There are signs that something is going wrong in payment allocation and return recording in HMRC's Making Tax Digital for VAT records. There is evidence of 'glitches' on the account. It appears that the agent ASA may not reflect what is shown in the Business Tax Account and vice versa and that HMRC are not showing tax overpayments.
SME Tax News
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We have a new Agent Update from HMRC for you this time, our edited version also provides more detail on HMRC's Income Record Viewer (IRV) service. Agents can now sign up taxpayers for a private beta pilot.The IRV is a game changer for everyone. HMRC will be able to provide details of clients' pay, tax, employment history and tax code via the firm's agent services account.
HMRC have issued their Agent Update for December 2021. We have summarised the key content for you with links to our detailed guidance on the topics covered.
In Metropolitan International Schools Ltd v HMRC [2021] TC08322, the First Tier Tribunal (FTT) reduced the scope of a widely drafted Schedule 36 Information Notice. Items such as 'all computer records' were not reasonably required as there was no ground to believe that record-keeping was inaccurate. Items such as board minutes and marketing material had no bearing on tax return entries. Using its powers, the FTT re-made the Notice.
In A D Bly Groundworks and Civil Engineering Limited and CHR Travel Ltd v HMRC [2021] TC08329, the First Tier Tribunal (FTT) concluded that substantial pension payments made on behalf of key employees as part of a tax scheme were not incurred wholly and exclusively for the purposes of the trade. No corporate tax deduction was available as a result.
Scottish Finance Secretary Kate Forbes announced the draft Scottish Budget for 2022-23 on 9 December 2021.
Many taxpayers are unable to file their Self Assessment returns for the year ended 5 April 2021 online due to software specification issues from HMRC. Updated lists of filing exclusions have recently been published.
In Quinn (London) Ltd v HMRC [2021] TC08321, the First Tier Tribunal (FTT) found that R&D undertaken as part of a larger project had not been subsidised and enhanced relief under the SME Scheme was available.
HMRC have released a call for evidence on 'Individual Savings Accounts: Compliance and Penalties'. It considers the implications of a failure to comply with regulations for all types of ISA. There is concern that the existing penalty provisions do not provide an effective deterrent to non-compliance.
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Basis year reform is the biggest and most confusing tax reform to hit Self Assessment, since, well, the introduction of Self Assessment.