Nichola's SME Tax w-update 18 August 2016

Hello

HMRC have published six consultations on Making Tax Digital (MTD).

The good news is that nano sized businesses (turnover up to £10,000) may be exempted from quarterly reporting.
The bad news is that HMRC is not providing any free software and it is favouring a new points based penalty regime for late filing (and we presume for late quarterly payment, when introduced).

According to HMRC's research there are about 2 million small businesses who are not using software or tax agents, MTD could come as something of an expensive shock as they will need to buy software. Despite the promises that apps will do everything, the fact of the matter is that these businesses will still need to prepare annual accounts and they have four more interventions with HMRC in making four quarterly returns. They then need to reconcile those returns to their end of year figures in order to make an end of year declaration and claim any reliefs or allowances as necessary. I guess in time a robot will do this for you!

Do read through our Making Tax Digital index as this summarises the different consultations for you.

See also more consultations and our Practical Tax Guide updates below.

Have a good week.

Back soon

Nichola Ross Martin FCA Tax Director

www.rossmartin.co.uk

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

Quick news (freeview)

HMRC late payment interest rate dropped
HMRC have announced that their late payment rate will drop to 2.75% from 23 August 2016 following the Bank of England's decision to reduce the base rate.

Making Tax Digital

Making Tax Digital: index
NEW: A summary of the new MTD consultations, press releases and road maps with links to our summaries of each.

Case Update

In Cyclops Electronics Limited and Graceland Fixing Limited V HMRC [2016] TC05234 tax planning involving an award of loan notes to directors as bonuses failed. The tribunal found that there was no commercial reason for loan instruments to contain forfeiture conditions. As a result the loans were not restricted securities and so were taxable as cash bonuses.

More Consultations

HMRC have published numerous other consultations in recent weeks:

Consultation: tackling disguised remuneration
A consultation providing more details on the changes to the disguised remuneration rules to be introduced in Finance Bill 2017.

Consultation: SDLT payment and filing
A consultation proposing changes to stamp SDLT payment and filing from 2017-18 onwards, including reducing the payment and filing deadline to 14 days.

Consultation: salary sacrifice and BIKs
A consultation proposing to limit the tax and NIC advantages for benefits in kind provided under salary sacrifice and similar arrangements.

Consultation response: Gift Aid Small Donations Scheme
HMRC's response to feedback received during their consultation earlier this year on reforms to the Gift Aid Small Donations Scheme (GASDS).

Consultation: GIft Aid & Intermediaries
HMRC have launched a technical consultation proposing a further expansion to the role of intermediaries in administering Gift Aid.

Consultation: tax & NICs on termination payments
HMRC's response to the 2015 consultation on simplification of the tax and National Insurance treatment of termination payments together with draft legislation to implement the proposed changes.

Practical Tax Guides & Updates

ISA Guide
UPDATED: Draft legislation has been released on expanding the Innovative Finance ISA to crowdfunding.

Disguised remuneration: changes from 2016 onwards
UPDATED: More details released on the proposed Finance Bill 2017 changes.

Termination, redundancy and leaving payments
UPDATED: More details and examples added on the proposed Finance Bill 2017 changes

Employment related securities: designing share schemes
UPDATED: A review of the different types of share and share option scheme that are suitable for SMEs with examples and case studies.

Editor's choice

Finance Bill 2016: tax update and rolling planner
Keep up to date with all developments and announcements for the 2016/17 tax year and beyond with our rolling planner.

Property profits & losses: toolkit (up to 5 April 2016)
Our toolkit for landlords and advisers preparing property business accounts for the 2015/16 tax year.

Property profits & losses: toolkit (from 6 April 2016)
Our up-to-date toolkit for the current year.

Missed last time's update?

Nichola's SME Tax Update 12 August

Features:

HMRC consultations on partnerships, lease accounting changes, PSAs and making good benefits in kind.
HMRC's new standards for agents and their latest agent update.
Plant and machinery leasing.
VAT groups
Family planning

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