We have a great range of news and updates this week. Ignoring the Coronavirus for a minute, it is a time of big changes in tax. 

‘Off-payroll working’ now extends to large and medium sized private sector engagers, we see the introduction of the Construction Industry Scheme (CIS) reverse charge VAT scheme, which applies to business-to-business supplies of CIS services and, of course, there is Brexit. With luck, not too many businesses are affected by all three at once. 

HMRC's briefing on off-payroll working indicates that compliance checks under the new regime are likely to be far more unpleasant than any normal PAYE visit, although any penalties for error will be suspended for a year. HMRC is yet to publish the results on its secondary legislation on the transfer of PAYE and NICs debts in the off-payroll supply chain. I don't know if the delay is a good thing or not. Maybe off-payroll working is a storm in a teacup that will vanish once everyone realises that workers who ditch their personal service companies (PSC) are simply agency workers. Our guide to 'Who is the employer for PAYE and NICs' aims to highlight some of the issues for advisers.

It is disappointing to find that Great Britain is only offering Brexit training funding to the largest of 'small businesses'. Most of the queries that we have dealt with would not attract this funding as the underlying businesses are too small. It is ironic given that many of the new difficulties faced are the same whatever the business size.

Judging by the activity on our website, accountants and advisers are even busier this month than they were in January. If you are also keen on CPD then do not miss our CPD section and also our Director's Tax Planning Toolkit, really practical stuff.

If you have any queries do post them on our Virtual Tax Partner advice service at www.VtaxP.co.uk scroll down for more news and updates.

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 briefing: supporting organisations on Off-Payroll Working
HMRC's policy briefing 'Supporting organisations to comply with changes to the off-payroll working rules (IR35)' notes a soft landing on penalties and some useful examples to illustrate how it expects to deal with PAYE compliance reviews. 

Agent Update February 2021
HMRC have issued the Agent Update for February 2021. We have summarised the key content for you with links to our detailed guidance on the topics covered.

SME Brexit Support: just for the biggest small business
A new 'SME Brexit Support Fund' is a grant of up to £2,000 towards training or professional advice. Unlike the new Irish Brexit voucher, the Great Britain (GB) grant is only available to the largest of small business.

COVID-19: Loan funding
UPDATE: The government announced extensions to repayment conditions on Bounce Back loans. Our guide to COVID-19 business loan funding.

Editor's Pick

Directors: Tax Planning Toolkit 2020/2021 
This planner looks at a range of director tax issues, including company profit extraction and changes to be aware of this year. Are your tax affairs up to date? What can be done to improve tax efficiency before the year-end? 

CIS: Construction Industry reverse charge
What is the CIS reverse charge? How do you account for VAT? Can you still cash account for VAT? What administrative changes do I need in order to operate the reverse charge? 

Who is an employer for PAYE and NICs?
Who has to operate PAYE in a labour supply chain? We compare the rules for Agencies, Off-Payroll working and Off-shore agencies.

Guides and Updates (subscribers)

VtaxP Toolkits
This range of tax diagnostic tools is designed to help you solve some really complicated tax questions in a matter of minutes.

Employer NICs relief for Veterans 
From April 2021, a new relief will be available for employers who hire veterans within their first 12 consecutive months of civilian employment. 

Influencers: What expenses can I claim?
UPDATE: What expenses can online influencers claim for tax purposes? Are there special rules? What are the rules for VAT for online influencers?

Woodlands: Overview
UPDATE: Woodlands and forestry ownership carry significant tax reliefs, including Income Tax, Capital Gains Tax (CGT) and Inheritance Tax (IHT). This is a guide to those reliefs.

Cash or accruals accounting toolkit
Unincorporated businesses can elect to use one of two different methods of accounting for tax: simpler accounting (cash basis) or accruals basis accounting.

Leases: Plant and machinery
A summary of the accounting and tax treatment of leased plant and machinery (P&M).

Tax Cases

Entrepreneurs’ Relief denied for trust share disposal
In HMRC v The Quentin Skinner 2005 Settlements [2021] UKUT 0029, the Upper Tribunal (UT) denied a claim for Entrepreneurs’ Relief on the sale of shares by a trust. The individual must have been a qualifying beneficiary throughout the one-year period when the personal company condition was met.

Capital allowance claims on power plant upheld but not extended  
In HM Revenue & Customs v SSE Generation Ltd [2021] EWCA Civ 105, the Court of Appeal upheld the decision of the Upper Tribunal that disputed items of expenditure qualified for capital allowances but did not allow extended allowances on a procedural point.


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 11 February 2021

  • GAAR catches director's loan repayment scheme
  • Employer Bulletin: February 2021 
  • What is the 2021/22 PAYE tax code?
  • Time to Pay arrangements and Class 2 NI warning
  • COVID-19: Loan funding
  • Withdrawal of CIS gross payment status disproportionate
  • SDLT: annexe not a separate dwelling
  • Settlement income scheme a distribution
  • Safestore acted as insurance principal not intermediary
  • VAT distance selling rules caught out vitamin mail-order
  • Year-end top tips for OMB 2020/21
  • Brexit: working abroad/working in the UK ...More


SME Tax Monthly Summary January 2021

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

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