HMRC published Agent Update 118 on 20 March 2024. This is our summary of the highlights in direct and indirect tax announcements affecting for SME owners and advisers.
SME Tax News
In the March Agent Update HMRC has introduced GOV.UK One Login as a new way of signing into government services.
Distributions in specie made from a share premium account were confirmed by the Upper Tribunal (UT) to be income distributions and not capital. The UT considered if the payments by a non-resident company satisfied the definition of a dividend for the purpose of English law.
An agreement involving an option which allowed a company to purchase a £9.3 million property in two stages and advantaging the seller too, fell foul of both SDLT and ATED relief as the option was not ‘acquired exclusively’ for re-development as claimed.
From 6 April 2024, HMRC is finally given the power to deduct tax and NIC already paid by a worker from the tax and NIC due from their deemed employer when the off-payrolling IR35 apply to an engagement. The new rules do not extend to an offset of the Employer's National Insurance Contributions (NIC).
Audio-Visual Expenditure Credit (AVEC) will replace Film Tax Relief (FTR), Animation Tax Relief (ATR), Children's Television Tax Relief (CTR), High-End Television Tax Relief (HETR). Video Games Expenditure Credit (VGEC) will replace Video Games Tax Relief (VGTR).
Hello,
We have news of a couple more U-turns from HMRC this week, on advice for landlords and in respect of phone line closures. We also feature a handy set of 'top-tips' for Owner Managed Businesses (OMBs) and Private Clients which also factor in changes that are coming up on 6 April.
HMRC is issuing 'correction letters' to landlords to confirm a change in guidance: a new boiler can be considered an allowable expense against rental income, even when it constitutes an upgrade driven by advancements in technology.
Changes to the income thresholds for the claw-back of child benefit coming into force on 6 April 2024 will mean that some higher-income parents should reapply to have child benefit reinstated.
An attempt to claim Entrepreneurs’ Relief on a disposal of goodwill to a close company was denied by the First Tier Tribunal (FTT). It was found that there was no unconditional contract to sell the business prior to 3 December 2014.
