Nichola's SME Tax W-update 2 November 2023

Hello,

The weeks are flying by at the moment, Halloween and World National Savings Day, both on 31 October, have now passed and today the Bank of England has again frozen interest rates in its penultimate rate review for 2023.

With this in mind this week we are featuring our Savings and ISA guides. As 2 November marks ‘All Souls Day’ otherwise known as the ‘Day of the Dead’, we also have our Estate planning checklist!

For those still looking to be scared, it is now 90 days until the Self Assessment deadline and HMRC are taking pains to let taxpayers know that authorising their agent to file their return does not absolve them of the responsibility to file a correct and complete return. A timely reminder to agents to obtain confirmation from clients that their returns are accurate before submission, which is sometimes a difficult task when the 31 January deadline is looming.

We have the second part of our new Pre-trading expenses guides, this time for corporates, a useful guide dealing with an area that can sometimes cause confusion.

We also have an interesting case on cash-basis accounting under FRS105 or rather the fact that contrary to the taxpayer's opinion in this case, there is no such thing, except of course in the case of VAT!

Finally, the latest two-year survey of Women in Finance Charter signatories came out this week. There does appear to have been some headway made since the last survey in 2021 though there is a long way to go; 40% of survey respondents anticipate that it will take another five to ten years for the charter to change the face of the financial services industry.

More news, cases and updates are below. Do check out the 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)  

HMRC stresses the need to check agent-prepared tax returns 
HMRC are changing their online advice pages and letters to clients on agent authorisation to clarify what agents can and cannot do when they are working via the Online Agent Authorisation system and to stress the need for clients to check their tax returns before allowing their agents to submit them on their behalf.

New Act strengthens Companies House anti-fraud powers 
The Economic Crime and Corporate Transparency Act, which gained Royal Assent last week, includes measures to help Companies House close loopholes on identity verification for all new and existing registered company directors and people with significant control, including overseas entities.

Estonia tops tax Competitiveness Index, UK bottoms out 
The International Tax Competitiveness Index 2022, compiled by the OECD's Tax Foundation, has seen Estonia top the league for the tenth year in a row making it an ideal destination for those looking to live, work and set up businesses overseas, as well as digital nomads.

Women in Finance Charter survey results cautiously optimistic 
HM Treasury has issued its latest Women in Finance Charter signatory survey with 65% of respondents saying that the charter has driven permanent change in their organisation. It is helping them maintain focus on increasing female representation in the sector as they move into the next phase of their diversity efforts.

Tax Cases

FRS 105 does not allow cash basis accounting 
In Hart St Maltings Ltd v HMRC [2023] TC08961, the First Tier Tribunal (FTT) found that a property development company reporting under FRS 105 could not use the cash basis of accounting for Corporation Tax purposes.

Debt repayment did not reduce £8m sales proceeds 
In McEnroe & Newman v HMRC [2023] UKUT 255, the Upper Tribunal (UT) refused the appeal on the basis that the First Tier Tribunal (FTT) had not erred in law in failing to interpret the Share Sale & Purchase Agreement (SPA) in a manner that reduced the consideration by over £1 million.

Editor's Choice (subscribers)

Pre-trading expenses (companies)
NEW: What are pre-trading expenses? What tax relief is available for pre-trading expenses? What are the restrictions to relief? What expenses will not qualify? What about pre-incorporation expenses?

IHT: Estate planning checklist
This checklist covers some of the essential planning points that taxpayers should know when planning for their estate and Inheritance Tax (IHT).

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)

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?

Converting part of a home into an office
What taxes need to be considered when converting part of a home to an office? What relief is available? 

Employers

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?

Exemption for paid and reimbursed expenses
What exemptions apply for paid and reimbursed employee expenses? What are the rules?

Directors & Companies 

Loss relief (Income Tax) disposal of shares
Share Loss relief allows you to offset a loss made on the disposal of shares against income instead of following normal capital loss treatment. 

Substantial Shareholding Exemption (SSE)
What is the Substantial Shareholding Exemption? When does it apply? How does it interact with de-grouping charges?

Private Client & Estate Planning

ISA guide
What is an ISA? What are the limits? How are ISAs taxed?

Savings income: How interest is taxed
What is savings income? How is savings income taxed? What allowances are available? 

Devolved Taxes

Scottish Income Tax: Am I a Scottish taxpayer?
Who does Scottish Income Tax apply to? Am I resident in Scotland? What constitutes a residence and the 'main' residence?

Welsh Land Transaction Tax (LTT)
What is Land Transaction Tax? How does it operate? What reliefs are available? 

Land & Property

Annual Tax on Enveloped Dwellings (ATED)
UPDATE: What is the Annual Tax on Enveloped Dwellings (ATED)? Who does ATED apply to? What relief is available and how is it claimed? What are the ATED return filing dates? 

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?

Overseas & Residence

Remittance basis (overseas income)
UPDATE: What is the remittance basis? Who can claim it and when? What are the advantages of claiming the remittance basis and how much is the remittance basis charge?

Non-Resident Landlord Scheme
What is the Non-Resident Landlord scheme? How does it work? Who does it apply to? How can I apply to receive rent without a withholding tax deduction?

Capital Allowances

Full expensing & First Year Allowances
What is full expensing? When does it apply and what is the rate of allowance? How are disposals of full expensing assets dealt with? What assets qualify for the 50% First Year Allowance (FYA)? How do I deal with disposals of 50% FYA assets? How do I make a claim?

VAT News & Cases

VAT group membership could not be backdated 
In Dollar Financial UK Ltd v HMRC [2023] UKUT 00256, the Upper Tribunal (UT) found that the First Tier Tribunal (FTT) was correct to strike out an appeal seeking to backdate membership of a VAT group. No valid application had been made and there was no appealable decision.

No VAT exemption for indivisible intra-group supplies
In JPMorgan Chase Bank NA v HMRC [2023] TC8957, the First Tier Tribunal (FTT) found that support and business services supplies were one single supply not qualifying as exempt from VAT. The intra-group supply exemption was disapplied due to elements coming from overseas, meaning all elements had to be standard-rated. 

Input VAT claims: Pre-registration
UPDATE: When can pre-registration input VAT be recovered? What are the time limits and restrictions? 

VAT representatives
UPDATE: When can (or must) a business appoint a VAT representative, and what does it mean to be one?

Deregistration
When do I have to deregister for VAT? When can I voluntarily deregister? What penalties might HMRC issue if I am late notifying them of mandatory deregistration?

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 26 October 2023

• HMRC starts work on VAT Split Payments Proof of Concept
• Government responds to tax reliefs reports 
• SC finds director’s share options are Employment-Related Securities 
• Sickness lump sum NICable in single year 
• Taxpayer uses WhatsApp to prove enquiry notice is out of time 
• No BPR for ‘village hall’ wedding barn business
• Blissful ignorance of the correct VAT rate for chocolate biscuits
• Pre-trading expenses NEW
• Capital taxes round-up: 2023 NEW
• Cash or accruals accounting toolkit UPDATE
• Tax risk review
• Employment status & detailed checklist 
• Shifting your income to save tax
• Top Slicing Relief: How you slice it
• Land: future consideration (overage)
• SRT: Statutory Residence Test ...More

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