I have been reading over a few of HMRC's research findings this week and some of the results must be pretty shocking for them.

Highlights or lowlights (depending on who you are) are that most PAYE 'customers' don't check their tax calculations, most people who are digitally savvy have never heard of a Personal Tax Account and HMRC’s use of language was difficult to comprehend. It was unsurprising to also find that people are exasperated that they had to repeatedly complete the same forms and submit the same information. Clearly, HMRC have their work cut out. Digital transformation is going to be far more than just the IT aspect. 

A couple of CGT cases, this time on Private Residence Relief (if the taxpayer had read our note on this she might have acted differently) and a CGT roll over on a farmhouse. Always interesting to see these but again, it's much more sensible to do the tax research before you complete your tax return.

I have not had too much success in evaluating the new MTD software from HMRC's list. I get the feeling that HMRC have rushed to get a list up there and not all the suppliers are ready for full testing. If you are a firm and you are trialling some new products, do get in contact with us.

And finally, Revenue & Customs Digital Technology Services Limited is HMRC's IT company. It was formed in 2015 and all its income is generated directly from services to HMRC. Its accounts for the year ending 31 March 2018 indicate that the total provision for the pension shortfall had risen to £2,969,700 at 31 March 2018. The company has only 12 staff... I do hope I have misread the pension note. If that is the shortfall for only 12 people what state is the rest of the civil service pension pot?

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 CTA (Fellow) Tax Director


Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers

Quick news (freeview)

Digital tax is going to be tricky: shocking results of HMRC research
HMRC has published the results of a number of its different research projects. They all look at digital services, in particular the public's perception of the Personal Tax Account (PTAs), Digital Tax Account (DTA) and attitudes to digital contact in general. 

HMRC updates its guidance on Heritage Assets
How to avoid IHT or CGT on your house, land or antiques.

GAAR Panel: EFRB covenant and employee deed arrangement
The panel rule that a scheme is ‘abnormal and contrived’: there was no reason, other than for tax purposes, to create a complex web of undertakings.

PAYE RTI data sheds new light on number of employees in the UK
How many people are employed in the UK? It seems that RTI can now give us a more accurate answer than paper surveys.

My voice is my password
HMRC has published partially completed details of a privacy impact assessment for the use of Voice Biometric Identification (Voice ID) technology for calls. 

Case Update

Camping does not guarantee PRR
In Patricia Lam v HMRC [2018] TC6540 a taxpayer found that the fact that you stay a few nights in your property in a sleeping bag is unlikely to convince a tax tribunal that a property is your only or main residence.

Farmer's son's house does not qualify for roll-over relief
In Maurice and Shirley Bell v HMRC [2018] TC06575 taxpayers were unsuccessful claiming CGT roll over relief under s152 TCGA 1992 on the disposal of a farmhouse constructed on their farmland for their son. The building was not used only for the trade.

Editor's Choice (subscribers)  

How to appeal a tax penalty: grounds for appeal HMRC error
UPDATE: if have a self assessment late filing penalty to appeal then read this. HMRC has been issuing defective section 8 TMA 1970 notices to file tax returns. If a s8 notice is invalid there can be no late filing penalty. ESSENTIAL READING for advisers.

Private Residence Relief
UPDATE: HMRC continues to compare Land Registry data with tax returns and so it is worth spending some time on being 100% sure of the rules, particularly if you have two or more properties.

CGT Reliefs: disposal of a business or its assets
What relief can you claim and when? Includes relevant case summaries and background including cases on s152 roll over: when can you claim tax relief on your farmhouse or business buildings?  

Tax Guides and Updates (subscribers) 

Loss relief: uncommercial trades and tax avoidance
UPDATE: the rules covering sideways loss relief have become more and more complicated thanks to the efforts of tax avoidance industry. If you are making a loss, it is worth having a re-visit of the rules as you may well be caught out by some of the legislation.

Business Property relief and letting activities
UPDATE: whilst normal letting is unlikely to be treated as a business, there is scope for relief for furnished holiday letting businesses. Combine your let with a horse B & B and you may have the perfect combination!

Finance Act 2018 and Finance Bill 2019: tax update and rolling planner
UPDATE: an invaluable resource which shows you what is new and proposed for each tax and taxpayer this year and the next.

VAT (subscribers) 

Making Tax Digital: New VAT Notice
VAT Notice 700/22 sets out the proposals for sets out who needs to follow the MTD rules, what records need to be kept, and what agents need to do.

VAT: place of supply of services
A business must charge VAT depending on the place where the supply is liable to VAT, the nature of the supply and the type of customer. 

CPD Webinars

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Nichola's SME Tax w-update 20 July 2018


  • Draft Finance Bill updates
  • Rent a room relief 
  • Mixed VAT groups for companies and individuals
  • VAT and Vouchers: new rules
  • CGT relief and surplus cash
  • 30 day CGT payment window
  • and much more..

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