Hello,
February has been an extremely busy month and this is reflected in the content of this week's Web-update. We are taking a look at HMRC's latest Agent Update and Employer Bulletin, having a speed-read-refresher on the key measures in the new Finance Act, there are a couple of new consultations from HMRC on administration and powers and, of course, we have reviewed some interesting cases, including two from the Upper Tribunal (UT).
The third Finance Act of 2023-24, 'Finance Act 2024', cleared its final hurdle and received Royal Assent last week. Next Wednesday we have the Budget.
We were anticipating the usual weekend of pre-budget leaks, but that process might have kicked off early with news agencies suggesting this morning that the government may be considering changing the tax rules for non-domiciled individuals ('non doms'). No doubt a potential vote winner, the Labour Party has already made this a manifesto commitment. The big question is how much revenue will such a commitment raise; it rather depends of course on the nature of any changes.
Reflecting on what has changed in tax this year, it seems that the three Finance Acts have taken their toll. We now just long for simplicity. I was updating our Employers' What's On for 2023-24, which is a rolling tracker of developments in the tax year, and I have a suspicion that this year's version is the longest it has ever been. Maybe shelving the special tax regime for non-doms is a good idea; forget the tax take, just in terms of simplicity!
More news, updates and cases are below so do have a good old read-through.
Back soon
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
Advisory fuel rates from 1 March 2024
HMRC have published new advisory fuel rates for company car drivers which apply from 1 March 2024.
Agent Update: February 2024
HMRC have issued their Agent Update for February 2024. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Employer Bulletin: February 2024
HMRC published another Employer Bulletin this month, we have summarised the key points including benefits and payrolls, and added some extra details and links where we think it will be useful to do so.
Tax administration framework: Consultation response
HMRC has published a response to its consultation ‘Simplifying and modernising HMRC's Income Tax services through the tax administration framework’. A number of improvements and legislative changes are planned to promote a 'digital by default' approach and improve systems around tax codes.
Call for evidence: HMRC’s enquiry and assessment powers
HMRC have launched a new call for evidence ‘The Tax Administration Framework Review: enquiry and assessment powers, penalties, safeguards’. This explores wide-ranging possibilities for reform, with an emphasis on simplification and modernisation.
Finance Act 2024
Finance Act 2024 received Royal Assent on 22 February 2024. This is a list of contents, with links to our subscriber guides on the new measures.
Construction sector dominates tax defaulters list
New research shows that 40% of HMRC's list of deliberate tax defaulters are involved in engineering and construction. The figures come as new changes to the CIS Gross Payment Status (GPS) registration tests come in on 6 April 2024.
Tax Cases
Umbrella travel expenses disallowed
Another umbrella company’s pay model has not survived the hard scrutiny of the tax tribunal. A lack of evidence of sufficient 'mutuality of obligation' during downtimes meant no overarching contract of employment and therefore all worker travel costs were ordinary commuting.
SDLT sub-sale scheme steps ignored
The Court of Appeal ended a couple's attempt to claim stamp duty land tax under a deceptively simple sub-sale relief scheme. The scheme just did not work. A company incorporated to purchase a property and then transfer it to its individual owners by way of a capital reduction did not avoid any tax as the subscription price of their shares formed consideration for the property.
HMRC right to approach employee using potential tax avoidance arrangement
In Gareth Evans vs HMRC [2023] TC08946, the First Tier Tribunal (FTT) found that information requested by HMRC in regards to Mr Evans's use of a tax avoidance scheme was 'reasonably required' to assess his overall tax position.
Editor's Choice (subscribers)
Employer’s What’s On: 2023/24
This employer update for advisers and their clients is a rolling tracker of measures that are new in 2023-24. The Chancellor will hold his budget on 6 March 2024: this update reflects what's new up to 5 March 2024.
Construction Industry Scheme (CIS) Contractors & Subcontractors
UPDATE: Finance Act 2024 refines the tests for immediate cancellation of gross payment status. This note covers the Construction Industry Scheme? Who does it apply to? How does it work?
Guides & Updates (subscription content)
Self-Employed
Cash or accruals accounting toolkit
Unincorporated businesses can elect to use one of two different methods of accounting for tax: simpler accounting (cash basis) or accruals basis accounting.
Pre-trading expenses (self-employed)
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?
Partnerships
Transfer of assets and income streams through partnerships
What are rules for the transfer of assets and income streams through partnerships? When do they apply?
Directors & Companies
Disguised remuneration loan charge
What is disguised remuneration? What is the loan charge? When does the loan charge apply? Will the loan charge affect me?
Mutual trading, members clubs and community trades
How are mutual traders, members clubs, associations and community trades treated for tax purposes?
Employers
Tips, gratuities and troncs
How are tips, gratuities and troncs taxed? What are the rules for National Insurance Contributions (NICs)? What impact will the Employment (Allocation of Tips) Act 2023 have?
Private Client & Estate Planning
ISA guide
UPDATE: What is an ISA? What are the limits? How are ISAs taxed?
National Insurance: What's the maximum payable?
UPDATE: How are National Insurance Contributions (NICs) limited? What is the maximum payable? What different rules apply to employment and self-employment income?
Divorce & Separation: Toolkit
A summary of the tax implications which can arise on divorce and separation.
Land & Property
National Insurance for landlords
When are National Insurance Contributions (NICs) payable by landlords? Can landlords pay Class 2 NICs voluntarily?
Gardens: selling or developing
What are the tax consequences of selling a garden for development purposes? What if the owner develops the garden?
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?
Capital Allowances: What's new 2023-24
What's new in Capital Allowances for 2023 and 2024? A summary of the different types of capital allowances currently available to UK businesses.
Overseas & Residence
Non-domicile status, deemed domicile & tax
Who is non-UK domiciled? What does this mean for UK Income Tax, Capital Gains Tax and Inheritance Tax? What reliefs are available to non-doms?
VAT News & Cases
Capital Goods Scheme
What is the VAT Capital Goods Scheme (CGS)? When do I use it? How does it work?
Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?
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.
CPD for Lunch
Byte-sized chunks of lunchtime CPD for subscribers
- CPD: VAT Penalties Update
- 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 22 February 2024
- HMRC U-turn on double cab pick-ups
- Registration of short-term lets in England
- HMRC target group AIA claims
- Companies House 134% fee increase
- Libor rigging dismissal claim was taxable
- Companies: Essential Year-End Planning & Compliance Checklist 2023/24
- Employment-Related Securities Update 2024
- Cash or accruals accounting toolkit UPDATE:
- A new company? Start-here UPDATE
- Health and welfare: VAT
- VAT fraud: What is the Kittel principle? ...More
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