Hello
This time we feature our Land and Property update and a really interesting business separation VAT case. There is of course much more...
The CIOT and IFS held a debate this week on Tax Simplification. It seems that although the Office of Tax Simplfication (OTS) has had some good ideas, the combination of politics and the need to prevent tax avoidance get in the way and then we end up with chaos. The OTS has published a paper showing how it had analysed tax complexity, and I have to confess that I found the paper too esoteric to be able to summarise in a nice way.
In terms of complexity caused by politics, this year's bomb shell that HMRC had mis-specified the requirements to calculate the dividend and savings allowance shows that chancellors should not be allowed to attempt to produce rabbits from their hats, or perhaps that political parties should never say that they won't raise taxes because we know that they will then just tinker with allowances. The knock on effects on the poor taxpayer are quite unreasonable.
In terms of complexity caused by tax avoidance, again we seem to be shot in the foot by complex legislation. We feature a case this week in which tax scheme users tried to appeal a Follower Notice on the basis that it was not drafted properly and so was not a Notice within the terms of the legislation. It is daft for HMRC to press forward legislation that they apparently cannot operate.
And, don't get me started on company losses...we have an almost uncodeable new corporate loss regime. It did not go through the Finance Act due to the election, but it is expected to be added to the next finance bill. Quite why we have such complicated rules at this time (the OTS is currently reviewing corporation tax) defeats me, but I imagine there will be long debates in the tax teams of the multinationals on the proposed provisions. I don't understand why, given the respresentations made by tax bodies and industry, HMRC have not amended their proposals.
We are all waiting in anticipation for HMRC's post election announcements, the prime points of interest being what will happen in respect of Making Tax Digital and what will happen to the legislation that was omitted from the first finance bill. As the Queen's Speech will now be next Wednesday I expect that we will hear more next time.
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Enjoy the guides and updates and the news is below.
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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 will cancel inactive VAT Direct Debits
HMRC have updated the terms and conditions for direct debit agreements relating to VAT payments: if your direct debit is inactive for 13 months, it will automatically be cancelled under the Dormancy Period rules. This could catch out some annual accounting cases.
Accelerated payment notices
HMRC has updated its list of current tax schemes where accelerated payments may be due, there are some 1,200 schemes.
E-books to become zero rated?
The European Parliament have voted heavily in favour of amending the EC Directive 2006/112/EC, which is the leading law for VAT across Europe, to grant all Member States the right to treat electronically supplied publications in the same way as printed publications.
Clearance for complex cross-border VAT transactions
HMRC have agreed to continue to participate in a trial of VAT ruling requests for complex cross-border transactions until 30 September 2018.
Case Update (freeview)
Was terminal loss part of the return under enquiry?
In Spring Salmon and Seafood Limited [2017 UKUT 0205 (TCC) the Upper Tribunal (UT) upheld the decision that a terminal loss relief claim was not a stand alone claim.
Follower Notices challenged
In David Benton, Steve Jackson, Paul Hudson v HMRC [2017] participants in tax schemes tried to bar HMRC from their penalty appeals on the basis that Follower Notices were invalid.
Husband and wife partnership is two businesses for VAT
In G & C Belcher v HMRC [2017] UKFTT TC05891 the First-Tier Tribunal (FTT) agreed with the taxpayer that, even though they had submitted partnership returns under self-assessment, they were two separate business and so were not required to register for VAT.
Editor's Choice (subscribers)
Land & Property: an Adviser's Tax Update June 2017
What's new in land and property tax.
Capital Taxes Round-up: June 2017
What's hot and what's new in CGT and IHT this tax year.
Practical Tax Guides and Updates (subscribers)
LBTT: Additional Dwelling Supplement
UPDATE: A draft order is due to come into force at the end of the month, ensuring spouses, civil partners and co-habitants can get refunds of the 3% additional Scottish LBTT on repacement main residences where only one of them owned the previous residence.
SEIS: Seed Enterprise Investment Scheme
UPDATE: read our guide on SEIS covering the income tax relief on investment and rules on loss relief
Social Investment Tax Relief
UPDATE: there were a number of proposed changes, including a six-fold increase in amount that can be raised, which are effectively on hold following removal from the final Finance Act 2017.
Business splitting and VAT (single business directions)
UPDATE: updated for recent case law
Tax advice for 2017/18
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?
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?
The Finance Bill 2017 tax update and rolling planner
UPDATE: Our unique tracker new legislation and consultations across all the taxes relevant to SMEs.
CPD (for lunch)
Manageable chunks of practical and relevant tax CPD to go with your lunch or afternoon cuppa
New webinars on:
- Employer's update
- VAT Update
- Flat Rate Scheme
- Making Tax Digital: Practical issues for tax agents
- How to Run the Most Tax Efficient Accounting Practice... Ever!...More
Missed last time's update?
Nichola's SME Tax w-update 9 June 2017
Features:
- Penalties and how to appeals
- Penalties: P11D and VAT
- Woodlands
- Sch 36 Information Notices
- Pricing guides for accountants
- Making Tax Digital updates
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