This time we have been looking at an ever more diverse range of topical tax, from Freeports to free and subsidised staff lunches, from legal tax avoidance to tax enquiries.

The Arts Council has reported on tax savings achieved by two legitimate tax avoidance schemes, both which may be ideal for hoarders! The Cultural Gifts Scheme and Acceptance in Lieu scheme allow you to pay tax bills in 'collectibles'. Hoards that have been swapped for tax bills include a fossil collection and the archival material of several politicians, as well as fine art and drawings. These are all objects deemed to be of national importance and the purpose of the scheme is to prevent these works from falling into the hands of foreign collectors. Taking a quick look through the art catalogue reveals that when it comes to art, we are happy to collect the works of foreign artists too.

We have also been taking a closer look at HMRC’s Stamp Taxes Newsletter. The latest edition reviews cases on Stamp Duty Land Tax (SDLT) and the Annual Tax on Enveloped Dwellings (ATED), and, as usual, HMRC is happy to accept some tribunal decisions and not others. The decisions it does not like both relate to penalties. We suspect that we will see some corrective clauses tabled for the next finance bill. Something to watch if this is your topic.

If Freeports are your thing, then there are some very generous tax breaks offered for those who wish to set up shop there. The tax breaks on offer are not unlike those offered in the past for Enterprise Zones. 

We have a new guide on employer subsidised meals, updates on employee working from home claims and many other useful guides. If you are struggling with the qualifying conditions for a Business Asset Disposal Relief (BADR, the relief formerly known as Entrepreneurs' Relief), then do check out our Virtual Tax Partner 'VtaxP' toolkits, these munch through the rules in seconds.

The third SEISS grant window closes on 29/1/2021, and it is worth reminding clients of that..

Stay safe. 

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

HMRC Stamp Taxes Newsletter: January 2021
This is our enhanced version.

Collectors avoid record amounts of tax (legitimately)
The Cultural Gifts Scheme and Acceptance in Lieu Annual Report saved £40 million in taxes for collectors.

Government seeks bids for Freeport scheme
The ‘Freeport Bidding Prospectus’sets out the government’s ambition for Freeports.

DAC6: 31 January reporting deadline
DAC6 is a reporting requirement for those involved in cross-border tax planning arrangements.

Scotland to increase plastic bag charge
The single-use plastic charge is set to rise to 10p from from 1 April 2021.

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

Post Brexit VAT MOSS; February deadline
UK VAT registered business supplying B2C digital services to customers in the EU have until 10 February 2021 to register under the EU non-union MOSS scheme for January 2021 supplies. 

Editor's Pick (subscribers)

COVID-19: Landlords & tenants
UPDATE: (Freeview) Landlords and tenants: the government measures to support landlords and tenants during the Coronavirus crisis.

COVID-19: Employees working from home
UPDATE: (freeview) Working from home: a guide to claims by employees working from home due to Coronavirus. 

Subsidised meals
NEW: An employer may provide subsidised or free meals for its staff tax-free.

Guides and Updates (subscribers)

A to Z Index for different trades, professions & vocations
UPDATE: Self-employed A-Z index: what expenses can I claim

Reasonable Excuse 
UPDATE: HMRC have confirmed that they will accept delays to filing Self Assessment returns as a result of COVID-19 as a reasonable excuse.

Wages: Spouse or family
UPDATE: Can I employ family members? Can I employ my children? Will the costs be allowable? What needs to be considered? 

Losses, trade losses and sideways relief
How can trade losses be utilised? What are the restrictions?

Investors' Relief
Investors' Relief can first apply to disposals of shares made in 2019/20. What is Investors' Relief? Which disposals qualify? 

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

Non-domicile status, deemed domicile & tax
Who is non-UK domiciled? What does this mean for UK Income Tax, Capital Gains Tax and Inheritance Tax? What reliefs are available to non-doms?

Tax Cases

Partial closure notice must specify tax liability
In HMRC v Epaminodas Embiricos [2020] UKUT 0370, the Upper Tribunal (UT) confirmed that HMRC cannot issue a partial closure notice which does not quantify the amount of tax due.

Discovery appeal allowed in part despite lack of evidence 
In Mark Turner v HMRC [2020] TC7982, a taxi driver's failure to declare income resulted in three years of tax 'Discovery' Assessments. The First Tier Tribunal was sympathetic in respect of his expenses as he had sought assistance from HMRC's Need Extra Support (NES) team.

No SDLT relief if combining two apartments 
In Noaref & Mozhdeh v HMRC [2020] TC7873, the First Tier Tribunal (FTT) dismissed a claim for the Replacement Dwelling Exemption which would have granted a refund of the higher rate of Stamp Duty Land Tax (SDLT) on the purchase of a property replacing their old main residence.

VAT news & cases

VAT assessments invalid: HMRC failed to exercise discretion
In Harry Edebiri (t/a TT Trading) v HMRC [2020] TC07988, the First Tier Tribunal (FTT) set aside VAT assessments totalling £16,600 as HMRC had failed to exercise their discretion to allow alternative evidence to support input VAT claims.

VAT (subscribers)

Correcting VAT errors
UPDATE: What are the time limits? Can you do it through the VAT return? Do you have to notify HMRC?

Flat rate scheme
What is the VAT Flat Rate Scheme (FRS)? Who can apply? How do you apply? What are the rules? What are the rules for capital expenditure and pre-registration VAT? 

Land & Property: Dwellings
What is a dwelling for VAT purposes? What is the VAT treatment for construction, conversion, sale, and letting of a dwelling?

Virtual Tax Partner Toolkits (freeview)

Virtual Tax Partner © 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 14 January 2021

  • Consultation on Small Brewer’s Relief
  • Employers NIC holiday for employers of veterans
  • Covid-19: Coronavirus Job Retention Scheme (CJRS) from 1 November 2020
  • Website and e-commerce costs 
  • Grounds for Appeal: Reasonable Excuse 
  • Sponsorship
  • No CGT Entrepreneurs' Relief for former director
  • R&D claim fails key criteria
  • Sports show cars were available for private use
  • Judicial Review: Loan Charge not in breach of Human Rights Act
  • No VAT deduction if importer not owner
  • ECJ allows input VAT for goods/services on abandoned projects...More


SME Tax Monthly Summary December 2020

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

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