This time we have a bit of a mix for you. We are introducing the first of a set of new guides on different trade, professions and vocations. Today, we have the formal launch of our Disguised Remuneration Zone and updated guides for companies and their owners. Plus our pick of topical SME case law.
If a trade has no hope of profitability and if found to be operating on a non-commercial basis, then you are prevented from claiming side-ways loss relief. This rule applies for all business including companies. It might be argued that share dealing is not trading but an investment activity, but where do you draw the line? We report a case on this topic this week, worth a read if you are advising in this area as it contains a good run down of the Badges of Trade in relation to share dealing.
The other case that caught my eye involved late claims for capital allowances. You would think, by now that most of us would know the rules as to when you can make a late claim? It appears that we didn't and neither did HMRC. The FTT finds that on strict reading of the relevant legislation that if HMRC opens an enquiry into your company tax return, you will then have the opportunity to make a late capital allowances claim. Whilst this is not something I have ever needed to do, I am sure that this will be useful for some people.
Turning to our new Disguised Remuneration Zone, we have found that lots of people are baffled by the tax calculations that are required if you settle your outstanding loan, whether a contractor loan, an EBT loan or a self employed contractor loan. We have therefore provided template calculations for you. Given the number of these loans that have been set up over the last ten years or so we calculate that there must still be many cases left to settle, and settle you must do if you wish to avoid a punitive tax charge next year.
Finally, not forgetting VAT! That can be an expensive mistake as some directors found when their company became insolvent. Do check out our other guides.
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.
Nichola Ross Martin FCA Tax Director
Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers
Quick news (freeview)
Some Overseas Territories to declare beneficial owners
British Overseas Territories may be required to establish public registers of beneficial ownership in 2020.
Conduct of Tax Enquiries and Disputes: Treasury inquiry
The Treasury Sub-Committee has recently opened an inquiry into the conduct of tax enquiries and the resolution of tax disputes.
Treasury inquiry into Tax avoidance and Evasion
An inquiry has been launched by the Treasury Sub-Committee into the progress made by HMRC in recent years in dealing with tax avoidance and evasion.
Case Update (freeview)
Tax return enquiry allows a late capital allowance claim
In Dundas Heritable v HMRC  TC6476 the FTT found on technical analysis, that Paragraph 82 Schedule 18 FA 1998 gives an unexpected result: the taxpayer is given the chance to make a late claim for capital allowances once HMRC has opened an enquiry into the relevant return.
Share dealing is a trade and HMRC's late evidence is not admitted
Rajesh Gill v HMRC  TC06477 the FTT decided that share dealing could be a commercial trade in respect of side-ways loss relief, it also considered a procedural point: could HMRC 'ambush' the tribunal with late evidence? The answer that was expensive for HMRC.
Editor's Choice (subscribers)
What expenses can I claim? A to Z for particular trades, professions and vocations
UPDATE: introducting our new resources if you are advising sold traders or partnerships
Disguised remuneration? Start here...
NEW FREEVIEW GUIDE: a new guide to help you navigate our new Disguised remuneration zone.
Tax Guides and Updates (subscribers)
Directors: what expenses can I claim?
UPDATE: special rules for company owners
Hairdressers: what expenses can I claim?
NEW: our checklist for subscribers outlining what expenses hairdressers can claim for tax purposes.
Sideways loss relief (restriction) for uncommerical trades
UPDATE: find our by what is meant by an uncommercial trade and how it affects loss claims.
Anti-avoidance: residence issues
UPDATE: UK residents owning shares in private offshore companies can be taxed on the capital gains of the company in certain circumstances. We have added a section to our guide to explain how the rules work.
Tax-efficient profit extraction checklist 2018-19 (companies)
UPDATE: this tax tool can be used for a new company, an existing company and company owners and directors. It also contains links to detailed guides on salary v dividend, IR35, the settlement provisions, income shifting, use of home, charging your company a licence fee, employment related securities, transactions in securities, repurchase of own shares, capital reduction and striking off.
Directors' 2018-19 Tax Planning Toolkit
UPDATE: Read in conjunction with the above guide for your company.
Treasury call for evidence: VAT
The Treasury Committee has launched a call for evidence in respect of four areas: VAT and the tax gap, VAT and Brexit, VAT and business and VAT and good tax policy.
Directors liable for VAT failings
In S D Raithatha (As Liquidators of Halal Monitoring Committee Limited) v M N A Baig & Ors  EWCH 2059 (Ch), the High Court found the Directors were personally liable for VAT debts due to a failure to register for, and charge, VAT.
Opting to tax land and property
Options to tax are one of the areas we are always asked about. Our guide covers what an option to tax is, what you need to do to opt to tax, and what happens if you buy an opted property.
Transfer of a going concern (TOGC)
Substantial VAT charges on the purchase of businesses or property can arise where the TOGC rules are not met or carefully considered prior to purchase. See our guide for the rules and case law on this area.
Missed last time's update?
- The UK's first Autonomous motorcycle: an R&D hit
- Disguised remuneration: FAQ and last chance for settlement
- Private client: what's on May 2018
- TAAR: distributions on winding up (anti phoenixing rules)
- and much more..
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