This week's web-update features some cases that continue to explore the dark world of ITEPA 2003 and the PAYE regulations. There is a new consultation on Private Residence Relief and an new VAT guide that might be more handy than you realise.

The legislation for IR35 and for arrangements which use Managed Service Companies (MSC) are found in Chapter 8 and 9 of Part 1 of the Income Tax Earnings and Pensions Act 2003. They are not recommended as bed-time reading yet you do need to know their consequences as they are essentially anti-avoidance rules to ensure that, in certain situations, individuals cannot re-route their income via their private companies. We have cases on both topics this week. When the MSC rules came out it seemed likely that some people would be caught out and to-date we have only two cases, this last one is a court of appeal decision and so worth a read. 

We have another case on CGT relief for payments made under a guarantee that might be of interest too.

In terms of VAT, HMRC has a new guide to import VAT for non-owners: HMRC says that its previous guidance (there was none) was unclear. This is useful if you have clients who are importing goods on behalf of others as there is now some clarity as to who should be record keeping and claiming back the VAT.

On to Making VAT Digital, by all accounts most practices are holding back from fully going for it until the 31 March-31 May returns are all filed. June looks to be a busy month for HMRC's helpline.

On the loan charge, has anyone else had clients with Schedule 36 Information Notices who have now been told to ignore them? I would like to hear more.

Not taxing. In case you have not heard, Brexit is postponed until Halloween. What is more scary than the endless puns about 'it being scary' is the terrifying distraction of new parties campaigning for next month's EU elections. If you read this today (the 12th) and act now, you can go online to .gov.uk and register to vote by post to escape the mayhem of the polling station (joke).

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 and tax advisers

Quick news (freeview)

CGT Private Residence relief: lettings restriction
HMRC has published a consultation, 'Capital Gains Tax: Private Residence Relief: changes to the ancillary reliefs'. This follows the Budget 2018 announcements.

Revenue and Customs Brief 2 (2019): VAT – import VAT deducted as input tax by non-owners
HMRC is aware of incorrect treatment by businesses whereby import VAT has been incorrectly deducted as input tax by non-owners of the goods.

Making Tax Digital

Making VAT Digital Zone
START here for guides to the different aspects of the new record keeping and filing requirements

Editor's Choice (subscribers)

CGT: Private Resident Relief
UPDATE: a gain made on the disposal of an individual’s only or main private residence is exempt from Capital Gains Tax (CGT) under private residence relief (PRR) if you meet the required conditions

CGT: Entrepreneurs' Relief
UPDATE: there are six different versions of this relief. This guide is continually updated as we answer your FAQs.

CGT Reliefs: A disposal of a business or its assets
This guide provides an outline of the main Capital Gains Tax (CGT) reliefs which may apply when an individual or company replaces or disposes of a business asset, or a business, or shares in a company.

Tax Guides and Updates (subscribers)

Managed Service Companies (MSCs)
UPDATE: What is a MSC? Can an accountancy firm be a managed service company provider? What are the consequences of being a MSC?

Capital Allowances: what are the time limits for making claims and adjustments?
NEW: What time limits apply and when? Can you make a late claim?

CGT Relief: Loans to traders
UPDATE: what counts as a loan, how and when to obtain tax relief when a business fails

R & D Zone
START here for practical guides in making successful R & D claims.

Case Update (freeview)

IR35: Actor's appeal fails 
In Big Bad Wolff Limited v HMRC [2019] UKUT121, the Upper Tribunal (UT) upheld the decision of the FTT finding that the special rules for actors prior to 6 April 2014 did not circumvent the deeming provisions of IR35.

Court of Appeal confirms definition of a Managed Service Company provider
In Christianuyi Limited & Others v HMRC [2019] WECA Civ 474  the Court of Appeal confirmed that the UT and FTT were correct in finding that a business (Costello Building Services Limited - 'Costello') which was set up to facilitate workers to provide their services via managed personal service companies was a Managed Service Company (MSC) provider.

No CGT loss carry back for payment under guarantee
In Gerard Arthur Eccles v HMRC [2019] TC6978,  the first tier tribunal held that tax relief for a payment under a personal guarantee may only be made in the tax year in which it was paid.

VAT Cases

Disputed VAT in tax appeals
In Snow Factor Limited v HMRC [2019] UKUT0077 the Upper Tribunal ruled that the appellant was not required to pay the sum of disputed VAT ahead of an appeal to the UT as it would cause financial extremity.

CPD for lunch

Finance Act 2019
NEW: A webinar covering the latest legislative changes.

Missed last time's Web-update?

Nichola's SME tax W-update 8 April 2019


  • Cases on carelessness
  • Disguised remuneration loan charge
  • Registering non-resident companies: for CT
  • Dividend tax update
  • Directors Tax Planning toolkit
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