Just a short update this week due to the bank holiday weekend.

There has been some speculation this week that HMRC are legislating for six returns under MTD per year. You will have up to four quarterly MTD returns, an end of period statement (EOPS) to summarise your quarterly returns, and then a final declaration. HMRC say that they are not going to publish draft secondary legislation on Making Tax Digital (MTD) until the summer, therefore no one really knows if the EOPS and final declaration will be in the same 'return'. Turning to the latest MTD penalties consultation, those in HMRC who are designing a penalty system for MTD clearly think that there will be five MTD returns per year, they just don't let on how many additional returns, if any, will also be required. If there is a sixth return, then surely that will be just the same as a normal SA tax return, and if so, then why change that?

The MTD penalty condoc reveals little about the quantum of each proposed late-filing penalty, nor is there much on the subject of safeguards. When it comes to safeguards for the taxpayer, these need some careful thought. Existing safeguards need to be updated to reflect the difficulties posed by MTD, and there could be very high demand on both HMRC's and Tribunal's time in dealing with appeals. It would be useful to have some updated research on the existing penalty system as I think that there are now more cases on penalties then ever coming before the tax tribunals.

Happy Easter. 

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 April 2017
HMRC have published their Employer Bulletin for April 2017. We summarise the key content for you, with links to our detailed guidance on the topics covered.

Tackling the hidden economy: consultation responses
HMRC have published responses to their consultations ‘Tackling the hidden economy: Sanctions’ and ‘Tackling the hidden economy: Conditionality’. 

Beneficial ownership register for overseas entities: call for evidence
The Government have published a call for evidence on proposals for ‘A register of beneficial owners of overseas companies and other legal entities’.  This would introduce a new publically accesible register for overseas entities holding UK property or involved in government procurement. 

Case Update (freeview)

Accounting exchange losses allowed
In Smith and Nephew Overseas (and 2 others) v HMRC [2017] TC05644 accounting exchange losses arising from a change in the group’s functional currency from £ to $ were allowed for tax. HMRC tried to argue disallowance on the basis that there were no changes to the underlying assets.

VAT: providing free services to your group is not 'an economic activity'
In MVM Magyar Villamos Muvet Zrt. V Nemzeti Ado-es Vamhivvatal Fellebbviteli Igazgatosag (Case C-28/16) a holding company was unable to reclaim input VAT on its management activities as it was providing its services free of charge to its subsidiaries.

VAT payments can be allocated to current period first
In Swanfield Limited & Others v HMRC [2017] UKUT 0088 the Upper Tribunal (UT) held that VAT payments can be allocated to current period VAT in order to minimise default surcharges. 

Editor's Choice (subscribers) 

Tax efficient extraction of profits: toolkit (2017/18)
NEW: company toolkit designed to help directors decide how to plan salary, benefits, expenses and dividends. 

Directors: tax planning toolkit for 2017/18
NEW: covers key essentials for directors to plan their affairs for the next year.  

Starting in business: start here
UPDATE: what advice do you give a start up in 2017?

Incorporation of a property business
UPDATE: this guide takes you across the key taxes and also considers the new interest restrictions that commence in April, corporation tax and stamp duty land tax.

Practical Tax Guides and Updates (subscribers) 

Self employed: which accounting basis?
Cash or accruals, fixed rate expense or actual costs? Your choice for reporting for 2016/17.

Pensions: tax rules and planning
UPDATED: More details added on the changes for QROPS from 1 April 2017.

Withholding tax
UPDATED: For changes to extend the Double Taxation Treaty Passport (DTTP) Scheme from 6 April 2017.

Will I pay less tax if I trade via an LLP?
UPDATED: For 2017/18 rates 

Company cars and Van benefits
UPDATED: From 2017/18 the date for employees making payments towards private use is extended to 6 July following the end of the tax year.

Making Tax Digital

Consultation (FREEVIEW): penalties
HMRC has published a new consultation, ‘Making Tax Digital sanctions for late submission and late payment'. This follows a consultation last year and proposes a new penalty and interest framework to deal with taxpayers new multiple reporting obligations under its MTD proposals.

MTD: survival guide for the self-employed
A handy briefing for existing and new clients

MTD: toolkit for accountants
Stay on top of the latest developments.


Technical tax vacancy
There really is nothing quite like www.rossmartin.co.uk. 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 ecomomy, although our top visitors come HMRC and the top accountancy firms. We are looking for another technical tax professional to join our expanding team. We can do flexible working (or full time) working from home. More...


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Missed last time's update?

Nichola's SME Tax w-update 7 April 2017


  • Closure notices: new rules and cases.
  • Making Tax Digital: toolkit for accountants.
  • CGT Private Residence Relief.
  • Promoters of Tax Avoidance Schemes (POTAS).
  • Interest paid to directors and other individuals.
  • Losses, trade losses and sideways relief.

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