Nichola's SME Tax w-update 22 February 2019

Hello

As the clock ticks down on both Brexit and Making VAT Digital, we have decided to ignore the former and concentrate on what everyone needs to do in order to become compliant for the new VAT regime.

HMRC updated its Making Tax Digital (MTD) - Mythbusters this week. The first 'mythbuster' is that 'Businesses don't know it's happening or what to do'. HMRC says that 'This is not correct'. With all due respect to HMRC, I would like to say that this kind of sweeping statement is unhelpful and I do not know who it's trying to kid, if not itself. As an agent, thus far, my Agent Services Account is blank, and my software says it will be ready on time but it is not ready yet. Taking part in a webinar with AccountingWEB yesterday we fielded a lot of questions from viewers and it is clear that 'one size' does not fit all. The people who do realise that something's up have markedly different interpretations of what they need to do and how it affects their record keeping. We don't know about the people who don't know it's happening because they are hardly likely to be watching webinars.

We have a small number of clients affected by MVD. We made them all move to cloud accounting last year and earlier. Some are still trying DIY VAT. All will in time require a fundamental change to their old bookkeeping systems in order to try toresolve the issue of digital links. A digital link is not to be confused with a bridge as in bridging software. Don't panic, there are no penalties for failing to maintain digital links in the first year of MVD, however its something to think about when you are setting up systems.

Plans for introducing Making Tax Digital for income tax and corporation tax are confirmed at being on hold until the outcomes of MVD are known. The second wave of MVD introduces more complex business into MVD from 1 October 2019. It seems unlikely that any further announcements on extending MTD beyond VAT will now be expected until the Budget 2020 in or around November of that year. We are aiming to get our spreadsheet accounting clients into the cloud over the next year, simply because it's easier for us.

I note that in its reply to the House of Lords Economic committee that HMRC has ignored a recommendation that it should "notify taxpayers in writing of its guidance and claims process for digital exemptions when it invites them to join the MVD pilot." Why the lack of transparency? Where is the guidance? MVD goes live in just 37 days.

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

www.rossmartin.co.uk

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

Quick news (freeview)

Spotlight 48: Disguised remuneration: contractor loans settlements and obtaining a deed of release
HMRC have issued Spotlight 48: Disguised remuneration contractor loans settlements and obtaining a deed of release, to clarify how their settlement terms work for inheritance tax (IHT).

Company cars: proposed changes to CO2 emissions
The government has released a ‘Review of WLTP and vehicle taxes’ which seeks evidence on the impact of a change to using the World Harmonised Light Vehicle Test procedure (WLTP) to measure CO2 emissions on Vehicle Excise Duty and Company car tax from April 2020.

Making VAT Digital & Making other taxes Digital (freeview)

The Government responses to the Lords on Making Taxes Digital
The government’s responses to the House of Lords Economic Committee’s recommendations  on Making Tax Digital for VAT: Treating Small Businesses Fairly may not give comfort to any small businesses and their advisers who were hoping that HMRC may yet postpone or modify the current plans to making VAT much more digital. 

Making VAT Digital tool: who has to join?
Use our MVD tool to check whether you have to join, whether any exemptions apply and whether you are eligible for deferral.

Editor's Choice (subscribers) 

Agent Service Account & VAT: Survival guide and Top Tips
What is an Agent Service Account? Why do you need one? Troubleshooting, Making Tax Digital for VAT, Making VAT Digital,  Lost user id? FAQS.

Making VAT Digital: who is excluded?
Who can claim exemption from Making Tax Digital for VAT?  What are the issues? A note for paid subscribers explaining what HMRC fails to.

Making VAT Digital: subscriber guide
ESSENTIAL READING & UPDATE: we cover the key issues, what are the requirements. What is digital? Digtal links v bridging software. What adjustments are digital? What records should be digital? What is the inconsistency in the guidance. What is the softlanding? What do you do with special schemes? Much more. Read on

Tax Guides and Updates (subscribers) 

Dividend tax (subscriber guide)
UPDATE: This guide now has examples for the new 2019/20 tax year.

Buy-to-let ownership: personal v. company?
UPDATE: We have added to our case studies in this helpful guide.

Finance Act 2018: tax update and rolling planner 2018-19 and Finance Act 2019: tax update & rolling planner 2019-20
Finance Bill 2019 received Royal Assent on 12 February 2019. We have updated our rolling planners for all of the changes introduced by Finance Act 2019.

Case Update (freeview)

Schedule 36 notices: no right for third parties to attend hearing
In HMRC v X Ltd, Y Ltd and Z Ltd [2018] TC06846 the First Tier Tribunal (FTT) held that where a hearing was held to approve HMRC issuing third party notices, neither the taxpayer nor the third parties were entitled to attend.

Information Notice served on non-resident taxpayer is valid
In Tony Michael Jimenez v FTT [2019] EWCA Civ 51 the Court of Appeal overturned the High Court decision and ruled that a Schedule 36 information notice issued to a taxpayer abroad was valid.

CPD & Webinars

Private Client Update - January 2019

NEW: A webinar covering private client news, legislative changes and interesting cases from the past few months.

Budget 2018: subscriber guide & CPD
UPDATE: key announcements at a glance

See CPD for Lunch

Changes to our Terms and Conditions

Important changes to our T & Cs
UPDATED: our terms and conditions are short and we hope transparent. Please do take a minute to read through them.

Missed last time's Web-update?

Nichola's SME tax W-update 15 February 2019

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