I note from HMRC's website that it seems surprised by the high demand for Annual Schemes under RTI. This strikes me as a very worrying admission following the lobbying by all the tax bodies for a relaxation in RTI reporting for smaller employers.

I would have thought that some in HMRC would realise how many small employers rely on their accountant to calculate payroll and it is done annually. This is for sound commercial reasons and not tax avoidance. The really important point here is that around 99% of business in the UK is small and the majority of employers employ 2 people or less. I advocate that those who dream up our legislation should have to complete a compulsory secondment with a small business and learn how to run a payroll.

Actually I must admit that the combination of RTI, lack of broadband, IT problems and new legislation have given me the worst week since our neighbour drove into a telegraph pole and wiped out all our comms last year. On RTI:  it just takes much longer to run a payroll now. On Broadband: it is so slow that apparently our Employer's Annual Return did not reach HMRC even though our software thinks it was sent. On IT: an upgrade wiped out all the software on one of my PCs, so that it has to all be reloaded and I am nervously checking backups. On new legislation: we have been updating and re-writing and so you can see the benefits of our Disincorporation Masterclass and new toolkits.

Check out Editor's choice for top tips on directors' leaving payments and CGT and IHT business asset reliefs. 


Best wishes


Nichola Ross Martin FCA
Tax Director

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

News headlines

Letting is a business for CGT roll over The Upper Tier Tax Tribunal allowed a taxpayer's appeal deciding that residential property letting is a business for the purposes of roll over relief under s162 TCGA 1992 (incorporation relief). HMRC has long argued that there is no business in ordinary letting as it is an investment activity.

Paying HMRC: some employers may not have received their PAYE payment books in time to make their PAYE payment by 19 May 2013. They need to make a payment by other means, such as online or direct at the bank. If no payment is due the employer needs to make a nil EPS report under RTI. Unless of course they have already registered an Annual Scheme.

RTI: Annual Schemes An annual scheme makes a lot of sense if you are a one man company to set up an annual scheme. Run the payroll once a year, ensure that your salary is high enough to give you entitlement to state benefits and low enough to avoid NICs.

PAYE Annual Returns are due by 19 May Notify HMRC if no return is due. Penalties for PAYE late filing are under the old system of £100 per month, per 50 employees...More on penalties

HMRC investigates offshore structures Save tax: run a company from a tropical island? According to HMRC it is investigating the affairs of some 100 individuals who have been using offshore companies for tax evasions. This figure seems remarkably low figure given that HMRC has access to some 400 gigabytes of data in a joint investigation with the US and Australian tax authorities. It is also looking at some 200 accountants and lawyers who have been instrumental in setting up structures. 

P11D forms online Two forms are now available online - No Return of Class 1A NICs and Notification of payrolled benefits.

NIC holiday for new employers Last chance to claim for new businesses however this scheme ends in September 2013.

Editor's choice

Leaving payments and directors NEW: Top Tips for avoiding tax pitfalls on leaver's packages of tax-free lump sum, company purchase of shares and the loan write offs.

Property letting: CGT and IHT issues NEW: a handy guide to where we now are in relation to various forms of property letting and tax relief. 

VAT traps: taking over a business NEW: if you start to run a similar business to one which operated from the same premises or if you take over an existing business you may need to consider VAT, with case update.

Close companies: tax planning and pitfalls NEW: changes since March may well affect clients with 31 March 2013 year ends as new close company loan measures counter tax avoidance via use of loans with partnerships, trusts, transfers of value and "bed and breakfasting".

Employee owner status New briefing note to chat over with clients, with links to detailed guidance.


Joint income: splitting income within the family
A family tax planning exercise involving joint bank accounts went very wrong when HMRC invoked the Settlement provisions. The tax tribunal seems to have had sympathy with a taxpayer who struggled over the interaction of income tax and trusts anti-avoidance.

Investigations: the presumption of continuity
When the `presumption of continuity' is made during the course of a tax investigation HMRC will take the view that an under-declaration made in one year will have been repeated in other years. The onus of proof is on the taxpayer to disprove this.

Guides and toolkits

Directors' loan accounts: toolkit
UPDATED: guidance on tax and NICs treatment of loan releases and write offs: do I gross up or not?

Employee Shareholder Status - tax & planning
NEW: the new measures introducing a new category of employee share owner are interesting for all sizes of companies. Our guide explains all.

Simpler income tax accounting and fixed expenses
Introduction to the new regime

Cash or accruals accounting toolkit
UPDATE: we have added "Adviser Alerts" to warn you about certain aspects of cash accounting that may catch you out. Further guidance on transitional measures of changing accounting method.

Flat rate expenses or actual cost toolkit
UPDATE: new introduction to help explain this new systems to clients with added tips for advisers.

IR35: changes from 2013
From April 2013 under measures introduced in the 2013 Finance Act office holders will become within the scope of IR35.

NICs on dividends
UPDATE: review of the circumstances (based on case law) in which we would expect HMRC to classify dividends as employment income and commentary on the PA Holdings case.

 Employment Allowance: NICs £2,000 relief
The NICs holiday ends in September 2013, this relief applies to all employers from April 2014

Finance Acts rolling planner
UPDATE: baffled by the constant changes in tax? Our rolling planning tells you what is new in each tax year for each different topic.

What expenditure qualifies for plant & machinery allowances?
UPDATE: added some examples from HMRC

Close companies: tax planning and pitfalls
UPDATE: s455 tax charge on loans to participators. New measures to counter tax avoidance via use of loans with partnerships, trusts, transfers of value and "bed and breakfasting"

High Income Child Benefit Tax Charge
Only two new questions to go on the 2012/13 tax return & HMRC is making a new calculator

Mansion tax(es) - at glance
Plans to tax individuals (and unsettle the coalition) may have been thrown out, but new annual tax charges apply on higher value property for corporate owners and other non-natural persons from April

Fees and subscriptions (professional bodies)
HMRC updates List 3: have all employees claimed tax relief yet?

CGT Top tips: losses & connected persons
Think twice before selling property to your company at a loss; a cautionary tale of clogged losses.

Essential reading

for paying subscribers only


Repairs and renewals
UPDATE: another case on resurfacing and explaining the interaction between the rules for residential property letting, integral features and repairs.

Adviser planning update: losses
Navigating the new losses minefield in 2013/14

Annual Investment Allowance
NEW: a handy summary with planning points

Investigation news

Property Sales campaign
Top tips on HMRC's latest disclosure opportunity 

Do I pay a salary or dividend? 2013/14
UPDATE and re-write of last year's highly popular guide and is designed to save you having to do all these workings yourself

Tax masterclass: running an LLP & Co structure
UPDATE: this guide is for trading companies and professional practices: we see many different structures

Disincorporation relief
New: a summary of the proposed rules. You may also register now for new Masterclass

ABC or alphabet shares: directors & employees
UPDATE: essential reading for directors

ABC or alphabet shares: family companies
UPDATE: issues for the family 

Distributions & striking off
NEW: this guide explains the rules now that ESC C16 has been legislated and notes potential planning points and pitfalls

High Income Child Benefit Tax Charge
The new charge explained with helpful flow charts to decide who pays and when

Accountancy & tax fees
What is allowable and what is not

Employer pension contributions
Last chance for income tax and NICs relief for pension contributions made on behalf of an employee's family

Disappearing tax reliefs
Tax reliefs that are disappearing in April 2013

Tax planning for income at marginal tax rates
Strategies to avoid unexpected tax charges such as the High Income Child Benefit Tax Charge (HICBC)

Property profits & losses: toolkit
Our toolkit covers the points made in HMRC's version but adds a great deal more information about what you can and can't claim

Editor's favourites

AIA: rules where there is a change of rate
Worked examples

Dividends: index
Guides to dividends: minutes, warrants and tax on unlawful distributions

Salary 2013/14
What is the minimum level before NI becomes due?

Tax penalties: SA late filing & payment
Guide plus examples: don't overlook the late payment provisions

Avoiding marginal rates of tax
Tax planning tips and examples

Tax-efficient profit extraction checklist (companies)
A new checklist and briefing too for companies and their owners

Relevant earnings for pensions purposes
A useful page to bookmark

Most popular

Here is a small selection of our guides (there are now over 900 guides and checklists available to paid subscribers)

Tax Data

PAYE late payment penalties buster

Overpayment Relief (formerly error or mistake)

What expenses can I claim?

Goodwill & incorporation: tax issues

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