Nichola's SME Tax W-update 22 December 2022

Hello,

As we head towards the Christmas holiday we have had another exciting week in tax! We have announcements on Making Tax Digital, we use AI with mixed results and the chancellor announces the March Budget date.

The government has very sensibly decided to postpone the start of Making Tax Digital for Income Tax Self Assessment (MTD ITSA) until April 2026 and even later still for smaller business and partnerships. A key reason for the delay is to give time for taxpayers who are affected by the reforms to the tax basis year to adjust their accounting periods.

HMRC have announced that they have decided to restrict the use of their Self Assessment Agent helpline during January to the effect that you can only ask them complex questions. What do they think is complex? I asked ChatGPD (this is the AI bot which is taking the internet by storm). It suggested that complex means really complex and gave me a few examples of what it thinks are difficult tax queries, noting that you probably need to refer to a tax agent! Not terribly helpful if you are a tax agent with a query, I thought. Do note you can always contact our Virtual Tax Partner service (www.vtaxp.co.uk) if you have a tax problem.

Advisers of all kinds will increasingly feel threatened by the abilities of AI, however for now, we tax advisers and accountants are safe in our jobs, as I also ran our Christmas Quiz through the AI. It was stumped by the first question and invented a formula instead. Very enterprising, but an incorrect answer! I note that we have had a lot of human entries into our Christmas Quiz, do have a go and beat the AI!

Wishing you all a very Merry Christmas and a Happy New Year.

More news, new Employers' tax update CPD, other 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)  

Christmas Quest 2022
This year's seasonal fun from here at rossmartin.co.uk comes in the form of a Christmas Quest. Collect all 10 answers from our website, using our magical elf help should you need, and win our mystery prizes. You do not need to be a subscriber to enter.

Agent Dedicated Line: Complex questions only
HMRC have announced that the Agent Dedicated Line for Self Assessment and PAYE will only be available in January for complex Self Assessment questions.

Making Tax Digital for ITSA postponed
The Financial Secretary to the Treasury, Fiona Atkins has issued a ministerial statement confirming the postponement of Making Tax Digital for Income Tax Self Assessment until 2026. 

Spring Budget 2023 date announced 
The Chancellor, Jeremy Hunt, announced in a statement made on 19 December 2022 that the 2023 Spring Budget will be held on 15 March 2023.

HMRC's interest rates rise again
Following the Bank of England’s announcement on 15 December 2022 that the base rate would rise to 3.5%, HMRC interest rates will also increase by 0.5%, to 6% for late payment interest and 2.5% for repayment interest, from 6 January 2023. 

Editor's Pick 

Scottish Budget 2023-24 summary
Scottish Deputy First Minister John Swinney announced the draft Scottish Budget for 2023-24 on 15 December 2022.

HM Treasury reports on Women in Finance and its gender pay gap
HM Treasury (HMT) has recently published its annual update as a signatory to the Women in Finance Charter and its annual Gender Pay Gap Report. It notes that while it now has achieved gender parity in terms of the numbers of men and women in senior management, in terms of pay, lower-paid women are over-represented across lower grades which has increased its gender pay gap.

Tax Tools 

SDLT MDR Annex Tool
TOOL OF THE WEEK: If you are buying two or more properties in a single transaction use this tool to see if you meet the qualifying conditions and to claim Multiple Dwellings Relief (MDR) and relief from the Higher Rate Charge. For December only we have made this tool free to use. Try it out now!

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

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 

Authors: Tax Overview 
NEW: What expenses can Authors claim for tax purposes? Are there any special rules for authors and writers? What are the VAT rules? How should authors account for their income? Our new tax overview guide explains it all.

Averaging claims
UPDATE: When can profits be averaged? What trades does averaging apply to? How are averaging adjustments calculated and made?

Directors and Companies

Do I need to file a tax return?
Do I need to file a Self Assessment tax return? What if I am a director? Can HMRC make directors file tax returns? When should I file a Self Assessment return?

Dividends (how to pay & process): Step-by-step guide
A step-by-step guide to paying and processing dividends for companies and their owners.

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.

Tax-free benefits and perks
What are the key tax-free benefits or 'perks' that can be used to incentivise your staff? How should you structure them?

Private client & estate planning

Personal Allowance: who is allowed to claim?
Am I entitled to the UK personal allowance? Are there circumstances when the Personal allowance is not available?

UK residential property and returning expats: to sell or not to sell?
For expatriates owning UK residential property who are considering moving back to the UK, the decision of whether and when to sell their UK property can be a tricky one. Should you sell before or after? What are the CGT and IHT issues?

Land & Property

Consultation: licensing for Welsh accommodation 
The Welsh Government have issued a consultation entitled: Statutory licensing scheme for all visitor accommodation providers in Wales.  This seeks to collate views on how the scheme should be implemented.

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?

Partnerships

Employment status: Partners
What is the employment status of a partner in a partnership or a member of an LLP? Are partners/members employed or self-employed?

Intangibles regime and partnership interests
How is an interest in a partnership held by a company accounted for? How and when does the Intangibles regime apply? 

Other News

Anti-money laundering: Supervision report 2020-22 
HM Treasury has published ‘Anti-money laundering and countering the financing of terrorism: Supervision Report 2020-22’ which details supervisory and enforcement data over two years, including the number, and value, of fines issued. 

NAO appraises HMRC pandemic tax compliance   
The National Audit Office (NAO) has released a report entitled: Managing tax compliance following the pandemic.  This report considers how well-placed HMRC is to manage its compliance work, its understanding of its compliance performance and whether it has a clear vision to manage the risks post-COVID.

Representations wanted for Spring Budget 2023
HM Treasury is inviting representations from stakeholders ahead of the 2023 Spring Budget, which will be held on 15 March 2023.

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Employers' tax update: 2022-2023
• CPD: The Targeted Anti-Avoidance Rule (TAAR)
• CPD: Sole trader update: 2022-23
• CPD: Double tax treaties: where do I start?

More at CPD Index

VAT Cases & Guides 

Land & Property: Dwellings
UPDATE: What is a dwelling for VAT purposes? What is the VAT treatment for construction, conversion, sale, and letting of a dwelling?

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 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 15 December 2022

• Christmas Quest 2022
• CIOT survey supports postponing MTD ITSA 
• Draft Welsh Budget 2023 to 2024   
• Double taxation for Group Income Protection cover
• Calendar of tax deadlines and new tax measures
• HMRC wrong to back-date High-Income Child Benefit Charge assessments
• No refund of loan charge voluntary settlement payments 
• No best judgement for chippy VAT assessment
• Agency fails to claim VAT-exempt supply of medical services
• CIS: Construction Industry reverse charge
• Discovery Assessments
• TAAR: Targeted Anti-Avoidance Rule Tool
• Basis Period reform
• Actors: Tax overview
• Demergers: What are your options?
• Striking off a company: Step-by-step
• Trusts & Estates: Exit charge reporting requirements
• Domicile and the remittance basis: At a glance
• Restricting mortgage interest relief (subscriber guide)
• Partnerships: What's new 2022-23?
• CPD: The Targeted Anti-Avoidance Rule (TAAR) ...More

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