Nichola's SME Tax W-update 5 December 2019

Hello

This week we 'tear the wrapper off' our Christmas Selection Box. With not a chocolate in sight and full of tax 'hacks', we hope that our box of goodies will save you pounds rather than piling them on.

There seems to be a bit of a theme running through many recent first tier tax tribunal (FTT) decisions and that is evidence, or a lack of it. As we are approaching the deadline for Self Assessment it is well worth flagging up to clients the need to ensure that if you are using estimates then you need to tick the box on the return to indicate so. Most importantly you must have some valid proof or other form of supporting evidence to back up any claim that you have incurred an expense or met the qualifying conditions of any claim for relief.

There is always a back story to any tax appeal and often we cannot tell exactly what happened during an actual tax enquiry. In both the Research & Development relief and Private Residence relief appeal cases we selected to report this week there was no valid evidence, at all, to support the claims made. It seems a massive waste of everyone's cash to entertain appeals where there is no evidence. 

We have summarised the highlights of another IR35 case. Yet again there were key issues in terms of mutuality of obligation, substitution and control. The chancellor announced last week on BBC Radio 4's Money Box program that he would undertake a review of IR35, if his party wins the general election. I have to wonder if there is any point in another review as this is not exactly a new problem. I wonder if instead it would be easier to have a statutory test for employment. 

My Editor's picks cover a number of guides which we hope will be useful for Self Assessment returns. Next week, we will look at some of our guides dealing with off-shore matters.  

Finally, we have rolled out our guide to Christmas Parties as many of us could do with something to cheer us up in these dark days. 

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 and tax advisers

Quick news & Guides (freeview)

C is for...
We unpack our Christmas Selection Box of tax hacks.

Employer Bulletin
HMRC have published their Employer Bulletin for December 2019. We summarise the key content for you, with links to our detailed guidance on the topics covered.

Christmas Parties: 2019 Advent Special
Staff Christmas parties: how to claim tax relief on your Office Christmas Party. Must all staff attend? Is there tax relief for an owner manager or personal service company owner? Are there any reliefs? How do you avoid a hangover?

Editor's self assessment pick (subscribers)

Joint property ownership: legal v beneficial ownership
UDPATE: your tax FAQs answered

Furnished Holiday Letting
UPDATE: ensure that all the qualifying conditions are met before reporting income and gains.

Replacement of domestic items relief
UPDATE: a recap on the relief that replaced the wear and tear allowance.

Property Finance Costs
UPDATE: how the rules work that restrict interest relief.

Case Update (freeview)

IR35 again: DWP contractor not a deemed employee
In RALC Consulting v HMRC [2019] TC7474 the First tier tribunal found that IR35 did not apply to an IT contractor; there was no mutuality of obligation, or real control.

PRR: "complete absence" of evidence
In Cornelia Simpson v HMRC [2019] TC7576 failure to report a capital gain on the disposal of a London flat resulted in a £14k penalty. A claim for Private Residence relief was dismissed by the FTT the taxpayer failed to provide any evidence to show that she had ever occupied the property. 

R & D claim: no evidence
In Teksolutions-Inc v HMRC [2019] TC7456 a company's Research & Development claim was rejected in full: the company failed to prove that it had incurred any of the expenses claimed.

No transfer of losses to successor
In Spring Capital Ltd v HMRC [2019] TC7471 the First Tier tribunal dismissed a claim for the carry forward of corporation tax losses on the transfer of a trade; liabilities not transferred exceeded the corresponding level of assets.

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New: Stamp Duty Land Tax

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Nichola's SME Tax W-update 28 November 2019

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