Just a short web-update this week. Reviewing my inbox and the type of queries we are seeing, there is clear evidence that the government's tax policy is doing a lot to bolster the profits of professional firms. 

We note:

  • Record numbers of companies are rushing into members' voluntary liquidation ahead of proposed changes to the distributions rules.
  • There is a surge of incorporation of buy to let property businesses; these are being set up with the precise intention of retaining profits in a corporate structure and of course avoiding the restriction on higher rate tax relief on finance costs.
  • Auto-enrolment has created a whole new income stream.
  • CGT has become something of a dark art for those with ATED and Non-resident gains.
  • We see a lot of interest in SEIS and EIS schemes, particularly from foreign nationals setting up businesses in the UK; the complex rules continue to fox the unwary.
  • Finally, the other outcome of the changes to the dividend rules appears to be a surge in interest in setting up both employee share schemes and non-exit based EMI option schemes, although the government's Employee Shareholder scheme is not as popular as it could have been.

We have guides covering all the above on our webservice.

I am not convinced that tax has got any simpler or that administrative burdens on business are decreasing and I just hope for all our sakes that the chancellor won't announce any further dramatic changes to the tax system in his March budget. 

Back soon

Nichola Ross Martin FCA Tax Director


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Quick News

RIP post transaction valuation checks
HMRC's Shares & Asset Valuation (SAV) is to withdraw its informal valuation check service for PAYE Health Checks and ITEPA Post Transaction Valuation Checks due to a lack of resources 

Case Update

Fee paid to avoid tax partner's bankruptcy: disallowed
In HMRC v Peter Vaines [2016] UKUT 0002 (TCC), a partner in a law firm was disallowed tax relief on a payment made to avoid potential bankruptcy and to protect his reputation, it was not wholly and exclusively incurred for the purposes of the trade.

Company car benefit but no fuel benefit on partnership cars   
In Southern Aerial Communications Ltd and Mr & Mrs Jones v HMRC [2015] another partnership with an associated company is unsuccessful in avoiding the car benefit rules. Links to similar cases.

Discovery assessments: Court of Appeal decision on adequate disclosure
In D S Sanderson v HMRC [2016] EWCA Civ 19 the Court of Appeal decided that information disclosed by a taxpayer on his tax return was not sufficient to provide a hypothetical HMRC officer with enough information to raise an enquiry, even though the actual officer involved did possess that information.

Practical Tax Guides & Updates - for subscribers

Simpler income tax (cash basis) and fixed expenses
Start here for our guidance this sets out the different claims in a table form making it really useful to explain to new clients.

Companies: Year end tax planning checklist
A useful list for the year end. Cut and paste and adapt for your own uses.

Employers' NIC allowance
UPDATED: Details of the of the proposed removal of employers’ NIC for apprentices under 25, with links to check whether your apprentice is on the approved statutory apprenticeship list.

Non domicile status & tax
UPDATED: To include a summary of the proposed deemed domicile definition for Income and Capital gains tax purposes.

Editor's choice

Seed Enterprise Scheme (SEIS)
Under SEIS, a director may invest up to £100,000 in his qualifying new start-up business and be eligible for income tax relief of 50 per cent. The trick is to set up the company with the correct share capital and work carefully through the rules at each stage.

Share schemes: employment related securities
With the changes to the dividend rules, why not make you employee a shareholder?  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?
From dividend tax to proposals to restrict tax relief on liquidation. The latest changes and proposals for 2016/17 affecting small company taxation.

Employers: what's on from April 2016  
Yes, more changes: employers need to have systems in place to exempt reimbursed expenses.

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 29 January 2016

Features updates for:

  • Construction Industry Scheme
  • Share schemes
  • Sideways loss relief and restriction for uncommercial trades
  • Planning for the 2015/16 year end
  • Planning ahead for 2016/17

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