Nichola's SME Tax W-update 20 October 2022

Hello, 

It has been another busy week in tax and politics as the new Chancellor Jeremy Hunt reversed most of his predecessor’s remaining mini-budget policies in his first Fiscal Statement on Monday.

All this came after the Prime Minister reinstated the planned April 2023 increase in Corporation Tax rates at the end of last week.

If you are struggling to understand what has been reversed, what has not, and the reversal of the reversals, check out our Fiscal Statement ‘At a glance’ guide which will hopefully clear things up, at least until the next fiscal event on 31 October, assuming of course that there is a level of political status quo until that time. Is it a coincidence that the economic and fiscal forecasts are being released on Halloween this year? We suspect that the OBR figures could be more frightening than any scary movie and that the Chancellor may be giving out more tricks than treats.

HMRC has also been busy this week with a new Agent update as well an Employer Bulletin. We have summarised these as usual with helpful links to our detailed guides on each topic. In particular these include how to handle the next change in National Insurance rates, from 6 November, as well as another reminder to sign up for Making Tax Digital for VAT before the  filing VAT online account is finally shut down in less than two weeks' time.

We have some interesting cases on VAT and vouchers, and schedule 36 notices. In both cases the taxpayers were successful in their appeals. The latter case is a reminder that just because HMRC asks for information it doesn’t necessarily mean that they are entitled to it.

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)  

Government reinstates increase to Corporation Tax rates
The Prime Minister announced on 14 October 2022 that plans to increase Corporation Tax rates to 25% from April 2023 would be reinstated after they were reversed in the September mini-budget.

House of Lords Call for Evidence into R&D relief
The House of Lords Finance Bill Sub-Committee has launched a Call for Evidence inviting contributions to its inquiry on draft Finance Bill 2022-23 in respect of proposed changes to R&D relief.

Fiscal Statement October 2022: At a glance
On 17 October 2022 the Chancellor, Jeremy Hunt, made a fiscal statement reversing almost all tax measures announced at the Mini-budget on 23 September 2022, other than those that have already been legislated.

Editor's Pick  

Employer Bulletin: October 2022
HMRC have published their Employer Bulletin for October 2022. We have summarised the key content for you, with links to our detailed guidance on the topics covered.

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

Guides & Updates  

Directors & Companies

Employee Ownership Trusts: An exit route for owner-managers
UPDATE: What is an Employee Ownership Trust (EOT)? When are they a good exit route for owner-managers? What are the tax benefits?

Associated companies & tests for control
UPDATE: What are the tax effects of associated companies? What is an associated company? How do the control tests work?

Directors: Tax planning toolkit for 2022/23
UPDATE: This planner looks at a range of director tax issues, including company profit extraction. This year's toolkit, like all our maintained guides, is a rolling planner and is updated throughout the year.

Land & property  

Adviser's Guide: Property Business, profits and losses
UPDATED: What is property income? How is it taxed? How are profits calculated? How are losses relieved? Is NI paid on property income? Is property income classed as a business activity?

Buy-to-let ownership: personal v. company? (Subscribers)
UPDATED: 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. 

Employers 

EMI: Enterprise Management Incentive Scheme
UPDATE: What is the Enterprise Management Incentive (EMI) scheme? What's the difference between EMI and an unapproved share scheme?

Employment-Related Securities & Share Schemes
UPDATE:  We have now added sample elections for s.430 and s.431 ITEPA 2003 to this guide.

Private Client & Estate Planning 

Top Slicing Relief: How you slice it
UPDATE: What is Top Slicing Relief? When does it apply?

Self Assessment Return 2021/22: What's new?
UPDATE: Now that Self Assessment season is in full swing, our 2022 Self Assessment toolkit contains top tips for completing tax returns for the year ending 5 April 2022. 

Tax Cases (Freeview) 

Sch 36 request not reasonably required
In Barry Davies, Rupinder Mahil and the Davies Mahil Partnership v HMRC [2022] TC 8619, the First Tier Tribunal (FTT) allowed appeals against Schedule 36 information notices, the information requested was not reasonably required.

VAT Cases & Guides 

Input VAT claims allowed for Steam vouchers bought in Harrods 
In Lucky Technology Limited v HMRC [2022] TC08616 the First Tier Tribunal (FTT) held that input VAT could be reclaimed on Steam vouchers purchased from a Harrods concession: they were retailer vouchers, Harrods was acting as principal not agent, so VAT had correctly been charged and could be reclaimed.

Correcting VAT errors
What are the VAT error correction time limits? Can you correct errors through the VAT return? Do you have to notify HMRC?

Reverse charge: Domestic
UPDATE: HMRC guidance has changed to state 'supplies for final consumption' are no longer excluded from the Reverse Charge.

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 13 October 2022

• Medium-Term Fiscal Plan set for 31 October 2022
• Scottish budget date fixed for 15 December 2022 
• Net Zero: Call for evidence 
• Consultation: More fiscal powers for Northern Ireland 
• NHS Pensions relief feedback 
• Adjusted Net Income calculator
• How to calculate the High-income child benefit change
• GAAR Opinion: Trust arrangements and loan novation not reasonable  
• GAAR Opinion: SDLT scheme not reasonable
• Supreme Court confirms creditor duty
• Land & Property: DIY Housebuilders scheme
• Welsh LTT Rates
• Pool cars
• Business Asset Disposal Relief (Entrepreneurs' Relief): Disposal of trust business assets
• Airbnb: What expenses can I claim? (subscriber content) 
• Directors' loan accounts: Toolkit (subscribers) ...More

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