Hello,
Our highlights this week include a briefing on the reporting obligations for digital platforms. We have posted a reminder for ICAEW firms: the PI insurance rules change in September. We have more 'one-to-many' letters from HMRC and some non-tax items of interest too, plus more 'stories from the tax tribunals'.
Reporting duties for a large number of digital platforms commenced in January 2024. They will be required to report details of the sellers operating on their platforms annually starting with the year ending 31 December 2024. Platform operator obligations include performing 'customer due diligence' (CDD). We note that a number of sites who would appear to have reporting obligations don't seem to have the necessary functionality to report their sellers details at present. We also note that HMRC is still building its reporting portal and writing its guidance too. Time to get coding!
Our Editor's Choice this time includes updates on the Salaried Members LLP rules. Partnerships remain a popular trading vehicle because of flexibility: you can give someone an interest in the business and not be concerned about the Employment Related Securities (ERS) rules. The downside of partnerships we note is the complexity of the anti-avoidance rules for partnerships.
We have been working through the site updating as we go. Do check out the guides under the news and of course our set of CPD webinars. Scroll down for more news and cases.
If you have any tax queries then do post these to our Virtual Tax Partner service at www.VtaxP.co.uk.
Back soon
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
Online platforms: ready for tax changes?
Online Digital Platform Operators have to register with HMRC and report details of people who sell goods and services to buyers from their platforms. This creates a new Customer Due Diligence (CDD) requirement. While HMRC is still building its new Digital Platform reporting service, online operators need to start their own CDD systems to ensure they capture and record the right data.
ICAEW new £2m PII limit from September
The Institute of Chartered Accountants in England and Wales (ICAEW) new Professional Indemnity Insurance (PII) limits and regulations apply from 1 September 2024. The changes follow last year's review by its Professional Indemnity Insurance Committee (PIIC).
One-to-many letter that takes the biscuit
HMRC are launching another one-to-many campaign aimed at dog and cat breeders. Their particular concern is that many animal breeders have failed to register for self-assessment.
Self-assessment: Check for HICBC
HMRC have commenced another one-to-many campaign, this time targeted at taxpayers already in Self Assessment who have either declared the wrong amount of Child Benefit or missed it off their 2022-23 tax return completely. Where this is the case, the High-Income Child Benefit Charge (HICBC) will be incorrectly calculated.
Local authorities warned on trustee responsibilities
Local authorities in England and Wales have been warned about the use of charitable land for which they are acting as trustees. The Charity Commission for England and Wales (the Charity Commission) has written warning them not to improperly dispose of or change the use of land for which they have responsibility.
Tax Cases
Deathbed gift of registered land to be appealed
In Rahman v Hassan [2024] EWHC 2038 (Ch), the family of the late Al-Hasib Al Mahmood has been permitted to appeal the High Court's decision regarding a deathbed gift of registered land.
Not one reason to reject MDR claim
In James Winfield v HMRC [2024] TC9259, the First Tier Tribunal (FTT) rejected every argument advanced by HMRC when it tried to defend its decision to deny a claim for Stamp Duty Land Tax (SDLT) Multiple Dwellings Relief (MDR) in respect of a house with an annexe. The taxpayer, who cannot claim back costs against HMRC, had his appeal allowed.
Editor's Choice
Salaried members: When is a partner taxed as an employee?
UPDATE: HMRC updated its guidance earlier this year, taking a much more literal approach to the anti-avoidance provision and potentially changing its approach to Condition C. Limited Liability Partnerships (LLPs) and their members may wish to review their arrangements in light of this change.
Digital Platform Reporting
NEW: What is Digital Platform reporting? What is a digital platform? What are the digital platform reporting obligations? Who is excluded from digital platform reporting?
Guides & Updates
Self-employed
MTD: Toolkit for accountants
UPDATE: HMRC has confirmed that where you jointly own a property and only receive notice of your share of the income after expenses have been deducted, then they will assess that figure as your qualifying income.
Online Sellers: Tax Overview
What are the tax implications of being an online seller? When does a hobby become a business? What is a side hustle? What expenses can online sellers claim for tax purposes? Are there special rules for taxing income? What are the VAT rules for online sellers?
Partnerships
Partnerships with mixed membership
What is a mixed-member partnership? How are the profits of a mixed-member partnership taxed?
Directors & Companies
Employment-Related Securities: Reporting
If an employer gives shares to a director or employee, or allows anyone to acquire shares during their employment or sets up a tax-advantaged share or share option scheme, any benefit is taxed within the Employment-Related Securities (ERS) regime. The employer will then have a requirement to register a share scheme with HMRC and file an annual return by 6 July following the tax year-end.
Corporation Tax relief for awards of shares to employees
UPDATE: We summarise common errors companies make when claiming corporation tax relief under Part 12 for employee share awards.
Employers
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?
Eye tests and glasses
Can you provide staff with eye tests? Is there a taxable benefit if you provide employees with eye tests or glasses?
Land & Property
SDLT: Residential property & dwellings
What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies?
Penalties & Compliance
Appeals: Grounds for Appeal Toolkit
What grounds are there to appeal a tax penalty? How should you word a tax appeal? Can you appeal HMRC errors? What is a reasonable excuse?
Named tax avoidance schemes, promoters, enablers
UPDATE: HMRC publishes a list of named tax avoidance schemes, promoters, enablers and suppliers. It is not recommended that taxpayers use any of these schemes, as HMRC does not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers.
Private Client & Estate Planning
Online filing exclusions for 2023-24 tax returns
Some taxpayers will be unable to file their Self Assessment returns online for the year ended 5 April 2024, due to software specification issues from HMRC. Lists of filing exclusions for individuals, partnerships, trusts and estates have recently been updated.
PRR: Private Residence Relief
What is Private Residence Relief (PRR)? What are the qualifying conditions? Can you claim relief on two homes? How do you claim PRR? Can you claim PRR if you develop your garden?
VAT News & Cases
Hair loss treatment not zero-rated
In Mark Glenn Ltd v HMRC [2024] TC09255, the First Tier Tribunal (FTT) found that the supply of a female hair loss treatment system could not be zero-rated for VAT purposes as hair loss was not a disability.
Director notice: no debarring HMRC
In Jeneruhl Trading Limited and Vivek Nayar v HMRC [2024] TC09260, a company director was unsuccessful in an attempt to debar HMRC for pursuing him for his company's debts using a company officer liability notice. His company was partly successful on the case management issue of disclosure of HMRC information related to the timing of HMRC's assessments.
VAT representatives
When can (or must) a business appoint a VAT representative, and what does it mean to be one?
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
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 the Last Tax Update?
Ross Martin Tax: SME Tax News 8 August 2024
- Simple Assessments, seven years in the making
- HMRC's interest rates revised
- One-to-many letter for Investors' Relief claimants
- One-to-many letter on cryptoassets
- HMRC prompt correct deductions for CIS
- Tax avoidance litigation league table
- Declared farming, forgot football
- Partnership allocations were miscellaneous income and not capital
- No late appeal for failure to respond to Statutory Review
- No rewrite of estate return to enhance charitable relief ...More
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