Nichola's SME Tax W-update 9 March 2023

Hello,

This week we continue to explore optimising owner-director remuneration, we look at business start-ups, whether you are trading or acting as a landlord, and we have some new tax guides for pubs and brewers, new VAT briefs, further updates, tax cases and news.

Contacting certain government departments is an ongoing problem. This week the Treasury extended the 5 April 2023 deadline to pay voluntary National Insurance Contributions (NICs) in order to top-up State Pension entitlement after HM Revenue and Customs (HMRC) and the Department for Work and Pensions (DWP) experienced a surge in customer contact. The former deadline had been widely shared and promoted online and the relevant government call centres and websites could not cope with demand.

Such a failure in public sector 'customer' service is unsurprising since Covid. Maybe it's the result of early retirement of the workforce, a move to hybrid or part-time working or, staff cuts, or maybe it's a combination of all three, but isn't it just plain annoying?

There is an economic cost for the time we are all wasting while waiting. Whether we are waiting for a call to be answered, waiting for an overdue response to a letter, or waiting for a date for hospital treatment. Waiting is distracting and a waste of otherwise useful time.

It comes as some disappointment to see in a recent report from the House of Commons Public Accounts Committee (PACs) that HMRC have given up trying to recover several billion pounds of fraudulently claimed Covid employee furlough payments. The problem yet again seems to be a lack of planning, staff and resources.

I hope that the Chancellor has plans to announce measures during his Budget next Wednesday to improve the operations of the public sector; the problems now affect multiple departments and impact all of our lives.

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)  

Pension: Check National Insurance records by 31 July 2023
Taxpayers are given more time to fill gaps in their records to maximise their future State Pension benefits:  the April 2023 deadline has been extended as taxpayers were unable to access government helplines.

Spring Finance Bill & Budget
The Chancellor, Jeremy Hunt will present his Budget on 15 March and the Spring Finance Bill 2023 will be published on 23 March. Our rolling planner 2023 and budget update provide a useful summary of all the key tax measures so far proposed for April 2023 onwards.

COVID support fraudsters escape prosecution
The Public Accounts Committee's (PAC's) 'Fortieth Report - COVID employment support schemes' is highly critical of both HMRC and HM Treasury in their poor efforts to recover fraudulently claimed COVID support. 

Super-deduction one-to-many letter 
HMRC’s latest ‘one-to-many’ letters, sent to some taxpayers, focus on the Super-deduction and whether capital allowances have been incorrectly claimed by companies. 

Official rate of interest
Regulations have been laid increasing the official rate of interest to 2.25% from 6 April 2023. 

Editor's Pick 

Salary 2023/24 (avoiding NICs) 
NEW: What amount of salary can be paid by an employer to a director/shareholder and avoid or reduce National Insurance Contributions (NICs) in 2023-24? Is it beneficial to pay a slightly higher salary to claim the Employer's NICs allowance and pay some NICs?

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 taxes. 

Adjusted Net Income Calculator
Calculator of the week: This week's calculator helps you work out your 'Adjusted Net Income' to check if you are a higher rate taxpayer for the purposes of various different allowances and charges including the High-Income Child Benefit charge and the Personal savings allowance.

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 

Basis Period reform
UPDATE: What is basis period reform? Who is affected? What is the new basis year for tax? What are the transitional rules?

Pubs & Bars: Tax Overview
NEW: Our new and improved guide for publicans and bar owners covers how they are taxed, what expenses they can claim for tax purposes and the special VAT rules which apply.

Brewers: Tax Overview
How are brewers and gin makers taxed? What expenses can they claim for tax purposes? How is their income taxed? What are the VAT rules for brewers and gin makers? 

Land & Property

A landlord? Start here...
FREEVIEW: essential reading for landlords: our guides take you step-by-step through planning your business for tax purposes and complying with your different tax obligations during the life of your rental business.

Employees 

National Insurance: Rates
UPDATE: What are the current National Insurance rates? What rates will apply to next year? 

Directors & Companies

Employment-Related Securities: Reporting 
UPDATE: Amended returns and guidance has been issued.  Our guide now includes guides to file EMI and Other ERS Returns.

Directors' responsibilities and duties
UPDATE: What duties and responsibilities does a director have? What is the definition of 'director'? 

Private Client & Estate Planning

Pensions: What happens when you die?
What happens to your pension when you die? What tax is due by your estate? Will your family have to pay Income Tax if they receive your pension going forward? What can you do to mitigate any tax charges?

A tax guide to investment bonds
How are investment bonds taxed? What are the problems and pitfalls to be aware of?

Overseas & Residents

Business Investment Relief
Business Investment Relief is a special relief for non-UK domiciled individuals designed to encourage them to remit funds to invest in UK businesses.

Residence v non-residence: tax treatment
What are the differences between being UK resident and non-UK resident for UK tax purposes?

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Taxation of couples in 2022-23
• CPD: Associated Companies
• CPD: Directors Tax Update 2022-23
• CPD: Land and Property Update 2022-23

More at CPD Index

Tax Cases (Freeview) 

SORN car available for Benefits code   
In Timothy Norton & Tim Norton Motor Services Ltd v HMRC [2023] UKUT 00048, the Upper Tribunal (UT) found that cars were made available to a director and subject to Benefit In Kind charges despite being untaxed and a declared SORN.

Reversionary interest was not excluded property 
In The Executors of the estate of Peter John Linington & Anor v HMRC [2023] TC08717, the First Tier Tribunal (FTT) found that a reversionary interest in a trust was not excluded property. When the reversionary interest was assigned to another trust, this was a transfer of value for Inheritance Tax (IHT) purposes.

UK-domicile chosen on fleeing the Nazis
In Jeremy Coller v HMRC [2023] TC08738, the First Tier Tribunal (FTT) found the appellant, a leading venture capitalist, had a Domicile of Origin in the UK. He was unable to claim the remittance basis of taxation.

LLP and corporate members were related for IP amortisation
In Muller UK & Ireland Group LLP & Ors v HMRC [2023] TC08742, the First Tier Tribunal (FTT) held that a Limited Liability Partnership (LLP) was related to all of its corporate members despite not being a 'company'.  As a consequence, the relief claimed for the amortisation of Intellectual Property (IP) acquired from those companies was denied.

VAT Cases & Guides 

College training restaurant's supplies VAT exempt 
In Fareham College v HMRC [2023] TC08740, the First Tier Tribunal (FTT) found that supplies made to members of the public by a college’s training restaurant were exempt from VAT.

Revenue and Customs Brief 2 (2023): VAT and value shifting consultation update 
HMRC have published Revenue and Customs Brief 2 (2023) ‘VAT and value shifting consultation update’. This sets out HMRC’s conclusions and actions taken following the VAT and value-shifting consultation in 2021.

Revenue and Customs Brief 3 (2023): Changes to VAT treatment of local authority leisure services
HMRC have published Revenue and Customs Brief 3 (2023) ‘Changes to VAT treatment of local authority leisure services’. The supply of leisure services by local authorities to members of the public may now be treated as non-business. 

Assessments: Best judgement
UPDATE: What is a 'best judgement' assessment for VAT? When can HMRC raise one? What are your rights of appeal? How do you displace a best judgement assessment?

Agents and principals
UPDATE: What is an agent for VAT purposes? When do the agency rules apply? 

Online Marketplaces: Selling goods in the UK
UPDATE: When do you have to register for UK VAT? When is UK VAT payable? What amount is VAT payable on? What information do you have to give the marketplace provider? What will it do with that information?

Tax Queries?

UK Agent for registration of Overseas Entities
Do you require 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 2 March 2022

• How Post Office Horizon Compensation receipts are taxed
• Stamp Taxes Newsletter: February 2023   
• Economic Crime Levy
• HMRC have landlords in tiers!
• Associate Dentists lose automatic trading status
• Annual Tax on Enveloped Dwellings (ATED): At a glance REMINDER 
• Careless accountant enables discovery    
• 13-year-old negligence claim allowed by High Court
• Dinosaur exhibit was for a business and not just charity 
• VAT fraud backfires to provide UK fixed establishment 
• Badges of Trade: Are you trading or not?
• Insurance: Deductions and receipts
• National Insurance for landlords NEW
• AIA & WDA: Rules where there is a change of rate UPDATE
• IHT: Transferable Nil-Rate Band UPDATE
• CGT: Reporting when & how? UPDATE ...More

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