In this week's web-update: news on Making Tax Digital for Income tax as well as VAT, useful cases and much more.

The Office of Tax Simplification (OTS) has produced a survey which will be of great interest to the self employed and their advisers. In the run up to a new Making Tax Digital for Income Tax system, the OTS are exploring the idea of something like PAYE for the self employed and they are canvassing advisers' views via the survey. I guess that the concept of tax deduction at source may appeal to people who are working, are taxpayers, are paid regularly and do not have cashflow issues. Tax is already deducted on this basis for some self employed people under the Construction Industry Scheme (CIS) and that works OK in some situations although reconciling what has been deducted can be an ordeal, particularly when your engager is late with their paperwork.

News on Making Tax Digital for VAT: there is some evidence HMRC is operating a light touch on compliance failures for the first returns. Our blog has some top tips too.

We also have a fine pick of direct tax and VAT cases, so do have a careful read. The employee travel case had a particularly nasty twist: HMRC were allowed to make discovery (made out of normal enquiry time) assessments as the accountant was judged to be careless in failing to advise on the correct rules. Does your fee charging model provide everyone enough time to actually advise when required? 

If you have tax queries contact the Virtual Tax Partner support portal at www.VtaxP.co.uk.

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Nichola Ross Martin FCA CTA (Fellow) Tax Director


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Quick news (freeview)

Complete a survey for the OTS
The Office of Tax Simplification is asking self employed taxpayers and residential landlords to complete two online surveys as part of its current project on simplifying tax reporting and payment arrangements for these taxpayers.

Vote winner? PM considers review of the Loan Charge
During Prime Minister's questions, prime minister Boris Johnson told MPs that he had 'undertaken to have a thoroughgoing review' of the Disguised Remuneration loan charge.

CIS VAT reverse charge delayed
The start date for the new VAT regime for the Construction Industry Scheme is delayed by a year to 1 October 2020.

Jobs and opportunities with us
NEW: tax and non-tax varied roles and specialist opportunities 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

Freeview updates 

Structures & Buildings Allowance (SBA): At a glance
An at a glance guide to the new structures and buildings allowances.

Main Residence Nil Rate Band: At a glance
How the main residence nil rate band works for IHT.

Restricting mortgage interest relief (freeview)
How to calculate mortgage interest relief on buy to let properties.

Tax Guides (subscribers)

Sole trader v. limited company: tax differences & savings (2019/20)
Whether, from a purely tax point of view, it is more efficient to run your business as a sole trader or as a company.

Which trading structure is best for me?
An at a glance guide to the key tax and legal differences between the different trading structures of self-employed, a partnership or a company.

Employee travel rules
When can you claim travel expenses? What are the different rules for temporary and permanent workplaces?

This is the tax term for food and drink: a claim is possible when you make a qualifying journey

Accommodation: with travel or temprorary workplaces
When and why you can obtain tax relief for staying away from home

Discovery Assessment 
“Discovery” is the power that allows HMRC to reopen closed periods where they believe there is an underpayment of tax, by means of issuing an assessment.

How to appeal an HMRC decision
Step by step guide

Case Update (freeview)

Non-domiciled taxpayer did not transfer assets abroad
In Andreas Rialas v HMRC [2019] TC07316 the FTT found the Transfer of Assets abroad rules did not apply to dividend income: Mr Rialas was not the transferor of shares acquired by his offshore family trust from his former business partner.

Shares sold by trust are eligible for Entrepreneurs Relief
In The Quentin Skinner 2005 Settlements v HMRC [2019] TC7312 the FTT approved an Entrepreneurs relief claim on a sale of shares by a trust: the 1 year period did not have to be met by a qualifying beneficiary if they already met the personal company conditions for shares held personally.

Technician's travel claim fail
In Paul Nowak v HMRC [2019] TC7307 an engineer's claim for travel expense was disallowed: he worked on different contracts not a single contract covering multiple different workplaces. A discovery assessment was allowed on the basis that his accountant had acted carelessly.

Making VAT more Digital (freeview)

MTD: VAT blog
This time: evidence of a light touch by HMRC, tips on browsers and observations that software is not always following HMRC's guidance. 

VAT & VAT cases

VAT margin scheme
UPDATE: example of how some software's workaround produces reporting issues.

Cars were unavailable for private use
In Barry John Graham v HMRC [2019] TC7313, the First Tier tribunal agreed that a sole trader had done enough to establish that three cars were not “made available for private use” and could claim input tax on their purchase.

Botox and nail fungus treatments are cosmetic 
In Skin Rich Ltd v HMRC [2019] TC7310 the First Tier tribunal ruled that neither injectable Botox treatment nor nail fungus treatment came within the scope of VAT exempt medical care.

Virtual Tax Partner Toolkit (freeview)

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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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CPD for lunch 

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See: CPD Index

Missed last time's Web-update?

Nichola's SME W-update 28 August 2019

  • 7 vital things PSC owners must do before April 2020
  • IR35 Discovery time bomb for Personal Service Companies
  • Trusts and Estates: What's New? August 2019
  • IR35: Off payroll working
  • Construction Industry VAT reverse charge: at a glance
  • IHT: Transferable nil rate band: At a glance
  • UK Trusts: At a glance
  • Advisory fuel rates from 1 September 2019
  •  and much more..

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