We have some interesting news and new guides for you this week.

In our newest guide we take a look at the taxation of image rights in the UK. Many top footballers and celebrities have image rights companies. Pretty much standard planning (if the celeb is a non-dom) is the type of structure where an offshore trust is set up to hold the shares in the image rights and other offshore companies. The House of Commons Public Accounts Committee (PAC) has been highly critical of HMRC's lax approach to taxing footballers' image rights, and the question is whether our latest chancellor will create some kind of tax machanism to deal with the issue. We already have 'deemed' payments for IR35 and 'direct deemed' payments for off-payroll working, so not too much imagination is required.

Last time I was critical about HMRC's plans to fill in the gaps in the Making Tax Digital (MTD) Finance bill 2017 legislation by using secondary legislation. I gather that HMRC is also going to try and iron out some of the IR35/Personal Service Company off-payroll rules by adjusting the PAYE regulations, although that does not solve the corporation tax issues alluded to last week. Use of regulations to repair gaps makes for bad law. However, if you are going to make it up as you go then you need to have the authority to do so. In a recent FTT case, the tribunal found that HMRC did not have the authority to make regulations allowing employers to reclaim VAT on employee fuel. Perhaps this is another thing that the chancellor can fix in the budget.

Finally, we asked HMRC whether the forthcoming restrictions on tax relief on landlords' finance costs could apply if you are renting part of your property to your own company. HMRC thinks that they will and so it is worth reading the guide on this below. 

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 Agent Update February 2017
HMRC have issued their Agent Update for February / March 2017: we have summarised the key content for you with links to our detailed guidance on the topics covered.

Changes to Scottish Tax Tribunals
From 24 April 2017 the existing Scottish Tax Tribunals will be reorganised.

Late filing penalties: new online appeal service
HMRC have introduced a new online service for appealing against late filing penalties for 2015/16 self assessment returns.

New Advisory Fuel Rates from March
HMRC have published new advisory fuel rates for company car drivers which will apply from 1 March 2017. 

Case Update (freeview)

VAT & vouchers: Court of Appeal decision
The Court of Appeal has published its decision in the long running case of Associated Newspapers Limited v HMRC [2017] EWCA Civ 54 concerning the VAT treatment of retail vouchers given away by newspapers.

Regulations invalid: VAT on employees' fuel is irrecoverable
In Marsh (Bolton) Limited and Others v HMRC [2017] UKFTT 0149, the First-Tier Tribunal (FTT) determined that the regulations allowing for employers to recover VAT on reimbursements of business mileage to employees are invalid. 

Editor's Choice (subscribers) 

Image rights and tax
NEW: A summary of the taxation of image rights and the use of image rights companies. 

Charging your company rent: will the new interest restrictions apply?
UPDATE: response from HMRC

Practical Tax Guides and Updates (subscribers) 

Salary 2017/18 (avoiding NICs)
NEW: What is the optimal monthly or weekly salary that can be paid by an employer without incurring a liability for the employer or employee for National Insurance (NICs)? 

Do I pay a salary or dividend? 2017/18
NEW: This guide explores the tax-planning points and pitfalls of using dividends to create a tax-efficient pay package. 

Investors' Relief
UPDATED: The way that Investors' Relief and Entrepreneurs' Relief interact added to our note.


Transfer of a going concern (TOGC) - properties
UPDATED: Note on 1% retention rule for leases and how this works for leases over part of a building

Flat rate scheme
UPDATED: Confirmation that the 1% reduction for newly registered businesses applies to those caught by the new 'limited cost trader rules'.

CPD Webinars

Small Companies Update

Missed last time's update?

Nichola's SME Tax Update 17 February 2017


  • HMRC's latest employer bulletin.
  • PSCs & the public sector: ICAEW say changes needed.
  • HMRC spotlights disguised remuneration avoidance schemes.
  • ESCs to be enacted in April 2017.
  • Cases on NICs on private mileage made good and VAT on overseas agents fees for universities.
  • Accounting periods and tax basis periods: what impact will Making Tax Digital have?
  • What is the 2017/18 PAYE code?
  • Updates to our cash or accrual accounting and fixed or actual expenses toolkits.
  • Temporary non-residence.
  • ISA benefits after death.
  • The new deemed domicile rules and the settlement provisions.

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