Nichola's SME Tax W-update 18 March 2021

Hello

We have a blend of old and new for you this time as we look at last-minute tax planning for the end of another tax year and topical tax tips for the start of the new one.

It has been an extraordinary tax year. Many individuals are still struggling to get up to date with their affairs, and this, in turn, has had a knock-on effect for many accountancy and tax practices. To this end, HMRC says that it will allow ‘bulk’ tax appeals where COVID-19 is the 'reasonable excuse' for late filing of tax returns. I'll admit I was unaware that bulk tax appeals were not allowed, as I have had cause to make several appeals of that nature in the past. They are useful when a major issue affects a lot of clients. You can link to our bulk appeal template from the news item below.

We continue our Budget 2021 coverage with a look at Freeports and the 'Help to grow' scheme. Links to the Budget are via those guides, in case you missed out. Alternatively, see the top menu on our site. 

Our year-end guides and new-year tax guides are providing extremely popular, so do subscribe to us to unlock the whole site. Also have a look at our IHT planning guide; we've had a lot of queries around that topic recently.

We have a very wide selection of cases with what 'the person on the Clapham omnibus' might think is a surprising result in a company discovery assessment appeal. I wonder if that one will end there. 

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

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

Deadline extension for Trust Registration Service
The March 2022 deadline for non-taxpaying trusts to register with the Trust Registration Service (TRS) has been extended indefinitely by HMRC following delays to the redesign of the online system.

Late filing penalties: HMRC to allow bulk appeals  
Late filing penalties will soon be issued for the 1.1 million taxpayers who failed to file their returns by 28 February 2021. It is understood that HMRC are planning on allowing bulk appeals, where the reasonable excuse is Covid-19.

R & C Brief 3 (2021): VAT liability of digital publications update
Revenue & Customs Brief 3 (2021): 'VAT liability of digital publications – update on litigation in News Corp and Ireland Ltd' provides an update on the VAT treatment of supplies of digital newspapers and other digital publications prior to 1 May 2020.

Budget 2021: Help to Grow
Applications for the government's 'Help to Grow' scheme announced in Budget 2021 have opened. The programme will help small and medium-sized businesses with digital and management training.

Budget 2021: Freeports
The Chancellor announced the designation of eight areas across Great Britain that will become Freeport locations. These locations will benefit from a range of tax reliefs to encourage investment.

Editor's Pick 

Year-end top tips for OMB's 2020/21
Last-minute year-end tax planning advice for owner-managed businesses and clients. What should you focus on as the 2020-21 tax year-end approaches? What should you do before 5 April and what could you leave until later? 

Property profits & losses: Toolkit (2020-21)
Our Property profits & losses toolkit takes HMRC's version and adds a great deal more information about what you can claim as an individual. 

Discovery Assessments
When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences?

Different ways of taxing UK property
This guide summarises the different ways of taxing income, value and gains in respect of the exploitation of UK property:

Guides and Updates (subscribers)

Salary 2021/22 (avoiding NICs) 
NEW: What is the optimal monthly or weekly salary that can be paid by an employer without incurring a liability for employer or employee National Insurance Contributions (NICs)?

Do I pay a salary or dividend? 2021/22 
NEW: This guide explores the tax-planning points and pitfalls of using dividends to create a tax-efficient pay package.

Tax Data Card 2021/22 
NEW: A summary of key tax rates and allowances for 2021-22 and 2020-21

Website, software & e-commerce costs
UPDATE: there are different rules on tax deduction, depending on whether you are a sole trader or company. This may affect your choice of trading vehicle as a start-up business.

IHT: Estate Planning with BPR
It is possible to use Business Property relief (BPR) to its maximum advantage by using the interaction of other Inheritance Tax (IHT) reliefs. This guide explains how.

Annual Tax on Enveloped Dwellings (ATED): At a glance
What is ATED?  When does ATED apply?  What relief is available and how is it claimed?  What are the ATED filing requirements?

Tax Cases

ATED returns: Daily penalty notices invalid as issued too late
In Jocuguma Properties Ltd v HMRC [2021] TC8007 and Bennedy's Development Ltd v HMRC [2021] TC8088, the First Tier Tribunal (FTT) partially allowed two appeals against late filing penalties for ATED returns. HMRC had not issued valid notices in respect of the daily penalties charged.

LLP Profit reallocation scheme fails (2)
In Odey Asset Management LLP & Ors v HMRC TC08018, the First Tier Tribunal (FTT) found that a Limited Liability Partnership (LLP) scheme to reallocate profits via a corporate vehicle using allocations of Special Capital failed to work and the allocations were chargeable to income tax on the individual partners. 

Not plant: underground gas storage cavities
In Cheshire Cavity Storage 1 Ltd & Anor v HMRC [2021] UT 50, the Upper Tribunal (UT) dismissed the appellants appeal against the FTT decision denying a capital allowances claim on the creation of underground storage cavities for the storage of gas.

SDLT: Annex not a separate dwelling
In Andrew & Tiffany Doe v HMRC [2021] TC08003, the First Tier Tribunal (FTT) dismissed the appellants appeal against an HMRC closure notice denying Multiple Dwellings Relief (MDR) on the purchase of a property with annex.  The FTT also concluded the HMRC enquiry had been raised within the required time limits.

Tax Toolkits (freeview)

Virtual Tax Partner © Tax Toolkit© Tax Toolkits
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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

• CPD: CIS Reverse Charge VAT
• CPD: Trading Loss Relief: Individuals
• CPD: Business Property Relief
• CPD: Furnished Holiday Lettings

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax Update 11 March 2021

• Budget 2021
• Enterprise Management Incentives Call for Evidence
• HMRC: Consultation responses: R&D Qualifying expenditure 
• HMRC consultation: R&D Tax Reliefs
• Employment-Related Securities: What’s New? March 2021
• LLP profit reallocation scheme fails 
• Overseas university's services outside scope of VAT
• Deficiencies in invoices prevent VAT recovery
• Sole trader v. limited company: Tax differences & savings (2021/22)
• Budget 2021: Corporation Tax rate change
• Budget 2021: Interest and penalty reform (subscriber guide)
• Creating an office at home or in your garden
• When does a valid partnership exist? ...More

SME Tax Monthly Summary February 2021

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

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