Nichola's SME Tax W-update 8 December 2022

Hello,

We are back this time with some light relief in the form of a Christmas Quest, a new Employer bulletin, a new tax guide for Doctors and Dentists, and a collection of interesting case reports.

HMRC's Employer Bulletin came out this week, and we have summarised the good bits for you. It fails to mention the strange anomaly that shows interest charges on employers' PAYE accounts, even when they have PAYE payment set up by direct debit. HMRC's system removes the charge once the payment is processed, but this is a confusing feature for employers who think that they are being over-charged. This kind of oddity does not bode well for the automation of the new system of point-based VAT penalties, which are due to apply from 2023. We have a tool to check when they apply to you, as it depends on your reporting cycle and VAT 'stagger'.

We have been making new CPD and looking at the Targeted Anti-Avoidance Rule (TAAR) which can apply to distributions made on liquidation. The CPD also features a link to our handy TAAR tool. Our tools aim to guide you through tricky legislation and save hours and hours of research time. 

Thinking of tools we are also featuring our Capital Gains Tax (CGT) Business Asset Disposal Relief (BADR) tools this week.

Our case summaries include one in which late payment of voluntary Class 3 NICs was denied. We are baffled as to quite why the government should impose a time limit in trying to top up voluntary paid NICs given that NICs are essentially a Ponzi-scheme. 

The cold weather has spurred us into creating a new Christmas Quest. This follows a range of different clues which will take you around our site. It's free to enter and you do not have to be a subscriber to participate, and there will be prizes.

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

If you cannot see our new Christmas site header, then you will need to Clear the cache on your browser.

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)  

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

PAYE direct debit's interest charge anomaly confirmed by HMRC
HMRC have confirmed that interest charges showing on employers' online Business Tax Accounts, where direct debits have been collected after the due date, are correct, but are cancelled on the same day once the payment is processed.

Van benefit and fuel benefit charges 2023-24 confirmed 
HMRC have confirmed the flat rate van benefit charge, flat rate van fuel benefit charge and car fuel benefit multiplier which will apply for the 2023-24 tax year. 

HMRC's App, not just for Christmas 
HMRC are promoting their App as a gift to seasonal Christmas workers in making it easier to access their employer's details and their own tax information.

Consultation response to 'Making Flexible Working the Default' 
The Government has released its response to the Consultation on 'Making Flexible Working the Default'. There was widespread support for the proposals and the Government will take further steps to encourage and support flexible working.

Editor's Pick 

Christmas Quest 2022
This year's seasonal fun from here at rossmartin.co.uk comes in the form of a Christmas Quest. You do not need to be a subscriber to enter, but you must collect all 10 answers from our website to win.

Tax Tools 

Tax Tools
FREE add-on for subscribers, or available separately

Introducing our new tax tool or calculator of the week! This week we have picked our CGT Business Asset Disposal Relief tools. We have one for the sale of a Sole trader business and one for the Sale of shares in your company. Check whether you will qualify for BADR and the 10% tax rate when you sell your business. 

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

Self-Employed 

Doctors and Dentists: Tax Overview
NEW: Our new and improved guide for Doctors and Dentists, we have expanded this from 'What expenses can I claim?' into a full tax overview guide. Do let us know what you think of these new and improved sector-specific tax guides.

Compare software for Making Tax Digital for Income Tax
UPDATE: IRIS accountancy suite and Tax Bridge, an app just for businesses have now been added to HMRC's list of eleven companies offering software compatible for Making Tax Digital for Income tax

Directors and Companies

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

Dividends: Index (freeview)
Preparing tax returns? Is your dividend paperwork in order? How are dividends taxed? What are the rules for non-UK residents? How do you vote a dividend? When is a dividend paid? When can a dividend be unlawful?

Employers 

Gifts (to staff, customers & charities)
UPDATE: What is the tax position of a gift made to your staff or to customers? Can you obtain tax relief on the cost of a gift to your staff?

CIS: Contractors and Subcontractors
UPDATE: What is the Construction Industry Scheme? Who does it apply to? How does it work?

Overseas & Residence

Offshore Income Tax Toolkit
UPDATE: This toolkit provides an outline of the tax issues for UK resident individuals with offshore income and investments.

Foreign and residency pages: FAQs
UPDATE: How do you complete the foreign and residency pages of the Self Assessment return?

Partnerships

LLP v Company: which will save me tax?
Different types of trading structures all have their own tax advantages and disadvantages. What are the key issues if you run a Limited Liability Partnership (LLP)? Should I run an LLP instead of a company? Does an LLP save tax?

Running an LLP in tandem with a company
It is possible to run a Limited Liability Partnership (LLP) or another form of partnership in tandem with a company. Partnerships can also have corporate partners. What needs to be considered?

Disguised Remuneration

GAAR Opinion: Loan-like transaction abusive  
The GAAR Advisory Panel found transactions with a pension scheme that purported to create a transaction akin to a loan, but without an unauthorised payment charge arising, were not a reasonable course of action.

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: The Targeted Anti-Avoidance Rule (TAAR)
• CPD: Sole trader update: 2022-23
• CPD: Double tax treaties: where do I start?
• CPD: Making Tax Digital

More at CPD Index

Tax Cases (Freeview) 

Interim dividends taxed when paid  
In Peter Gould v HMRC[2022] TC08647, the First Tier Tribunal (FTT) found an interim dividend paid to two shareholders on different dates was taxable on the dates of payment not the earlier date of declaration. The result was that the dividend was taxed in different tax years for each shareholder.

Late payment not allowed for Class 3 NICs
In Gek Siu Ng v HMRC [2022] TC08651, the First Tier Tribunal (FTT) dismissed Ms Ng's appeal to allow late payments of voluntary Class 3 NICs as the payment was a result of her own failure to exercise due care and diligence.

Accountant 'not credible', director liable for PLN  
In Apollinaire Ltd and Zakir Hashmi v HMRC [2022] TC08648, the First Tier Tribunal (FTT) found input VAT had been deliberately overstated. Personal Liability Notices to the director were upheld.

UT erred on nuclear site capital allowances  
In Urenco Chemplants Limited and Urenco UK Limited v HMRC [2022] EWCA Civ 1587, the Court of Appeal (CoA) found that the Upper Tribunal had erred in law when setting aside an earlier decision on whether certain expenditure on a nuclear deconversion facility qualified for capital allowances.

Use of losses can be a tax advantage 
In Kwik-Fit Group Limited & Ors v HMRC [2022] UKUT 00314, the Upper Tribunal (UT) held that restructuring loans to utilise trapped Non-Trading Loan Relationship Deficits (NTLRDs) and obtain greater deductions for the debtors did count as securing a tax advantage, meaning the loans had an unallowable purpose.

VAT Cases & Guides  

Discounts, Reward Schemes & Vouchers: VAT
UPDATE: Loyalty and reward schemes come in various shapes and sizes and the VAT implications may vary depending on the type of scheme offered. This guide covers some common schemes.

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 1 December 2022

• Advisory fuel rates from 1 December 2022 
• Use of marketed tax avoidance schemes in the UK 2020-21
• PAC investigating COVID-19 impact on tax compliance   
• Self Assessment 2021-22 returns: Updated online filing exclusions
• Consultation response on Statutory Debt Repayment Plan 
• A new business? Start here...
• Planning permission not enough for SDLT MDR   
• SDLT joint property scheme fails
• Share subscriptions were consideration for SDLT
• No reasonable excuse for reliance on VAT adviser, as no evidence given
• Grazed land not part of residential property for SDLT
• Land & Property: Relevant residential & relevant charitable purpose
• Tax Tools
• Annual expenses for employees: How to claim
• CO2 emissions: Ultra-low emission cars
• Accountants: Tax Overview
• CGT: Reporting when & how?
• CGT: Payment of tax
• Requirement to correct and Employee Benefit Trusts
• NEW: CPD: Sole trader update: 2022-23 ...More

Come and join our Cloud

Subscribe (and UNLOCK the whole site) A single-user annual subscription is £425 (+ VAT).

What do you get?

• We keep YOU up to date in SME tax.
• FULL access to www.rossmartin.co.uk: your firm's favourite TAX INTRANET containing over 3,500 actively maintained tax guides, briefings, toolkits and checklists.
• Want to know more? Commission your own articles and checklists.
• Structured CPD our detailed SME tax updates "for Advisers Only" provide topical summaries and planning notes our webcasts provide you with structured CPD at your desk.
• Regular client tax briefings: these cover the latest business and employment tax issues and are designed to assist you plan meetings and improve your client services.