This time we are having a closer look at late filing penalties. We also have new guides on the disguised remuneration loan charge.

Last time we promised you a new guide on how to complete the postponement application form for the disguised remuneration loan charge, but we have found an interesting issue with the form and are waiting for HMRC to let us know what the answer is before we publish our guide.

We have some interesting cases this week in which both taxpayers had their late filing penalties quashed by the tribunal. One notice to file went to the wrong address, the other was not delivered at all. Both cases raise complex technical issues, issues that were never considered when Schedule 55 FA 2009 was devised. This 'new' penalty system was meant to be easy to administer and to contain adequate safeguards to protect the taxpayer, however, as tribunal hearings reveal you often need a high level of expertise to appeal a tax penalty. The devil is in the detail and your case management both during the compliance process and appeal needs to be spot on. 

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)

More guidance on the Trust Registration Service
Following the introduction of the Trust Registration Service (TRS) in 2017, HMRC have issued more guidance about how to deal with existing trusts, access for agents who cannot use the online system and 2016/17 tax returns for new trusts.

New Welsh Land Transaction tax already reduced
Wales will introduce the Land Transaction Tax (LTT), its own version of Stamp Duty Land Tax (SDLT), in April 2018 but the lower threshold for the tax has already been reduced by the Welsh Government.

Case Update (freeview)

Late filing penalties: wrong address and late appeal
In Johnston v HMRC [2017] UKFTT TC06238, the First Tier Tribunal allowed a late appeal and held that no penalties were due for late filing of a joint income tax return: HMRC had sent the notice to file to the incorrect address. 

Late filing penalties: wrong address and HMRC out of time
In D Nnaji v HMRC [2017] UKFTT TC06233 the First Tier Tribunal decided that late filing penalties should be cancelled as no notice to file a tax return was delivered to the taxpayer. This also appears to be the first case to consider whether HMRC were in time to raise the penalties.

Editor's Choice (subscribers)  

Travel (self employed) 
GUIDE to what journeys qualify as business journeys, what records to keep and how to avoid the travel tax traps.

Subsistence (self employed) 
GUIDE: What can I claim as subsistence and how much, can I claim round sum allowances? This guide answers these questions and more for the self-employed.

Tax Guides and Updates (subscribers) 

As part of our self-assessment special we have refreshed the following guides, more to come next week:

Motor expenses (self employed)
UPDATED: for more information about the interaction with capital allowance claims.

Capital allowances: What is an integral feature?
UPDATE: more examples added to illustrate how the replacement rules work.

Capital allowances: Fixtures: overview
UPDATE: information added about solar panels as fixtures, as well as how to treat fixtures you never knew you had!

Property profits and losses toolkit 2016/17 
This toolkit takes HMRC's version and adds a great deal more information about what you can claim as an individual with a property business, now updated for how to deal with non-residents disposing of UK residential property.

Pensions: tax rules and planning
UPDATE: now includes details of how to deal with pension payments which include backdated payments which were in arrears.

CGT: Negligible value claims
UPDATE: we have added more information on the timing of claims to help ensure that where the claim relates to shares the claim can successfully be set against income.

CGT: Private Residence Relief (PRR)
UPDATE: selling a property you refurbished or that was a buy to let? PRR only applies to a property (or its grounds) if it was your only or main residence. This guide explains the conditions for tax relief.

VAT (freeview)

Construction industry fraud: consultation response
HMRC has published a summary of responses to ‘Fraud on provision of labour in the construction sector: consultation on VAT and other policy options’. It includes details of a new domestic reverse charge.

Tackling VAT fraud on online goods: consultation outcome
HMRC has published the outcome of its consultation on tackling fraud on goods sold online, ‘Alternative method of VAT collection’. This consultation explored the prospect of real time VAT collection.

Scope of VAT Grouping
HMRC has published a response to its consultation, ‘Scope of VAT Grouping’, looking at whether changes should be made to the rules on forming a VAT group should be changed following European Court decisions.

VAT (subscribers)

Agents and principals
UPDATE: disclosed agents will be able to treat some supplies as outside the scope of VAT. Undisclosed agents and principals will have to charge VAT. Our guide explores the differences and case law in this area.

Opting to tax land and property
UPDATE: opting to tax a property can secure VAT recovery and it can also protect against VAT clawbacks.

Post-deregistration VAT recovery
NEW: even after you deregister for VAT you may still be able to recover VAT on bad debts, late purchase invoices and credit notes.

Reverse charge & place of supply
UPDATE: with talk of a new domestic reverse charge, revisit our guide on the existing rules and what the proposed changes are.

EC Action plan: a single EU VAT Area
UPDATE: whilst HMRC look to tackle fraud on online goods, the European Commission are likewise looking to simplify cross-border VAT. This will include changes to the place of supply rules and more Mini One Stop Shops.

Costs sharing exemption
UPDATE: following EU Case law, the cost sharing exemption allowing independent exempt businesses to form a centralised admin company and save VAT, has been narrowed and only public interest businesses can qualify.

CPD Webinars

New CPD click here 

  • Trading and property allowances
  • Goodwill: reliefs and allowances

Missed last time's update?

Nichola's SME Tax w-update to 8 January 2018 


  • Top hits of 2017
  • 2016/17 Self-assessment tax return toolkit
  • Finance Acts 2017: tax update and rolling planner
  • Issuing new shares
  • Flat (fixed) rate expenses or actual costs toolkit
  • Closure notices

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