was able to reclaim input VAT to the extent that it could be established that it related to future taxable supplies.

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!

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. 

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: Making Tax Digital
• CPD: Where are we with Crypto?
• CPD: How to avoid the High-Income Child Benefit Charge (HICBC)
• More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 22 September 2022

• Energy Bill Relief Scheme for business
• ICAEW responds to proposed R&D reform 
• Cryptoasset tax: complete overhaul is required
• Starting in Business: Start here...
• 60% tax penalties for self-employed landlord
• CoA allows Entrepreneurs' Relief on trust share disposal 
• UT: Income tax charge on incorporation
• Input VAT largely irrecoverable by property partnership 
• Registering for VAT
• Partnerships: What's new 2022-23
• Insolvency FAQs for boards
• Corporate Criminal Offence: failure to prevent tax evasion toolkit
• Buy-to-let: SDLT on partnership incorporation
• De-enveloping property
• PAYE: Paying HMRC
• Trusts & Estates: Exit charge reporting requirements
• UK Trusts
• CPD: Where are we with Crypto?  ...More

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