Hello,
This week we note changes to Welsh Land Transaction Tax (LTT), a variety of HMRC ‘nudge’ letters, and some of the latest decisions from the tax tribunals, including the VAT status of fundraising activities by charities, a non-resident's appeal against Self Assessment late filing penalties and Capital Allowances at ports.
The First Tier Tribunal’s (FTT) decision in The Mersey Docks and Harbour Company Limited relates to Capital Allowances on a quay wall. It might appear to be of niche interest at first glance, but it warrants a much closer look as it refers to the growing body of Capital Allowance case law and delves into many fundamental principles which apply when identifying qualifying plant and machinery in a Capital Allowance context. Check out our summary below.
Charities feature in several of our updates, including HMRC’s recent educational e-mail sent to small, VAT-registered charities which seeks to raise awareness of the need to complete business/non-business apportionment calculations for VAT. We also look at the details of the Government’s proposed changes to charities' tax compliance.
As we approach the Self Assessment deadline, check out HMRC's important warning of scam texts which some tax agents have received. Note the late filing penalty appeal case too: when it comes to claiming you have a 'reasonable excuse' for late filing you must retain evidence to support that claim.
More news, cases and also don't miss the updates noted in the subscriber sections below.
Nichola and the team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
Restriction to LTT Multiple Dwellings Relief
The Welsh Government have laid draft regulations to amend the Land Transaction Tax (LTT) rules surrounding the combined use of Multiple Dwellings Relief (MDR) and the Subsidiary Dwelling Exception (SDE).
TaxGateway scam text warning
The Institute of Chartered Accountants in England and Wales (ICAEW) is warning agents to ignore text messages from 'TaxGateway'.
HMRC tackle delivery drivers
HMRC are sending letters and e-mails to delivery drivers that they believe may need to register for Self-Assessment in 2023-24.
Estate agents receive nudge to register for AML supervision
HMRC are sending one-to-many letters to estate agents, informing them of the requirement to register for Anti-Money Laundering (AML) supervision if they are engaged in activities defined by the Estate Agency Act 1979.
Tax Cases
Quay wall eligible for Capital Allowances
In The Mersey Docks and Harbour Company Limited v HMRC [2024] TC09391, the First Tier Tribunal (FTT) allowed a claim for Plant and Machinery Allowances (PMAs) for expenditure incurred on the construction of a quay wall. The quay wall was a distinct asset that functioned as plant and was not part of the premises in which the business is carried on.
Living abroad? No excuse for late return
In Mohammed Muhsen Yaqoobi v HMRC [2024] TC09388, the First Tier Tribunal (FTT) found that living abroad, postal delays and limited internet access were not reasonable excuses for the late submission of a self-assessment return.
CJRS payments not valid
In SWG Polymer Services Ltd v HMRC [2025] TC09398, the First Tier Tribunal (FTT) found that Coronavirus Job Retention Scheme payments made whilst an employee was still working were invalid, and should have been repaid to HMRC.
Editor's Choice (subscribers)
Rent-a-room relief
A 2024 HMRC survey indicates that 6% of UK adults were renting out a furnished room in their home. What is rent-a-room relief? When does it apply? What are the limits and restrictions?
Next steps in charities tax compliance
Following the government's consultation on Charities Tax Compliance, it has decided 'to make incremental and modest changes' to preserve tax reliefs. We take a closer look at this often-overlooked sector.
Pre-trading expenses (self-employed)
What are pre-trading expenses? What tax relief is available for pre-trading expenses? What are the restrictions to relief? What expenses will not qualify?
Negligible value claims
What is a negligible value claim? When and how can a CGT claim be made?
What's in your 2025 training program?
20:20 Innovation Tax Product Review (CPD)
Join Sharon Cooke and Nichola Ross Martin for a webinar in which we look at ways in which accountants can obtain timely and relevant tax knowledge, resources and support from the 20:20 Innovation portfolio of products and services. When? February 27th 2025 ...More
Guides & Updates
Self-employed
Cash or accruals accounting toolkit
Unincorporated businesses can elect to use one of two different methods of accounting for tax: simpler accounting (cash basis) or accruals basis accounting.
Flat (fixed) rate expenses or actual cost toolkit
What types of expenses can I use fixed-rate expense deductions for? Which is better, fixed-rate deductions or actual cost?
Checklist: Year-end Accounts & Tax (self-employed)
This is a checklist to assist you in preparing accounts and completing the Self-Employed section of a Self Assessment tax return and highlights key areas of discussion with your sole trader clients.
Partnerships
Partnerships: What's new 2024/25
What's new for partnerships in 2024-25? What are the issues on Basis Year reform? What is the fuss about hybrid structures? Where are we on partnership tax appeals?
Directors & Companies
Loss relief (Income Tax) disposal of shares
Share Loss relief allows you to offset a loss made on the disposal of shares against income instead of following normal capital loss treatment.
Reorganisations & Reconstructions
What is a company reorganisation or reconstruction? What tax reliefs apply to a company reorganisation, a share for share exchange or a reconstruction?
Employers
Employee expenses: how to claim
UPDATE: new links and updates to online claims. A guide to explain the different ways employees can claim tax relief for the employment expenses they incur as part of their jobs.
Travel (employer's guide)
How do employers apply the tax rules to travel costs? What is available for subsistence costs? What are the rules on home-to-work travel?
Private Client & Estate Planning
Cryptoassets: How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK?
How do you tax Bitcoin? Are cryptocurrency or cryptoasset gains or profits, taxable? Can you obtain tax relief if you make losses on Bitcoin? Gains on transactions in cryptoassets are potentially taxable in the same way as other investments.
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
Adviser's Guide: Property Business, profits and losses
What is property income? How is it taxed? How are profits calculated? How are losses relieved? Is National Insurance paid on property income? Is property income classed as a business activity?
VAT News & Cases
Exempt supplies allowed for the 'Great Yorkshire Show'
In Yorkshire Agricultural Society v HMRC [2025] UKUT 00004, the Upper Tribunal found that admission fees to the ‘Great Yorkshire Show’ were an exempt supply for VAT purposes.
Private equity companies warned on VAT
HMRC are sending one-to-many e-mails to businesses in the private equity industry reminding them of their VAT accounting procedures. The e-mails highlight the importance of following HMRC’s guidance at PE79000.
Small charities receive VAT nudge
HMRC are writing to small charities to remind them to be wary about reclaiming input VAT on non-business activities. Tax compliance, especially for VAT, can be a complicated problem for many charities as there is a general tendency amongst trustees and managers to assume that they operate 'tax-free'.
Flat rate scheme
What is the VAT Flat Rate Scheme (FRS)? Who can apply? How do you apply? What are the rules? What are the rules for capital expenditure and pre-registration VAT?
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 9 January 2025
- E-bikes, mopeds and tax issues
- HMRC updates to List 3, approved organisations and societies
- BADR: HMRC one-to-many letters
- Consultation Response: Digitalising paper wills
- SME R&D relief allowed
- BPRA available on warehouse conversion
- Revenue Scotland not obliged to remind taxpayers of three-year LBBT return
- HMRC tests GAAP, amortisation of IP allowed
- Hottest Topics for Accountants January 2025 ...More
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