Nichola's SME Tax W-update 5 October 2023

Hello

We are now well into the political conference season and as we wait for next month's Autumn statement there is little new coming out of the Treasury or HMRC.

However, further afield we note that the Portuguese prime minister has announced that the generous scheme providing tax breaks to foreign residents in Portugal which has made it an attractive place to emigrate, is to close to new applicants next year. Check out our on-demand Tax & the Digital Nomad CPD to find out how you can take advantage of these and other residency perks whilst they are still available if you are considering moving to work abroad.

Meanwhile, closer to home, the Tax Conditionality rules which require certain types of business to be licensed, were extended to Scotland and Northern Ireland from 2 October 2023.

This week we have a bumper set of new CPD which navigates the rise in Corporation Tax, with a particular focus on the associated company rules which are complex enough to require a session of their own.

We also have a summary of HMRC’s latest Avoidance Spotlight, on 'Property business arrangements involving hybrid partnerships', which focuses on a scheme that has been much highlighted in the media. As a result, we have recently had several queries about this scheme through our Virtual Tax Partner service. HMRC have made their view very clear, they consider that the scheme does not work!

More news, cases and updates below. Do check out Editor's Choice.

Back soon

The Team

www.rossmartin.co.uk

Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.

Quick News (Freeview)  

Revenue Scotland releases Green Freeports guidance 
Revenue Scotland has introduced guidance for the new tax relief on Green Freeports which come into effect on 1 October 2023. Claims for relief can be made from the designation of tax sites although the date for this is yet to be confirmed.

Tax exemption for war 'widow' recognition payments
The UK government has announced that the £87,500 'recognition' payments to the spouses of those who lost their lives during service will be exempt from Income Tax and National Insurance Contributions (NICs). 

Spotlight 63: Property business arrangements involving hybrid partnerships
HMRC have published Tax Avoidance Spotlight 63: ‘Property business arrangements involving hybrid partnerships.’

Tax Cases

Grazing land does not make equestrian property mixed use for SDLT
In Sangeeta Modha v HMRC [2023] TC8936, the First Tier Tribunal (FTT) held that a field used under an informal grazing agreement did not make a house with equestrian facilities a mixed-use property for Stamp Duty Land Tax (SDLT). It was a second residential property so higher rates of SDLT applied.

F1 lawyer's appeal fails again, £40 million is taxable as income 
In Stephen Mullens v HMRC [2023] UKUT244, the Upper Tribunal (UT) upheld the decision by the First Tier Tribunal that the receipt of £40 million in payments from the Ecclestone family by their family lawyer was taxable income rather than a gift. 

Editor's Choice (subscribers)

Investment bonds & tax
UPDATE: How are investment bonds taxed? What is an investment bond? What is a chargeable event gain and how is it calculated? How do notional tax credits work? How is top-slicing relief calculated? What is the accrued income scheme?

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

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.  

Guides & Updates (subscription content)

Start-ups

Badges of Trade: Are you trading or not?
UPDATE: 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.

Self-Employed  

Partnerships: Capital Gains Tax
How does Capital Gains Tax (CGT) work for partners and partnerships? What is HMRC’s Statement of Practice D12? How are transactions between partners treated? What if the partners are connected persons for CGT?

Conditionality: taxi, private hire vehicles and scrap licenses
UPDATE: What is tax conditionality? Does this affect tax registration? The renewal of certain licences, to drive taxis and private hire vehicles or deal in scrap metal, is conditional on applicants confirming that they are appropriately registered for tax. 

Employers

EMI: Enterprise Management Incentive Scheme
What is the Enterprise Management Incentive (EMI) scheme? What's the difference between EMI and an unapproved share scheme? 

Employer pension contributions
Is there a taxable employment benefit if an employer makes contributions to an employee's pension scheme? What are the rules for employer pension contributions?

Directors & Companies 

Settlement anti-avoidance rules
What are the settlement anti-avoidance rules? How do these rules catch some common family tax planning? What are the rules for spouses and other family members?

Private Client & Estate Planning

Self Assessment Return 2022/23: What's new?
2023 Self Assessment toolkit: top tips for completing tax returns for the year ending 5 April 2023.

IHT Agricultural Property Relief
UPDATE: What is Agricultural Property Relief (APR)? When does it apply? What are the conditions and restrictions of the relief? 

Overseas & Residence

Non-Domiciles Tax Toolkit
This toolkit provides an outline of the tax compliance issues for non-UK domiciled (non-dom) individuals.

Land & Property 

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

Rent-a-room Relief
What is rent-a-room relief? When does it apply? What are the limits and restrictions?

Penalties & Compliance

Economic Crime Levy
UPDATE: The Economic Crime Levy is a fixed fee paid by medium and large-sized entities that are subject to Money Laundering Regulations. This will include accountants, auditors and tax advisors. Registration, filing and payment are due by 30 September.

VAT News & Cases

Repatriation of the dead predominantly a supply of transport 
In UK Funerals On-Line Ltd v HMRC [2023] TC08937, the First Tier Tribunal (FTT) decided that the repatriation of dead bodies was a specialist transport service, making it zero-rated for VAT and not exempt as services provided in connection with the disposal of human remains.

Withdrawal of paper VAT registration form 
From mid-November 2023 businesses will no longer be able to access the paper VAT registration form online and will have to either register online or call HMRC to request a form.

Reverse charge: Domestic
UPDATE: Domestic reverse charge VAT is a mechanism designed to prevent VAT fraud. When does it apply? How does it operate?

Post-deregistration VAT recovery
UPDATE: When can VAT be recovered following deregistration? How is such VAT recovered? 

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Corporation Tax Part 1: Rates and Challenges
• NEW:CPD: Corporation Tax Part 2 Associated Companies
• NEW:CPD: Corporation Tax Part 3 Augmented Profits & Marginal Relief
• CPD: Landlords Update 2023

More at CPD Index

CPD Workouts

Two hours of CPD: Unravelling the diverse tax rules over 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 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 28 September 2023

• Agent Update: September 2023 
• Representations wanted for Autumn Statement 2023
• New 2023-24 CPD programme 
• £1m each for top 1% on IHT abolition says IFS
• No Stamp Duty savings for dilapidated house
• Contributing to EBT after enquiry opened was deliberate behaviour
• Generous treatment for persistent failure to declare eBay profits
• Three-year delay too serious for late appeal
• Trust Registration Service UPDATE
• Acting for a trust? Start here… UPDATE
• Employment-Related Securities: Reporting
• Is it a trade, a business, or an investment activity?
• Woodlands: Overview
• Campsites: Tax overview   ...More

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