Hello
Happy New Tax Year and we welcome in the UK's newest tax, Sugar Tax.
Reflecting on SME tax at the beginning of another year, it does not seem to get any easier! Many of the same issues continue to haunt tax payers and their agents, as our pick of recent case decisions reveals.
We have a new IR35 case where HMRC lost their argument due to the contractor in question being largely left alone to get on with his work unsupervised. It is only a FTT decision but possibly of some significance as the BBC continues to deal with the aftermath of the Christina Ackroyd Media case, and we wait to see whether (or when) responsibility for IR35 status will pass to the engager in the private as well as the public sector going forwards.
The Upper Tribunal overturned the FTT's decision in the Stephen West case. Pre-liquidation planning involved voting a salary in order to clear a director's overdrawn loan account. PAYE was operated and book entries were all made. The company then went into liquidation and unsurprisingly did not pay its PAYE. Unsurprisingly, HMRC challenged the FTT's finding that there was no wilful and deliberate failure to deduct PAYE and won.
In Sippchoice, HMRC ignored their pension manuals and queried whether an in specie contribution of company shares into a personal pension plan in lieu of cash was a payment for income tax purposes. The pensions industry will be pleased to find that it was. HMRC may yet appeal the decision, which hangs on the wording of the agreement to contribute.
We thought we were having a fairly quiet week thanks to the Easter holidays when HMRC dropped a bombshell and announced that they had just remembered that EU State Aid approval for the Enterprise Management Incentive (EMI) scheme expires on 6 April 2018. Do not issue any EMI options until approval is renewed.
As we have been getting more and more queries on trusts, we have been refreshing our guides as well as concentrating on deadlines and changes coming up.
Finally, thinking of changes, the new General Data Protection Regulations (GDPR) apply from 25 May. If you have bought mailing lists for marketing purposes ensure that you know your responsibilities under GDPR. Have a look at our guide to make sure you are compliant.
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)
Large business compliance risk review: consultation response
HMRC have now published a response to their consultation ‘Large Business compliance – enhancing our risk assessment approach’.
Trusts and Estates: What's new? April 2018
HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version.
Expiry of State aid approval for EMI option schemes
HMRC has advised that EU State Aid approval for the Enterprise Management Incentive (EMI) scheme expires on 6 April 2018 and whilst the government has applied to the European Commission for fresh approval, it will not be received before 6 April 2018.
SDLT: Wales
Stamp Duty Land Tax (SDLT) does not apply to land transactions in Wales from 1 April 2018.
Case Update (freeview)
HMRC lose latest IR35 case
In MDCM v HMRC [2018] TC 6400 IR35 did not apply; MDCM’s contractual arrangements were such that its primary employee did not have to be treated as an employee of the ultimate contracting company, he was skilled and experienced and given autonomy in how he undertook his work.
Decision overturned: Liability for PAYE transferred to sole director
In HMRC v Stephen West [2018] TC 0100 the Upper tribunal (UT) overturned the decision of the First Tier Tribunal (FTT): the director of an insolvent company was liable for PAYE on a bonus paid just before the company went into liquidation.
HMRC challengers in specie pension contribution
In Sippchoice Limited v HMRC [2017] TC06378 the FTT confirmed that a contribution ‘in specie’ paid into a SIPP in satisfaction of a monetary obligation amounted to a payment and so was allowable for income tax.
Editor's Choice (subscribers)
Property buy-to-let: personal ownership or limited company?
UPDATE: what to do with your property portpolio? The dividend allowance reduces to just £2,000 on 6 April 2018 and Wales sees the introduction of its own version of stamp duty.
Finance Act 2018-19: tax update and rolling planner
Our rolling planner includes details of all changes for new 2018-19 tax year and like all our planners is updated during the year ahead.
Practical Tax Toolkits
Key guides for self employed taxpayers. As the new tax year commences now might be a good time to take another look at our tax toolkits to plan for the year ahead.
Tax Guides and Updates (subscribers)
UK Trusts
UPDATE: More information added about pre-2006 trust which do not fall within the relevant property regime.
General Anti-abuse Rule - GAAR
UPDATE: HMRC have released a new factsheet about counteraction notices and adjustment details of which are now in our guide. Are you ready for it?
General Data Protection Regulation (GDPR)
NEW: The GDPR comes into effect from 25 May 2018 and brings tougher sanctions for data breaches than the Data Protection Act.
R & D: Staff costs & Subcontractors & Reimbursed Expenses
UPDATE: The deadline for making amended claims for prior years in respect of reimbursed expenses is 30 April 2018. See our R&D zone for more details.
Welsh Land Transaction Tax (LTT)
UPDATE: Welsh LTT was introduced on 1 April 2018. Our subscriber guide explains how it works, what the transitional arrangements are and how to deal with cross border transactions.
VAT (freeview)
Accountants fees
Input VAT recovery on accountancy fees is likely to be denied if personal tax work is included in the bill. Our guide explains how to avoid creating problems for clients here.
VAT (subscribers)
Flat rate scheme
UPDATE: HMRCs approved Flat Rate Scheme (FRS) simplifies VAT for businesses by applying a lower flat rate percentage to gross sales instead of making businesses calculate input and output VAT. This is an area we get asked about quite regularly.
CPD Webinars
Missed last time's update?
Nichola's SME Tax w-update to 29 March 2018
Features:
- Gardens: selling or developing your land
- Closure notices
- Discovery assessments
- Many (unhappy) returns: to-do list before/after 5 April 2018
- Directors: creating a home office
- and much more..
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