There are definitely signs that some elements of life are returning to normal although I do keep thinking of the scene in the film 'Joker' where Arthur says to his social worker "Is it me or is it getting crazier out there?" Everyday brings some new unexpected news. We have picked out the SME highlights for this week and we have updated some of our guides for those businesses that are now allowed to reopen and we feature a series of guides for those who are keen to invest in a new future.

In terms of the government’s Coronavirus support measures, you may have missed a last-minute addition to the online version of our news last week. This added a previously unannounced measure of support for new parents who have lost income through parenting who would not have otherwise met the 2018/19 profits tests under the Self Employed Income Support Scheme.

The ICAEW has clarified with HMRC what is meant by ‘usual hours’ when it comes to the new version of the employee Job Retention Scheme (JRS) which started yesterday. I recommend being very careful with your calculations and following the guidance step-by-step. As the ICAEW says, do not base your calculations on a normal calendar month.

Companies House has just announced that it is automatically extending accounts and other filing deadlines. That is most welcome. To be frank I am not a fan of any system that fails to have a transparent appeal process and the fewer penalties the better.

On the topic of appeals, it has been enlightening to follow HMRC’s attempts to pursue the scheme promoters and users of the type of tax schemes unearthed back in 2016 by Channel 4’s Dispatches team in their programme, ‘How the rich avoid tax’. When HMRC introduced the Loan Charge in order to combat Disguised Remuneration planning, the scheme promoters and users decided to amend their documents in order to circumvent the tax charge. This was the final straw for HMRC which had been making various unsuccessful attempts in obtaining information under the civil code but, it allowed them to persuade the courts that search and seize warrants were justified under criminal law. 

Finally, on VAT, we look at another case where the Tribunal had to decide whether a service was educational or not. After it decided that it was not, it was consultancy! Then it had to consider the place of supply rules. The result was expensive for the business: it had failed to consider the Place of Supply rules. Be scared! Some areas of VAT are more complicated than most business owners realise.

If you have any tax-specific queries, please post them up to our sister site, details are here: www.VtaxP.co.uk

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

Seven unmissable deadlines for this July
Despite the lockdown continuing into July, it looks like being a busy month for businesses and their accountants with a long list of things to do before the end of the month.

COVID-19: Coronavirus Job Retention Scheme
UPDATE: From 1 July new letters will be required if you are introducing flexible furlough arrangements such as part-time working and to reflect the new minimum furlough period of one week and changes in the caps from September 2020. Our guide explains.

COVID-19: Self Employed Income Support Scheme
UPDATE: A special modification of the rules for new parents who do meet the 2018/19 profits condition.

COVID-19: Companies House
NEW: New move sees automatic filing extensions.

COVID-19: Tracker
UPDATE: Start here to track the latest government measures and announcements aimed at supporting businesses and individuals during the pandemic. 

COVID-19: Interim report on economic impact of Coronavirus
The House of Commons Treasury Committee (Treasury Committee) has published its interim report, ‘Economic impact of coronavirus: Gaps in support’, as part of its inquiry into the economic impact of Coronavirus. 

Last chance to settle Disguised Remuneration Schemes?
HMRC have been contacting individuals with disguised remuneration loans to see if they wish to conclude settlement of their tax liabilities ahead of the loan charge deadline of 30 September 2020.

Corporate Insolvency and Governance Bill 2020 
The Corporate Insolvency and Governance Bill 2020 aims to give companies experiencing financial difficulties as a result of the Coronavirus outbreak some extra assistance in order of increasing their chances of survival.

Editor's Pick

Investors' Relief
UPDATE: Looking to invest and help out as a business angel? Although the lifetime limit has just changed for Entrepreneurs' Relief the same restriction does not apply for investors.

Business Investment Relief
UPDATE: Moving funds to UK? This generous tax relief that is available to non-UK domiciled and UK resident taxpayers who are taxed on the remittance basis in the UK.

Inheritance Tax: Business Property Relief
UPDATE: Business Property Relief (BPR) provides total relief from Inheritance Tax (IHT) on the transfer of relevant business assets at a rate of 50% or 100%.

Entrepreneurs' Relief
UPDATE: Tax relief for smaller sized business disposals. When does Entrepreneurs' Relief apply? What is the rate of Entrepreneurs' Relief? How to claim Entrepreneurs' Relief. Case law on Entrepreneurs' Relief

Tax Guides and Updates (subscribers) 

What expenses can I claim? Hairdressers
UPDATED: For expenses required to meet COVID-19 health and safety requirements. What expenses can hairdressers claim for tax purposes? Are there special tax and accounting rules for hairdressers? What are the VAT rules?

What expenses can I claim? Pop-up bars and cafes
UPDATED: For COVID-19 health and safety expenses. This guide outlines what expenses unincorporated pop-up café, restaurant and coffee shop owners can claim for tax purposes.

Case Update (Freeview)

Re-branding loan scheme is a criminal offence
In Anthony Ashbolt and Simon Arundell v HMRC & anor [2020] BTC 17, an application for judicial review over a decision that allowed HMRC to issue search and seizure warrants in respect of financial advisers who used a disguised remuneration scheme was denied.

Should you trust your siblings with your inheritance?
Archibald & Anor v Alexander [2020] EWHC 1621 (Ch) the High Court held that a property owned by one sibling was held on constructive trust for her brother and sister who were not on the title deeds; this was the family’s intention when the property was purchased.

VAT Update

Career coaching is consultancy and not education for VAT
In Mandarin Consulting Limited v HMRC [2020] TC07714, a career coaching service to Chinese students was found to be a supply of consultancy services and not of education. 

VAT: Place of supply of services
UPDATE: What are the place of supply rules and how do they apply to your business? Our illustrations provide a really useful guide based on your FAQs.

VAT: Place of supply of goods
UPDATE: Where is the place of supply for goods?

VAT: Withdrawal of postal concession on property search fees
HMRC have issued Revenue and Customs Brief 6 (2020) ‘VAT treatment of property search fees charged by solicitors and conveyancers’ confirming the concession on the VAT treatment of property search fees obtained by post is withdrawn from 1 December 2020.

Electronic sales suppression - summary of responses
HMRC have published 'Electronic sales suppression - summary of responses', following its 2019 consultation on Electronic sales suppression (ESS). 

Virtual Tax Partner Toolkits (freeview)

Virtual Tax Partner © Tax Toolkit© Tax Toolkits
NEW: be a winner with our game-changing tax diagnostics tools. Sign up 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 25 June 2020

  • COVID-19: Tracker
  • Employer Bulletin: June 2020
  • FAQs: Coronavirus Job Retention Scheme
  • FAQs: Coronavirus Self-Employment Income Support Scheme
  • COVID-19: NAO publishes guide for audit and risk committees
  • COVID-18 Self-Employed Income Support Scheme: SEISS
  • Three in a row, serial mover denied private residence relief
  • Travel around greater London was ordinary commuting
  • Finance Act 2020: Tax update & rolling planner 2020-21
  • Tax & Travel: At a glance




Nichola's SME Summaries for June 2020

Links to all of June's newswires


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