Hello
Many of you will be off enjoying half-term this week so we will keep this editorial short.
You may have read through our guide last week on Personal Service Companies working through the public sector and seen our conclusions that the Finance Bill 2017 legislation does not make any sense from the PSC's accounting and corporation tax angle. The ICAEW agrees with us. In their Tax representation on this topic they suggest that the changes should be put back to 2018.
Perhaps a better way to make law would be to run extensive test pilots and see that the contents of the bottle do equate to the label. In the case of PSCs the problems stretch not only cross tax, but cross law. The unfortunate worker has no employment rights, it is quite dubious as to whether a direct deemed payment is a taxable supply for VAT (we will probably be Brexited before anyone can work that out) and there are a host of other issues.
Still on the topic of bad law making takes me back to Making Tax Digital (MTD). We have some draft legislation and HMRC is clearly aiming to do a lot of adjusting via the use of statutory instruments (SIs) and still no one yet knows who will be exempted from quarterly reporting. This creates a massive issue for taxpayers, most of whom are not aware of what is about to befall them. A better way would have been to run an extensive test pilot and then draft the legislation and do away with SIs.
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)
HMRC: Employer Bulletin February 2017
HMRC have published their Employer Bulletin for February 2017. We summarise the key content for you, with links to our detailed guidance on the topics covered.
PSCs & the public sector: ICAEW say changes needed
The ICAEW have published Tax Representation 15/17 ‘Workers’ Services provided to public sector through intermediaries’. This highlights a number of concerns with the proposed changes for Personal Service Companies (PSCs) working in the public sector, and suggests that they be postponed until 2018.
Spotlight 35: Disguised remuneration using annuities
HMRC has issued Spotlight 35: Disguised remuneration: tax avoidance using annuities. This features a scheme which attempts to avoid income tax and NICs by using annuities to pay for services.
Spotlight 36: Avoiding the new disguised remuneration loan charge
HMRC has issued Spotlight 36: Disguised remuneration: schemes claiming to avoid the new loan charge. This features schemes which attempt to avoid the new disguised remuneration loan charge to be introduced in 2019.
3 ESCs to be enacted in April 2017
Extra-statutory concessions (ESCs) covering input VAT prior to insolvency, non-resident trusts and inheritance tax on woodlands will be enacted into legislation from 6 April 2017.
Case Update (freeview)
Private mileage made good: NIC still payable
In M Najib & Sons Limited v HMRC [2017] UKFTT 0147 the First-Tier Tribunal (FTT) agreed with HMRC that mileage payments for commuting and health insurance payments were earnings and subject to Class 1 NIC despite later repayment by the Directors.
Overseas agents fees for universities
In a lead case for Universities, University of Newcastle Upon Tyne v HMRC [2017] UKFTT 0145, the First-Tier Tribunal (FTT) concluded that from 1 January 2010, the university must pay irrecoverable VAT under the reverse charge mechanism for overseas agency fees.
Editor's Choice (subscribers)
Directors' Tax Planning Toolkit 2016/17
As we approach the end of another year, have a read through and check out that you claimed what you can.
Accounting periods and tax basis periods
UPDATED: new tab added on what Making Tax Digital means for accounting and basis periods, including the possibility to delay onset by changing your accounting period.
What is the 2017/18 PAYE Tax Code?
NEW: What codes do you need to use in the next tax year? (freeview)
Cash or accruals accounting toolkit
UPDATE: Finance Bill 2017 proposals and new limits
Flat (fixed) rate expenses or actual cost toolkit
UPDATE: is it better to claim a fixed rate expense or go for actual cost when you are self employed?
Practical Tax Guides and Updates (subscribers)
ISA Guide
UPDATED: draft regulations have been published on preserving ISA benefits on death.
Residence v non-residence: tax treatment
UPDATED: More information added on the temporary non-residence anti-avoidance rules.
Non-domicle status & tax
UPDATED: draft legislation relating to the new deemed domicile rules and settlement provisions.
CPD Webinars
Missed last time's update?
Nichola's SME Tax Update 10 February 2017
Features:
- Making Tax Digital: Let's simplify further.
- Scottish income tax rates and thresholds.
- Cases on Sch36, insurance premiums taxable as earnings, suspension of VAT penalties and late NIC contributions.
- Charging your company rent: will the new mortgage interest restrictions apply?
- PSCs and the public sector.
- Leaving the flat rate scheme.
- Unauthorised payment charges for pensions.
- Gift Aid.
- Foreign pensions.
- Main Residence Nil Rate Band and trusts.
- Social Investment Tax Relief (SITR).
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