Hello
I hope that you are all holding up through the worst month of the tax year.
The top story in tax this week has been the Treasury Select Committee's (TSC) report on Making Tax Digital (MTD). In less than 140 characters the committee is suggesting that: HMRC delay MTD until 2019/20, up the exemption threshold, run pilots over the full reporting cycle and allow the software market to catch up.
The TSC make an interesting point about software, they suggest that HMRC should include adequate free software and the market is dysfunctional. I agree. There is some really horrible software out there. I don't know if this is down to a straightforward lack of competition or just that the concept of a career in writing accounting software has low appeal. Probably it’s a mixture of both. In this month’s Tax Adviser mag (journal of the CIOT and ATT), Chris Mattos tested manual bookkeeping v. Excel v. an App. No surprises to find that the spreadsheet was fastest and that handwriting was faster than using a phone App. The App also had difficulties with auto-recognition.
We’ve been testing popular accounting software for the last two years and results are disappointing. Our bank feeds go wrong and the reporting is dire. I would not trust it to file anything for me. Although we are some of the very few businesses using our software to file our VAT returns this is only after we have printed out and scrutinised several meters of transactions first, we cannot use the software to file VAT returns for certain businesses because it won’t do the adjustments. Our sales ledger unbalanced itself recently, oh joy! How is that actually possible? I think I can guess: something with the wretched bank feed. In the rosy tinted world of HMRC’s version of MTD we don't worry about sales ledgers because we are all cash accounting. In the cold light of day we DO need worry about sales ledgers because otherwise we can’t tell if our software has gone wrong and we have no records assisting credit control. We need software that supports both our business and MTD.
My apologies I am going on a bit: it's the time of year. For those of you untroubled by self assessment filing we have something of an offshore special and some updates in IHT. Offshore compliance is one of the biggest headaches for 2017 with the onset of super-penalties. I hope you like our guides on these.
If you have any tax queries please do try out our Virtual Tax Partner support portal at www.VtaxP.co.uk
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)
Making Tax Digital: changes needed
The Treasury Committee is recommending that HMRC make radical changes their approach to Making Tax Digital (MTD), including delaying implementation, raising the exemption threshold, running a pilot the covers the full reporting cycle and waiting for the software market to catch up.
Case Update (freeview)
EIS: preferential rights acquired
In Abingdon Health Limited v HMRC [2016] TC 05525 EIS relief was denied as shares acquired preferential rights on the issue of a new class of growth shares.
No sideways loss relief for uncommercial dairy farmers
In Bryan Scambler & Rebecca Scambler v HMRC [2017] UKUT 001 the Upper Tribunal (UT) denied sideways loss relief for dairy farmers who had made losses for over five years.
The danger of cheques! Taxpayer's duty to ensure tax payment clears
In W Coomber v HMRC [2016] UKFTT 0809 the First-Tier Tribunal (FTT) dismissed the taxpayer’s appeal that he had a reasonable excuse because the bank failed to honour his cheque despite sufficient funds.
Editor's Choice (subscribers)
Non-doms and overseas
Offshore evasion: requirement to correct
NEW: A summary of the new Requirement to Correct (‘RTC’) undeclared tax on offshore matters and the tougher penalties that will apply if you don't.
Non-domicile status & tax
UPDATED: The deemed domicile rules for Income Tax, CGT and IHT along with the IHT for UK residential property were included in the Finance Bill 2017
Business Investment Relief
UPDATED: A substantial re-write of our BIR guide including the proposed changes included in the Finance Bill 2017
IHT: non-domiciled spouses
UPDATED: Includes the latest proposed changes on deemed domicile included in Finance Bill 2017.
Non-residents CGT on UK residential property
UPDATED: special rules for interspouse transfers, payments and new calculator.
Practical Tax Guides and Updates (subscribers)
Inheritance Tax
Main Residence Nil Rate Band (RNRB)
UPDATED: following several articles in the press.
IHT: gifts with reservation
UPDATED: Details on the interaction with gifts for Capital Gains Tax purposes.
Companies
Museum & Gallery Exhibitions tax relief
NEW: Our guide to the new creative industries relief for companies from April 2017.
EIS: Enterprise Investment Scheme
UPDATED: new section added on qualifying share conditions together with some related cases.
ATED CGT: UK residential property and non-natural persons
UPDATED: details on filing and payment requirements added.
Compliance
Gift Aid
UPDATED: Changes to simplify the small donations scheme from April 2017 have now passed into law.
Accelerated Payments & Follower Notices
UPDATED: Our guide has been renewed and refreshed, with more detail added on appeal rights.
CPD Webinars
Missed last time's update?
Nichola's SME Tax Update 13 January 2017
Features:
- Buy to let ownership: personal or company?
- Tax credits: don't miss 31 Jan deadline.
- Consultation on withdrawal of 4 ESCs.
- Cases on CGT errors under the LDF, enhanced protection, share loss relief and VAT deregistration.
- VAT: goods v services and updated toolkits.
- Profits from dealing in and developing UK land.
- Pensions: unauthorised payments and third parties.
- Updates to our guides on ER, gift / holdover relief and investors' relief.
- New CPD: Small Companies Update.
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