Nichola's SME Tax W-update 29 June 2023

Hello

Keeping up with your tax compliance obligations can seem akin to trying to learn to drive a high-speed bulldozer. While it's relatively easy to get started, steering in the right direction can be tricky and you are likely to crash if you take your eye off the road!

How time flies. It is now time for employers to file form P11D, the return of expenses and benefits, and if you have an ongoing or new share or share option scheme you will need to file your annual Employment Related Securities (ERS) return.

Non-residents are subject to Capital Gains Tax (CGT) on the disposal of UK residential property. Measures which can sometimes be overlooked by non-resident property owners are the ‘Profits from dealing in or developing UK land’ rules. These are essentially anti-avoidance rules which allow HMRC to assess what might be hoped for as gains as profits to Income or Corporation Tax regardless of your residence. We don’t often see too many cases which involve these provisions, but we feature one this week.

The other case report that I think is worth a mention is one in which the tax tribunal had to weigh up whether an individual had reverted from their domicile of choice (UK) back to their domicile of origin (India). As so often happens, the appeal failed due to a lack of good quality evidence.

If you missed our Digital Nomad & OMB Tax Update workout this week, a recording will soon be available to purchase and a notes pack will also be available too. Details of our next Workouts will come next week. By popular demand I am including an Anti-Money Laundering Compliance refresher too: there have been so many developments this year.

More news, updates 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)  

It's P11D time: are you reporting all your Car Benefits?
It's that time again! 6th July 2023 marks the filing deadline for 2022-23 P11Ds. There are special rules for 'Payrolled benefits' and HMRC is concerned about some underreporting of Car Benefits.

99% increase in additional rate Income Tax payers
New annual statistics from HMRC show a 99.2% increase in additional rate Income Tax payers in the tax year 2023 to 2024 over 2020 to 2021. The freezing of tax bands, along with higher wages, showed an increased tax take across all types of taxpayers.

Interest rates: HMRC's further rises
Following the Bank of England’s announcement on 22 June 2023 that the base rate will rise to 5%, HMRC interest rates are also increasing by 0.5%, to 7.5% for late payment interest and 4% for repayment interest, from 11 July 2023.

Behind on complaints handling
The Adjudicator’s Office Annual Report 2023 highlights that HMRC’s complaints handling performance has not fully recovered post-pandemic and a divergence in service levels between departments. In a separate letter to the Treasury Committee, HMRC said the suspension of Self Assessment helplines was a pilot project.

Editor's Pick 

Non-Residents' Tax Toolkit
This toolkit covers the key UK tax issues for non-UK resident individuals holding UK assets and property and working in the UK.

Profits from dealing in or developing UK land
These rules apply UK Income tax or Corporation tax to all profits from trading in and developing UK land, regardless of your country of residence.  

Tax Tools 

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.  

Tax Cases (Freeview)

UK domicile of choice acquired, no evidence of a move to India
In Ameet Shah (As Executor of the Estate of Anantrai Maneklal Shah deceased) v HMRC [2023] TC08442, the First Tier Tribunal (FTT) found that the deceased had acquired a domicile of choice in England before his death. His estate could offer no evidence that he planned to move back to India.

No automatic adjustment for loss carryback
In Civic Environmental Systems Ltd v HMRC [2023] EWCA Civ 722, the Court of Appeal (CoA) agreed with prior decisions, deciding that a loss relief claim outside of the tax return did not have to be amended in line with any amended assessments.

Unexplained property transactions result in Schedule 36 Information Notice
In Foreign National v HMRC [2023] TC8835, a non-resident and non-domiciled individual was unsuccessful in his attempt to prevent HMRC from gaining access to his UK bank statements. He was unable to explain certain property ownership and transactions and may have been trading in UK property.

Guides & Updates (subscription content)

Self Employed

Tax Rules for A-Z of different trades, professions and vocations
How are different types of businesses taxed? What special rules apply to different types of business income and expenses? What about VAT? We summarise the different rules for taxing income and expenses.

Employers

Making Good Benefits In Kind
What is the deadline for making good a non-payrolled Benefit in kind? What if the benefit is payrolled?

P11Ds: Employers' checklist & top tips
Top Tips for employers on preparing form P11D together with a checklist.

Company cars
Company car tax. How do you work out car benefit? How do you work out car fuel benefit? Are there savings for low-emissions vehicles? How do you reduce car benefit? Cars and the tax tribunals and Top Tax Tips.

Employment-Related Securities: Reporting
UPDATE: 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.

Directors & Companies

Directors' loan accounts: Toolkit (subscribers)
HM Revenue & Customs (HMRC) have a director's loan accounts toolkit for advisers. This is our enhanced version with planning points. 

Associated companies & test for control
UPDATE: What are the tax effects of associated companies? What is an associated company? How do the control tests work? 

Land & Property

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

Private Client & Estate Planning

Making a tax disclosure (Digital Disclosure Service)
How to disclose errors or mistakes in direct taxes and notify HMRC of an under-assessment. A practical guide to making a tax disclosure using HMRC's online system.

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?

Partnerships

Salaried members: When is a partner taxed as an employee? 
In some circumstances, LLP members are taxed as employees under PAYE. When does this apply? 

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Maximising Expense Deductions for Businesses
• CPD: Purchase of Own Shares (POS)
• UPDATE: CPD: Non-Resident CGT: UK Property  
• UPDATE: CPD: Dividend Taxation

More at CPD Index

VAT Cases & Guides

Annual accounting
UPDATE: What is the VAT annual accounting scheme? How does it work? Who can use it? What are the conditions? 

Assessments: Best judgement & time limits
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? What are the time limits for a VAT assessment?

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 22 June 2022

• Agent Update: June 2023
• Complex tax system obstacle to economic dynamism 
• Key HMRC services are out of action over Glastonbury weekend
• COVID-19: Tax Appeals
• Reasonable excuse claim fails due to unreasonable payment delays
• Software issue invalidated CJRS claim
• Ceased trading: No SEISS
• Plastic Packaging Tax: At a glance
• Free Covid PPE in part a 'business activity' for Input VAT
• Cash or accruals accounting toolkit
• Close company loans toolkit (loans to participators)
• Family Investment Companies
• SDLT: Residential property & dwellings UPDATE
• Trust Registration Service UPDATE
• Partnerships: What's new 2022-2023?
• Starting in business: VAT UPDATE
• Annual accounting UPDATE
• Assessments: Best judgement & time limits UPDATE  ...More

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