Nichola's SME Tax W-update 17 November 2022

Hello

We are a little late off the press today so that we can include a summary of the Chancellor's Autumn Statement 2022. We also have summaries of other tax news and announcements for you.

According to the official statistics, the UK is now officially in recession. The majority of the key tax-raising measures announced by the Chancellor in his Autumn Statement today, the third fiscal event in as many months, take effect from April 2023. The main revenue raising strategy is to freeze various tax allowances, including the Income Tax Personal Allowance and the VAT threshold. With inflation climbing to over 10%, the government receives its own windfall in terms of VAT receipts. The decision to reduce the additional (upper) rate threshold next year means that more taxpayers will pay tax at the 45% rate, thus spreading some of the tax burden, as anticipated, to higher earners.

Looking at the position of the 'private client' there is some bad news in the form of a reduction in the tax-free allowances for both Dividend tax and Capital Gains Tax (CGT) over the next two years. The Chancellor has also extended the scope of a windfall tax on the energy sector. There are always winners and losers, and online businesses might breathe a sigh of relief that the government has decided not to introduce an online sales tax. Meanwhile, reforming measures for business rates continue to evolve, with a new form of small business rate relief planned to protect certain businesses from the large increase to bills that may well occur thanks to the update in rateable values of all non-domestic properties in England to reflect their value as at 1 April 2021.

We hear from the tax professional bodies that HMRC are writing to a range of different taxpayers on a variety of topics, see 'An inspector calls' below.

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) 

Autumn Statement: At a glance
The Chancellor, Jeremy Hunt has presented his Autumn Statement 2022. This is the UK's third fiscal event this Autumn. The Autumn statement was accompanied by the Office of Budget Responsibilities report.

A tax inspector calls...

Rollover relief for residential property?
HMRC have are writing to taxpayers who have filed tax returns that included claims for Capital Gains Tax (CGT) Rollover relief on the disposal of residential property for tax years before 2020-21. It is unusual to be able to claim this form of relief on a residential property.

Review of company loss discrepancies
HMRC are writing to companies and their tax agents where they have identified inconsistencies between CT600s and the accompanying tax computations, relating to corporate losses.

EIS deferral claims under scrutiny
HMRC are reviewing claims made by taxpayers for EIS deferral relief and are reminding them of the events which cause the deferred gains to come back into charge. These letters initially cover deferral claims made as far back as 2012/13 and 2013/14.

Unreported loan charges: New assessments
HMRC have started issuing assessments to taxpayers who they believe should have declared the disguised remuneration loan charge on a 2018-19 tax return and have failed to do so, or who appear to have reported the charge incorrectly.

Investigation news

Alternative Dispute Resolution for SMEs 
UPDATE: This freeview guide now has more details on when Alternative Dispute Resolution (ADR) can and cannot be used. 

Editor's Pick  

Byte-sized chunks of lunchtime CPD for subscribers

• NEW CPD: Double tax treaties: where do I start?
• CPD: Making Tax Digital
• CPD: Where are we with Crypto?
• CPD: How to avoid the High-Income Child Benefit Charge (HICBC)

Guides & Updates  

Directors & Companies

Substantial Shareholding Exemption (SSE)
UPDATE: What is the Substantial Shareholding Exemption? When does it apply? How does it interact with de-grouping charges? 

Succession planning: Buyouts
UPDATE: What are the options for succession planning and a company buyout? What are the tax implications?

Director's loan accounts: Toolkit (subscribers)
HM Revenue & Customs (HMRC) have a director's loan accounts toolkit for advisers. This is our enhanced version with planning points. 

Land & property  

Rollover Relief: Exchanges of joint interests in land
This guide outlines the form of Capital Gains Tax (CGT) Rollover Relief available for exchanges of joint interests in land.  

Non-Resident Landlord Scheme
What is the Non-Resident Landlord scheme? How does it work? Who does it apply to? How can I apply to receive rent without a withholding tax deduction? 

Employers 

What is the 2022/23 PAYE tax code?
UPDATE: What is the 2022/23 PAYE tax code? What do the different types of tax code suffixes mean? HMRC have launched a new interactive tool to help taxpayers check and understand their tax code.

Private Client & Estate Planning 

How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK?
How do you tax Bitcoin? Are cryptocurrency or cryptoasset gains or profits, taxable? Can you obtain tax relief if you make losses on Bitcoin? Gains on transactions in cryptoassets are potentially taxable in the same way as other investments. 

IHT: Estate planning checklist
This checklist covers some of the essential planning points that taxpayers should know when planning for their estate and Inheritance Tax (IHT). 

Tax Cases (Freeview) 

Date of incorporation? Income belongs to company not partners
In Clive Kingdon, Terry Stead & Anne Kingdon v HMRC [2022] TC08633 the First Tier Tribunal (FTT) allowed an appeal against assessments which increased taxable partnership income following the incorporation of the business. The date of transfer was earlier than HMRC contended and the profits belonged to the company, not the partners.

FTT: Gilt loss scheme ineffective 
In Timothy Watts v HMRC [2022] TC08634, the First Tier Tribunal (FTT) found a tax avoidance scheme involving gilts did not work.  The claimed Income Tax loss of £1.35m was reduced to £6,300.

VAT Cases & Guides 

A beginner's guide to VAT
VAT: Where do I start? What is VAT? Who has to register for VAT? What rate should you charge? How do you calculate VAT? When are your VAT filing obligations? 

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?

UK Agent for registration of Overseas Entities
Announcing the launch of a new service to provide assistance in the registration and verification of an overseas entity that owns UK land or property.

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. 

Missed last time's Web-update?

Nichola's SME Tax W-update 10 November 2022

• HMRC interest rates increase again
• HMRC's increasing use of data harvesting powers 
• NICs changes: don’t forget to update your payroll software
• Time to Pay arrangements: reminder
• SDLT return amendments can't be made out of time
• HMRC have an implied power to refuse VAT credits 
• Supreme Court rejects historic input VAT claims 
• UT: Hospital parking VATable 
• Assessments: Best judgement
• How to appeal an HMRC decision
• Tradespeople: What expenses can I claim?
• Board and lodging adjustments
• Property profits & losses: Toolkit (2022-23)
• Can I charge my company rent for use of my home?
• PRR: Private Residence Relief
• Working from home (employee guide)
• IHT Business Property Relief...More

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