Hello
‘Online markets’ are in the news again. This time, HMRC has a new campaign afoot which aims to catch online traders who are operating via serviced offices in the UK to appear to be UK resident for tax.
One reason (and there are many more, this is a complex issue) for creating a UK address is to avoid compulsory VAT registration. A non-established taxable person is not subject to our normal VAT thresholds. Online platforms play a major role in tax collection, but they are still quite limited in their ability to check a trader’s tax residency.
We have been reviewing some topical case decisions all coming from the First Tier Tribunal this week. If you are keen on tax, a great way into the heart of the subject is to read tribunal decisions. We are all quite addicted to this activity and sometimes we get carried away and report far too many! Our cases this time cover Business Asset Disposal Relief, private use of company credit cards, loan relationship unallowable purposes, mis-claimed Coronavirus Job Retention Scheme payments, Stamp Duty Land Tax and VAT on Poppadoms!
If you have any tax queries, however small, please put them onto our Virtual Tax Partner portal so that the right person can address the issue. Many thanks.
Back soon
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
HMRC campaign hits service office traders
Ever purchased an item at a nice low price online from what appears to be a UK address, only to find that it’s shipped from abroad? That bargain purchase may be because the seller is ignoring UK VAT rules. Another campaign targets online markets.
HMRC’s simplification update: January 2024
HMRC have announced a package of measures intended to simplify and modernise the tax system. These include mandating the payrolling of Benefits In Kind, from April 2026, and allowing parents who do not claim Child Benefit to obtain a National Insurance credit.
Luxury watch tax terminates Schwarzenegger's travel plans
Actor Arnold Schwarzenegger found his travel plans temporarily terminated when he was detained at Munich Airport for allegedly avoiding tax payable on a luxury watch. Mr Schwarzenegger was on his way to Austria to auction the custom-made Audemars Piguet watch for charity.
Simplifying alternative refinancing arrangements for tax
HMRC has launched a consultation ‘Tax Simplification for Alternative Finance’. This explores proposals to address the difference in Capital Gains Tax (CGT) treatment when property is refinanced using alternative, rather than conventional, finance methods.
Tax receipts: how is Government is funded?
The House of Commons Library has published 'Tax Statistics: an overview' using research from several resources. The report shows that for 2022/23 UK government revenues were £1,027 billion, equivalent to 40% of GDP, with Income Tax, National Insurance Contributions (NICs) and Value Added Tax (VAT) contributing around three-fifths of all revenues.
Tax Cases
Salary in lieu of dividends did not qualify for CJRS
In Bandstream Media and Corporate Communications Limited v HMRC [2024] TC09016, the First Tier Tribunal (FTT) found that an employer could not base its Coronavirus Job Retention Scheme (CJRS) claims on a salary which was increased after 19 March 2020, in lieu of dividends.
No Entrepreneurs’ Relief on trust share disposal
In The Trustees of the Peter Buckley Settlement v HMRC [2024] TC09022, the First Tier Tribunal (FTT) found that Entrepreneurs’ Relief was not available on a trust’s share disposal. The company was not the qualifying beneficiary’s 'personal company' for the required period.
A cautionary tale of credit cards & loan relationships
In Mr James Keighley (1) Primeur Limited v HMRC [2024] TC9023, the First Tier Tribunal (FTT) found that a director’s personal use of his company’s credit card resulted in six years worth of tax assessments and penalties. Worse still, a write-off of an intercompany loan was ruled to have a disallowable purpose.
£20m property was residential for SDLT despite railway vent
In 39 Fitzjohn's Avenue Limited v HMRC [2024] TC9021, the First Tier Tribunal (FTT) found that a London property which had a railway tunnel vent in its garden and workshop in its basement was a dwelling and not a mixed-use property for Stamp Duty Land Tax purposes.
Editor's Choice (subscribers)
Directors: Do I need to file a tax return
Do I need to file a Self Assessment tax return? What if I am a director? Can HMRC make directors file tax returns? When should I file a Self Assessment return?
Non-resident Tax toolkit
UPDATE: This toolkit covers the key UK tax issues for non-UK resident individuals holding UK assets and property and working in the UK.
Tax Tools
Tax calculators
UPDATED for NICs changes: 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)
High Income Child Benefit Charge
What is the High-Income Child Benefit Charge? Who pays it? Can you appeal against an assessment? Are there any useful cases from the tax tribunals?
Self-Employed
What expenses can I claim?
Our index of guides for each type of expense.
Partnerships
Partnerships: How to prepare partnership and partners tax returns
UPDATE: 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?
Partnership agreements: What should be considered?
Partnership agreements can be invaluable to clarify everyday matters and settle disputes within a partnership. What sort of things should be discussed for inclusion in a partnership agreement? Why are they important?
Directors & Companies
IR35
What is IR35? How does it work? How is the deemed payment calculated? What expenses are deductible?
Private Client & Estate Planning
CGT: Reporting - when and how?
How do you report your capital gains? What return do you use? There are different ways for individuals to report capital gains depending on whether you are resident or non-resident, and whether you are in or out of Self Assessment.
CGT: Date of acquisition or disposal
UPDATE: When is the date of acquisition or disposal of an asset for Capital Gains Tax (CGT) purposes? When do special rules apply? Why does it matter?
Land & Property
Repairs and renewals
What expenses can you claim for tax? In what situations are repairs disallowed and treated as capital expenditure?
Property profits & losses: Toolkit (2023-24)
Our Property Profits & Losses toolkit takes HMRC's version and adds a great deal more information about what you can claim as an individual.
Capital Allowances
Full expensing & First Year Allowances
UPDATE: 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?
Super-deduction & First Year Allowances
UPDATE: What is the Super-deduction? When does it apply and what is the rate of allowance? What is the SR Allowance? What if I dispose of an asset on which the Super-deduction or SR allowance has been claimed? What happens when an accounting period straddles 1 April 2023?
Overseas & Residence
SRT: Statutory Residence Test
UPDATE: What is the Statutory Residence Test (SRT)? Why is it important and how does it determine a person's residency?
Non-Domiciles' Tax Toolkit
This guide provides an outline of the tax compliance issues for non-UK domiciled (non-dom) individuals.
VAT News & Cases
Walkers ‘Sensations Poppadoms’ were standard rated
In Walkers Snack Foods Limited v HMRC [2024] TC09024, the First Tier Tribunal (FTT) found that Walkers ‘Sensations Poppadoms’ were standard rated for VAT. They were made from potato, and potato starch, and were similar to potato crisps.
Online marketplaces: VAT & selling goods in the UK
When do you have to register for UK VAT? When is UK VAT payable? What amount is VAT payable on? What information do you have to give the marketplace provider? What will it do with that information?
CPD for Lunch
Byte-sized chunks of lunchtime CPD for subscribers
- CPD: Maximising Expense Deductions for Businesses
- CPD: CGT Reporting and payment deadlines
- CPD: Corporation Tax Part 1: Rates and Challenges
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 11 January 2023
- Landlords One-To-Many letters
- Online filing exclusions for 2022-23 tax returns
- Consultation on timescales for repairs in the social rented sector
- Welsh visitor accommodation registration and licensing scheme
- Side-Hustles & Tax
- Horizon scandal: tax filing issues
- Hottest topics for accountants: January 2024
- Landlords: Start here
- Pre-trading expenses (self-employed)
- Unlawful, illegal or ultra vires dividends UPDATE:
- SRT: Statutory Residence Test UPDATE
- UK Trusts UPDATE
- Cryptoassets: How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK?
- National Insurance for landlords UPDATE
- Sch 36 Information Notices UPDATE
- Partial exemption & input VAT UPDATE ...More
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