This news update has a self-employment theme, although we have news and updates for other types of taxpayer too.
Did you know that there are about 5 million self-employed individuals registered in the UK and of those something like 1/3 don't have tax agents? The average income from self employment is about £11,000 (presumably this is the average 'declared' income), according to some research. Under Making Tax Digital, HMRC is proposing that those whose turnover is less than £10k do not need to make returns. We also have a proposal for an uber allowance of £1,000, but little detail. Read more in our Self-employed update below.

In terms of guides and updates this week:
  • We have updated guides on hobbies, farming and market gardening. 
  • As most self-employed businesses trade under the VAT threshold VAT is not an issue...until you need to register! It is worth reading up on the rules and so we have new guides this week on VAT registration and deregistration. We also look at supply of goods and services and how the rules affect you if you trade in the EU.
  • Tax cases on penalties are never in short supply, this time we feature a couple of cases were the taxpayers were given suspended penalties. In one the taxpayer's error was caused by his accountant, and in the other it seems that both HMRC and the FTT misunderstood the legislation.
  • Under Making Tax Digital we will all have the same accounting reference date of will we? This issue is subject to current consultation. We have client briefing on chosing a simple to operate accounting reference date. We also feature a case where the accountants got a change of accounting date wrong. 
Finally, HMRC have published a consultation on tax penalties for 'enablers' of tax avoidance schemes. These proposals should see an end to the tax avoidance industry in the UK as they aim to penalise anyone in the supply chain of abusive tax planning schemes, from the QCs that 'approve' the schemes to the accountants and IFAs who earn commission as introducers. 

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 (freeview)

New advisory fuel rates from 1 Sept 2016
For employee company car drivers.

Case Update

Tribunal suspends one-off penalty for error
In Eric Eastman V HMRC [2016] TC05276 the First Tier Tribunal allowed a penalty for a one-off CGT error to be suspended: HMRC often attempts to apply a blanket ban on suspending one-offs.

Plumber does well on penalties
In Kujtim Gjoci v HMRC [2016] UKFTT TC05325 a plumber who did not keep records had a good break on tax penalties. Apart from quoting the wrong legislation in its decision First Tribunal (FTT) did not spot that penalties for a deliberate error are not normally capable for suspension.

Actor fails to change accounting date
In Rupert Grint V HMRC [2016] TC05286 the Harry Potter star fell foul of the rules for change of accounting date for tax. His accountants prepared accounts for too long a period to meet the conditions as required by the relevant legislation.

Football agent denied relief for trading losses
In Jerome Anderson v HMRC [2016] UKFTT TC05314, the First Tier Tribunal denied any relief for trading losses.  If Mr Anderson was carrying on a trade, then it was not on a commercial basis with a view to making profits.

Practical Tax Guides and Updates (subscibers only)

Accounting periods and tax basis periods
NEW: Which accounting date should I choose and does it matter?

VAT: registration
NEW: When to register for VAT, when to start charging VAT, how to register and what penalties might HMRC charge for late registration.

VAT: deregistration
NEW: When you have to deregister, when you can choose to deregister and what penalties might HMRC charge if you are late deregistering.

VAT Place of supply: services
At a glance guide on when to charge VAT when trading in the EU. 

Hobbies, farming and market gardening (subscribers only)

HMRC has been scrutinising loss claims for evidence that taxpayers are operating uncommercial trades. 

Losses (sideways): restriction for uncommercial trades
UPDATED: Our guide to the restriction of sideways loss relief for uncommercial trades and "hobby" farming, including case references, has been given a makeover.

NEW: What is farming?  What special tax reliefs and tax treatments apply? Does diversification affect tax relief? Our new guide provides a cross-tax summary.

Market Gardening
NEW: A guide to the defining characteristics of market gardening and a summary of special tax treatments.

Editor's choice  (subscribers only)

Self-employed: update for September 2016
There are potentially many changes on the horizon for those running their own business. With some mixed messages coming out of government as to what income you may need to report and what profits will really be tax free, this update provides you with a summary to enable you to warn your clients and plan ahead. 

Tax planning for university: a parents' guide
A topical guide.

When an inspector calls (FREEVIEW)

Worldwide Disclosure Facility
NEW: HMRC's Worldwide Disclosure Facility (WDF) is available from 5 September 2016 to anyone wishing to disclose a UK tax liability relating wholly or partly to an offshore issue.

EBT new settlement opportunity
HMRC have published a table showing the differences between the original settlement opportunity which closed in 2015 and the opportunities available now.

Consulations (FREEVIEW)

Consultations: tackling the hidden economy
HMRC have launched three consultations on ‘Tackling the hidden economy’ proposing tougher sanctions, conditionality and the extension of data-gathering powers.

Missed last time's update?

Nichola's SME Tax Update 30 August

Features include:

  • Employer special: Tax-free benefits in kind, Employment related securities, Share schemes, Apprenticeship Levy, Company cars.
  • Condocs: Offshore evasion, reforms to the taxation of non-domiciles.
  • Buy to let incorporation: use as a VAT planning tool, impact for ATED.
  • Tax issues for divorce and separation.
  • Statutory residence test: split year treatment.

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