We have some useful new tools for you this week, all covering some tricky but topical areas of tax. 

If you have ever struggled to calculate the correct VAT rate on a land and property transaction, then you'll appreciate just how complex that topic can be. HMRC's latest call for evidence considers simplifying the VAT exemption. It transpires that the four original land and property VAT exceptions have, over the years, turned into 15 exceptions with 26 sets of notes. HMRC is now considering options for reform.

Another area of tax that is in need of reform but which unfortunately is not yet on the government's published to-do-list, is employment supply chain taxation. The current model is clearly broken, as demonstrated in this week’s BBC Radio 4’s ‘File on 4’ program. It highlighted the case of more than 40,000 ‘ghost companies’ formed in the UK and run by nominees in the Philippines who are defrauding HMRC on ‘an industrial scale’ via the use of mini-umbrella companies. The umbrellas operate in labour supply chains to secure the employers' NICs allowances, maximise employee expense claims and save VAT. Ghost umbrella companies are set up by UK directors and then replaced by Philippino directors, all who are recruited via Facebook and network marketing sites. Clearly HMRC is struggling to cope with fraud on this scale, and while the temps and other agency workers at the end of this fraud chain won’t necessarily realise that there is any issue, some employers are turning a blind eye when selecting their outsourcing partners.

Finally, another tax that will soon need reforming and re-writing is Stamp Duty Land Tax (SDLT). Just like your worse gaming enemy this tax 'spawns' with almost every finance bill. Each new manifestation makes it more evil and untrustworthy. In an effort to try to regain some ground against this foe I have created a new 'Quick check' tool for the SDLT Non-Residents Surcharge. Test it out and tell me if it has helped you.

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

Call for Evidence: Simplifying the VAT land exemption 
HMRC have issued a new call for evidence, 'Simplifying the VAT Land Exemption' which seeks views on the VAT rules relating to land and property and how they may be simplified.

Mini-umbrella company fraud exposed 
HMRC have issued guidance on what mini-umbrella company fraud is. It follows a BBC Radio File on 4 programme that revealed that as many as 48,000 companies had been created in the last five years under such arrangements, at a cost of potentially millions in lost tax revenue.

R & C Brief 5 (2021): VAT liability of installation of blinds 
Revenue & Customs Brief 5 (2021): 'VAT liability of installation of blinds – First Tier Tribunal decision' explains HMRC's revised policy on the VAT treatment of installation of blinds.

Get your business ready for the Plastic Packaging Tax 
HMRC have issued a new policy paper ‘Get your business ready for the Plastic Packaging Tax’ advising businesses who will be affected by the new tax how to prepare for it.

OECD calls for IHT revenues to be increased 
The Organisation for Economic Cooperation and Development (OECD) has released a report ‘Inheritance Taxation in OECD Countries’ calling on governments to increase taxes to help readdress wealth inequality.

Apprenticeship Levy scheme failing says CIPD 
An analysis of the Apprenticeship Levy by the Chartered Institute of Personnel and Development (CIPD) found that employers lost out on £2 billion in apprenticeship training funds and the government scheme had 'failed'.

Editor's Pick  

IR35: Kaye Adams v Lorraine Kelly v Christa Ackroyd v Eamonn Holmes 
What was the difference between the facts and circumstances of the recent IR35 decisions on radio and TV hosts, Kay Adams, Lorraine Kelly, Christa Ackroyd and Eamonn Holmes?

SDLT: Non-Residents surcharge
UPDATE: our new quick-check tax tool is designed to spare the pain of these new rules.

Guides and Updates (subscribers) 

Making Tax Digital: VAT (subscriber guide)
Businesses are now required to have digital links in their first VAT Return starting on or after 1 April 2021. As the 'soft landing' period has ended the use of 'cut and paste' does not now constitute a digital link.

Non-resident Tax Toolkit
UPDATE: This toolkit covers the key UK tax issues for non-UK resident individuals holding UK assets and property and working in the UK.

Offshore income toolkit
UPDATE: This toolkit provides an outline of the tax issues for UK resident individuals with offshore income and investments.

CGT: deductible expenditure
What expenditure is allowable for Capital Gains Tax (CGT)? What about loan interest, early redemption fees etc?

Tax Cases 

CGT: Unsupported costs are not deductible
In Babtunde Iginla v HMRC [2021] TC8081, the First Tier Tribunal (FTT) restricted the amount of costs allowable against a capital gain for lack of evidence but partially allowed the taxpayer’s penalty appeal.

VAT Guides

Place of supply: Mini One Stop Shop (MOSS)
UPDATE: The place of supply of B2C digital services is where the customer is based. Where supplies are made to the EU, this can mean multiple VAT registrations are required. How does MOSS assist with this? What is the position post-1 January 2021? 

Online Marketplaces: Selling goods in the UK
UPDATE: When do you have to register for UK VAT? When is UK VAT payable? What amount is VAT payable on? What information do you have to give the marketplace provider? What will it do with that information?

Place of supply: Goods
UPDATE: The place of supply (POS) of goods determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.

International goods
UPDATE: Special VAT rules apply to goods bought from and sold to non-UK businesses.

Tax Toolkits 

Tax Tools
Be a winner with our game-changing tax diagnostics tools for Business Asset Disposal Relief, SDLT & annexes/subsidiary properties, Company reorganisations, R & D Zone and TAAR on winding up. 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 6 May 2021 

  • Treasury criticised for lack of climate plan  
  • Going Eco: Ten steps to a climate-friendly business
  • Consultation on Residential Property Developer Tax
  • SA Notices to File incorrectly issued to non-resident corporate landlords
  • Share repurchase fails minimum ownership condition 
  • Gardens: selling or developing
  • De-enveloping property
  • Demergers: What are your options? 
  • Losses: Trading and other losses
  • Purchase of own shares: Checklist (Masterclass)
  • Case Study 6: POS, buyout retiring shareholder
  • How to set up a UK trust 
  • Land & Property: DIY Housebuilders scheme
  • Private use of goods: VAT and Lennartz ...More


SME Tax Monthly Summary April 2021

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

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