We are counting down the days until the end of September, ever more conscious of the work that is being undertaken by HMRC in trying to agree settlement of the remaining disguised remuneration loans. 

Some firms are very nervous about whether HMRC is able to meet the deadline. I would suspect that some form of discretion will be exercised in those cases where the delay is out of the taxpayer's control, however no announcements have been made yet.

Judging by our inbox this week, it appears that many business owners who managed to get away for a summer break have now returned with great plans to reorganise their business. There are signs of decluttering as business owners try to split their investment properties from their trading business. Why hoard investments within a trading business? We all know why that happens, the trouble arises when you want to sell the trade or plan Inheritance Tax (IHT). We have updated some key guides to answer many of your FAQs on these topics. 

We have also had a lot of queries on property ownership following the changes to the UK's Capital Gains Tax (CGT) and IHT rules and we feature an updated guide to offshore company property ownership.

It seems that the government is increasingly tied up with the grim combination of Brexit and Covid-19 and there are unlikely to be any tax announcements until the leaves on the trees start turning brown. Until then we have VAT! We have some new VAT briefs that are worth a mention and H M Treasury have raised a call for evidence on VAT and grouping. The latter is worth a read if you are new to that topic and will be of interest also to those who have mixed VAT groups which include partnerships.

In our pick of this week's tax cases, we report a cautionary tale of a gift aid claim that went wrong, we see a rare outcome - an investigation case where the presumption of continuity did not apply - and finally, a judgment that examined the nature of share options.  

If you have any tax-specific queries, please do post them up to our sister site: 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

Spotlight 56: Disguised remuneration
HMRC have released Spotlight 56 ‘Disguised remuneration: tax avoidance by owner-managed companies using remuneration trusts’.

New grants for local COVID lock-down businesses
The government has announced new grants of up to £1,500 for businesses that have been forced to close due to local COVID-19 lockdown orders.

6,000 in race to settle EBT loans
HMRC have 1,000 officers working to agree a settlement with an estimated 9,000 outstanding Disguised Remuneration cases before the settlement deadline of 30 September 2020.

Editor's Pick

Offshore company holding UK residential property: Tax issues
Is it still worth holding UK property via an offshore company? How are these properties taxed? Should I bring my offshore company into UK corporation tax? What are the tax issues of repatriation?

Selling the business: Deferred consideration and earn outs
When a company is sold via a share purchase the buyer may hold back or defer paying the whole of the purchase price until certain agreed conditions are satisfied or profit targets are met.

Employee Ownership Trusts: An exit route for owner-managers
Time to retire? Company owners may sell their controlling interests in the ordinary share capital of their trading companies to a new type of Employee Ownership Trusts (EOTs) free of Capital Gains Tax (CGT) and Inheritance Tax (IHT)

Guides and Updates (subscribers)

The disguised remuneration loan charge
If your outstanding loan is not settled by 30 September you must report your loan and pay the loan charge. You may spread the change over a number of years.

Capital allowances: Fixtures
What are fixtures? What allowances can be claimed instead? What should I be thinking about before making a claim?

Capital allowances: Plant & machinery
A handy guide with a time lime of recent developments

Case Update (Freeview)

Options amounted to a right to acquire securities
In J Charman v HMRC [2019] UT0253, the Upper Tribunal (UT) considered whether the grant of a share option amounted to a ‘right to acquire securities’. 

Gift Aid carryback must be via an original tax return
In Alan Firth Webster [2020] EWHC 2275 (Ch), the claimant’s case for 'rectification' of his 2016/17 tax return to correct a Gift Aid claim error was dismissed by the court. 

Presumption of continuity did not apply when trade changed
In Stirling Jewellers (Dudley) Limited v HMRC [2020] UKUT 0245, the Upper Tribunal found that changes to a company's trade and the appointment of a qualified accountant meant that the 'presumption of continuity' could not apply to record-keeping and business margins for earlier years.


Call for Evidence: VAT Grouping, Establishment, Eligibility, and Registration
HM Treasury has published a new call for evidence on 'VAT Grouping - Establishment, Eligibility and Registration'. 

New VAT brief on charity advertising
Revenue and Customs Brief 13 (2020): 'VAT charity digital advertising relief', sets out HMRC's policy in different digital advertising situations. The guidance may contain some errors.

VAT changes for contract compensation
HMRC have published Revenue and Customs Brief 12 (2020): VAT early termination fees and compensation payments. 

Current vacancies

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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.
  • 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.

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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. 

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Byte-sized chunks of CPD for subscribers


More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 3 September 2020

  • New Kickstart Scheme open for applications
  • Trusts and Estates: What’s New? August 2020
  • Tax increase on single-use plastic bags
  • HMRC upgrades online report and pay CGT facility
  • Is it worth restructuring to save tax?
  • The articles are definitive: No voting rights, no relief
  • A compromise agreement bonus payment is not a termination payment
  • Place of supply of services
  • Place of supply: Mini One Stop Service ...More

Nichola's SME Web-Updates for August 2020

Links to all of August's newswires...More 

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