Nichola's SME Tax W-update 12 January 2023

Hello

As we approach the deadline for filing Self Assessment tax returns, we have put together a list of ‘Top tips’ covering some of the oddities that we have picked up from your queries. For those who have filed all their returns and are looking forward to the end of the tax year, we have a year-end planning guide for owner-managed businesses.

We have made a handy guide to disclaiming the personal allowance after noting from an online forum that some people think that you cannot do this. You can, and it’s a useful thing to do when you need to create income so that you can claim tax relief under, for example, the Enterprise Investment Scheme (EIS).

Our review of tax cases covers the disallowance of travel and subsistence claims for the workers engaged by a large employment agency (Mainpay) who failed to meet the temporary workplace travel rules. It really is time those rules were re-written to make them clearer. We have yet another case involving the accidental creation of an unauthorised payment from a pension scheme; again, another confusing area of taxation. Then there is a slightly controversial decision on the date of incorporation of a dental business. I say ‘slightly’ because it's a case involving goodwill, and typically for this topic, a first glance makes sense based upon its facts and circumstances, but then with hindsight it possibly does not.

Finance Act 2022, you will be very pleased to note, must be one of the shortest finance acts in history. It received Royal Assent this week and we have a summary of its nine main measures.

Finally, following consultation and a lot of lobbying by the Low Income Tax Reform Group (LITRG), HMRC are now going to take steps to prevent unscrupulous tax repayment agents from pocketing their client’s refunds.

That's all for now,

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)  

Register for Self Assessment
If you need to file a Self Assessment tax return and you have not previously registered for tax and you also need to pay your Income Tax liability (both of which should be done by 31 January 2023), you need to register for Self Assessment and obtain your own Unique Tax Reference code (UTR).

Finance Act 2023 receives Royal Assent
Finance Bill 2023 received Royal Assent on 10 January 2023 and became Finance Act 2023. It is the first Finance Act to be approved by King Charles III.

Strengthened Standard for Agents
Following a consultation on raising standards in tax advice and protecting customers claiming tax repayments, HMRC will strengthen their ‘Standard for Agents’ and set new rules for tax refund agents. These are to ensure that their customers do not accidentally sign up to unfair contract terms, which can allow the tax agent to claim a large cut of any tax refund claimed.

Top Tips for agents with last-minute tax returns
A summary of our top tips for dealing with last-minute tax returns. This is freeview 'At a glance' guide for agents completing Self Assessment returns for clients.

Editor's Pick 

Year-end top tips for OMB's 2022/23 
This is last-minute year-end tax planning advice for owner-managed businesses and clients. What should you focus on as the 2022-23 tax year-end approaches? What should you do before 5 April and what could you leave until later?

Christmas Quest: Results and Answers
In case you missed it, here are the results of our Christmas quiz. Over 70 firms took part and you can re-run the quiz and see where you might have got stuck. We are delighted to announce the winner is... 

Tax Tools 

Full details of our tax calculators
We have a suite of useful tax tools that help agents, business owners and sole traders calculate their tax. 

Salary v dividend: tax calc
CALCULATOR OF THE WEEK: This week we have a calculator and this one is very useful as it calculates Income Tax and National Insurance payable on a salary, compared to Income Tax & Corporation Tax paid on a dividend, assisting director shareholders in determining their optimum remuneration strategy.

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 

Farming: Tax Overview
UPDATE: What is farming? What are the tax consequences and tax considerations of farming? What are the features of agricultural tenancies?

Extracting profits (self-employed)
What tax planning tips will help you to run a tax-efficient business? We review your different options. The majority of businesses in the UK are run by sole traders. This guide looks at profit extraction from the perspective of the unincorporated business. 

Directors & Companies

Employment-Related Securities: Reporting issues 
If an employer gives shares to an employee or sets up a tax-advantaged share or share option scheme, the benefit is taxed within the Employment-Related Securities (ERS) regime. The employer will then have a requirement to register a share scheme with HMRC and file an annual return by 6 July following the tax year-end.

Private client & estate planning

IHT Business Property Relief
UPDATE: A guide to what Business Property Relief is, when it can apply and pitfalls and planning points.

High-Income Child Benefit Tax Charge
UPDATE: Matthew Kensall & Mark Goodall cases are now included.

How to disclaim the Personal Allowance
NEW: Why would I want to disclaim the Personal Allowance (PA)? What are the advantages? How do I disclaim the PA?

Overseas & Residence

Registration of Overseas Entities: Agent Guide
UPDATE: Registration of Overseas Entities: How to register an Overseas Entity that owns, buys or sells UK property. A detailed guide for Overseas Entities and their UK Agents.

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

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Land and Property Update 2022-23
• CPD: Employers' tax update: 2022-2023
• CPD: The Targeted Anti-Avoidance Rule (TAAR)
• CPD: Sole trader update: 2022-23

More at CPD Index

Tax Cases (Freeview) 

No travel and subsistence for agency workers   
In Mainpay Limited v HMRC [2022] TC08678, the First Tier Tribunal (FTT) found workers for an umbrella company could not claim travel or subsistence expenses for work assignments. Each assignment was a separate employment and the underlying workplace was a permanent workplace which prevented the expense claims.

Loan from pension fund is unauthorised payment
In Nilebond Limited v HMRC [2022] TC08676 the First Tier Tribunal (FTT) dismissed an appeal against a pension scheme's unauthorised payment charge in respect of an unauthorised loan made by the scheme to the sponsoring employer. The loan should have been secured when paid and that condition was not met.

Date of incorporation determined by facts and intention
In 2 Green Smile Limited & Dr Ameeka Patel v HMRC [2023] TC08677, the First Tier Tribunal (FTT) held that the incorporation of a business did not require any legal documentation. Evidence of intention and subsequent realisation of the transfer was enough to set the date of incorporation.

VAT Cases & Guides 

Penalties (VAT)
UPDATE: When do penalties apply for VAT? What penalties are charged and how can they be mitigated?

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 5 January 2022

• Agent Update: December 2022 
• Updated online filing exclusions for 2021-22 Self Assessment returns
• Spotlight 61: Remuneration trusts 
• VAT Options To Tax confirmations: Time is getting short
• Christmas Quest: Results and Answers
• Register of Overseas Entities
• Tax scheme fails to take advantage of the settlements rules 
• VtaxP Tools VAT: when do points-based penalties apply?
• Antiques dealers: Tax Overview
• Basis Period reform
• PAYE late payment penalties buster
• Employee liabilities and indemnity insurance
• Self Assessment Return 2021/22: What's new?
• Partnerships: What's new 2022-23?
• CPD: Employers' tax update: 2022-2023 ...More

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