Hello
In this time's web-update: the House of Lords urges HMRC to defer all aspects of Making Tax Digital, we look at new measures likely to catch out Non-residents and much more.
In its latest report the House of Lords' Economic Committee has concluded that Making VAT Digital (MVD) is likely 'to make life even more difficult for small businesses given their scarce resources to devote to preparing for the change'. It highlights that the 'emerging software market appears difficult to navigate. It is unfair to expect businesses to make choices about their accounting software without a better understanding of the future Making Tax Digital regime.' The committee also took evidence from accountants in practice, including a pretty reasonable estimate of the costs in trying to 'digitise' clients. The full report is worth a read.
We have been continuing to update the site for the Budget announcements and create our Rolling Tax Planners for the next tax year. As you know, many non-UK-resident landlords were caught out by the introduction of the Non Resident CGT regime back in 2015. Many overseas UK property owners may fail to realise that NRCGT will cast its net a lot further from April 2019. Not only will tax have to be paid within 30 days of conveyance, the regime also extends to disposals of UK commercial property and to indirect disposals of interests in property rich entities. The latter means that if you dispose of a shareholding in a UK property company you may well have a new reporting obligation. There are exceptions for minority shareholdings, however, you need to consider your holding by dertermining who is connected with you. It took me 45 minutes to burrow down into the recent finance bill to see what the latest version said and then compare it with the old. I was not aided by the fact that there are difference versions of the Bill and notes in two places on HMRC's website. I am hoping that someone in parliament actually manages to scrutinise these new rules. I am unsure how HMRC will be able to track share disposals by non-residents, and also it's difficult to see who owns what now that the Companies House Annual Return has been replaced by the Confirmation Statement.
Also this time, the Court of Appeal may have finally decided the question as to whether 'the imaginary world' that is created by a UK tax deeming provision can be enough to decide a double tax treaty. You will be pleased to know that it can!
Black Friday: I am sorry but there is only so much I can take. A day to buy loads of stuff that you probably don't need. We are not discounting as we are so competitively priced that it would be commercial suicide to discount further. A massive 'Thank you' though for your continued support.
If you have any tax queries please do try out our Virtual Tax Partner support portal at www.VtaxP.co.uk.
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)
GAAR Panel opinions: contractor and employee rewards using loans
The General Anti-Abuse Rule (GAAR) Advisory Panel have published details of three opinions dated 11 October 2018 and 12 October on contractor and employee rewards using loans, finding the planning used unreasonable.
Corporate Intangible Fixed Assets regime: condoc outcome
HMRC have published ‘Review of the corporate Intangible Fixed Assets regime: summary of responses’, which contains detailed proposals for partial reinstatement of relief for goodwill acquisitions.
Making Tax Digital (freeview)
House of Lords: postpone Making VAT Digital
HMRC urged to defers the introduction of mandatory Making Tax Digital for VAT by at least one year, while encouraging businesses to join voluntarily.
CGT: Different ways of taxing UK properties
UPDATE: this is a hand guide which shows you who and what is taxed and when. It also summarises the forthcoming changes to property taxation
Non-residents' CGT: UK property
UPDATE: more details on what's new in April 2019 and the indirect disposals rules
Tax Guides and Updates (subscribers)
MVD: how much to charge?
We look at evidence submitted to the House of Lords.
Entrepreneurs' Relief
UPDATE: all the budget changes and commentary for each version of the relief.
Childcare and childcare vouchers
UPDATE: to clarify the rules now that all schemes except the tax free childcare account are closed to new entrants.
Case Update (freeview)
No IHT exemption for donations to UKIP
In Arron Banks v HMRC [2018] TC06768 the First Tier tribunal (FTT) denied exemption from IHT for gifts to a political party: UKIP did not meet the criteria as their MPs were not appointed at a general election.
Cashing in pension scheme results in unauthorised payment charges
In A McCashin v HMRC [2018] TC06776 the First-Tier tribunal (FTT) dismissed an appeal against unauthorised payment charges on pension scheme withdrawals paid to Gibraltar.
Tax treaty: UK deeming provisions applied
In HMRC v Fowler [2018] EWCA 2544 Civ the Court of Appeal held that the deeming provisions of UK tax law were effective in determining for the purposes of a tax treaty whether an employed diver is treated as self employed in terms of the treaty
Consultations
Digital services tax: consultation
HMRC have published ‘Digital services tax: consultation’, regarding the design and implementation of the new tax. This does not apply to small companies.
Corporate Capital Loss Restriction: consultation
HMRC have published ‘Corporate Capital Loss Restriction: Consultation on delivery’ looking at proposals to restrict the use of carried forward capital losses for companies.
VAT (freeview)
Fleming claim succeeds for cars bought for leasing
In Bramall Contracts Limited & Others v HMRC [2018] TC06648, the FTT concluded that VAT had not been recovered on cars purchased for leasing and therefore the repayment claim for VAT on manufacturer bonuses were recoverable.
Food and catering found to be separate supplies
In Olive Garden Catering Ltd v HMRC [2018] TC06595, the FTT found that the appellant was providing separate supplies of food and services, but the services provided were standard rated catering services.
VAT (subscribers)
Place of supply: services
As the place of supply of a service determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply this is an area where we get a lot of questions so we are re-featuring our guide.
Place of supply: goods
VAT on goods is determined by the place of supply. Our guide has a flowchart to help you determine place of supply and sets out which boxes to use on the VAT return for non-UK supplies and purchases.
Buy-to-lets & VAT
This guide sets out the rules on reclaiming VAT under the partial exemption rules where a VAT registered business also lets residential property with some helpful examples.
Agents and principals
We have been getting a lot of complex queries recently about agents. This guide sets out who is an agent, who is a principal and what it means from a VAT perpective.
CPD & Webinars
Budget 2018: subscriber guide & CPD
UPDATE: key announcements at a glance
See CPD for Lunch
Missed last time's Web-update?
Nichola's SME tax W-update to 16 November 2018
Features:
- Brexit and Northern Irish border
- Tax debt and insolvency
- Making Tax Digital: survival guide for the self employed
- VAT update November 2018
- and much more..
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