Hello
We have a fun-packed web-update this time. IR35, Sole trader v Limited company, trust registration deadlines, last minute R & D and Nesquick.
We also look at optimal salaries to pay for the current year and next year, and whether to incorporate in 2018/19 or not.
Top tips: now is a good time to register and run an annual payroll, if you have not already done one for 2017/18. It's also a good time to check over your dividend paperwork to ensure that is in order.
On IR35, the personal service company owned by BBC presenter, Christa Ackroyd former presenter of BBC1’s “Look North”, faces a tax bill of £420,000 after the tribunal found that she would have been classed as an employee if she had been directly engaged by the Beeb. Her own company should have assessed her employment status. This is an important decision as many presenters have been holding out in the hope that something in the nature of presenting gives them a special status. The tribunal thought not.
Although not a lead case, it is expected that more cases may follow in respect of BBC 'talent' and it proves that the IR35 rules can work when HMRC enforces them.
This week we also have a reminder that the deadline for the online registration of trusts of 5 March is fast approaching and don't forget to claim back your R & D costs.
Nesquick: it's a VAT thing, you need to scroll down to read more. I prefer Banana flavour as it happens.
We have had a 'rash' of SEIS and EIS queries of late. It appears that companies and their accountants are getting unnecessarily ensnared by the hideous complexities of these rules. Can I make a suggestion to HM Treasury/ HMRC if you are reading this, the rules are way too complex and this is absurd if you wish to encourage start-ups. People should not be tripped up by excess detail.
If you have any tax queries, on SEIS, EIS, IR35, appeals, investigations or anything else 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)
Spotlight 42: Contractor loan schemes: misleading advertising
The Advertising Standards Authority (ASA) has ruled that a promoted contractor loan scheme was misleading. It is highly unlikely (unless you are lower paid and have your personal allowance to deduct) that you will ever be able to '"take home up to 92% of your pay".
Extra time to claim reimbursed R&D expenses
HMRC have extended the deadline for claiming reimbursed Research and Development (R&D) expenses to 30 April 2018.
Online registration deadline for existing trusts
A reminder that the deadline for registering existing trusts with HMRC via the online registration service is now less than two weeks away, on 5 March 2018.
Employer bulletin: February 2018
HMRC have published their Employer Bulletin for February 2018. We summarise the key content for you, with links to our detailed guidance on the topics covered.
CIS repayments: top 10 tips
UPDATE: CIS repayments can now be claimed online using form i-form 2017. HMRC's 'old' list of top tips is still helpful, particularly if you choose to reclaim by post.
Wales: Vacant Land Tax
The Welsh propose a “Vacant Land Tax” (VLT) aimed at land where planning permission has been granted, or that is within a local development plan, but no work has been carried out. The objective is to disincentivise the hoarding of land.
Consultations
Corporate Intangible Fixed Asset Regime: Consultation
As announced in the 2017 Autumn budget, a new consultation has been opened in respect of the Corporate Intangible Fixed Assets regime.
Review of Modern Working Practices
As the UK considers how to make people work harder, four consultations following the Taylor Review of Modern Working Practices: Employment rights, transparency of employment agencies, transparency in contracts for workers, enforcement and sanctions for employers
Case Update (freeview)
IR35 and the BBC
In Christa Ackroyd Media Limited v HMRC [2018] TC06334, the First tier tribunal (FTT) held that a BBC television presenter was caught by the IR35 regulations.
NRCGT: Penalties reduced
In Alan Jackson v HMRC [2018] TC06329, the First Tier Tribunal (FTT) again considered the question of whether a non-UK resident could be expected to know about the Non-Resident CGT regime. In this case, the answer was yes but the penalties were reduced to £100.
Return found to be unsolicited
In DJ Wood v HMRC [2018] TC06339, the First Tier Tribunal (FTT) found that a return was unsolicited so late filing penalties could not apply.
Editor's Choice (subscribers)
Salary 2017/18 (avoiding NICs) (freeview)
There is still time to run an annual payroll: must register first, some software won't allow it, don't forget RTI rules.
Salary 2018/19 (avoiding NICs) (freeview)
NEW: What is the optimal monthly or weekly salary that can be paid by an employer without incurring a liability for the employer or employee for National Insurance (NICs)?
Sole trader v. limited company: tax differences & savings (2018/19)
NEW: Guide as to whether it is better from a tax perpspective to operate as a sole trader or limited company in 2018/19.
Do I pay a salary or dividend? 2018//19
NEW: Guide as to whether it is better from a tax perspective to extract corporate profits as salary or dividend.
Tax Guides and Updates (subscribers)
Business Investment Relief
UPDATE: Slight clarification following updated HMRC guidance.
Goodwill and the Intangibles Regime
UPDATE: to include changes in Finance Bill 2017-19
SDLT & residential property (dwellings): higher rate
UPDATE: a 3% surcharge applies to purchases of second residential properties, or the purchase of dwellings by companies. The company rate can be 15% on properties costing more than £500,000 in some cases.
Employers
IR35
UPDATE: for recent case law and developments
Working from home (employer/employee)
UPDATE: for recent case law
P11D: Reporting benefits and expenses
UPDATE: with the end of the tax year fast approaching, we have updated our guidance in respect of Salary Sacrifice and Optional Remuneration Arrangements.
PAYE and settlement agreement
UPDATE: In preparation for the new tax year
Appeals & Compliance
Grounds for Appeal: Taxpayer Excuse
UPDATE: for recent case law
Grounds for appeal: HMRC Error
UPDATE: for recent case law
Overpayment Relief
UPDATE: for Mark Wallace v HMRC [2017] EWHC 3115 (Ch)
Discovery Assessments
UPDATE: like Appeals this is a area of tax that is constantly evolving.
Overseas
Non-Resident CGT
UPDATE: for recent developments
Devolved Taxes
Northern Ireland corporation tax rate
UPDATE: Minor changes following updated HMRC guidance .
Welsh Land Transaction Tax
UPDATE: Minor amendments following the publication of additional regulations.
VAT (freeview)
U-turn for VAT recovery on employer pensions
HMRC have confirmed that employer’s can continue to recover VAT on pension scheme administration. This follows previous expectation VAT would not be recoverable from 1 January 2018.
VAT on Nesquick: what's your flavour?
In Nestle UK Limited v HMRC [2018] UKUT 0029, the Upper Tribunal (UT) agreed that although chocolate Nesquick was zero-rated, banana and strawberry Nesquick is standard rated.
VAT (subscribers)
Food: catering and takeaway
UPDATE: see our flowchart and details of the most recent cases including bicarbonate of soda and Nesquick.
VAT: deregistration
UPDATE: goods held on deregistration can trigger a VAT clawback, depending on the total market value.
CPD Webinars
Missed last time's update?
Nichola's SME Tax w-update to 16 February 2018
Features:
- Response to the Taylor review of Modern Working practices
- Agency workers consultation
- Employment status consultation
- Discovery assessments
- Draft PSA legislation
- Non domicile rebasing relief
- and much more..
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