Hello
Great to see the back of January. I hope it went well for all of you. This time we have a Making Tax Digital (MTD) survival kit, new rules on the cash basis and lots of director and company tax planning guides: only two months until the end of the next tax year.
Due to my inability to say 'No' and an urge to help those befuddled by the tax system I accidently ended up spending pretty much the whole of January back at 'the coal face' doing self assessment tax returns. Not such a bad thing as it meant that I was able to scrutinise the cases and work through how the individuals would deal with the future demands of Making Tax Digital.
Even though HMRC says that taxpayers can now all use spreadsheets, the situation is bleak: so many have never learnt how to use spreadsheets. To be frank, and I have thought about this a lot, I think that these taxpayers will thus have to do paper summaries quarterly and accountants and bookkeepers will then submit those summaries to HMRC for them. Extra hassle, extra cost. Although the government will benefit from the extra tax you and I pay on those extra fees, the bigger picture is to consider whether there is any actual benefit to the UK's economy. We are victims of a Ponzi scheme of our own making.
Accepting that the 'tax gap' is caused by the undeclared sales not the incorrect expenses.I have a better solution to MTD reporting that will yield a positive result: report income quarterly and have the option of reporting expenses quarterly or annually. I think its is no-brainer. Barely any extra work. Read my piece on this below and give me feedback. My clients all think that this is a really good idea.
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
P.S If you have any tax queries please do try out our Virtual Tax Partner support portal at www.VtaxP.co.uk
Quick news (freeview)
Making Tax Digital: the Grand Design
We have launched our new Making Tax Digital (MTD) zone. Click here for:
HMRC's responses to the six consultations
We have summarised these for you.
MTD: the survival guide (self employed)
NEW: a practical guide for taxpayers. What's going be best for you? Do I chose an App, a spreadsheet or software?
MTD: Let's Simplify Further
It's actually a 'non-brainer', Nichola Ross Martin's practical suggestion to simplify current proposals
MTD: House of Lords calls for evidence
The House of Lords Finance Bill Sub-Committee (FBSC) has made a call for evidence in respect of Finance Bill 2017 provisions for Making Tax Digital (MTD).
HMRC to use voice identification technology
Those calling the tax credits and self assessment helplines can enrol for voice identification to speed up the security steps that HMRC go through.
Case Update (freeview)
Child benefit charge: ignorance of law no excuse
In G Nonyane v HMRC [2017] UKFTT TC05577 the First-Tier Tribunal (FTT) found that the discovery assessment issued to a taxpayer claiming not to know about the new high income child benefit charge (HICBC) was valid.
Lost options don't reduce termination income
In Lars Sjumarken v HMRC [2016] UKUT 0568 the Upper Tribunal (UT) held that the value of lost share options could not be used to reduce taxable income on termination of employment.
What is (and isn't) a caravan for VAT?
In Oak Tree Motor Homes Limited v HMRC [2017] UKUT 0027 the Upper Tribunal held that self-propelled vehicles were not ‘caravans’ for the purpose of VAT zero rating.
No IHT on pension death-benefit
In HMRC v Personal Representatives of Rachel Staveley (dec’d) & Others [2017] UKUT 004 the Upper Tribunal (UT) found in favour of the taxpayer on two points resulting in the death benefit paid to the sons of the deceased not being subject to Inheritance Tax (IHT).
Editor's Choice (subscribers)
Tax Planning for directors
You may have just filed your 2015/16 tax return, you now have two months to ensure that you have max'ed all your tax reliefs for 2015/16. Get stuck into our guides. Top tip: check out our Directors' Tax Planning Toolkit.
Tax-efficient extraction of profits toolkit
Ever sat down and tried to work out the MOST tax efficient way to extract profits from a company? If not then you will love this guide.
Share schemes for employees
Although the employee shareholder scheme has now been repealed there are other tax advantaged ways of awarding shares. The new £5,000 dividend allowance is an attractive prospect for employees.
Practical Tax Guides and Updates (subscribers)
Cash basis for property businesses
NEW: The cash basis will be the default from 6 April 2017. Our guide gives you the essential information on what this means
Accounting: Simpler income tax (cash basis / fixed expenses)
UPDATED: From April 2017 thresholds will be raised and there will be new rules governing deductions for capital expenditure.
EIS: Enterprise Investment Scheme (Subscriber guide)
UPDATED: Our essential guide has been revamped.
Penalties (VAT)
UPDATED: Details of the new penalty for participating in VAT fraud has been added to our guide.
Death-in-service
NEW: A new guide on death-in-service benefits provided by employers .
CPD Webinars
Missed last time's update?
Nichola's SME Tax Update 27 January 2017
Features:
- Capital allowances: disposal events and values
- Consultation on Scottish Limited Partnerships
- HMRC's new ATED online system
- Optimistic expense claims
- Cases on employment status and VAT recovery on tax advice fees.
- Self assessment late filing and payment penalties
- Simpler income tax: accounting and expense claims
- Personal allowance: who can claim?
- Penalties for enablers of tax avoidance
- Reasonable care and tax penalties
- Termination, redundancy and leaving payments
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