Nichola's SME Update 10 Sept 2015

Hello again,

I am interested in (amongst other things) a proposal to introduce fees to the tax tribunals. Will a £250 court fee deter you from appealing a £100 penalty?

I think that it is likely that the answer will be 'Yes'. In fact, we are already fairly sure that court fees act as a deterrent because since their introduction to the Employment Tribunal, appeals have dropped by a staggering 79%. The government does not believe that the drop in those cases is as a result of charging and so it is investigating. The reality is that there are over 30,000 outstanding tax cases listed to be heard before the tribunal and the tax tribunal alone is costing us £8.7million per year. Following the recommendations of the OTS, HMRC have been reviewing the 'new' tax penalty system and we will hear about the outcome in November. I think something is going to have to 'budge' on the penalty front. Penalties are without a doubt taking up too much of everyone's time and HMRC are still getting them wrong. We have a good example of this below: a case of a penalty for accidentally completing the wrong form.

We have the first of a new selection of CPD modules for subscribers this week, please scroll on down the page.

Back soon

Nichola Ross Martin FCA Tax Director

www.rossmartin.co.uk

Your online Virtual Tax Partner®: practical support for accountants, tax advisers and their clients. 

Quick News

The chancellor's Autumn Statement will be on 25 November
We are also expecting draft legislation on the new dividend tax and further updates on the restriction on buy to let interest, as well as news on changes to the employee travel rules.

Hang on: we can see that YOU'RE not ready!
Two professional bodies ask HMRC to postpone changes to the employee benefits and expenses system. HMRC have not yet got systems in place for employers to notify the changes necessary before the 6 April 21016.

ERS: where are your missing returns?
HMRC are concerned about the high number of share schemes that have been set up online for which no returns have been submitted.

Direct Recovery of Debts to target Accelerated Payment Notices
HMRC's new briefing on their forthcoming Direct Recovery of Debts (DRD) powers fails to mention that the draft legislation now includes specific provisions in respect of payments due under the new Accelerated Payment Notice (APN) regime.

Consultation on the introduction of fees to the tax tribunals
Will a £250 court fee deter you from appealing a £100 penalty? We think so.

Dividends

Dividend allowance is a tax rise through the backdoor
The ATT's new president observes that the governments' so-called "triple lock" on taxes is meaningless.

How dividends are taxed in 2016/17
UPDATE: HMRC have now published examples and this clears up all the confusion.

Case review

Penalties: use of the wrong VAT form
In C J Palau & R C Loughran v CRC (2014) TC 04251, the FTT allowed a taxpayer’s appeal against a penalty under Schedule 24 FA 2007 for an error in a document. Although the taxpayer had used the wrong VAT form, in error, there was in fact no loss of tax because the entries on the form provided HMRC with the information to show that no repayment was due. 

Investigation into loss carry back does not affect tax due under SA
In R (on the application of Derry) v HMRC (2015) BTC 525, the taxpayer was unsuccessful in challenging HMRC's practice in demanding the payment of tax for a year where he had claimed a carry back of loss relief.

Practical Tax Guides (for subscribers only)

Restricting mortgage interest relief
NEW: this practical guide introduces the proposed restriction on interest relief, it come with detailed examples to assist landlords in making the right choices in restructuring their property businesses.

IHT: the additional nil rate band for home owners 
This new relief will be introduced from 2017 as an additional £100,000 per individual (rising to £175,000 in increments of £25,000 per tax year) and will apply to any property in the estate which is or has been the main residence at some point, provided that it is left to linear descendants.

Finance Act and Bill 2015: rolling tax planner
UPDATE: want to know what's new in any tax and what's expected in future years? Bookmark this planner. 

How to appeal a tax penalty
Taking you step by step with links to the latest relevant case law.

Editors' choice

This time we have a Capital Taxes Update. A subscriber CPD special. 

Our Capital Taxes round-up - September 2015 features updates on all recently announced measures from this year's budgets with the latest news and cases on:

• Rates and allowances
• Residential Property and individuals
• Private Residence Relief
• Entrepreneurs' Relief
• Case round up (misc' cases)
• Annual Tax on Enveloped Properties
• Inheritance Tax
• IHT Trusts
• Carried Interests
• EIS, SEIS and Venture Capital schemes

Back to basics

VAT: and pre-registration input tax
UPDATE HMRC changed its views on recovery of input tax on goods. If you have advised on this topic in the last four years you may wish to update your clients.

How to work out the Higher Income Child Benefit Charge
It is worth considering how the proposed dividend tax interacts with the HICBC.

The Annual Investment Allowance
UPDATE: don't forget there is no AIA in the year in which a business ceases. A couple of recent appeals to the First Tier Tribunals illustrate that not everyone is familiar with this rule. A claim may not be lost if suitable planning is made in advance.

Starting in business: checklists for you to re-brand
Please do not use these on your website, they are for you to use and re-brand for in-house use with your new clients. Trouble branding your lists? Contact us for help.

New business: sole trader compliance checklist
UPDATE: new version of our start-ups checklist

New business: company compliance checklist
UPDATE: new version of our start-ups checklist

New business: company formation checklist
UPDATE: new version of our start-ups checklist

Voting a dividend? Start with our:

Dividend Index

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