Hello
This week we saw the publication of VAT guidance for Making Tax Digital (MTD) together with, not only secondary but also tertiary legislation, for Making Tax Digital for business.
Given the massive outcry in parliament at the use of these 'Henry VIII clauses' (secondary legislation) in relation to the Brexit bill, I am hoping that anyone reading this will take this up with their MP. Do we want to see fundamental changes to the tax system legislated this way? Brexit is a massive bill. MTD is miniscule in comparison, however MTD for business will affect the vast majority of business in the UK. Why are HMRC allowed to make it up as they go along? This approach has been nothing less than a disaster for both HMRC's childcare accounts and the DWP's universal credit. Surely any proposals for a new system must be thoroughly piloted before legislation is drafted and not after, and MPs must scrutinise all the legislation. If we continue to legislate by statutory instrument I wager that 'ignorance of the law' will be a perfectly viable excuse.
HM Treasury has a new consultation/review on-going on business funding. Did you know that there are only two software companies listed on the FTSE 100? One of those is Sage Plc. The trouble is that US companies come in and buy up UK tech companies at an early stage. Everyone is happy about this as many UK investors, private equity in particular, are looking to go to market after just five years, unless they are asset stripping! What we need is to get into 'patient capital' so HMT thinks. I had not heard the term before, but this is the capital that sits and waits for long term gains. The review says that it is not looking for modification of any existing investment reliefs such as Entrepreneurs' Relief, SEIS, EIS, Investors' Relief or Business Property Relief, however it is considering further expansion of Business Investment Relief for non-domiciled individuals ('non-doms').
HMRC have just published the first ever statistics on non-doms and it says that there are only 85,000 non-dom taxpayers out of a tax paying population of 30 million. Of those just 400 individuals used Business Investment Relief and this sheltered some £837m of remittances into the UK from tax. The figures are tiny, however judging by our experiences we note that most non-doms don't file tax returns or if they do file tax returns, they do not necessarily complete the non-dom or residence pages anyway. I do hope that no one in HM Treasury is relying on these statistics. More importantly for us tax agents, following the new changes to the taxation of non-doms you will need to start completing the whole tax return to see who is now long term resident and now subject to tax on their worldwide income. To celebrate this new tax regime we have created a new Non-dom Tax Toolkit for you.
Lots more below including MTD for VAT, the new rules. A final death blow for EBTs following the Rangers' decision, a great new guide to pensions. More on this in coming weeks.
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)
Making Tax Digital
HMRC has published draft secondary and tertiary legislation and guidance in respect of Making Tax Digital for business, for Income Tax and VAT, together with draft guidance on MTD for VAT.
Autumn Budget 2017
The chancellor has announced that the Autumn Budget 2017 will be held on Wednesday 22 November 2017.
So few Non-domiciled taxpayers?
HMRC appears to have very little data on the number of Non-domiciled taxpayers in the UK.
Financing Growth in innovative firms
Condoc and review by HMT who are looking at patient funding and ways to enhance longer term investment into UK business.
Case Update (freeview)
Entrepreneurs' Relief the dangers of unusual share rights part 2
In HMRC v M & E McQuillan [2017] UKUT 0344 (TCC) the Upper Tribunal (UT) held that shares with no entitlement to dividends were Ordinary Shares for the purposes of the Entrepreneurs’ Relief legislation. Zero is not a number for tax.
No valid notice
In David Hogg (as executor of Mrs B Dodd) v HMRC TC05987 the First Tier Tribunal (FTT) held that neither s8 nor s8A of TMA 1970 apply to an executor’s Return so late filing penalties should be cancelled.
HMRC defeats another EBT scheme
In Oco Ltd and Another v HMRC [2017] UK FTT payments from an EBT into sub trusts were found to be earnings under the Ramsay principle; there was no possibility that the loans from the sub trusts to employees would ever be repaid.
Editor's Choice (subscribers)
Non-domiciles' Tax Toolkit
NEW: we notice that many non-UK domiciled individuals do not complete the residence or domicile sections of their tax returns. Thanks to the changes made on 6 April 2017 many more non-domiciled individuals will be now taxed on their worldwide income, gains as well as IHT.
Making Tax Digital for VAT
NEW: we summarise HMRC's draft guidance to the new regime from 2019.
Practical Tax Guides and Updates (subscribers)
Pensions: tax rules and planning
NEW & IMPROVED: We have rewritten our pensions guide which is now much easier to follow.
Company losses
UPDATED & IMPROVED: a new regime for carried forward losses from 1 April 2017 and a £5 million restriction on carried forward losses.
Making Tax Digital
MTD: the Index
Start here: Confused or bemused by HMRC's Making Tax Digital (MTD)? What does Making Tax Digital really mean? How will it affect you? Does MTD mean quarterly reporting? Is my business exempted from Making Tax Digital?
CPD Webinars
Missed last time's update?
Nichola's SME Tax w-update to 8 Sept 2017
Features:
- Negligent director liable for NICs
- Livery business qualifies for BPR
- HMRC timebarred in proceedings
- Buy to let incorporation
- ATED charge
- Tax on currency gains
- Crowdfunding
- SME company update August 2017
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