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SME Tax News
Hello,
This is our last newswire of the year. We have lots of useful news on new COVID-19 support, the Welsh budget and interest rate changes, together with case reports and updates. I am also very worried about Making Tax Digital (MTD) and the proposal for quarterly payment of Income Tax.
HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version.
In Hotel La Tour Ltd v HMRC [2021] TC08335, the First Tier Tribunal (FTT) found that the sale of a subsidiary was a means of fundraising that could be directly linked to future trading activities. This allowed the input VAT on associated professional fees to be reclaimed.
The government has published 'The future of insolvency' in which it proposes an independent insolvency business watchdog. The industry was labelled as the 'wild west' by a cross-section of MPs earlier this year, and the document outlines wide-ranging changes to the sector.
In JT Quinns Limited & Queen-Rose Green v HMRC [2021] TC08338, disallowed personal expenses put through a company's books resulted in tax assessments for the company and its director, including a s.455 tax charge. The director's lack of understanding of the basic principles of finance and tax and reliance on her accountant meant that tax penalties were downgraded for careless rather than deliberate behaviour.
Welsh Government Finance Minister Rebecca Evans announced the draft Welsh Budget for 2022-23 on 21 December 2021.
As part of the 2022-23 budget, the Welsh Government have launched a consultation ‘Local variation to land transaction tax rates for second homes, short-term holiday lets and potentially other additional residential properties’ seeking views on possible Land Transaction Tax (LTT) changes.
In Christopher Thomson v HMRC [2021] TC08337A, the First Tier Tribunal (FTT) allowed an Entrepreneurs’ Relief claim on the disposal of a partnership asset as the property disposal was part of the wider disposal of the partnership business even though that process had lasted over 20 years.
Following the Bank of England’s decision to increase the base rate, HMRC have announced that their late payment interest rate will increase by 0.15% to 2.75% from 7 January 2022.