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Our highlights this week: HMRC introduces a new claims process for employee expenses, there is useful case law on the timing of dividend payments and the meaning of residential property for SDLT, we have created a detailed suite of new R&D guidance, new CPD webinars and a new case study on buying out a retiring shareholder.  

SME tax news 13

HMRC started suspending claims for employee expenses from employment in the summer following concerns about the validity of claims. A new claims process commences from next week. This only affects employees who cannot otherwise claim expenses directly from their employers.

Statistics recently released by HMRC show the number of Research & Development (R&D) claims made in 2022-23 fell by some 21% compared with 2021-22. We conclude that HMRC’s increased compliance activity is a significant contributing factor to this drop. 

We have spent considerable time updating our R&D guides and examples to assist in the preparation of R&D claims. If you would like more hands-on support, we have recently been dealing with a number of R&D cases via our Virtual Tax Partner service.

Last Friday, HMRC emailed some agents requesting that they confirm details of their agent codes as part of a 'cleaning up' exercise. Many agents thought this was a phishing email, but HMRC has confirmed it is genuine. 

In our coverage of this week’s cases, the Upper Tribunal (UT) consider when an interim dividend is taxable and we have yet another Stamp Duty Land Tax (SDLT) appeal deciding whether a vandalised property retained the characteristics of a dwelling. At the First Tier Tribunal (FTT) it was confirmed that you only have 'one bite at the cherry' for a VAT repayment claim under the DIY Housebuilders’ Scheme.

A subscriber emailed this week to say that in five years of subscribing he did not realise that we do CPD webinars! Just in case you have missed that detail, our CPD zone is found on the top menu of our website and there are links below. We also do one-to-one CPD training in-house, you chose the topic. Recent in-house courses have covered the Corporation Tax regime, Purchase of Own shares, Incorporation of a business and CIS reverse charge.

More news and updates below.

Enjoy!

Nichola and the Team 

Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.


Quick News 

New evidence requirements for employment expenses
HMRC are implementing new evidence requirements from 14 October 2024 for standalone claims for employment expenses. HMRC have identified a growing tax risk from ineligible claims.

Confirm HMRC agent codes by 8 November 
On 4 October 2024, HMRC e-mailed tax agents who may have more than one agent code, requesting that they provide details of their codes for Self-Assessment, VAT and Corporation Tax by 8 November 2024.

2023-24 paper tax return easement 
In the run-up to the 31 October 2024 paper tax return filing deadline, HMRC have announced that printed copies of the tax return from GOV.UK will be accepted. 

One-to-many: Provisional returns and Gas Safe engineers 
HMRC's latest one-to-many letter campaigns focus on agents who have submitted provisional returns for clients without subsequent amendment, and Gas Safe Engineers who may need to register for self-assessment.

Tax Cases

Interim dividend taxed on payment 
In HMRC v Peter Gould [2024] UKUT 00285, the Upper Tribunal (UT) found that an interim dividend paid to two shareholders on different dates was taxable in different tax years. 

Suitable for use as a dwelling
In Amarjeet and Tajinder Mudan v HMRC [2024] UT307, the Upper Tribunal rejected a claim that a property was too dilapidated and vandalised to make it suitable for use as a dwelling. Despite its poor condition, it remained 'residential' at the time of purchase for Stamp Duty Land Tax (SDLT). 


Editor's Choice (subscribers)

An Index to Share Transactions incl. Reorganisations, Demergers, Sales & Share Exchanges
NEW: Case Study 8: buying out a retiring shareholder

Private Schools and VAT
This 'At a glance' guide is based on HMRC's newly published draft legislation and guidance.


CPD 

CPD for lunch: Byte-sized chunks of lunchtime CPD (free for our Subscribers)

CPD: Pay as you go:

  • How to run the most tax-efficient business 2024/25.
  • Purchase of Own Shares: all the details.
  • Anti-money Laundering Update and Firm-Wide Risk Assessment ...More...

Guides & Updates 

Self-employed

MTD: Income Tax Pilot Tool
UPDATE: How to register taxpayers for Making Tax Digital (MTD) for Income Tax Pilot?

Directors & Companies

Directors' Tax Planning Toolkit 2024/25
What tax planning opportunities and strategies are available to directors? What's the optimum way to extract profits in 2024/254? What tax reliefs and tax deductions are handy to consider? This planner looks at a range of director tax issues.

Substantial Shareholding Exemption (SSE)
What is the Substantial Shareholding Exemption? When does it apply? How does it interact with de-grouping charges?

Research & Development 

R&D: SME Tax Credit scheme
UPDATE: What Research & Development (R&D) schemes are available for small and medium-sized companies undertaking R&D? How to make an R&D claim? What are the qualifying costs and how much can be claimed?

R&D: Research and Development Expenditure Credit (RDEC)
UPDATE: What is the R&D Expenditure Credit (RDEC) Large Company Scheme for R&D relief? How does it work?

R&D Guides
Keen on R&D? Check out our R&D subscriber guides and our popular R&D Zone (premium content)

Land & Property

SDLT: Residential property & dwellings
What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies? What garden and grounds are subject to higher rates of SDLT? 

LBTT: Land and Buildings Transaction Tax
What is Land and Buildings Transaction Tax (LBTT)? What are the rules? 

Employers

Childcare: Employer provision
UPDATE: What support can employers give to parents? Are childcare vouchers still available? Can employers pay for nursery costs for their staff? What are the tax implications of employer-provided childcare?

Staff parties and annual functions
This Practical Tax Guide looks at the tax treatment of parties, including Christmas parties and other annual functions for staff from the perspective of the employer and their business. 

Private Client & Estate Planning

Trust Registration Service
UPDATE: What is the Trust Registration Service? What trusts does it apply to? What are the requirements and deadlines?

Acting for a trust? Start here…
UPDATE: This is an essential guide for advisers and trustees on how to manage the tax affairs of a UK trust and how to avoid common pitfalls.

Dividend tax
UPDATE: This practical tax guide explains how dividends are taxed. It includes HMRC's own examples, more detailed examples, including an Owner Managed Business (OMB) section together with tax planning tips. 

VAT News & Cases

Only one DIY housebuilder VAT claim permitted 
In Brian Lawton v HMRC [2024] TC09309, the First Tier Tribunal (FTT) found that a taxpayer could not make two DIY housebuilder VAT repayment claims where a barn conversion was undertaken in two parts.

Agents and principals
What is an agent for VAT purposes? What is a principal? When do the agency rules apply?

Land & Property VAT at a glance
Supplies of land and property are exempt from VAT, with numerous exceptions to this rule. Group 1 Schedule 9 VATA 1994 lists the supplies that are exempt from VAT and those to which the exemption does not apply. 


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. 

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 3 October 2024

  • Rule change to allow fractional shares
  • Changes to HMRC telephony agent services
  • Double tax assessment invalid 
  • Discovery conditions not met for employee's travel or subsistence
  • SDLT and a fishy business
  • EIS relief denied, not ready to trade
  • R&D relief denied on subcontractor expenditure
  • Research & Development Tax Reliefs: At a glance UPDATE 
  • Apprenticeship levy (employers' briefing) UPDATE   ...More

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