This week, a case on trade tariffs; even more crazy than ‘VAT on milk shakes’ it transpires that the final tariff tie-breaker uses a process not unlike 'paper, scissors, stone'. 

Continuing with last week's theme of trading structures, our Contractor and Personal Service Company (PSC) planning, 'What now? guide', considers the resurrection of 'the Umbrella': what this means for workers, tax advisers and HMRC.

Starting in business or just planning a new business? It is important, for the sake of a whole range of different tax reliefs, to know exactly when the planning stage stops and the exact time that you ‘cast off and your venture 'sets sail'. Check out the loan to traders case and all the links contained in that write up.

Other news to note is the Law Society’s new guidelines on disbursements and the Treasury's initiatives to support female entrepreneurs, which could be a social media marketer's dream.

If you have tax queries contact the Virtual Tax Partner support portal at www.VtaxP.co.uk, but do check for guidance on www.rossmartin.co.uk first.

Enjoy the guides and updates and the news is below. Subscribe now: you cannot get better value elsewhere.

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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)

HM Treasury initiatives support female entrepreneurs
HM Treasury has launched an 'Investing in Women' code to promote female entrepreneurship among organisations that offer finance. The code follows the launch of a 'Women In Finance Charter', already supported by over 330 firms.

2019 Budget scrapped: there is a General Election
At the end of this month chancellor Sajid Javid cancelled the 2019 Budget which was due to be held on 6 November. Then parliament agreed to early General Election.

New Law Society guidance on disbursements
The Law Society has updated its 2018 guidance on the VAT treatment of disbursements following the case of Brabners LLP v HMRC and comments made by the Court of Appeal in the more recent 2019 case of British Airways v J. Prosser.

Editor's pick (subscribers)

Contractors & PSC Planning: what now?
NEW: What is best advice, right now, for personal service companies (PSCs) and contractors? 

Tax Guides (subscribers)

Accounting: Simpler Income tax (cash basis) / fixed expenses
UPDATE: So Simple (not). If you are self employed there are now two different combinations of accounting methods and a choice of four different expense systems: all to work out your profits for tax purposes. 

Record keeping & tax: what, how and until when?
UPDATE: A handy summary of the records you need to keep across the various taxes and how long you need to keep them.

Exit strategies: Index
UPDATE: Had enough? What are your options for closing down the business.

Case Update (freeview)

Bog standards: FTT examines a toilet seat
Goods imported from outside the EU are subject to duty based on trade tariffs. In Bemis Limited v HMRC [2019] TC7332 the FTT considered whether a loo seat made mainly out of wood-flour should be classified as wood or plastic.

Loan to traders: when did the trade commence?
In Michael John Hunt v HMRC [2019] TC7311, the FTT allowed a claim for loss relief on a £4.9m loan guarantee when a company failed. HMRC had denied relief on the basis that the company was merely in business and was not trading.

Trust gets 5 years interest-free credit on CGT charges
In Trustees of the Panayi A&M Trusts Nos 1-4 v HMRC [2019] TC7406 the First Tier Tribunal interpreted UK law to conform with EU law and allowed Capital Gains Tax exit charges on the migration of a trust to be paid over a five year period.

BBC presenter loses second IR35 appeal
In Christa Ackroyd Media v HMRC UKUT0326 the Upper Tribunal dismissed a TV presenters appeal against IR35 applying to her personal service company; the BBC did exercise sufficient control over her work for an employment relationship to exist.

ATED: Ignorance is no excuse for retired lawyer
In Tysim Holdings v HMRC [2019] TC7389 the First Tier Tribunal upheld late filing and payment penalties for ATED; ignorance of the law was no excuse for a non-resident taxpayer with a UK legal background.

VAT & VAT Cases

Flat Rate Scheme
UPDATE: What is the VAT Flat Rate Scheme (FRS)? Who can apply? How do you apply? What are the rules? What are the rules for capital expenditure and pre-registration VAT?

VAT FRS: backdating ultra vires
In Holy Cow! Ice Cream Company Ltd v HMRC [2019] TC7400 the FTT denied a loss making business' appeal to backdate entry into the VAT Flat Rate Scheme (FRS). Although survival of the business was an issue, VAT returns had already been filed and the directors were propping up the company personally.

Making VAT more Digital (freeview)

MTD: VAT blog
Making Tax Digital for VAT the on-going drama. Disappointment that the software is still not working.

Virtual Tax Partner Toolkit (freeview)

Virtual Tax Partner © Tax Toolkit© Tax Toolkit
NEW: be a winner with our game-changing tax diagnostics tools. Sign up at Tier 1 prices now.

  • 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.

CPD for lunch 

Byte sized chunks of CPD for subscribers

Land and Property Update April 2018

Personal Service Companies (public sector)

see also: CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 24 October 2019

  • Tax cuts for high earners get the chop
  • HMRC issue briefing: Reform of off-payroll working rules
  • Agent update October/November 2019
  • What are the different variations of Brexit?
  • Stamp Duty Land Tax & Stamp Duties: what's new?
  • More...


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