Hello

This week we have a new Agent and Trusts update, along with updates on a range of other guides; however, as it is tax return time, we also revisit some old classics. We review some tribunal decisions which illustrate just why you need to be extremely careful with dates and deadlines in tax.

From time to time we are contacted by people who suspect that HMRC has incorrectly deducted old 'out of time' tax liabilities against current repayments. In most of these cases the amounts are so small and the details so complex that it is just not worth it in terms of costs v. benefits to pursue an appeal. The case of Mr Uddin, which we report this week, perfectly illustrates this problem of double standards that we see so frequently.

Even if you are not that interested in Stamp Duty Land Tax (SDLT), and I must confess that I am, you might like to read over the Smith Homes case below. Just about everything that could go wrong in terms of the mechanics of HMRC's appeal process did go wrong. It is, however, exceedingly difficult to level any criticism at HMRC's conduct in its attempt to deal with the taxpayer's demands: it was dealing with a curved ball. Luckily, the First Tier Tribunal (FTT) unravelled the resultant mess.

I don't want to harp on too much, but we also have a case in the VAT section that is a timely reminder on VAT surcharges. Whatever you do, ensure that the VAT payment goes out on time.

We have split the news into two as it was looking a bit heavy. Do scroll on down. Next week we will have one final newswire before Christmas and then we are taking a little break. 

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

www.rossmartin.co.uk

Your Virtual Tax Partner® online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.

Quick News

Trusts and Estates: What’s New? December 2020
HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version.

Agent Update December 2020
HMRC have issued the Agent Update for December 2020. We have summarised the key content for you with links to our detailed guidance on the topics covered.

Coronavirus tests exempt benefit
HMRC confirmed that where an employer reimburses an employee for the cost of a Coronavirus test, that reimbursement will be an exempt benefit in kind.

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

Editor's Pick (subscribers)

Cash basis for property businesses
UPDATE: When should landlords use the cash basis? How are profits calculated? Is there an alternative?

CGT: connected persons & losses
A capital loss made on a disposal of an asset to a connected person may be a 'clogged' loss. What does this mean? What consequences does it have?

SRT: Split Year Treatment
What is a split year? What is the consequence of split year treatment? In what cases might a split-year arise? 

An Index to Reorganisations and Demergers
You can reorganise or separate company activities and different subsidiaries using a variety of different methods. This series of tax guides provide an outline of the tax treatment together with step guides and tax clearance templates. 

Guides and Updates (subscribers)

Creating an office at home or converting part of a home into an office
UPDATE: Many company owners work from home. This guide looks at how you may obtain tax relief on the cost of converting the spare room or building a deluxe summerhouse to serve as an office in the garden.

Gardens: selling or developing
UPDATE: What are the tax consequences of selling a garden for development purposes? What if the owner develops the garden?

Working from home (self-employed)
What expenses can you claim for working from home, if you are self-employed? Are there special rules and precedents for certain types of trade or profession?

Working from home (employees)
What expenses can employees claim for homeworking? Are the rules the same for the self-employed? How do you make a claim?

Working from home (directors)
What are the rules for directors? Are they different from other employees? What are the additional issues and complications caused by their jobs? 

Tax Cases

SDLT claim 'comedy' of errors
In Smith Homes v HMRC [2020] TC7914 an attempt to use an Overpayment relief claim to try and facilitate a late claim for SDLT relief failed to extend the statutory deadline for amending a claim in a return. The claim invalidated HMRC's enquiry process however the FTT unravelled the resultant mess and found for HMRC

HMRC double standards over four-year claims limit
In Mohammed Masbah Uddin v HMRC [2020] TC7918, the First Tier Tribunal (FTT) found that HMRC was operating double standards when it withheld out of time tax from a foreign student's claim for a tax refund. 

Consultations and more news

New R&D CT600 supplementary page from April 2021
HMRC have published a draft CT600 supplementary page to be used in respect of Research and Development claims from 1 April 2021.

Study finds one-off 5% wealth tax could raise £260bn
The Wealth Tax Commission has published ‘A wealth tax for the UK’ which calls for a one-off UK wealth tax of five per cent on assets above £500,000. 

Consultations: Company fraud and corporate transparency
Companies House and the Department for Business, Energy & Industrial Strategy have opened three consultations seeking to crack down on company fraud and improve corporate transparency. 

Consultation: Follower Notices and penalties
HMRC has opened a new consultation ‘Follower Notices and penalties‘ inviting views on proposed changes to penalties that may be charged to people receiving Follower Notices as a result of using avoidance schemes.

VAT news & cases

R & C Brief 21 (2020): Withdrawal of the VAT Retail Export Scheme and the tax-free shopping concession
Revenue & Customs Brief 21 (2020): 'Withdrawal of the VAT Retail Export Scheme and the tax-free shopping concession' confirms the withdrawal of 'airside' tax-free shopping and the Retail Export Scheme on 1 January 2021.

Pub converted to flats: VAT incorrectly charged
In Kang & Mand Limited v HMRC [2020] TC07945, the First Tier Tribunal (FTT) upheld HMRC’s assessment of overclaimed input tax following VAT being incorrectly charged on an exempt supply. 

Bank delayed payment not a reasonable excuse 
In Dougs Maintenance Services Limited v HMRC [2020] TC07941, the FTT found that a delay by the appellant's bank in processing the payment did not constitute reasonable excuse for an appeal against a default surcharge penalty. 

VAT (subscribers)

Capital Goods Scheme
What is the VAT Capital Goods Scheme (CGS)? When do I use it? How does it work?

Virtual Tax Partner Toolkits (freeview)

Virtual Tax Partner © Tax Toolkit© Tax Toolkits
Be a winner with our game-changing Business Asset Disposal Relief tax diagnostics tools. Sign up now.

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 10 December 2020

  • £1,000 Christmas grant for 'wet-led pubs'
  • CJRS claims not valid for Christmas shutdowns
  • Watch out! SEISS new criteria may catch you
  • 100% FYA extension for zero-emission cars
  • Employer Bulletin: December 2020
  • Trivial benefits
  • Pensions: tax charge for excess contributions
  • Property landlord caught by both SDLT and SLP
  • No relief from 15% SDLT following owner occupation
  • Late appeal denied: taxpayer had the right tools to self-assess
  • Spot the signs of tax avoidance
  • R & C Brief 20 (2020): Repayment of VAT to overseas businesses not established in the EU and not VAT registered in the UK...More

 

SME Tax Monthly Summary November 2020

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

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