Nichola's SME Tax W-update 13 April 2023

Hello,

One potential way of tackling the current housing shortage in places like London and the South West is to make it more difficult for home owners to holiday let their properties through sites such as Airbnb or Vrbo. With demand for the ‘staycation’ showing few signs of abating, investor demand for lettable properties is driving up house prices. 

The government’s solutions to the problem include the introduction of a short-term let registration scheme and to make home owners apply for planning permission before letting. As the government itself notes, holiday letting spawns its own ‘ecosystem’ of local services, and therefore any measures will have to balance the needs of local employment with local housing.

We have a new Director’s Tax planning toolkit for 2023/24 this week; it's always a very popular guide. Will trading via a company remain so popular now that Corporation Tax rates have increased? It's partly a numbers game and you can use our different Tax Calculators to compare and contrast the differences of paying a salary or dividend and compare that to our Self Employed tax calculator. 

Recently we have had a lot of queries on incorporation, and we now have some useful detail on this often rather complicated topic in our Incorporation section in the main menu. We have also been updating lots of useful guides for employers for the next tax year.

As usual we have a pick of tax case decisions, including a couple of decisions from the General Anti Abuse Rule (GAAR) panel.

That's all for now, more news and guides below.

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)  

New registration and planning to stem Airbnbs and holiday lets
The government is introducing a new short-term/holiday let registration scheme and is also consulting on making changes to the planning rules that could result in house owners requiring planning permission to operate a short-term or holiday let. 

State Pension age review 2023
The Department for Work and Pensions (DWP) has published its report reviewing the State Pension age. This confirms that the increase to age 68 will not be brought forward at present. 

What is the 2023/24 PAYE tax code?
What is the 2023/24 PAYE tax code? What do the different types of tax code suffixes mean?

Editor's Pick 

Incorporation? Start here...
FREEVIEW: Guidance and checklists to assist in forming a new company together with the incorporation of an existing business.

A landlord? Start here...
You are about to become a landlord. Where do you start and what do you need to do before you buy? What business structure should you use? 

Tax Tools 

2023-24 Tax Data Card
FREEVIEW

Tax calculators
FREE for subcribers: We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes. 

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 

Starting work 1. Self-employed or employed?
If you want to start your own business, what is the difference between being employed or self-employed? A freeview guide.

Badges of Trade: Are you trading or not?
Are you trading, running a business, or just buying and selling investments? The 'Badges of Trade' are a set of indicators, built up over time by the courts, to decide when an activity is a trading or investment activity.

Land & Property

Airbnb Host: tax overview
What expenses can Airbnb owners claim for tax purposes? How is income taxed? Can you claim Rent-a-Room Relief? How does it affect Private Residence Relief? What are the VAT rules? 

LBTT: Land and Buildings Transaction Tax
UPDATE:  Revenue Scotland has launched its Enhanced Support service aimed at supporting taxpayers who have additional needs.

Employees 

Employment tax: Reporting, dates & deadlines 2022-23 
NEW: This freeview guide summarises the key deadlines and additional considerations for employers for the end of the 2022-23 tax year.

PAYE: Starter checklist new employee 2023-24 
NEW: Freeview PAYE starter checklist. Use this form if you are taking on a new employee. 

Directors & Companies

Directors: Tax planning toolkit for 2023/24
NEW: This planner looks at a range of director tax issues, including company profit extraction for the new 2023-24 tax year. 

Managed Service Companies (MSCs)
UPDATE: Clarification added to confirm partnerships can be caught by the MSC provisions. 

Private Client & Estate Planning

PRR: Private Residence Relief
What is Private Residence relief (PRR)? What are the qualifying conditions? Can you claim relief on two homes? How do you claim PRR? Can you claim PRR if you develop your garden?

Overseas & Residents

Transfer of Assets Abroad
What are the TAA rules? When do they apply? How is the tax charge calculated? Is there any defence against the rules?

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

• CPD: Acting for a UK trust: Start here...
• CPD: CGT Reporting and payment deadlines
• CPD: Taxation of couples in 2022-23

More at CPD Index

Tax Cases (Freeview) 

SEISS grants not due despite HMRC invite to claim
In Thomas Merlin Ash v HMRC [2023] TC08749 the First Tier Tribunal (FTT) denied claims under the Self Employment Income Support Scheme (SEISS). Mr Ash, a sole trader who had incorporated his business, had no legitimate expectation of receiving the support just because HMRC had written to him suggesting that he might be eligible.

Vandalised property was residential for SDLT purposes
In Amarjeet and Tajinder Mudan v HMRC [2023] TC8777, the First Tier Tribunal (FTT) found a derelict house in a state of disrepair was residential property for Stamp Duty Land Tax (SDLT) purposes.

GAAR Panel finds IHT option planning unreasonable
The General Anti-Abuse Rule (GAAR) Panel has issued its opinion on an Inheritance Tax scheme which utilised a loan and options. The scheme claimed to transfer value with no IHT consequences and left the estate with a significant loan debt.

GAAR Panel finds SDLT planning unreasonable 
The General Anti-Abuse Rule (GAAR) Panel has issued its opinion on a Stamp Duty Land Tax (SDLT) scheme which used sub-sale relief and an annuity in order to reduce the resulting SDLT charge on the purchase of a residential property to nil.

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 6 April 2022

• Loan charge warnings: new assessments & disproportionate IHT charges
• Tourist tax first for Manchester
• Digitalising Business Rates Consultation response
• Are your state pension arrears taxable?
• Upper Tribunal confirms Eamonn Holmes was an employee 
• Woodlands was residential grounds for SDLT
• FTT made significant errors of law 
• Kids' driving experiences not like a funfair for VAT
• Consultation: Draft regulations - VAT provisions for drink deposit return scheme 
• Place Of Supply: Mini One Stop Shop (MOSS)
• IR35: Kay Adams v Lorraine Kelly v Christa Ackroyd v Eamonn Holmes UPDATED
• P11D forms UPDATED...More

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