This time: Off-payroll working rules will increase your chances of investigation. Is software ready for the CIS VAT reverse charge? The latest trusts and estates newsletter and changes to employee fuel rates.

Forthcoming changes in the Off-payroll working tax rules are set to increase the odds for IR35 discovery for some 170,000 personal service companies (PSCs). The changes have an added twist that I had not considered previously. The PSCs' end-clients will assess employment status and with that rule change suddenly a large chunk of what HMRC would have to do when investigating an IR35 case is done for it. Thus, if your working relationship with your end client today is substantially the same as it will be come 6 April 2020 and it turns out that you will be caught by the new version of Off-payroll working rules then it follows that you should be in IR35 today. 

Is this a good time for HMRC to open a new IR35 disclosure facility? I think this is a good time and, for another reason. It was also reported this week that HMRC's IR35 task force appear to be focusing on the largest FTSE companies and have just opened 1,500 potential new IR35 enquiries into GlaxoSmithKline contractors. Top tip of the week: if you run a PSC do run HMRC's Check Employment Status Tool before you self assess IR35.

The introduction of the Construction Industry VAT reverse charge is now only a month away and whilst we can all bet that many in the CIS industry will be blissfully unaware of the changes, several of the biggest small business accounting software companies are not ready either. Both the NFB and CIOT have asked HMRC to postpone the change, however as HMRC has already said that it will offer a light touch on penalties this looks unlikely.

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Nichola Ross Martin FCA CTA (Fellow) Tax Director


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Quick news (freeview)

IR35 Discovery time bomb for Personal Service Companies
Changes to Off-payroll working mean that end-clients will generate high quality evidence for HMRC

CIS VAT Reverse charge: is all software ready for the change?
No, as it turns out, and the NFB and CIOT have requested postponement of the 1 October change.

Advisory fuel rates from 1 September 2019
HMRC have published new advisory fuel rates for company car drivers which will apply from 1 September 2019.

Trusts and Estates: What’s New? August 2019
HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version.

Jobs and opportunities with us
NEW: tax and non-tax varied roles for our expanding online tax and business platform.

Tax Bait (freeview)

A (sometimes) more light-hearted look at tax and the news

7 vital things PSC owners must do before 6 April 2020
On balance, tax things are not looking good for PSCs...More

Ten 'easy wins' for the chancellor...on tax simplification
In terms of cost (to calculate and administer) versus tax outcome we pick our top ten choices for Sajid David...More

Freeview updates 

Construction Industry VAT reverse charge: at a glance
Start here

IHT: Transferable Nil Rate Band: At a glance
The transferable nil rate band for inheritance tax.

UK Trusts: At a glance
A guide to the taxation of UK trusts.

Tax Guides (subscribers)

Agency Workers: employment intermediaries rules
You supply your personal services to an agency who supplies you to and end client

Off-payroll working with private sector end clients 
You supply your personal services via your own PSC to an agency who supplies you to a large or medium sized end client

Off-payroll working with public sector end clients
You supply your personal services via your own PSC to an agency who supplies you to a public sector end client

IR35: off-payroll working
You supply your personal services via your own PSC to an agency who supplies you to a small sized end client

Personal service companies & tax 
What's new for PSCS? What tax rules apply when, changes to VAT and travel rules 

Discovery Assessment
When and how can HMRC raise an assessment outside of normal investigation time limits?

Structures & Buildings Allowance (SBA)
UPDATED: For the latest HMRC guidance. 

Case Update (freeview)

Time apportionment is correct approach for capital gains
In Richard Lee & Nigel Bunter v HMRC [2019] TC07269 the First-Tier tribunal confirmed that time apportionment is a just and reasonable basis to apportion a capital gain between business and non-business assets.

Payments to GP are his income and not that of his company
In Bruce Cawdron v HMRC [2019] TC07295 the FTT held payments to a GP were his remuneration and not compensation to his personal company for the time he spent working elsewhere.

Cost of options incurred as an expense under IFRS2
In HMRC v NCL Investments Limited, Smith & Williamson Corporate Services Limited  v HMRC [2019] UKUTT the Upper Tribunal confirmed that the grant of share options by an employee benefit trust was deductible as a trading expense under IFRS2.

Making VAT more Digital (freeview)

MTD: VAT blog
Let us have your moans and groans on your latest experiences with MTD for VAT so we can update our blog. It would be nice to hear some success stories too!

VAT (subscribers)

Getting your VAT return wrong
In Faux Properties (A Partnership) v HMRC [2019] TC7051 a partnership's failure to adjust their VAT return to declare VAT received on the sale of an opted property resulted in a penalty for carelessness.

VAT: correcting mistakes 
How difficult can it be? What are the time limits.We explain the different processes.

VAT: penalties
Depending on the type of 'failure', VAT penalties may based on the same legislation as some direct taxes, or they may follow specific penalty rules within the VAT legislation.

Virtual Tax Partner Toolkit (freeview)

Virtual Tax Partner © Tax Toolkit© Tax Toolkit
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  • Entrepreneurs' Relief: Sole traders: sale of a business, incorporation, sale of assets
  • Entrepreneurs' Relief: Company owners: rules for sales pre 29 October 2018, sales between 29 October 2018 and 5 April 2019 and after.
  • TAAR: closing your Personal service company? Will your final dividends be taxed as income?
  • Salary or dividend, or a mixture of both. Better to claim the Employers' Allowance?
  • Making Tax Digital for VAT: when do you need to join.

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Missed last time's Web-update?

Nichola's SME W-update 23 August 2019

  • 10 easy wins for the Chancellor on tax simplification
  • Agent Update August/September 2019
  • Employer Bulletin: August 2019
  • Pensions: At a glance
  • Rollover relief: At a glance
  • Construction Industry Reverse Charge
  • VAT FAQs: Agents and principals
  • and much more..

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