Nichola's SME Tax w-update 31 March 2017

Hello

A lot of exciting news this week, from HMRC software errors, to Brexit, to 'old school tax', and we have an Employer Update and last-minute, end-of-year checklist.

Multiple errors in HMRC's specification for the 2016/17 Self Assessment return means that some taxpayers in receipt of savings and dividend income will have to file their returns on paper. Perhaps a lesson here for the chancellor, having multiple allowances, tax rates and bands is a very bad idea. If the programmers cannot work it out then it is probably way too complicated. We all know that the creation of elaborate bands and rates was simply window dressing to disguise tax rises, but it rather worries me about the software specifications with regard to the end-of-year adjustments under Making Tax Digital. 

Prime minister May triggered Article 50 and the government has published a white paper which explains what this might mean for business.

We have a CGT hold over case featuring a bit of 'old school' tax, by this I mean s416 ICTA 1988 which sets out who controls a close company. Most people will be unaware of this section as it does not come up much since the associated company rules were abolished. The wide net of s416 caught out a hedge fund manager who was attempting to avoid CGT on some of his partnership interests when the massive Bluecrest hedge fund emigrated in 2010. Ironically, the fund moved to shield its partners from the new 50% income tax rate introduced at that time. HMRC seems to have had its teeth into other aspects of this fund's tax planning, more on that next week.

Plenty more to read below and some lovely new guides and updates. Finally, we are now looking for someone to come and join us in technical tax on the corporate side, see the advertisement 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

www.rossmartin.co.uk

Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers

Quick news (freeview)

Many (unhappy) Returns! To-do list before/after 5 April 2017
NEW: only a few days to go until the end of the tax year. 

HMRC software specification error means some 2016/17 forced to file on paper
The combination of the savings starting rate, dividend allowance and different tax rates proves too much for programmers.

Brexit: new white paper on legislating the move out of the EU
This explains how the Great Repeal Bill will convert the body of EU legislation into UK law and then considers options, such as imposing restraints on delegated power.

Spotlight 37: Contractor job board schemes
HMRC has issued Spotlight 37: Disguised remuneration: job board avoidance scheme. This features a scheme which attempts to avoid income tax and NICs by paying contractors in the form of redeemable loyalty points. 

Case Update (freeview)

Hold over relief fails: share ownership attributed to non-resident spouse
In William Reeves v HMRC [2017] TC05679, a US citizen’s claim for s165 CGT hold-over relief on transferring his partnership interest to his own UK company was denied when applying wide-ranging tests for control in s416 ICTA 1988:  his shareholding was attributed to his non-resident wife or children.

CIS and foreign subcontractors
In Schotten & Hansen (UK) Limited v HMRC [2017] TC05679 a taxpayer escaped a £28k penalty. Ignorance of the CIS rules was a reasonable excuse: neither taxpayer or accountant realised it applied to foreign sub-contractors.

No VAT refund for employment agency
In Adecco UK Limited & Others v HMRC [2017] UKUT 0113 the Upper Tribunal (UT) found that an employment agency was supplying self-employed temporary workers for VAT purposes. Contrasts with the decision in Reed.

Editor's Choice (subscribers) 

Employers: What's On - April 2017
NEW: An essential update for employers featuring all the changes for 2017/18, future proposals, consultations and recent cases of interest.

Practical Tax Guides and Updates (subscribers)  

Substantial Shareholding Exemption (SSE)
UPDATED: more details on the relaxations which come in from 1 April.

Leaving the Flat Rate Scheme
UPDATED: added details on how to maximise bad debt relief for those leaving the Flat Rate Scheme

Dividend tax (subscriber guide)
UPDATED: 2017/18 worked examples added.

Pensions:unauthorised payment charges
UPDATED: more detail added on the new authorised payment for pensions advice.

Vacancies

Technical tax vacancy
There really is nothing quite like www.rossmartin.co.uk and we have come from nothing to rank within the top 9,000 websites in the UK and we not stopping yet. We are here to look after the firms that look after the SMEs that drive this economy. We have lost count of our page impressions (too many) and our top visitors include HMRC and the top accountancy firms. We are looking for another technical tax professional to join our expanding technical team. We can offer flexible working (or full time) working from home. More...

Missed last time's update?

Nichola's SME Tax w-update 24 March 2017

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