Great to have some sunshine at last.

The Making VAT Digital (MVD) pilot starts this month, and a small number of businesses that meet the eligibility criteria have been asked to join. There is still a lack of MVD compliant software in the market although HMRC report that they have had strong interest from software developers and members of the accountancy profession. A couple of the firms who subscribe to this service are developing new bookkeeping products and I genuinely wish them well. Many of our clients struggle even with basic spreadsheets and it is going to be a tall order to digitise them sufficiently well for the proposed MVD start date of April 2019.

We have seen several cases on time limits in our inbox in the last couple of weeks, either as time limits for amending returns or from HMRC’s perspective for making a late (Discovery) assessment. An issue from the advisers’ end is that they have relied on software to do the job for them and not made a manual check of the computations to see that data has been entered incorrectly and so certain claims on returns have gone wrong. Very easy to point that out, with hindsight, not so easy when you are staring at a screen. Also, isn’t the whole point of software (and Making Tax Digital) that it does all the calcs? Conversely, HMRC processes returns and ‘checks later’ but their software does not apparently go so far as to make a logic check and it takes manual intervention to check certain entries. Who, if anyone, is being ‘careless’ in any of these processes? Why should we not rely on software listed by HMRC?  

Hope you all have a good week.

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)

Employer bulletin: April 2018
HMRC have published their Employer Bulletin for April 2018. We summarise the key content for you, with links to our detailed guidance on the topics covered.

Tax abuse and insolvency: a consultation
HMRC have opened a consultation “ Tax abuse and insolvency” focussing on the exploitation of the insolvency procedures to avoid or evade taxes.

Case Update (freeview)

Payer of wages not automatically the employer
In Grand UK Limited & others v HMRC [2018] UKUT 0096 the Upper Tribunal confirmed a dispute as to was the actual employer for PAYE. Was it the person who appeared to be the employer, or the person who actually paid the wages?

Expenditure is revenue not capital but is disallowable
In HMRC v Investec Asset Finance [2018] UKUT 0069 the Upper Tribunal agreed that the costs of capital contributions in relation to the acquisition of partnerships were revenue not capital but found they were still not allowable: the expenditure was not solely for the purposes of Investec’s own trade.

Open justice: third parties may request appeal documents
In Aria Technology Ltd v HMRC and Situation Publishing Ltd as a third party [2018] UKUT 0111 it was decided that a copies of tax appeal notice and the respondents response could be made available by the tribunal to a third party under the principle of open justice.

Editor's Choice (subscribers)  

Tax Penalties Grounds for appeal: HMRC error
UPDATE: we all make mistakes, sometimes it takes a tribunal to spot the error. This handy guide looks at appeals on the basis that HMRC has failed to follow the law or made errors in setting penalties.

Directors: tax planning toolkit 2018/19
This year's toolkit, like all our maintained guides, is a rolling planner and is updated throughout the year. This planner looks at a range of director tax issues, including company profit extraction, creating family companies, succession and disposal.

Visit our SEIS and EIS zones. Resources covering the two popular reliefs for companies and investors in start-up companies.

Tax Guides and Updates (subscribers) 

CGT: deductible expenditure
NEW: Guide on what is and isn't allowable as a deduction for capital gains tax.

P11Ds: top tips tool kit
UPDATE: for 2017/18 and the approaching P11D deadlines.

Employment Related Securities & Share schemes
UPDATE: not all share are employment related, there are mixed views as to when the friends and family exemptions apply and so far only one case has considered exemptions. Reporting deadline for 2017/18 is 6 July 2018.

CIS: contractors and subcontractors
UPDATE: more information on verifications, PDS, and monthly returns.

Scottish Income Tax Rates
UPDATE: clarification of how gift aid, marriage allowance, pension relief and mortgage interest relief will work for Scottish taxpayers. 

VAT (freeview)

Clubhouse similar to village hall gets zero-rating
In Greenisland Football Club v HMRC [2018] TC06321, the First Tier Tribunal (FTT) allowed zero rating on the construction of a clubhouse as the building was for the benefit of the community as a whole.

Land use partial exemption method best for woodlands
In Will Woodland v HMRC [2017] TC06021, the First-Tier Tribunal (FTT) agreed with the partial exemption method used by the charity: based on the way in which the land was used, an area basis.

VAT (subscribers)

Transfer of a going concern
UPDATE: for latest case law and when an option to tax has to be in place to qualify for TOGC.

Flat rate scheme
UPDATE: see our guide on the flat rate scheme, one year on from the introduction of the limited cost trader rules.

Leaving the Flat Rate Scheme
Revisit our guide on leaving the flat rate scheme, particularly if you have found that the limited cost trader rules apply to you. 

CPD Webinars

New CPD click here

Missed last time's update?

Nichola's SME Tax w-update to 13 April 2018


  • P11D and end of year reporting
  • New rules on termination
  • Family companies, giving shares and small company share schemes
  • CGT: Entrepreneurs' Relief and Private Residence Relief
  • Disguised Remumeration penalties
  • Lots of VAT stuff
  • and much more..

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