In this time’s web-update we feature guides that aim to answer your last minute tax FAQs for Self Assessment (SA), carelessness by agents and, the Upper Tribunal (UT) finally resolves an important question: does a notice to file a SA return have to be issued by a human?

In terms of tax FAQs, we have had a few reader’s comments on our mini-guide ‘How to calculate the Higher Income Child Benefit charge’. I was checking out HMRC’s calculator; you need to be a bit careful using it, especially when it comes to pensions. Strangely, it also says that it is only ‘optional’ to claim allowable deductions.

Most people would never think to question the validity of a notice issued by HMRC to file a tax return however it is something that several First Tier Tax Tribunal judges have recently started questioning in the context of late filing penalty appeals. A key sticking point has been whether a notice to file a tax return has to be issued by an actual human at HMRC or whether HMRC can simply press a button and allow its software to generate such notices in batches. The UT has now stopped all such speculation and confirmed that the latter is acceptable. The slightly odd twist to this tale is that HMRC clearly did not think that this was the case as it has included draft legislation for the next finance bill to allow computers to a free hand in the automatic generation of such notices.

One final case to highlight this week is the John Hicks' ‘discovery’ appeal. The UT found that HMRC met the condition to make an out of time assessment due to the carelessness of the tax adviser. The adviser should have taken advice on the tax scheme promoted to his client when preparing a tax claim, and the scheme promoter was also careless in promoting something that did not work. Food for thought.

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Nichola Ross Martin FCA CTA (Fellow) Tax Director


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Quick news & Guides (freeview)

Scottish budget date set for week after Brexit
The Scottish parliament has announced that its 2020 budget will be held on Thursday 6 February 2020, less than a week after the date now set for Brexit of 31 January 2020 and a month before the UK parliament's 2020 budget.

HMRC's 2019 Top Prosecutions
HMRC has published its most successful tax fraud prosecutions for 2019. During the year 600 people were convicted and around £5bn was recovered through civil and criminal investigations.

Penalties: SA late filing and payment
Self Assessment (SA) tax penalties: what penalties are due for outstanding tax returns? What penalties are due for late payment?

Editor's hot topics self assessment pick (subscribers)

Capital gain tax: what's allowable?
What expenditure is allowable for CGT? What about loan interest, early redemption fees etc?

How do you work out the High Income Child Benefit Tax Charge?
Do not forget about this when filing your SA return.

Pensions: tax charge for excess contributions
When does a tax charge arise for excess contributions? What are taxpayers' responsibilities under self-assessment? 

Discovery Assessments
When can HMRC raise assessments outside of normal time limits? What can you do to prevent one?

Case Update (freeview)

Discovery Assessment allowed: agent was careless in advising on tax scheme claim
In HMRC v John Hicks [2019] UT 0040, the Upper Tribunal (UT) allowed HMRC’s appeal finding there had been carelessness on the part of the taxpayer's adviser. The discovery assessments raised were in time, after all.

No 'flesh and blood' officer required to issue a s8 notice to file
In HMRC v Nigel Rogers and Craig Shaw [2019] UT 0406  the Upper Tribunal (UT) decided that a section 8 'notice to file a return' does not have to be issued by an identified “flesh and blood” officer of HMRC. The UT also provided guidance to the FTT on how to address any future concerns that it has on the validity of s.8 notices. 

Employment intermediary return: penalties charged on wrong person
In Angela Salazar v HMRC [2019] TC7398, the First Tier Tribunal (FTT) allowed an appeal against employment intermediary return late filing penalties. They were raised against the wrong person and the taxpayer had a reasonable excuse. 

Topical guides for subcribers 

Index to CGT reliefs
Last-minute tax return claims: what relief applies and when?

Penalties: Grounds for Appeal toolkit 
What grounds are there to appeal a tax penalty? How can you word a tax appeal? What is a reasonable excuse?

VAT Cases (freeview)

Cricket club issued wrong VAT certificate
In Westow Cricket Club v HMRC [2019] TC07484, the First Tier Tribunal (FTT) ruled that the Club did not have a reasonable excuse against a penalty for getting the zero-rating certificate wrong, after relying on a letter from HMRC.

Taxpayer suffers as HMRC changes views
In The Lilias Graham Trust (‘LGT’) v HMRC [2019] TC07346, the First Tier Tribunal (FTT) concluded that a charity which assessed families referred to it by social services was supplying welfare services, therefore VAT exemption applied.

VAT Guides (subscribers)

Accountants' fees
When is input VAT deductible and when is it not? What wording should apply to an invoice?

Correcting VAT errors
What are the time limits? Can you do it through the VAT return? Do you have to notify HMRC?

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.
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  • 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

Recent additions:

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 9 January 2020

  • Agent update: Self-Assessment Special January 2020
  • Treasury announces review of Off-payroll rules
  • Anti-Money Laundering: New Directive focuses on Beneficial Ownership
  • Tax Hits of the Decade: 2010 to 2020
  • Government makes changes to Disguised Remuneration Loan Charge
  • Self Assessment penalties: HMRC assessments valid but not notified correctly
  • VAT: E-newspapers should be zero-rated
  • Dixons loses £1.8 million VAT claim on bounced cheques
  • More...


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