The US presidential election result 'trumped' all other news this week; it has certainly seemed like Brexit+++.

There is no point in worrying or speculating about the future at this stage, we have just got to put our noses down and do that very British thing, "Keep calm and carry on". On that note, let's have a cuppa and get back to some tax!

Last week the professional bodies published new guidance for their members in relation to tax avoidance schemes. We have summarised the differences between the old and the new guidance for you this time. 

The Office of Tax Simplification have been quick to publish the outcomes of the recent discussion papers on small business taxation. The 'Lookthrough' company model has been rejected, however they are still going to proceed with the ‘Sole Enterprise with Protected Assets' (SEPA) model for sole traders. Just as LLPs have replaced traditional partnerships, it may well be that in time all sole traders become SEPAs. This is very exciting news for advisers and perhaps another marketing opportunity, however, there are no plans to introduce the new model until Making Tax Digital (MTD) has bedded in.

Of our updates this week we have news on Pre-incorporation input VAT, we have an updated guide to Incorporation of an Existing Business, and updates on SDLT and Entrepreneurs' Relief.

We also have separated Replacement of Domestic Items Relief from the old Wear and Tear allowance and Replacement Cost note so that you can be clear which rule applies and when. 

Enjoy the guides and updates and the news is below. 

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)

Small company reforms: OTS says not to lookthrough, yes to SEPA
The Office of Tax Simplification (OTS) have published their final reports on small company tax reform, recommending that ‘Lookthrough taxation’ proposals be dropped but those for a new ‘Sole Enterprise with Protected Assets (SEPA)' trading vehicle be taken forward. 

OTS: Call for evidence on simplifying CT computation
The OTS has published a progress report into its review “Simplification of the Corporation Tax Computation” along with a call for evidence. 

Case Update

Sale of tenanted pub: HMRC's VAT split inappropriate
In David John Matthews and Pamela Ella Matthews v HMRC [2016] the First Tier Tribunal (FTT) found that the sale of a tenanted pub with a flat should be apportioned on a floor area basis for VAT purposes and not on the 90:10 split as generally agreed with HMRC.

Practical Tax Guides and Updates (subscribers)

Professional Conduct in Relation to Taxation
NEW: A summary of the requirements of the main professional accounting and tax bodies, March 2017 rules v Current rules.

Replacement of Domestic Items relief
NEW: From 1 April 2016 landlords of residential property can claim Replacement of Domestic Items relief, the wear and tear allowance is abolished.

SDLT & residential property: higher rate
UPDATED: new sections cover the acquisition of trust property and inherited property.

Employers' NIC allowance (subscribers)
UPDATED: we have added proposals to remove allowance where illegal workers employed.

Entrepreneurs' Relief
UPDATED: we have added a note on the CIOT's current concerns over associated disposals where an interest in the asset changes in the 3 years prior to disposal.

Main Residence Nil Rate Band (RNRB)
UPDATED: New examples from HMRC added to our note.

Pre-registration input VAT
UPDATED: HMRC have issued a policy paper confirming the treatment of pre-registration input VAT. 

Editor's Choice

Incorporation of an existing business
UPDATE: we have added a more detailed asset by asset analysis across all the taxes including more detail on VAT and SDLT with new links.

Directors tax-efficient extraction of profits: toolkit
RTI, dividend tax, the savings allowance and new pensions rules mean that despite changes to benefits and expenses reporting profit extraction is a complicated business.

Missed last time's update?

Nichola's SME Tax Update 4 November


  • Professional conduct in relation to taxation.
  • Brexit.
  • Cases on RTI filing, SDLT penalties, care home fees as a BIK and whether a partner is really an employee.
  • Private residence relief.
  • Penalties: advisers' planner and offshore matters.

Come and join our Cloud

Subscribe (and UNLOCK the whole site) A single user annual subscription is £349 (+ VAT). 

What do you get?

  • We keep YOU up to date in SME tax.
  • FULL access to www.rossmartin.co.uk: your firm's personal TAX INTRANET containing over 2,500 actively maintained tax guides, briefings, toolkits and checklists.
  • Want to know more? Commission your own articles and checklists.
  • Structured CPD: our detailed SME tax updates "for Advisers Only" provide topical summaries and planning notes & our NEW webcasts provide you with structured CPD at your desk.
  • Regular client tax briefings: these cover the latest business and employment tax issues and are designed to assist you plan meetings and improve your client services.
  • Nichola’s regular SME tax news web-update: we do the reading and cherry pick the best of the taxpress, magazines and websites for you.
  • You can also commission guides and checklists for your own practice, post comments and upload your own articles.
  • Access to the Virtual Tax Partner ® service provides subscribers with FREE quick calls and a discount of on phone, email and tax support and mentoring.