Hello
We have quite a diverse blend of news and features this week. More 'One-to-Many letters' and of more general interest, a record number of new bodies added to HMRC's List 3 in 2024. We have 'Top Tips' for January and consider issues for employers and illegally deresticted E-bikes after the issue cropped up on BBC Radio 4 News.
We are conscious that a vast number of our readers are not totally absorbed by meeting Self Assessment (SA) filing deadlines at this time. You lucky lot might like our selection of cases this week, none of which mention SA.
Cases of note include a successful appeal which centred on amortisation based upon the disparity of valuations of Intellectual Property (IP); HMRC valued it at £9m and the tribunal agreed £40m. This serves to emphasise that there is no exact science when it comes to valuation.
We record another failed appeal against a Land and Buildings Transactions Tax (LBTT) penalty for a failure to understand the three-year filing requirements for leases. It appears that lawyers who filed the original LBTT returns were simply unaware that another return would be required. This kind of thing does happen from time to time.
On the E-Bikes news item: there is a problem with illegal derestriction (i.e. cutting a wire to make an electric bike go faster). This is only going to get worse as the technology develops; multiple accidents just waiting to happen.
List 3 is HMRC's list of professional and learned bodies that have tax-deductible subscriptions. Relatively unchanged for many years, the list has recently expanded massively; it includes quite a strange blend of bodies!
There is cheerier news and more cases below.
Carry on filing those returns.
Nichola and the team
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Quick News
E-bikes, mopeds and tax issues
An E-bike, as in an electrically assisted peddle cycle, can be a tax-efficient means of transport. Derestrict the output and you've got a moped with very different tax and regulatory requirements. This is an issue for employers who provide E-bikes as part of Cycle to Work tax schemes as well as for regulators.
HMRC updates to List 3, approved organisations and societies
HMRC has regularly updated ‘List 3’; its list of approved professional organisations and learned societies. Many new organisations have been added over the last six months.
BADR: HMRC one-to-many letters
HMRC is sending another batch of one-to-many letters, this time focusing on taxpayers exceeding the lifetime limit for Business Asset Disposal Relief (BADR) in 2023-24.
Consultation Response: Digitalising paper wills
After receiving 1,600 responses, HMRC have published the outcome to their consultation, ‘storage and retention of original will documents’ which had outlined proposals for introducing a digital system for preserving paper wills currently held in storage.
Tax Cases
SME R&D relief allowed
In Stage One Creative Services Limited v HMRC [2024] TC09358, a company's claim for SME R&D tax relief was upheld by the FTT, which found that the relevant expenditure was not subsidised nor was it incurred in relation to activities which were contracted out to it.
BPRA available on warehouse conversion
In FRF (South Wales) Limited v HMRC [2024] TC09386, the First Tier Tribunal (FTT) found that a company could claim Business Premises Renovation Allowances when converting a retail warehouse into a car showroom. Although substantial alterations were undertaken, there had been continuity of the building’s identity.
Revenue Scotland not obliged to remind taxpayers of three-year LBBT return
In 71 Brewing Limited v Revenue Scotland [2024] TFSTC 10, the First Tier Tribunal (FTT) found Revenue Scotland has no obligation to notify taxpayers that a three-year lease review return is required for LBTT purposes.
HMRC tests GAAP, amortisation of IP allowed
In Chemidex Generics Ltd v HMRC [2024] TC09387, the First Tier Tribunal (FTT) ruled that the taxpayer's valuation and a ten-year amortisation period were compliant with UK GAAP and allowed relief for amortisation for Corporation Tax purposes
Editor's Choice (subscribers)
Hottest Topics for Accountants January 2025
We focus on Self Assessment this month, time-to-pay agreements, doubling up on online platform expenses and much more.
Guides & Updates
Self-employed
Woodlands: Overview
Woodlands and forestry ownership carry significant tax reliefs, including Income Tax, Capital Gains Tax (CGT) and Inheritance Tax (IHT).
Averaging claims
When can profits be averaged? What trades do averaging apply to? How are averaging adjustments calculated and made?
Partnerships
Partnerships: Capital Gains Tax
How does Capital Gains Tax (CGT) work for partners and partnerships? What is HMRC’s Statement of Practice D12? How are transactions between partners treated? What if the partners are connected persons for CGT?
Running an LLP in tandem with a company
It is possible to run a Limited Liability Partnership (LLP) or another form of partnership in tandem with a company. Partnerships can also have corporate partners. What needs to be considered?
Directors & Companies
Loan relationships: Connected Companies
How do the loan relationship rules apply to connected companies? What are the special rules? When do they apply? What are the exceptions to the special rules? What are deemed releases?
Employers
Training and course fees
What conditions should be met to ensure that either an employer obtains tax relief on the cost of employee training? Can employees or directors obtain tax relief on training if they incur the cost personally?
Company cars
Company car tax. How do you work out car benefit? How do you work out car fuel benefit? Are there savings for low-emissions vehicles? How do you reduce car benefit? Cars and the tax tribunals and Top Tax Tips.
Private Client & Estate Planning
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?
Self Assessment Return 2023/24: What's new?
2024 Self Assessment toolkit: top tips for completing tax returns for the year ending 5 April 2024.
Land & Property
A Landlord? Start here... (freeview)
A life in a page: links to our range of essential guides for landlords and their advisers
VAT News & Cases
Input VAT: What constitutes a valid claim (& VAT invoice)?
What is Input VAT? Who can claim it? What is needed for a valid claim? What needs to be included on a VAT invoice and can you make a claim without one?
Flat rate scheme: Farmers
What is the agricultural flat rate scheme? Who can use it? What are the conditions? What is the benefit? What about non-farming income?
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
CPD for lunch: Byte-sized chunks of lunchtime CPD (free for our Subscribers)
- CPD: Income Tax and Trusts
- Free Study Skills Session - Preparing for Your Tax Exams
- CPD: Change of basis periods: Transitional rules 2023-24 Returns
- 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...
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 January 2025
- Agent Update: December 2024
- R&D Disclosure Service
- Consultation on simplifying the taxation of offshore interest
- Tax Review of 2024: the Greatest Hits
- Private school fees and VAT
- Just how are our taxes raised and spent?
- Self Assessment Return 2023/24: What's new? ...More
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