Hello,
We continue to delve a little deeper into Basis Year Reform this week, adding extra FAQs and examples to our guides. We also have updates for partners and partnerships who may well want to consider changing their accounting periods for reporting to simplify tax reporting under the new tax year basis of assessment.
One thing to remember is that Basis Year Reform only affects unincorporated businesses that do not already prepare their accounts to a date which ends on or between 31 March - 5 April. My take on it all is that as 2023/24 is a transitional year in which you will need to work out profits up to 5 April 2024, you may as well kick off in 2024/25 with an accounting period that starts on 6 April 2024. This might require some manual adjustments to your accounts and rather depends on your software.
New guides this week: In response to a subscriber request we have created a new Tax Return questionnaire for you to send out to clients. We also have the Company Tax-efficient extraction of profits toolkit for 2024/25. It's quite long as there is a lot to say.
I am busy writing a talk on 'How to run the most tax efficient business' for next week's Accountex show (please do come to hear it, it's free). There is a lot to say on this topic and sadly I only have 45 minutes. The good news is that our stand backdrop has arrived.
On our Virtual Tax Partner support portal we are continuing to field a lot of queries on tax planning with partnerships. We have been updating guides and feature some absolute essentials if you are keen on that as a topic. We have a lot of queries on employee share ownership and we feature some of our favourite guides on these topics too.
The cases are all a bit different this week. More news and cases below.
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News (Freeview)
Basis Year Reform: At a glance
Basis reform: how it works and with Q&A. 2023-24 is a transitional year for anyone who does not have a 31 March - 5 April year end and all unincorporated (self-employed) businesses will be calculating their profit or loss arising up to 5 April 2024 regardless of their accounting end date. Should you change your year-end? If so when?
HMRC (finally) updates employer travel examples
In a rare update to its Employer Travel guide, HMRC has included some new examples of travel expenses with ordinary commuting and hybrid workers following post-pandemic changes to employee working patterns.
Anti-money laundering: Supervision report 2022-23
HM Treasury has published ‘Anti-money laundering and countering the financing of terrorism: Supervision Report 2022-23’ which details supervisory and enforcement data for 2022-23, including the number and value of fines issued.
Tax Cases (Freeview)
No R&D claim for publishing company's digitisation
A publishing company's Research & Development (R&D) claim was rejected by the First Tier Tribunal (FTT). The company was unable to demonstrate that its projects made any advance in science or technology, nor could it evidence how the expenditure claimed was directly related to the projects that it did carry out.
A cautionary tale about options
An unusual case: Capital Gains Tax (CGT) assessed in respect of an option granted but never exercised. The taxpayers avoided a tax liability when the FTT found that there were agreements but no option had actually been granted.
Letting of serviced accommodation subject to VAT
The First Tier Tribunal (FTT) has found that a company letting apartments as short-term serviced accommodation was subject to VAT. The accommodation was being let in an establishment similar to a hotel.
Editor's Choice
Tax Return questionnaire
What information is needed to complete a Self-Assessment Tax Return? This questionnaire will help you gather the documents and information required.
Company: Tax-efficient extraction of profits toolkit 2024/25
NEW: want some planning ideas? This refresher is aimed at company owners as an update and to help decide how company profits are to be extracted based on current tax, rates, reliefs and allowances.
Guides & Updates
Self-Employed
Basis Year Reform: subscriber guide
What is basis period reform? Who is affected? What is the new basis year for tax? What are the transitional rules?
Training costs
NEW rules: HMRC updated its guidance early on in 2024. Can a self-employed trader claim tax relief on their costs of training and ongoing professional development? Are training fees capital by nature?
Partnerships
Employment status: Partners
What is the employment status of a partner in a partnership or a member of an LLP? Are partners/members employed or self-employed?
Mixed Member Partnerships
UPDATE: what are the pros and cons of introducing a corporate partner into a partnership?
Partnerships: how to prepare partnership returns
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?
Directors & Companies
Being a director: start here (freeview)
UPDATE: our suite of essential reading for company directors
A new company? Start here
This 'At a glance' freeview guide is essential reading for anyone thinking about starting up a new company.
Employers
Setting up different share classes for directors and employees
How and why to set up different classes of shares? How do you create different share classes? What are the rules in giving different classes of shares to directors and employees? What are the potential pitfalls?
Employee Shares: Employment-Related Securities rules
What are the tax consequences when a company gives shares to an employee or director? What are employment-related securities? What is best: shares or share options? How do you set up a share scheme?
Private Client & Estate Planning
How to set up a UK trust
What are the tax implications of setting up a trust? What do I need to do as a settlor? What do the trustees need to do?
Incorporation
Valuation: Goodwill
What valuation methods are suitable for valuing a business? What are the issues with goodwill and other intangibles? What does HMRC suggest? What do the courts think?
Goodwill & incorporation: Tax issues
What are the tax issues in respect of Intangible Property (IP) assets, such as goodwill, on incorporation? What tax reliefs apply if you buy and sell goodwill and IP? What are the valuation and clearance procedures?
Tax Tools & Calculators
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.
CPD for Lunch
Byte-sized chunks of lunchtime CPD for subscribers
- NEW: CPD: Change of basis periods: Transitional rules 2023-24 Returns
- CPD: VAT Penalties Update
- CPD: CGT Reporting and payment deadlines
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 2 May 2024
- HMRC launches digital National Insurance service
- Spotlight 64: Employment agencies using umbrella companies
- Unexpected Class 2 NIC refund?
- Welsh Food and Drink Festivals and Events Fund 2024
- Variable-rate employees not fixed-rate for CJRS
- Filipino director mini-umbrella fraud schemes collapse at the FTT
- Loan by pension scheme a costly mistake
- Annexe under construction not a dwelling
- Basic supply description adequate for VAT
- VAT repayment fraud
- Deposit Return Scheme: Drink containers
- Promoters of Tax Avoidance Schemes UPDATE
- Land & Property: an Adviser's Tax Update 2024-25 NEW
- Property Profits & Losses: Toolkit (2024-25) NEW ...More
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