Nichola's SME Tax W-update 4 May 2023

Hello

In this week's update, we are having a deep dive into HMRC's Tax Administration and Maintenance day documents and consultations. 'TAM' day was last Thursday and we have made you an 'At a glance summary' so you can decide whether you want to learn more. 

The press now seem to have a better handle on the potential danger of allowing a large language Artificial Intelligence (AI) model to grow unchecked. What happens when AI becomes more intelligent than humans? It seems that some people are starting to take this matter more seriously. Reading through HMRC's new consultation "The Tax Administration Framework review – information and data", which looks at how HMRC might expand its powers of data gathering and information collection, the proposals seem quaintly old fashioned when staring down the barrel of the AI problem. What will data-gathering safeguards look like when AI is in charge of HMRC? I assume that AI will fully complete all our tax returns for us, talking to our banks and accounting software etc. Alternatively, what if a taxpayer's AI tries to outwit HMRC's version? I think we have a few years before these sorts of issues become reality, but in the meantime, it's difficult to future proof against technological change.

I will leave you with a conundrum. In the knowledge that some taxpayers have duplicated or missing National Insurance Numbers (NINOs), is it better to a) cure the problem or b) scrap the NINOs as taxpayer identifier and create a different unique identifier?

That's all for now, more cases, news and guides below and do sign up for our new season of Tax Workouts!

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)  

Tax Administration and Maintenance Day: At a glance
HMRC's new policy proposals in summary, notable are proposals for increased powers of data collection and changes to the Construction Industry Scheme (CIS), Cryptoasset tax and agent tax repayments.

Consultations

Tax Administration: New Powers for Information & Data condoc
This review explores a options for substantially widening and updating HMRC information and data-gathering powers these include new powers co-joining data information requests from both companies and their owners, and amending its powers to allow it to obtain data from cloud applications and data centres. 

Views sought on Off-Payroll Working non-compliance
HMRC have launched a new consultation 'Off-Payroll Working (IR35): calculation of PAYE liability in cases of non-compliance'. The aim is to seek views on a potential legislative change to address the over-collection of tax in cases of non-compliance.

Promoting tax avoidance will be a criminal offence
HMRC have launched a consultation ‘Tougher consequences for promoters of tax avoidance’. It seeks views on proposals for a new criminal offence for promoters of tax avoidance who fail to comply with HMRC stop notices, and to expedite the disqualification of directors who promote tax avoidance.

Help to Save Reform consultation
HM Treasury has launched a new consultation ‘Help to Save Reform’ which explores how the Help to Save scheme can be simplified and reformed to ensure it is a well-utilised, simple and effective savings product.

Construction Industry Scheme (CIS) reform
A new consultation has been opened on the Construction Industry Scheme (CIS), which considers whether the gross payment statutory compliance test should be reformed to consider VAT and other potential administrative reforms involving landlords, tenants and group.

Cryptoasset tax proposals aim to simplify
On Tax Administration and Maintenance Day last week, HMRC have released a consultation 'The taxation of decentralised finance (DeFi) involving the lending and staking of cryptoassets'. It seeks views simplifying the tax treatment of certain DeFi transactions.

Charities tax compliance consultation
HM Revenue and Customs have launched a new consultation ‘Charities tax compliance’ which explores possible changes allowing HMRC to tackle charities that obtain reliefs in ways that are not intended.

Editor's Pick 

VtaxP Tax Workouts 2023
BOOK NOW: Tax planning for Digital Nomads & OMB tax update 2023: Our new season of Virtual Tax Partner ®;Tax (VtaxP) Workouts commences with an exploration of exciting new innovations in working and the workplace.

Tax Tools 

2023-24 Tax Data Card
FREEVIEW tax data at a glance

Tax calculators
FREE for subscribers: 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 (subscription content)

Self-Employed 

Herd basis: Farming
The 'herd basis' recognises, for tax purposes, the economic nature of animals held for production as capital assets, rather than trading stock. This can be of benefit to some farmers and result in tax savings.

GAAP: Unincorporated businesses
What is UK GAAP? Does GAAP affect unincorporated business?

Employees 

Payrolling of benefits
UPDATE: The value of certain taxable Benefits In Kind can be included in taxable pay when calculating the PAYE deducted from payments of wages and salaries to employees. Employers have to provide employees with a statement of benefits received and their value by 1 June following the end of the tax year. 

Termination, redundancy and leaving payments
How are redundancy and termination payments taxed? What amounts can be paid tax-free? What amounts are taxable as earnings?

Directors & Companies

Management Buyout: What are your options?
What are the simplest options for a management buyout? For example, what happens when two current director/shareholders wish to retire and sell to the manager?  

Transactions in Securities
UPDATE: What are the Transactions in Securities rules? When do they apply? 

Land & Property

SDLT: Amending returns & refunds
How do I amend an SDLT return?  When can I amend an SDLT return?  How do I claim and SDLT refund?  How do I deal with contingent consideration?

Private Client & Estate Planning

CGT: Connected persons
UPDATE: Who is a connected person for Capital Gains Tax (CGT) purposes? Why does this matter?

CGT: Deductible expenditure
What expenditure is allowable for Capital Gains Tax (CGT)? What about loan interest, early redemption fees etc?

Penalties & Compliance

Disguised remuneration loan charge
What is disguised remuneration? What is the loan charge? When does the loan charge apply? Will the loan charge affect me?

Grounds for Appeal: Reasonable excuse
What is considered to be a 'reasonable excuse' when a taxpayer makes an appeal against a tax compliance failure?

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Company cars: 2023
• 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) 

No Child Benefit Charge discovery: father took reasonable care
In Toby Hextall v HMRC [2023] TC8804, the First Tier Tribunal (FTT) found discovery assessments looking to reclaim unpaid High Income Child Benefit Charge were not valid as they had been raised out of normal assessment time limits. The taxpayer had acted reasonably, despite not registering for self-assessment

VAT Cases & Guides

R&C Brief 5 (2023): VAT on medical services carried out by supervised pharmacy staff
HMRC have published Revenue and Customs Brief 5 (2023): ‘Change to the VAT treatment of medical services carried out by non-registered staff directly supervised by pharmacists’, which explains the amended rules which apply from 1 May 2023.

Italian place of supply for €4 million football transfer fee
In Sports Invest UK Limited v HMRC [2023] TC08797, the First Tier Tribunal (FTT) dismissed HMRC's claim that commission paid to the appellant by Inter Milan was subject to UK VAT, as a supply of services to a footballer. The services were supplied to Inter Milan and the place of supply was Italy not the UK.

Agricultural show entry exempt from VAT
In Yorkshire Agricultural Society v HMRC [2023] TC08803, the First Tier Tribunal (FTT) found that entry fees to an annual agricultural show were exempt from VAT and HMRC had raised a VAT assessment out of time.

Fuel scale charges (VAT)
UPDATE: New 2023-24 charges. What is the VAT fuel scale charge? What alternatives are there to the VAT fuel scale charge? Does the VAT fuel scale charge apply to vans? 

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 27 April 2022

• Agent Update: April 2023 
• Trusts & Estates: What’s New 2023/24 
• Electronic Sales Suppression one-to-many letters 
• Named tax avoidance schemes, promoters, enablers
• Late appeal denied: director could have done more
• FTT denies late appeal for tennis commentator  
• Late appeal allowed: tax adviser mistake
• HMRC correct to treat OTT as valid 
• Robson-Kanu's zero-rated turmeric shots not consumed for pleasure   
• VtaxP Tax Workouts 2023
• Tradespeople: Tax Overview UPDATE
• R&D Tax Relief: Overview UPDATE
• Plastic Packaging Tax UPDATE
• SDLT: Chattels, fixtures & fittings NEW 
• Investment Zones: Tax breaks NEW
• Fuel scale charges (VAT)  UPDATE
• Estates: Income Tax and Capital Gains Tax UPDATE
• Annual accounting UPDATE
• Input VAT claims: Pre-registration UPDATE ...More

Come and join our Cloud

Subscribe (and UNLOCK the whole site) A single-user annual subscription is £425 (+ VAT).

What do you get?

• We keep YOU up to date in SME tax.
• FULL access to www.rossmartin.co.uk: your firm's favourite TAX INTRANET containing over 3,500 actively maintained tax guides, briefings, toolkits and checklists.
• Want to know more? Commission your own articles and checklists.
• Structured CPD our detailed SME tax updates "for Advisers Only" provide topical summaries and planning notes our webcasts provide you with structured CPD at your desk.
• Regular client tax briefings: these cover the latest business and employment tax issues and are designed to assist you plan meetings and improve your client services.