Nichola's SME Tax W-update 22 March 2011 - www.rossmartin.co.uk

: Last Updated: 28 March 2014

The 2011 Budget is on Wednesday, this Web-update covers recent non-budget news and updates. By popular demand, we have a new section on site. This is devoted to Incorporation and tackles exciting topics such as valuation, goodwill, overvaluation of goodwill and of course CGT reliefs. We also have a new guide to Reasonable excuse. HMRC does not factor in "not being able to contact HMRC in any reasonable timeframe" as a reasonable excuse. I am interested to know exactly how long it is reasonable to expect a taxpayer to spend in trying to contact HMRC. Is it 6+ hours, or are we now talking whole days? More new guides and news below, so scroll down for full details. Best wishes Nichola Nichola Ross Martin FCA Tax Director www.rossmartin.co.uk Your online Virtual Tax Partner: practical support for accountants, tax advisers and their clients
News and FREEview Reasonable excuse Freddie Starr ate your mouse? Seriously. What counts as a reasonable excuse in the event of tax compliance failure? OT and additional rate PAYE codes Clearing up muddle: new types of codes for employers to use from April. Late filing: do we need a proof of posting if HMRC has no proof of receipt? Late filing penalty - HMRC unable to provide evidence of date of receipt. Taxpayer did not obtain a proof of posting certificate - lucky escape? Simplified PAYE schemes for small employers Employing someone for less than £160 per week? HMRC simplified PAYE scheme is there to help. Increased penalties for offshore offences Increased penalties when errors and failures relate to offshore income and CGT: from 6 April 2011. Adviser Update: Feb/March 2011 All this and more is included in our rolling update, topped up throughout the month. PAYE Update Feb 2011 Practical tips and links ahead of the new tax year. Guides and updates For PAID subscribers (because you are so special :) New ABC shares: family companies NEW: a guide that examines the tax consequences of creating new share classes. Incorporation A NEW section of the site with NEW guides on valuation of goodwill, tax avoidance issues, and worked examples to help you choosing the right CGT relief. Goodwill & incorporation: tax issues NEW: HMRC challenge goodwill where it is overvalued. This can be difficult to prove, so any attack is limited to cases of obvious abuse. Valuation (of goodwill) for incorporation NEW: methods vary considerably from business to business. Anti-avoidance: sale of occupational income NEW: an income tax charge may arise where certain sources of income are disposed of from capital. Keeping up to date: Finance Act 2011: tax planner Click here for Budget updates. This is a CPD powerbooster: our rolling planner keeps you abreast of key changes in tax legislation as they are made and proposed in each Finance Act and Bill for 2010/11, 2011/12 and 2012/13. Tax penalties and compliance "Spot the difference" Reasonable excuse NEW: this is needed to mitigate penalties for compliance failures Reasonable care UPDATE: prove that you have taken reasonable care in order to avoid tax geared penalties Tax penalties: grounds for appeal ESSENTIAL READING: recent decisions feature taxpayer carelessness and HMRC's judgement in suspending penalties. Private client specials Tax planning for the 2010/11 year-end NEW: for private clients Pensions: tax rules and planning With so little time remaining to contribute in 2010/11, pay heed to the transitional rules for the Annual Allowance. Note also carry forward measures. Companies and directors Running an LLP in tandem with a company NEW: an interesting topic that brings with it a whole range of tax issues. Company and shareholder year-end tax planner UPDATE: a summary of the key planning points - don't just save this for the year-end these apply all year too. Dividends: formalities for companies NEW: essentials for discussion with directors. Is it worth restructuring to save tax? UPDATE: a five minute tax briefing designed to add value to meetings. PAYE & Settlement Agreements - (how to gross up for) Do you pay an employee's personal bill, or so you provide the benefit and pay the tax on that instead? "Back to basics": what expenses can I claim for? Travel (self-employed) UPDATE: new At a glance section; decisions coming out of the Tribunals may not all be binding, but we seem to now have established a methodology for working out when travel is allowable. Haven't we? What expenses can I claim: guides for the self-employed Take a tour: a summary of our guides and updates Recently added and updated: Purchase (repurchase) of own shares NEW: tips and practical points together with detailed links Purchase of own shares out of capital (checklist) UPDATE: a step by step guide to the Companies Act and tax requirements. PAYE & NICs review NEW toolkit/selling opportunity: perform a PAYE and NICs review on your clients before HMRC do. What are earnings for NICs purposes? UPDATE: when remuneration planning goes wrong and we have NICs on dividends and loan write offs. Entrepreneurs' Relief UPDATED: planning points and pitfalls with illustrations to make qualifying conditions clearer. Accounts health check (self-employed) UPDATED: a general re-write with more interactive links. Know your client & money laundering checks UPDATED: this now comes with new "prompts". Essential reading. Enterprise Investment Scheme (EIS) UPDATE: recent decisions: EIS not denied on an MBO, clarification on values for shares/loan stock. What is a small company? NEW: a handy little aid memoire, should you ever be worrying about tax rates, transfer pricing or are just curious. NIC repayments on motoring allowances UPDATED: HMRC to appeal case on NICs refunds on motoring allowances. Take a tour of the site... Private client & estate planning This section covers personal and family tax matters as well as CGT and estate planning. Directors: tax-efficient remuneration These guides consider the different methods for extracting funds from a company. Joint property elections Including a note on transfer of legal title and beneficial ownership. Working from home (self-employed) UPDATED: we have partially rewritten our classic tax guide to clarify some aspects of measurement of useage. Company cars UPDATED: new tax Tribunal cases on shared ownership and new section on car schemes. Selling the business: deferred consideration and earn outs UPDATED: the 2010 changes to Entrepeneurs' Relief moved the goalposts. This is a handy quick guide and overview of the different tax consequences for the seller. Can I charge my company rent for use of my home? UPDATED: yes you can, but read this first. CGT: Main Private Residence Relief UPDATED: this is so topical that we have added a "quality of occupation" checklist. Furnished Holiday Letting UPDATED: new loss rules from 2011/12 and new measures from 2012/13 Subscribe now Come and join us . More Guides and Updates Materiality and tax penalties NEW: a tricky topic. NIC holiday for new employers A new note: guidance on what is a new business. iXBRL: a guide for advisers NEW: we have been reviewing software, what are you using? Tax penalties: failure to make a return (late filing) What applies and when - links to old and new penalties for SA, CT and CIS. Tax penalties: self-assessment late filing A quick guide to the penalties that apply for 2009/10 returns. DOTAS: are you an introducer? NEW..and why does it matter? Tax penalties: DOTAS These penalties are separate from the new tax penalty and compliance regime. Employer-Financed Retirement Benefits Scheme (EFRBS) UPDATED: for Finance Bill 2011 proposals. Entertaining: the double tax trap A quick guide for directors Entertaining: employee expenses A quick guide for employers Gifts & trivial benefits UPDATED: all change we have some new trivial benefits and of course changes in the VAT rules. CIS: penalties UPDATED: this is an invaluable guide to the old rules v. new rules, transitional arrangements, workings and much more. 2011/12 tax rates and allowances New rates and allowances published Practical Tax Toolkits (part freeview) Our Practical Tax Toolkits include tax planning tips and advice, essential reading for advisers: Toolkits for the self-employed This includes our Tax Healthcheck Toolkits for companies From compliance to associated companies to profit extraction. Samples (freeview) Property profits & losses: toolkit NEW: this is our re-write of HMRC's toolkit, unsurprisingly we go into rather more detail on what you can claim! Directors' loan accounts: toolkit UPDATED: our popular version of HMRC's toolkit with a new section on NICs, for advisers. Some more of our favourites Interest Relief: Loan to Buy an Interest in a Close Company Part of our directors' series. Pay close attention to a company's activities in these changeable times. What are earnings for NICs purposes? Part of our employers' series. Essential know-how for anyone wondering how they can avoid NICs. Close Companies: Transactions in securities A summary of the changes and guidance with particular emphasis on ESC C16. Tax on leaving payments At a glance guide to this difficult topic...More Is it a trade or a business? Practical back to basics for advisers, great for tea time reading...More Pool cars A quick guide for employers. There is no taxable benefit to an employee when a company car qualifies as a pool car. Can I back-claim capital allowances on residential property? An explanation of the ins and outs of our complicated capital allowances regime...More Unlawful, illegal or ultra vires dividends A look at the tax treatment for directors and shareholders...More Goodwill and the intangibles regime An explanation of rules for connected party trades straddling 1 April 2002. Can you apportion goodwill? An adviser's guide to Settlements Tax anti-avoidance rules: crammed full of examples, planning points and pitfalls, together with a summary of the leading tax cases. Adviser's Tax Penalty Planner New late filing penalties for CIS, SA and CT are all due to start this time next year. Have you discussed them with your clients and changed your letters of engagement? Share based incentives (part freeview) EMI: checklist This does what it says on the wrapper. Designing an EMI share option scheme Need some help? Please ask for details. Share scheme basics for small companies FREEVIEW While company values are low a share scheme can be a very tax efficient method of rewarding staff. We explain the basics of an unapproved share scheme. Enterprise Management Incentive (EMI) FREEVIEW A share option scheme is ideal for smaller companies. Buying and selling businesses Capital gains reliefs: disposal of business assets What relief to use where and how to incorporate a business. Selling the business: where do I start? A guide for you to discuss with your clients. How to value a business An adviser's guide that explores the different methods used for valuing private companies with worked examples. Purchase of own shares – out of capital Our unique guide explains the fiddly bits. The Advisers' Guide to the PAYE Fiasco Our one-off special contains: A Summary of guidance to give to clients who are affected by PAYE by under or over payments PAYE deadlines ESC A19 Overpayment relief NIC deadlines Links to LITRG Virtual Tax Partner Our Virtual Tax Partner service provides one-to-one practical support for accountants and advisers nationally. Need help with an enquiry, a valuation, a share scheme or buy-back? Want a second opinion, or assistance in drafting a difficult letter or computation? The Virtual Tax Partner peer review and mentoring service is discounted for subscribers. Give us a ring. Like the site? Come and subscribe. Recommendations: what do our subscribers say about us? Free guides - take a tour... You have two options: 1. Explore the site (then click on the menus and you will soon see what is free) 2. See a small sample. Missed an edition? See Nichola's SME Tax News Archive. Subscribe to the Practical Tax Database to UNLOCK your internet Virtual Tax partner: What do you get? Superb value for money and we are a UK company. Open access to the entire Practical Tax Webservice which contains over 450 tax, business and legal guides packed full of essential know-how for advisers. Our regular Email update when there are new guides and tax issues that we think you MUST read. Up to 50% off the Virtual Tax Partner helpline. Nichola’s monthly SME tax news summary (we do the reading and cherry pick the best of the press, magazines and websites for you). NEW our Quarterly Tax Refresher (for advisers ONLY) + our Quarterly Employer Briefing. A 25% discount to our NEW tax webinar-update service). 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