Last week, the government published draft legislation detailing the 6 April 2020 changes to National Insurance thresholds. Disappointingly, they have decided to diverge the thresholds at which employee and employer make contributions. We see the divergence of the thresholds as an added and unwelcome complication and something that is really annoying if you are programming software and tools.

The House of Lords has now commenced work on a review of the off-payroll working and has launched a call for evidence.

As always we report highlights of a selection of topical cases from the tribunals. It seems that HMRC is making use of its wide information collection powers, and in the Akhtar case, abusing the penalty regime by issuing a penalty for something which was so obviously bank error. The Statutory Review process needs to weed out these cases and stop wasting the tribunal's valuable time.

The VAT carelessness case is an interesting one for advisers and taxpayers. We are all made reliant on software for VAT now and the big question is whether your accounting system was reliable in the first place? Many taxpayers or their agents double-check the results quarterly, however, Making Tax Digital for VAT has added a lot of pressure to practices and taxpayers over the last year. Probably, the best thing that anyone can do, once the first year of the new style VAT reporting is completed, is to make time for a full review of the year and a double-check of figures.

We have new checklists for you to 'celebrate' the end of another tax year. Finally, we were hoping to report the highlights of the Scottish budget, but that has been delayed until later today. You will be able to find full details of the Scottish budget on the front of our site once it starts.

Back soon

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 & guides (freeview)

NICs rates change for 2020-21
Annoyingly, the primary Class 1 contributions threshold is set at a different level to the secondary threshold. 

Call for evidence: Extension of the off-payroll working rules to the private sector
The House of Lords Finance Bill Sub-Committee has published a new call for evidence on the extension of the off-payroll working rules to the private sector. The Treasury announced the review in January in the hope of ensuring smooth implementation of the rules which come into force in April 2020.

SME Tax Monthly Summary Jan 2020
Missed our SME Tax Web-updates in January? Here is a summary of the month. 

Editor's pick (subscribers)

Tax Planning for the 2019/20 year-end
This is our year-end and new tax year tax checklist and toolkit for individual Private Clients. It can be used in conjunction with our checklists for directors, employers and self-employed individuals.

Year-end top ten tips for OMB's 2019/20
Last-minute advice for clients? What should you focus on as the 2019/20 tax year-end approaches?  What should you do before 5th April and what could you leave until later?

Case Update (freeview)

Tax 'Top Trumps': Closure Notice v Information Notice
In X Ltd, Y Ltd, Z Ltd and 17 individuals v HMRC [2020] UKUT 0029 (TCC), the Upper Tribunal (UT) confirmed that it would be fruitless for it to consider a taxpayer's applications for a closure direction. HMRC was actively investigating and had issued notices to third parties requiring further information. 

Bank caused failure to comply with Information Notice
In Pervez Akhtar v HMRC [2020] TC07545, the First Tier Tribunal (FTT) found that a taxpayer's excuse of 'bank error' was reasonable. It upheld the appeal against a penalty for failure to provide bank statements in response to an Information Notice from HMRC. 

Upper Tribunal denies farming loss relief claims
In HMRC v Ardeshir Naghshineh [2020] UKUT0030, the Upper Tribunal (UT) refused sideways relief for farming losses. A competent farmer would have had a reasonable expectation of profits several years before the loss-making periods.

VAT Cases (freeview)

Taxpayer in difficult circumstances was not 'careless'
In Udlaw Limited v HMRC [2020] TC07548, the First Tier Tribunal (FTT) found that a VAT penalty for ‘careless’ inaccuracies was not ‘careless’.

Fund set-up and operating costs incurred by general partner are fully recoverable
In Melford Capital General Partner Ltd v HMRC [2020] TC7514, the First Tier Tribunal (FTT) held that VAT incurred in respect of the set-up and operating costs of a property fund was fully deductible. The fund only received dividends and was not making taxable supplies in its own right.  

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..

Tax Queries?

Virtual Tax Partner© Support
Have a tax query? Need a second option? Open a ticket and ask a question. A team of tax experts with a very wide range of expertise: covering direct and indirect tax, as well as accounting, R & D claims, reorganisations and much more. 

CPD for lunch 

Byte sized chunks of CPD for subscribers

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 30 January 2020

  • Off-Payroll Working: At a glance
  • Corporation tax for non-resident company landlords
  • Stamp taxes & Duty: What’s new? January 2020
  • Consultation: Fifth Money Laundering Directive and Trust Registration Service
  • Survival guide for the self-employed
  • Dividends: the Index
  • Martial arts VAT exemption claim kicked out
  • Church club bar should have VAT registered
  • More...

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