Nichola's SME Tax W-update 28 January 2021

Hello

This week kicked off with the welcome news that HMRC is relaxing late filing penalties for Self Assessment this year and we end the week with two HMRC Brexit ‘Specials’.  What a 'funny' old month January has been.

The relaxation on penalties ensures that if you file your Self Assessment tax return by 28 February 2021 no late filing penalty will apply. The same does not apply to tax payment; normal due dates apply.

Even if you are not an employer, I would recommend that you read HMRC’s Employer Bulletin: “UK Transition Special Edition”. We were joking that this might become collectible, but in all seriousness, it has a lot of advice on the new customs rules for travel, cash and goods declarations. The later issued Agent Update "Brexit edition" covers much of the same ground.

We have been doing a spot of ‘Spring Cleaning’ to our website and we keep finding excellent guides that were published many months ago. We are adding a lot of these to our system of Signposts throughout the site. These are all freeview and they will help you search for guides in certain topic areas. I have featured a couple this time.

A lot of doctors have been having difficulties with the NHS 'scheme pays' election. We also feature a new guide to this tricky topic this week.

We can see how busy you all are from the activity on the Virtual Tax Partner advice service at www.VtaxP.co.uk and so I will not keep you a moment longer. 

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

2019-20 Tax return penalties delayed to 28 February
HMRC have announced that taxpayers who do not file their 2019-20 tax return by 31 January 2021 will not receive a late filing penalty if they file by 28 February 2021. 

Employer Bulletin: UK Transition Special Edition  
HMRC have published a UK Transition Special Employer Bulletin. We summarise the key content for you.

Agent Update: January 2021 Brexit edition 
HMRC have issued a Brexit edition Agent Update for January 2021. We have summarised the key content for you with links to our detailed guidance on the topics covered.

Companies House paused strike-off again
A temporary pause to the voluntary and compulsory strike-off processes for one month from 21 January until 21 February 2021.

Editor's Pick

Residential Property: Tax signpost 
UPDATE: This signpost provides links to practical tax guides which explain the different ways in which profits or gains on the disposal of UK residential property and land are taxed for a variety of taxpayers, resident and non-resident.  

Trading status & tax: signpost
Is your company's business a trade, a business or an investment activity? What is the difference? What are the tax issues for the company and its shareholders?

NHS Pensions: Scheme pays elections
NEW: What is an NHS scheme pays election? What is the deadline? What if complete information is not available by the election deadline? Can elections be amended? 

Guides and Updates (subscribers)

SDLT: Residential property higher rate: At a glance
The temporary reduction to SDLT is due to end on 31 March 2021 and gives a perfect opportunity to remind you of our freeview SDLT guide for residential property.

Accommodation costs
Can accommodation costs be claimed for tax purposes? When are they disallowable? What is the relevant case law?

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

Averaging claims
When can profits be averaged? What trades does averaging apply to? How are averaging adjustments calculated and made?

Gifts
What are business gifts? Are business gifts allowable for tax? What needs to be disallowed?

Non-resident Tax Toolkit
HMRC have updated their manuals to clarify the taxation of non-residents undertaking employment duties in the UK due to COVID-19 travel restrictions

Overseas Workday Relief
HMRC have updated their manuals to reflect their view on how travel restrictions imposed by COVID-19 affect the calculation of Overseas Workday Relief. 

Tax Cases

No penalties for HMRC's bad advice and delays
In Brocklesby v HMRC [2020] TC07970,  the First Tier Tribunal (FTT) upheld the appeal against late filing penalties by a low-income taxpayer where HMRC's misleading advice and internal delays contributed to the amount of penalties incurred.

Reliance on HMRC’s decision for sister company not reasonable excuse
In Leisure Parks Real Estate Limited v HMRC [2020] TC07974, the First Tier Tribunal (FTT) found that a company did not have a reasonable excuse for filing its Corporation Tax return late simply because HMRC cancelled a penalty charged to a sister company in similar circumstances.

No excuse for failure to action Follower Notice
In Michael Bentley v HMRC [2021] TC7989, an IT consultant failed to persuade the First Tier Tax Tribunal (FTT) that he was incapable of understanding the consequences of failing to act on a Follower Notice (FN).

VAT news & cases

VAT on loan: far from best judgement
In GLS Limited (GLS) v HMRC [2020] TC07985, HMRC assessed output VAT on unknown income following a visit to the company's premises. The taxpayer claimed it was from loans.

Insulated roofing system not insulation for VAT
In Conservatory Roofing Systems Limited (CRSL) v HMRC [2020] TC07976, First Tier Tribunal (FTT) found that supplies of composite insulated roofing system are not the ‘installation of insulation’ and are not subject to VAT at the reduced rate. 

VAT penalties: lack of evidence
In St James Marketing Limited v HMRC [2020] TC07975, First Tier Tribunal (FTT) dismissed the appeal of late payment/filing of VAT as reasonable excuse offered.

 VAT (subscribers)

Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?

Is voluntary VAT registration worthwhile?
When can a business voluntarily register for VAT? When would it be beneficial to voluntarily register?

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

• New CPD: Business Property Relief
• New CPD: Furnished Holiday Lettings
• CPD: Option to Tax

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 21 January 2021

• HMRC Stamp Taxes Newsletter: January 2021
• Collectors avoid record amounts of tax (legitimately)
• Government seeks bids for Freeport scheme
• DAC6: 31 January reporting deadline
• Post Brexit VAT MOSS; February deadline
• Subsidised meals
• A to Z Index for different trades, professions & vocations
• VAT assessments invalid: HMRC failed to exercise discretion
• Partial closure notice must specify tax liability
• Discovery appeal allowed in part despite lack of evidence 
• No SDLT relief if combining two apartments ...More

SME Tax Monthly Summary December 2020

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

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