Nichola's SME Tax W-update 5 January 2023

Happy New Year,

We can now reveal the winners of our Christmas Treasure Quest, plus we have details of more filing deadlines, a new Agent Update, more software exclusions for Self Assessment and a facsinating tax case to digest. 

Over 70 individuals and firms competed in our Christmas Treasure Quest and two winners were drawn from a hat. We congratulate both on solving the quest. We have published the answers so you can rework it and see where you went wrong.

31 January is, as you know, the filing deadline for Self Assessment tax returns, it is also the deadline for Registration of Overseas Entities who hold an interest in UK property and it marks the start of the new VAT late-filing penalty regime. It will also be the last day on which most businesses can check their VAT Option To Tax (OTT) arrangements made within the last six years directly with HMRC. We have links and helpful guidance on all these, and we also have a handy tool to check when the new VAT penalty regime starts for you.

In terms of other news, we have summarised HMRC's latest Agent update for you which contains some important updates on the recent National Insurance changes and we have also added links to our more detailed version of their Offshore Income Tax toolkit.

Finally, we also report on a fascinating tax case for fans of the Settlement Provisions and Distributions rules. Although the case features a now illegal tax avoidance scheme, it provides a valuable whistlestop tour of recent and important judgments on the meaning of a 'distribution' and takes in some of the less well know elements of the Settlements rules. Both contain tax ‘known unknowns’. I have always thought that it must seem extremely strange to many people outside the world of tax that such important strands of tax law still baffle even the experts. 

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)  

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

Updated online filing exclusions for 2021-22 Self Assessment returns
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 22 December 2022, has recently been published.

Spotlight 61: Remuneration trusts 
HMRC have published tax avoidance Spotlight 61 ‘Disguised remuneration: remuneration trusts used to reduce profits and disguise income’.

VAT Options To Tax confirmations: Time is getting short 
HMRC have announced further changes to the Option To Tax (OTT) process, which will take effect from 1 February 2023. In future, HMRC will only give confirmation of the existence of an OTT in limited circumstances.

Editor's Pick 

Christmas Quest: Results and Answers
Over 70 firms took part in our Christmas Treasure Quest this season and we are delighted to announce the winner is...

Tax Tools 

Purchase of own shares (POS)
TOOL OF THE WEEK: If you are looking at a purchase of own shares use this handy tool to quickly work out the results of the substantial reduction & connection tests whether you are considering a full purchase or a phased buy-back.

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 

Antiques dealers: Tax Overview
Our new and improved guide for antiques dealers covers how they are taxed, what expenses they can claim for tax purposes and the special VAT rules which apply.

Basis Period reform
UPDATE: HMRC have confirmed that provisional figures can be amended in line with the normal time limits for amendment and that they will provide overlap relief figures should they have them.

Directors and Companies

Register of Overseas Entities
The Register requires overseas owners of UK property to register and report their beneficial ownership to Companies House when they own, buy or sell UK property. Existing owners and some past owners have until 31 January 2023 to register.

Employers 

PAYE late payment penalties buster
What penalties apply to late payment of PAYE? What can you do to manage or reduce them?

Employee liabilities and indemnity insurance
What are allowable deductions for employee insurance? What can ex-employees claim? How should policies be structured for full tax relief?

Private client & estate planning

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. 

How to calculate a capital gain or loss
How do you calculate a capital gain or loss? What costs are deductible? How can losses be utilised against capital gains?

Partnerships

Partnerships: What's new 2022-23?
What's new for partnerships in 2022-2023? How are they taxed? What reliefs might apply?

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

Tax Cases (Freeview) 

Tax scheme fails to take advantage of the settlements rules 
In Sharon Clipperton & Steven Lloyd v HMRC UKUT 00351, the Upper Tribunal (UT) agreed that a dividend tax avoidance scheme relying on the automatic application of the Settlement provisions did not work. The individuals, and not their company were the settlors of the arrangement but the Ramsay principle ultimately thwarted the planning steps.

VAT Cases & Guides 

VtaxP Tools VAT: when do points-based penalties apply?
VAT Penalties and the NEW points-based system. When do the new VAT late submission penalties (LSP), late payment penalties (LPP) and late payment interest apply? Use our Virtual Tax Partner tool to find out when you move into the fall into the new VAT penalty regime.

Goods or services for VAT
What are goods and what are services for VAT? The answer may have an impact on the time of supply, the place of supply and in some cases the rate of the supply. The answer is not always as straightforward as it may seem.

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 22 December 2022

• Agent Dedicated Line: Complex questions only
• Making Tax Digital for ITSA postponed
• Spring Budget 2023 date announced 
• HMRC's interest rates rise again
• Scottish Budget 2023-24 summary
• HM Treasury reports on Women in Finance and its gender pay gap
• Consultation: licensing for Welsh accommodation 
• Anti-money laundering: Supervision report 2020-22 
• NAO appraises HMRC pandemic tax compliance
• Representations wanted for Spring Budget 2023
• SDLT MDR Annex Tool
• Authors: Tax Overview 
• Averaging claims
• Do I need to file a tax return?
• Annual expenses for employees: How to claim
• Personal Allowance: who is allowed to claim?
• SDLT, LBTT, LTT: What's new 2022-23?
• Employment status: Partners
• Land & Property: Dwellings
• CPD: Employers' tax update: 2022-2023
• CPD: The Targeted Anti-Avoidance Rule (TAAR) ...More

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