Nichola's SME Tax W-update 1 December 2022

Hello,

We are starting to create new versions of our guides which look at the different accounting treatments and taxes, including VAT, that apply to different types of business. We are bringing out new versions as the weeks progress. It would be great to have your feedback on these guides. 

HMRC have published data on the use of marketed tax avoidance schemes. Although they have had some success in closing down schemes, they estimate that there are still at least 20-30 scheme promoters still in operation.

Disguised remuneration income schemes are the most likely to be sold: these often appeal to agency staff. Tamworth is now a tax avoidance hub, and, according to the statistics, hospital workers and bookkeepers are the most active participants in tax avoidance.

We have a rash of Stamp Duty Land Tax (SDLT) cases this week. Two appeals relate to failed tax avoidance schemes while the two other cases look at reliefs. All are worth a quick read.  

More news, updates and cases below, and don't miss our new range of tax calculators and tools.

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)  

Advisory fuel rates from 1 December 2022 
HMRC have published new advisory fuel rates for company car drivers which apply from 1 December 2022. 

Use of marketed tax avoidance schemes in the UK 2020-21
HMRC have released its annual report: It shows a decline in participation in tax avoidance schemes compared to 2019-20.

PAC investigating COVID-19 impact on tax compliance   
The Public Accounts Committee (PAC) have issued a Call for Evidence entitled: Managing tax compliance following the pandemic.  It seeks feedback on HMRC’s ability to carry out its compliance work and to identify future risks and challenges following the pandemic.

Self Assessment 2021-22 returns: Updated online filing exclusions
Many taxpayers will be unable to file their Self Assessment returns online for the year ended 5 April 2022 due to software specification issues from HMRC. An updated list of filing exclusions for individuals, as of 25 November 2022, has recently been published.

Consultation response on Statutory Debt Repayment Plan 
HM Treasury (HMT) has released its response to the May 2022 consultation ‘Statutory Debt Repayment Plan’. Respondents raised significant challenges and concerns, both in the design of the proposals and the timing of their implementation.

Editor's Pick 

Directors: Tax planning toolkit for 2022/23
This planner tracks current and topical director tax issues, including company profit extraction.

Tax Tools 

Tax Tools
FREE add-on for subscribers, or available separately, calculate tax outcomes for a range of different typical client queries, including: Salary or Dividend different combinations, Sole Trader tax & NICs etc.
Our game-changing tax diagnostics tools now cover CGT 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. 

Guides & Updates  

Directors & Companies

A new director? Start here...
This freeview 'At a glance' guide is essential reading for anyone thinking about becoming a company director.

Starting in Business

A new business? Start here...
Starting a new job or 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.

Employers 

Annual expenses for employees: How to claim
UPDATE: The ways in which employees can claim tax relief for expenses changed on 7 May 2022. This guide explains how employees can claim tax relief for the employment expenses they incur.

CO2 emissions: Ultra-low emission cars
UPDATE: CO₂ emissions bands and percentages that apply to company cars from 2019-20 to 2027-28.

Self-employed

Accountants: Tax Overview
NEW: Our new and improved guide for Accountants in practice, we have expanded this from 'What expenses can I claim?' into a full tax overview guide. Watch out for more of these over the coming weeks!

Self Assessment Return 2021/22: What's new?
2022 Self Assessment toolkit: top tips for completing tax returns for the year ending 5 April 2022. 

Private client & estate planning

CGT: Reporting when & how?
UPDATE: How do you report your capital gains? What return do you use?

CGT: Payment of tax
UPDATE: When is Capital Gains Tax (CGT) due? Can I pay in instalments? What are the penalties if I pay late?

Disguised Remuneration

Disguised remuneration loan charge
What is disguised remuneration? What is the loan charge? When does the loan charge apply? Will the loan charge affect me?

Requirement to correct and Employee Benefit Trusts
Under the Requirement to Correct (RTC) rules, undeclared UK tax liabilities in respect of offshore matters faced harsh penalties if they were not dealt with by 30 September 2018 and these rules may have applied to Employee Benefit Trusts and other remuneration trusts.

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Sole trader update: 2022-23
• CPD: Double tax treaties: where do I start?
• CPD: Making Tax Digital
• CPD: How to avoid the High-Income Child Benefit Charge (HICBC)

Tax Cases (Freeview) 

Planning permission not enough for SDLT MDR   
In Ladson Preston Limited v HMRC [2022] UKUT 00301 the Upper Tribunal (UT) found planning permission and the construction of boreholes were not sufficient to represent the construction of a dwelling for the purposes of Multiple Dwellings Relief (MDR).

SDLT joint property scheme fails
In Stuart Fox v HMRC [2022] UKUT00310, the Upper Tribunal (UT) found that a Stamp Duty tax avoidance scheme involving the transfer of a property from a wife to her husband failed because they were connected, as such he was liable for the entire tax liability.

Share subscriptions were consideration for SDLT
In Michael & Bridget Brown v HMRC [2022] UKUT00298, the Upper Tribunal (UT) found a SDLT avoidance scheme did not work. Amounts used to subscribe for shares to a company incorporated as part of a sub-sale scheme represented consideration for the underlying property purchase.

No reasonable excuse for reliance on VAT adviser, as no evidence given
In Mohammad Ameen Mirza v HMRC [2022] UKUT 00291, it was held that whilst a claim for reasonable excuse must examine the attributes of the specific taxpayer, in this case, there was no evidence of the appellant's attributes or state of mind which meant the claim could not be allowed. 

Grazed land not part of residential property for SDLT
In Gary Withers v HMRC [2022] TC08649, the First Tier Tribunal (FTT) found that land purchased with a dwelling house was not residential property for SDLT purposes.  A longstanding grazing license and agreement with the Woodland Trust gave the land a separate function other than garden and grounds.

VAT Cases & Guides  

Land & Property: Relevant residential & relevant charitable purpose
UPDATE: What are the VAT rules for land and property that is used for a relevant residential purpose or a relevant charitable purpose? What are the clawback provisions affecting a change of ownership or use?

Making Tax Digital: VAT (subscriber guide)
What is Making Tax Digital for VAT? What is VAT 'functional compatible' software? What do you need to do to report your VAT? Are there penalties for making mistakes?  

Tax Queries?

UK Agent for registration of Overseas Entities
Announcing the launch of a new service to provide assistance in registration and verification 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 24 November 2022

• Agent Update: November 2022
• HMRC trawling PSC register at Companies House
• Unpaid final dividends not taxable
• Expenses of management disallowed as capital in nature
• Partnership recovers VAT on associated company’s lease
• Autumn Finance Bill 2022: Contents
• NDA taints tax treatment of compensation payment
• Dividend Index
• How to gift your shares to the family
• Sole trader v. limited company: Tax differences & savings (2022/23)
• Tax-free benefits and perks
• DOTAS: Disclosure of Tax Avoidance Schemes
• Land & Property: an Adviser's Tax Update
• Finance Act 2023: tax update & rolling planner 2023-24
• CPD: Sole trader update 2022-23  ...More

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