What a busy week, although a relatively quiet week for SME tax news.

In between answering some of the most interesting queries that we have ever encountered through our Virtual Tax Partner service, we have found time to expand our Construction Industry guides and discover some interesting cases for you. Don't miss our Editor's Choice guides and checklists.

Only a couple of years ago, despite the economic disaster brought on by the banking crisis, parliament, the general public and nearly all journalists were not remotely interested in talking about anyone's tax other then their own, when it came to January 31st. What a change there has been. Starbucks, then Amazon and Apple, and this week, the UK press have gone tax crazy about Google. 

Following the announcement of HMRC's £130m settlement with Google, members of the CIOT and ICAEW have spoken up about intellectual property. Google's technology is created in the US, which is why it does not pay much tax here. At the opposite end of the scale we report on the parliamentary debate on quarterly reporting for the self employed. As we suspected this appears to be more about closing tax gaps than making anyone's life easier. There is something of a bitter irony that the US technology giants who are building cash mountains in Bermuda are at least partly to blame for HMRC's reliance on related technology that seems likely to force quarterly accounting and tax payment on the self employed of the UK.

All is not lost though. We have worked out that the technology that drives our site is also generated in the US and abroad. As we are a small company and thus exempted from the diverted profit tax we just have to decide which tax haven will be most suitable for our holding company and then Cashpiles-R-Us. I am only joking of course; we would miss the lovely wet climate here.

Back soon

Nichola Ross Martin FCA Tax Director


Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers

Quick News

Parliamentary debate on quarterly accounting for the self employed
MPs debated the online petition "Scrap plans forcing self employed & small business to do 4 tax returns yearly" earlier this week and the Financial Secretary to the Treasury, David Gauke provided more detail of the government's plans for digital reporting.

Google's tax bill
How can a big corporate pay so little? The CIOT and ICAEW defend the corporation.

New domestic reverse-charge procedure for telecoms businesses from 1 February
This is not exactly SME territory however we were asked about it the other day. From 1 February 2016 UK businesses who provide wholesale telecommunication services to other UK businesses will no longer account for VAT on the transaction; instead, the customer must account for VAT using the reverse-charge procedure.

Case Update

Upper Tribunal Decision: Termination payment taxable despite injury to feelings
An unusual case and a point rarely tested. In Krishna Moorthy v HMRC [2016] UKUT 0013 TCC, the Upper Tribunal ruled that injury to feelings did not exempt a payment from being taxable as a termination payment within s401 ITEPA.

Cars kept by a director were not pool cars
Another director falls foul of the pool car rules. No new legal development but worth mentioning to clients. In Alexander Jubb v HMRC [2015] UKFTT TC04760 the First Tier Tribunal agreed with HMRC that cars available for the private use of a director and kept overnight at his residence were not pool cars.

Practical Tax Guides & Updates - for subscribers

Losses (sideways): restriction on relief for uncommercial trades
UPDATED: New cases added to illustrate commercial and uncommercial trades.

Construction Industry Scheme (CIS)
NEW: Guide to the meaning of construction and the obligations of contractors and subcontractors.

Construction Industry Scheme: Penalties
UPDATED: Guide to the old and new penalty regime.

Construction Industry Scheme: Company repayment claims
UPDATED: Top tips for company's making CIS repayment claims.

Editor's choice

Share schemes: employment related securities
Clients like share schemes. Here we compare EMI with ESS with an unapproved scheme. Which one is best, can we combine them? This guide explores the different schemes. If you have a query give us a call to talk it over.

Small Company Tax: What's new?
Plan ahead with our guide to the latest changes and proposals for 2016/17 affecting small company taxation.

Employers: what's on from April 2016  
Following publication of HMRC guidance as to the system they will expect employers to have in place to check that conditions to exempt reimbursed expenses are met.

Land & Property: Adviser's update Dec/Jan 2016
A handy summary, great CPD, listing all of the many changes and proposals with links to our more detailed guides on each topic.

Private Client: Tax planning for the 2015/16 year end
Our unique year-end and new tax year tax checklist for "Private Clients", it can be used in conjunction with our checklists for Directors, Employers and Self-employed individuals.

Buy-to-let ownership: personal or via a company
What works better, considering the above changes? Holding a buy-to-let property investment personally or via a company? 

Incorporation of a buy-to-let
A guide to incorporation reliefs and tax treatment, plus practical considerations and planning points.

Missed last time's update?

Nichola's SME Tax Update 22 January 2016

Features updates for:

  • Small companies and directors
  • VAT
  • Land & property
  • Residence v non residence tax treatment
  • Overseas workday relief
  • Planning for the 2015/16 year end

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