We have already had a busy week putting through the updates on the Coronavirus Job Retention Scheme (CJRS) and adding other new COVID-19 announcements, now today, we have news of further extensions to the different funding schemes.

While many people are taking the new lockdown in their stride, there are some exceptions, notably those who do not know if they are still employed or not and those who are trying to run payrolls. The new extension of the CJRS means many more fiendish calculations for the businesses affected. I admit that I was a bit confused by the Job Support Scheme (JSS) and whether this would run in parallel to the CJRS. Now we know that the CJRS is going to run until March 2021, I think we can probably ignore the JSS. We are awaiting more detail to emerge on the extended version of the scheme for the self-employed, the SEISS. We will update our COVID-19 tracker as and when we hear more.

Our pick of topical cases from the tribunals includes building contractor travel and whether home is a base of operations. The sort of issue that you really need to be reviewing on an annual basis. We have another case of an unsuccessful appeal against an information notice. It was too bad that it was going to be very time consuming to put the banking information together, HMRC’s request was not unreasonable given the taxpayer’s unexplained bank transactions.

We also have a couple of cases featuring very well-known and failed tax schemes. It seems that only large city financial institutions have been the net winner of years of non-compliance with PAYE and IR35. This will change next year when the Off-Payroll Working rules require the end client to deduct PAYE, that is assuming that this measure will go ahead. With COVID-19 in the air, anything is possible. Will there still be a need to have a financial district in any city?

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

Employment-Related Securities: What’s New? July/November 2020
HMRC’s latest Employment-Related Securities Bulletins focus on the impact of COVID-19 on employee share and incentive schemes. Here is our enhanced version.

Coronavirus Job Retention Scheme
UPDATE: scheme extends until 31 March 2021.

Eat Out to Help Out: Repayment to HMRC
HMRC have released guidance in respect of making repayments of sums received through the Eat Out to Help Out scheme.

COVID-19 - Statutory Residence Test 
HMRC have issued new guidance on the treatment of UK workdays for non-residents where worked due to COVID-19 restrictions. 

COVID-19 Government Support Tracker
We try and keep this updated in real-time for you.

Editor's Pick

Directors' Tax Planning toolkit 2020/21
What's new for Directors this year.

ABC shares: family companies
This guide examines the tax consequences of creating new share classes in a family company in order to split income with a spouse or close family members. 

Disguised remuneration loan charge
What to pay, when to pay, your FAQs answered

Guides and Updates (subscribers)

Schedule 36 Information Notices
UPDATE: What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued?

Loss relief (Income Tax) disposal of shares
Share Loss relief allows you to offset a loss made on the disposal of shares against income instead of the normal capital treatment. When can it apply? 

Off-Payroll Working: IR35
There have been further changes to the scope of IR35 that is due to come into force for the private sector in April 2021. A material interest in the intermediary is no longer a requirement. How will this affect intermediaries?

IHT: Normal Expenditure Out of Income (gifts)
An exemption from IHT exists for normal expenditure made out of income. What is normal expenditure? What is income? How should gifts out of income be recorded?   


Subcontractor not based at home
In Hamish Taylor v HMRC [2020] TC07893, a claim for travel and subsistence by a sub-contractor failed on the basis that his home was not his base of operation.

No reason not to comply with Information Notice
In Umesh Gadhavi v HMRC [2020] TC07890, the First Tier Tribunal (FTT) considered whether a taxpayer was required to produce documents under Schedule 36 FA 2008.

No PAYE credit against contractor tax scheme earnings
In John Lancashire, Timothy Lee, Mark Johnson v HMRC [2020] TC7884, the First Tier Tribunal (FTT) rejected a claim to take credit for the PAYE that should have been deducted by employer against Income Tax assessments made in respect of a failed tax scheme. 

Contractor loan scheme was notifiable under DOTAS
In Opus Bestpay Limited v HMRC [2020] TC5530 a company claiming to be a ‘back-office’ for a Contractor Loan tax scheme was found to be a scheme promoter.


UPDATE: From 1 November 2020, supplies of PPE revert to the standard 20% rate of VAT.

R & C Brief 17 (2020): VAT liability of private sonography services
Revenue & Customs Brief 17 (2020): ‘VAT liability of private sonography services’ clarifies HMRC’s position on the VAT treatment of ultrasound scanning services for pregnant women following the First Tier Tribunal's decision in Window to the Womb (Franchise) v HMRC.

VAT cases

Local authority not a taxable person: Leisure facilities
In Chelmsford City Council v HMRC TC/2011/07816 the First Tier Tribunal (FTT) considered whether the provision of sports and leisure facilities by a local authority was subject to VAT at the standard rate.

Virtual Tax Partner Toolkits (freeview)

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  • Business Asset Disposal Relief: Sole traders: sale of a business, incorporation, sale of assets
  • Business Asset Disposal 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 29 October 2020

  • Mandatory scrutiny of pre-packs
  • Agent update October/November 2020
  • Job Support Scheme
  • COVID-19: Self-Employment Income Support Scheme (SEISS)
  • COVID-19: Employer support tracker
  • Employer's What's On: Sept/Oct 2020
  • R & C Brief 16 (2020): VAT liability of payroll services
  • Compensation taxable as income not capital
  • CGT relief given for large garden
  • Diver's fitness training an allowable expense...More


SME Tax Monthly Summary October 2020

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

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