Nichola's SME Tax W-update 3 August 2023

Hello

There is not much headline news to report this week as it's the holidays. We do feature a really disturbing case in which HMRC tried to bankrupt an employee on the mistaken basis that she was a payroll operator. 

Her horrible experience appears to have kicked off during lockdown, and the worse thing is that HMRC had no system by which to consider her protestations of innocence. 

If the House of Common's Treasury Committee's new report on 'Tax Reliefs' leaves you with a feeling of deja vu, it's because it comes 12 years after the government of the day asked the Office of Tax Simplification (OTS) to identify reliefs that should be simplified or repealed to help achieve a simpler tax system. The OTS has now been abolished. It's funny how tax policy goes round and round in circles.

We have a wonderful new version of our guide to Farming. Farming covers a range of different activities, but diversify too far and you might no longer be farming, as defined for tax. This will of course affect your potential ability to claim a number of different reliefs from sideways loss relief and averaging to Capital Gains Tax (CGT) and Inheritance Tax (IHT) reliefs.

If you are affected by Basis Year Reform we have a new freeview guide for you.

More news and updates 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)  

Tax reliefs uncosted, complicated & abused
MPs from the Treasury Committee have published 'Tax Reliefs' and call for a systematic review into the cost of over a thousand tax reliefs which complicate the tax system and are open to abuse.

Basis Period reform: At a glance 
NEW: From 2024-25, all unincorporated businesses will be taxed on their profit or loss arising in the tax year, regardless of their accounting end date. This is our new freeview 'At a glance' guide to tax Basis Period reform. 

HMRC falsifies bankruptcy order 
In Debra Elizabeth Adjei v Official Receiver and HMRC EWCA 1572 [2023] (Admin) the High Court annulled a bankruptcy order against an employee due to unpaid PAYE and NICs. She proved that she was the employee operating the payroll and not the employer as HMRC had falsely alleged.

Guides & Updates (subscription content)

Editor's Choice

Farming: Tax Overview
UPDATE: What is farming? What are the tax consequences and tax considerations of farming? What are the features of agricultural tenancies? What expenses can farmers claim for tax purposes? Are there special tax and accounting rules for farmers? What are the VAT rules for farmers?

Accounting periods and tax basis periods
Which date do I choose? Does it matter? Can I change my accounting date?  What changes are proposed as a result of the reform of basis periods?

Partnerships

Partnerships: How to prepare partnership and partners tax returns
How to prepare partnership returns. How are partnership profits calculated? How are corporate members of partnerships taxed? What are the differences between the tax treatment of individual and corporate partners? Are there anti-avoidance provisions to consider?

Employers

Accommodation: With travel or temporary workplaces
What cash allowances can be provided for business travel? What qualifies as business travel? What tax relief is available for accommodation?

Employers' NICs allowance
The Employers' National Insurance Contributions (NICs) allowance is an allowance given to small and medium-sized employers (SMEs) to offset against their annual Employers' National Insurance liabilities.

Directors & Companies

Directors: Tax planning toolkit for 2023/24
What tax planning opportunies and strategies are available to directors? What's the optimum way to extract profits in 2023/24? What tax reliefs and tax deductions are handy to consider? This planner looks at a range of director tax issues. 

Insurance: Deductions and receipts
This guide outlines when businesses can claim a trading deduction for insurance premiums and the taxation of any receipts. 

Private Client & Estate Planning

Acting for a trust? Start here…
An essential guide for advisers and trustees on how to manage the tax affairs of a UK trust and how to avoid common pitfalls

How to wind up a UK trust
What are the tax implications of winding up a trust? What do I need to do as a trustee to wind up a trust? Why wind up a trust?

Capital Allowances

Farming: Capital Allowances
What types of expenditure may qualify for capital allowances in farming businesses? What farming-specific points need to be considered?

Land & Property

SDLT: Linked transactions
What are linked transactions? When do the linked transaction rules apply for SDLT? How do I calculate SDLT on a linked transaction?

SDLT: Residential Property & Dwellings
What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies? What garden and grounds are subject to higher rates of SDLT?

Penalties & Compliance

Named tax avoidance schemes, promoters, enablers
UPDATE: HMRC publishes a list of Named tax avoidance schemes, promoters, enablers and suppliers. It is not recommended that taxpayers use any of these schemes, as HMRC does not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers.

Insolvency FAQs for boards
What issues does the board need to consider when a company is about to go into insolvent liquidation? This guide considers some common questions that directors may have about insolvency situations.

VAT Guides

VAT: land & property (signpost)
What are the VAT implications for land and property? This is a freeview signpost to our guides covering the VAT implications of UK land and property.

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• CPD: VAT Penalties Update
• CPD: Maximising Expense Deductions for Businesses
• CPD: Purchase of Own Shares (POS)
• UPDATE: CPD: Non-Resident CGT: UK Property

More at CPD Index

CPD Workouts

Taking a deeper dive into a range of topical subjects

• VtaxP Tax Workouts 2023: AML Essentials update & IHT and Family Investment Company case studies
• VtaxP Tax Workouts 2023: Tax Update for OMBs & Taxing the Digital Nomad

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 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 July 2022

• Agent Update: July 2023 
• Consultation on extending the medical BIK exemption
• Finance (No. 2) Act 2023 finally published
• Lords press to close offshore entity loopholes
• Prolific puppy breeder hid sales
• Input VAT claimable on fund-raising share sale
• Starting in business? Start here...
• Land & Property: an Adviser's Tax Update 2023-24
• LLP v Company: which will save me tax?
• PAYE late payment penalties buster
• Register of Overseas Entities: Agent Guide
• Register of Persons with Significant Control UPDATE
• R&D Tax Relief: Overview UPDATE
• Pensions: Tax rules and planning
• Super-deduction & First Year Allowances UPDATE
• Annual Investment Allowance (AIA): Related companies UPDATE
• Full expensing & First Year Allowances UPDATE
• CPD: VAT Penalties Update ...More

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