Hello,
This week we have been taking a look at HMRC's annual Trusts and Estates newsletter and their final Employer Bulletin for the tax year. We are now updating a lot of our 'annuals' and also our calculators. We have a list of 'last minute' reminders as follows:
As we are almost at the end of the tax year, if you are very quick about it you can take some steps to try and reduce your taxable income by making Gift Aid donations or personal pension contributions before 6 April. You could also subscribe to shares under SEIS or EIS (although we do not recommend rushing into any high-risk investments). The taxpayers who really need to worry about reducing their taxable income will be those with an income in excess of £100,000, who might otherwise stand to have some of their Personal Allowance clawed back, and anyone who is nearing the High-Income Child Benefit (HICB) charge clawback threshold, or any taxpayers who might otherwise hit higher rate tax brackets.
Conversely, if you have made investments in SEIS or EIS you need to ensure that you have some taxable income in 2023/24 to be able to claim Income Tax relief on your investment. You must make an Income Tax claim to claim Capital Gains Tax (CGT). Non-taxpayers should also be concerned if they have accidentally made donations under the Gift Aid scheme as they will have to repay any tax relief claimed by the charity concerned.
If you are an employer and considering trying out voluntary payrolling of benefits in kind in 2024/25 do note that you must register with HMRC to do this before 6 April.
Finally, as noted last week, companies owning residential property can now file Annual Tax on Enveloped Dwellings (ATED) return. You only have a one-month window to file this return (how mad is that?)
We have a lot of new guides and updates on the various Creative Industries reliefs and we have put these into a special new Zone in our Corporation Tax section. These reliefs are certainly worth the effort, however, as ever, the devil is in the detail.
More news and cases below.
Back soon
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News (Freeview)
Employer Bulletin 6: March 2024
HMRC published another Employer Bulletin in March 2024, here is our curated version of the highlights of the bulletin with added useful links.
Easement for probate grant on credit
From 1 April 2024, personal representatives seeking to obtain probate will no longer need to seek a commercial loan to pay Inheritance Tax, before applying to HMRC for a grant on credit.
Audio-Visual Expenditure Credit (AVEC) & Video Games Expenditure Credit (VGEC)
Audio-Visual Expenditure Credit (AVEC) & Video Games Expenditure Credit (VGEC) will replace Film Tax Relief, Television Tax Relief, and Video Games Tax Relief. AVEC and VGEC will apply to qualifying expenditures incurred after 1 January 2024, with transitional rules in effect until 31 March 2027.
Creative Industries: Additional Administrative Requirements
Companies making claims for Creative Industry Tax Relief will be required to submit an Additional Information Form (AIF) from 1 April 2024 onwards.
Tax Cases (Freeview)
No SEIS for fund's investors
A fund formed to exploit intellectual property rights via special purpose vehicles was found by the Upper Tribunal (UT) to be a 'party' to the arrangements aimed at securing its investors' SEIS relief in one such company. This had the knock-on effect of creating disqualifying arrangements in the underlying SEIS company.
Grant funded education is an economic activity
The First Tier Tribunal (FTT) found that irrespective of government funding, the supply of education and vocational training is a business activity for VAT. The supplies were provided in exchange for consideration; they fall within the scope of economic activity.
Editor's Choice (Subscribers)
Salary 2024/25 (interaction with NICs)
NEW: Is it still tax-efficient to pay a very low salary? Is it beneficial to pay a slightly higher salary to claim the Employer's NICs allowance? What if the Employer's NICs allowance is not available?
Sole trader v. limited company: Tax differences & savings (2024/25)
NEW: Is it better from both a tax and legal point of view to run your business as a sole trader or as a company? Are there tax advantages in running a business as a company? What legal protections apply?
Tax tools & calculators
UPDATE: 2024/25 versions available now. We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes.
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
Basis Period reform
UPDATE: What is basis period reform? Who is affected? What is the new basis year for tax? What are the transitional rules?
Partnerships
Mixed Member Partnerships
Running a company in a partnership? What is a mixed-member partnership? How are the profits of a mixed-member partnership taxed? What tax adjustments are required? Are there any relieving provisions?
Directors & Companies
Calculating Corporation Tax & Checklist
How do you calculate Corporation Tax? What is the small profits rate? How do you calculate Marginal Tax relief? How do you adjust for Associated Companies? What is meant by Control? What are Augmented profits?
Dividends: Formalities for Companies
UPDATE: A briefing note for discussion with directors about the formalities of declaring and paying dividends.
Employers
What is the 2024/25 PAYE tax code?
What is the 2024-25 PAYE tax code? What do the different types of tax code suffixes mean?
PAYE Codes: Starters/leavers & 0T code
What tax code should be used for new starters and leavers? Can I use a P45 tax code from a previous tax year? How should payments on leaving employment be taxed?
Private Client & Estate Planning
Trusts & Estates: What’s New 2024/25
HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version for subscribers, including reminders of recent and upcoming changes.
Pensions: Tax rules and planning
UPDATE: What tax rules apply to pensions? What tax relief is available? What tax charges can arise? What planning opportunities are there?
Land & Property
Annual Tax on Enveloped Dwellings (ATED)
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?
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
Short-life assets
What is a short-life asset? How to plan for short-life assets, what can be included and what are the exceptions?
Long-life assets
What is a long-life asset for capital allowances? What allowances can be claimed on long-life assets?
What expenditure qualifies for plant & machinery allowances?
What is plant and machinery? What expenditure qualifies as plant and machinery? What is treated as part of a building?
Tax Compliance
Worldwide Disclosure Facility
HMRC's Worldwide Disclosure Facility (WDF) opened on 5 September 2016. It allows the disclosure of a UK tax liability relating wholly or partly to an offshore issue.
Appeal: How to appeal a tax penalty
How do you appeal against a tax penalty? What are your rights of appeal if HM Revenue & Customs (HMRC) have assessed you for a tax penalty?
VAT
Business splitting and VAT (single business directions)
UPDATE: What measures can HMRC take when they identify that a business has been artificially split into two more entities in order to trade below the VAT registration threshold.
Opting to tax land and property
What is an option to tax? What do I need to do to opt to tax? What happens if I buy an opted property?
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 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 March 2024
- National Living Wage rates/National Minimum Wage rates
- HMRC's Agent Update
- GOV.UK One Login
- IR35 offset rules
- Distributions of share premium were dividends not capital gains
- No SDLT or ATED relief for option to purchase property
- Finance Acts 2024 and Rolling Tax Planner 2024-25 (subscribers)
- Different ways of taxing UK property
- Incorporation: property business/buy-to-let ...More
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