The dust has still not settled following the Spring Budget on Wednesday following proposals to raise National Insurance for the self employed. The future, in general terms is not looking so good for the UK's 5.5 million self employed.
Highlights from the Budget
- The government had pledged a triple lock on income tax, NICs and VAT, however that measure only applies to Class 1 NICs and not Class 4 and so the chancellor is able to increase rates from next year, even if that apparently contradicts his party's manifesto. The newspapers seem to have a lot of sympathy for 'the white van man' however they are missing a trick: the cost of a rise in NICs is insignificant to the cost of Making Tax Digital for business (MTD).
- On MTD, in case you missed it, there was some good news those who trade under the VAT threshold, with income in excess of £10,000 p.a. will not be forced to buy and use new software and making quarterly tax accounts until April 2019.
- For shareholders there was some bad news: the dividend allowance decreases in 2018 to £2,000.
On a slightly more positive note, HMRC launched its new Employment Status Indicator last week and it also confirmed that it was going to amend the rules for Personal Service Company (PSC) workers who are contracting for the public sector. Your turnover for corporation tax will be the net amount received from your direct deemed payment and not the gross as previously indicated.
To cheer you all up we have some useful new guides and updates.
My top tip for this week's Essential Reading is our NEW subscriber guide 'Sole Trader v Limited Company (2017/18 on)'. This considers that vital question as to what is the optimum trading vehicle following the Spring Budget announcements. It contains invaluable sections with summaries of What's new for sole traders? What's new for companies? What's new for company owners? There are a facinating number of variables. If you have not already subscribed to our service then come on, and give us a try.
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.
Nichola Ross Martin FCA Tax Director
Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers
Quick news (freeview)
Spring Budget 2017: at a glance
Your essential guide to the new announcements in this week's Budget.
PSCs & the public sector: new HMRC guidance
HMRC have issued new guidance clarifying the corporation tax treatment for personal service companies (PSCs) under the new public sector off-payroll working rules.
New HMRC employment status tool
HMRC have published their new online employment status tool. This can be used by workers, agencies and engagers to see whether a worker is employed or self-employed for tax purposes.
New online form for repayment of additional 3% SDLT
HMRC have launched a new online form to apply for repayment of the higher SDLT rates for additional properties when you sell what was previously your main home.
Register to manage your apprenticeship funds
You can now create an account to access your apprenticeship levy funds.
Case Update (freeview)
Potential lost revenue: losses carried forward
In Simon Fry v HMRC  UKFTT 0158 the First-Tier Tribunal (FTT) found potential lost revenue should be calculated with reference to the taxpayer’s future plans, such as becoming non-resident.
Accountant's deceit results in large VAT penalties
In Promo International Limited  UKFTT 0161, the First-Tier Tribunal (FTT) reduced the taxpayer’s penalty from deliberate to careless due to the reliance on a member of staff who hid correspondence with HMRC from the Directors.
Celebs' and privacy in tax hearings
In Martin Clunes v HMRC  TC05692 the tax tribunal decided that a well known actor did not have any special right to privacy in relation to an application made ahead of a potential tax appeal against the disallowance of cosmetic surgery as deduction from his trading profits.
Editor's Choice (subscribers)
Sole Trader v. Limited Company: tax savings (2017/18 on)
NEW: what is the optimum trading vehicle following the Spring Budget announcements? What's new for sole traders? What's new for companies? What's new for company owners?
Finance Bill 2017 tax update and rolling planner
UPDATE: at a glance, across all the taxes, you can track new announcements, consultations and keep fully up to date for CPD.
Practical Tax Guides and Updates (subscribers)
Personal Service Companies & Tax
UPDATE: handy summary of what's new for you with worked examples of cases under IR35 and the new rules for PSCs in the public sector.
NEW: When can a closure notice be issued, what does it have to contain and what does it mean?
Pensions: unauthorised payment charges
UPDATED: case of Morgan Lloyd Trustees Ltd & Ray Hallam v HMRC  TC 05625 added: the First-Tier Tribunal (FTT) held that unauthorised payment and scheme sanction charges arose on the purchase of plant and machinery, but relief should be granted from unauthorised payment surcharges
Missed last time's update?
- Finance Bill 2017 publication date.
- Flat rate scheme limited cost trader proposals: VAT returns spanning 1 April and CIOT comments.
- Updated advisory fuel rates: HMRC got it wrong the week before!
- Tax rates and allowances: divergence of Scottish higher rate band.
- VAT cases on white goods in houses and insurance supplied by a taxi firm to its drivers.
- Withholding tax.
- Employers' NIC allowance.
- Dividend vouchers.
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