As a change from income tax self assessment, we have various cases and updates on the VAT side for you this week together with analysis of a long awaited Upper Tribunal decision on MSC providers, and we are also looking at year end tax planning.

I did not want to mention self assessment, however HMRC confirms that 40% of all tax returns were filed in January and of the 11 million required, some 795,000 returns are still outstanding. For every late return there is penalty and so it is better to file on time, if possible. It is no coincidence that a new banking app was also launched last week.  This promises to take care of banking, accounting and tax and revolutionise self assessment, thus avoiding penalties. It would be fantastic if it was that easy and this leads me on to the MSC decision. 

The court found that the MSC providers were "involved" with the PSC's they were working with and, as a decision based largely on its own facts, it does little to clarify the position for others going forward. You can see where I am heading, when banks combine tax and accounting where does a managed service provider either begin or end? 

Thinking ahead to the end of the tax year we have our 2017/18 Tax Planning checklist as well as details of the new Risk to Capital restrictions on EIS, SEIS and VCT relief. The latter is an anti-abuse rule which is not going to affect most genuine entrepreneurial start-ups. Our point of interest is that HMRC are already implementing these new rules despite the fact that they are not the law yet. This may affect certain advance assurance applications.

If you have any tax queries please do try out our Virtual Tax Partner support portal at www.VtaxP.co.uk: subscribers you are entitled to free quick queries so do ask.

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)

OTS to review IHT following HMRC report
The Chancellor has written to the Office for Tax Simplification (OTS) requesting they carry out a review into the Inheritance Tax (IHT) regime. This follows HMRCs published report on IHT reliefs.

Risk to Capital Condition: EIS, SEIS & VCTS
Finance Bill 2017-18 introduces a new anti-abuse condition for companies applying for EIS, SEIS and VCT funding. HMRC are already not giving advance assurance where they believe the condition will not be met. 

Case Update (freeview)

HMRC must close enquiry when all information has been provided
In Hadee Engineering Co Ltd v HMRC [2017] TC06272, the First Tier Tribunal (FTT) ordered a closure notice issued where the taxpayer had provided all the information available in respect of its claim for Research and Development tax credits.

Confirmed: MSC provider involved with personal service companies
In Christianuyi Limited & Others v HMRC [2018] UKUT10  the Upper Tribunal agreed that a Managed Service Company (MSC) Provider was ‘involved’ with the taxpayers' personal service companies and subject to the MSC rules. 

Editor's Choice (subscribers)  

Tax Planning for the 2017/18 year-end
NEW: This is our year-end and new tax year tax checklist and toolkit for individual Private Clients; it can be used in conjunction with our checklists for Directors, Employers and Self-employed individuals.

How to appeal a tax penalty (subscribers)
UPDATE: a step by step guide that considers your different options in drafting an appeal and the various different grounds on which you may make an appeal.

Grounds for Appeal: Toolkit
NEW: there are numerous grounds of appeal as this handy toolkit with links to cases illustrates.

Tax Guides and Toolkits (subscribers) 

Statutory Residence Test Toolkit
UPDATE: As the end of another tax year looms ensure that your day-counting calendar is up to date.

Non-Domiciled Tax Toolkit
UPDATE: This toolkit provides an outline of the tax compliance issues for non-UK domiciled individuals.

CGT: Private Residence Relief
UPDATE: a relief that seems so straightforward and so often is not. Contains many traps for unrepresented taxpayers.

Professional Conduct in Relation to Taxation
UPDATE: HMRC have updated their standards for agents not regulated by a professional body in respect of tax planning so we have updated our guide too.

VAT (freeview)

Skates hire separate to entrance fee
In The Ice Rink Company Ltd and PI (Milton Keynes) Ltd [2017] TC06117, the FTT agreed with the taxpayer that the supply of access to the ice rink and hire of skates were two separate supplies.

Harley-Davidson membership not a single supply
In Harley-Davidson Europe Limited v HMRC [2017] TC06268, the FTT agreed with the taxpayer that the membership fees should be apportioned between zero-rated and standard rated supplies.

Novation of property sale loses exempt status
In Hanuman Commercial Limited v HMRC [2017] TC06249, the First-Tier Tribunal (FTT) concluded that the novation of a contract for the sale of land was a standard rated supply not an exempt supply of land.

Care home sale and leaseback triggers VAT charge
In HMRC v Balhousie Holdings Limited [2017] UKUT 410, the Upper Tribunal (UT) agreed with HMRC, that the sale and leaseback of a care home was the disposal of an entire interest in a property and a self-supply VAT charge arose.

VAT (subscribers)

Single or multiple supply?
UPDATE: where there is a dominant, principal supply and ancillary supplies or supplies so closely linked they are indivisible, the supplies are treated as a single supply.

VAT: Land and property (notes)
UPDATE: queries on VAT and land and property are never ending. Our guide includes comments on the most commonly dealt with issues.

Registering for VAT
UPDATE: recharged expenses, such as travel and subsistence can cause the turnover tests for compulsory VAT registration to be met.

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Missed last time's update?

Nichola's SME Tax w-update to 25 January 2018


  • Disguised remuneration: applying to postpone your tax charge
  • Help to save scheme
  • Welsh income tax and taxpayers
  • National insurance: what is the maximum payable
  • SDLT exempt transfers
  • and much more..

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