How many lawyers will it take to work out your Making Tax Digital for business (MTDfB) start-date? 

This is not a trick question, it is just that the draft secondary legislation as currently penned probably does not give the right answer. I say probably because at this point the legislation is in draft, and it is also secondary legislation. Secondary legislation does not get properly scrutinised by parliament, more's the pity. In this instance the MTD rules will cause problems if you are trying to program software for the new rules, write a tax guide to explain the new rules, or (God forbid!) attempt to advise a new client as to how their choice of year end will affect their MTD start date.

I can see a pattern is emerging. This is the fourth incident in recent months where we see that tax legislation is either poorly drafted, not followed correctly or is misinterpreted. Other recent occurrences, which are all discussed in more detail below, are as follows:

  • HMRC have changed their guidance on tax relief on interest when you withdraw capital by re-mortgaging your buy-to-let. They did not publicise the change but the result has created inconsistencies between their manuals and everyone else's guidance. Watch out if you are landlord or advising one.
  • Several tax commentators say that the rules HMRC apply on Top Slicing relief are wrong and it should work differently if you follow the actual legislation and not the guidance.
  • Many tax advisers say that the new rules for cleansing offshore bank accounts for non-domiciled individuals who become deemed UK domiciled do not work as intended.
  • And then there is of course the Self Assessment software specification error which has meant that the personal allowance has not been allocated correctly in cases where there are dividends and savings income. There are actually many other specification errors and the problem is a bit like an old bucket: plug one leak and other one appears.

Finally, my apologies for the bad link to the Fees for sale last week. it will now work.

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)

Making Tax Digital: when is the start date?
HMRC's draft secondary legislation introduces MTD for business a year too early! 

Interest on re-mortgaged buy-to-let property
HMRC seem to have changed its long held views on the availability of tax relief on interest charged on new borrowings by property business owners who remortgage their property to withdraw capital from their business. 

Agent update October/November 2017
HMRC have issued the Agent Update for October / November 2017. We have summarised the key content for you with links to our detailed guidance on the topics covered. 

Agent access to online trust registration is now live
On 17 October 2017 the new online trust registration service (TRS) went live for agents.

OTS call for evidence: Capital Allowances and depreciation
The OTS have published a call for evidence as it begins its review of whether to replace capital allowances with depreciation.

Personal credit card payments to HMRC will stop in January
HMRC have advised that from 13 January 2018, they will not longer be accepting payments from personal credit cards.

Case Update (freeview)

Is there a trust?
In Akers and Ors v Samba Financial Group [2017] UKSC 6, a non-tax case, the Supreme Court considered the validity of a Trust arrangement over assets situated in a country that does not recognise trusts.

Trust migration and freedom of establishment
In Trustees of P Panayi A & M Settlements v HMRC (Case C-646/15) CJEU the European court held that if a trust was an entity under UK law the EU right to freedom of establishment would apply when it moved offshore.

Change to VAT on PCPs coming?
In HMRC v Mercedes-Benz Financial Services UK Ltd [2017] C-164/16, the Court of Justice for the European Union (CJEU) have issued a preliminary ruling, finding that the ‘Agility’ Personal Contract Plan (PCP) could be a supply of services and VAT may not payable at the outset in full.

Editor's Choice (subscribers)  

Private Client: What's on October 2017
NEW: All the latest news from the private client world, all in one place.

The General Data Protection Regulation
NEW: Our guide to the new data protection rules being introduced in May 2018. Everything your practice or business need to know and what you should be doing now.

Top slcing relief: how you slice it 
A number of commentators have suggested that the generally understood mode of operating top slicing relief is incorrect. We review this alternative interpretation with worked examples.

Practical Tax Guides and Updates (subscribers) 

Dividends: the index
START HERE for step-by-step guides and to avoid illegal dividends.

R & D & Patent Box
START HERE for DIY, mentoring or assisted claims. 

Non-doms and tax
UPDATE: there is still time to consider cleansing relief. This guide provides a handy summary of the new rules with links to other relevant guides in this areal.

Self employed: what expenses can I claim?
The 'devil is in the detail', from cash accounting to fixed rate expenses to individual expense headings.

Accounting periods and basis periods
UPDATE: what period end will be most suitable for you?


Time of supply
NEW: the time of supply of goods or services determines the date on which VAT becomes due. See our flowcharts and new guide.

Making Tax Digital

MTD: the Index


For sale/opportunities

Tax and accounting fees for Sale

1. Block of fees for sale: London area: 90 tax returns, 100 corporation tax returns.

2. Small block of fees: small business accounting and compliance work.

3. Professionally qualified subcontractor wanted: small business accounting and tax compliance. 

 CPD Webinars

New CPD click here

Missed last time's update?

Nichola's SME Tax w-update to 13 October 2017


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