Nichola's SME Tax W-update 8 July 2021

Hello,

In this week’s web-update we note the end of the SDLT holiday, we look into the details of the newest COVID-19 grant, and look at cases on closing down tax enquiries as well as tax relief for repairs.

One of the ‘lucky few’ who has managed a full and uninterrupted holiday in 2020-21 is Stamp Duty Land Tax (SDLT). Like all good things, holidays must end, and from 1 July 2021house buyers will pay SDLT on properties costing more than £250,000. SDLT returns back to its pre-coronavirus rates in November 2021, when it will apply to properties costing more than £125,000. It remains to be seen whether this will slow down the rapid increase in house price inflation.

HMRC has announced details of the latest round of the Self-Employment Income Support Scheme (SEISS). SEISS 5 must be claimed before 30 September. HMRC says people are having a lot of difficult in successfully reporting grants already received on their 2020/21 tax returns and has just published guidance to show you how to correct your returns.

More than half the population watched the football last night, not nearly so many took part in our poll! We asked should we change the tax year end? This week, we publish the results.

Tax cases: we've picked out a couple this week. One is a cautionary tale which shows that the ideal way to become totally trapped in a tax investigation is to withhold answers and information from HMRC. If you want an investigation to end you need to provide HMRC with sufficient evidence for them to come to a conclusion and raise an assessment. If HMRC cannot raise an assessment a tribunal is most unlikely to be able to force their hand to do so.

More news, cases and subscriber updates below, enjoy. 

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

COVID-19: Self-Employment Income Support Scheme (SEISS)
HMRC have updated their guidance to reflect the fifth SEISS grant, including long-awaited details of how the two levels of grant will be determined.  

SDLT: End of the holiday
The COVID-19 Stamp Duty Land Tax (SDLT) 'holiday' concluded on 30 June 2021. From 1 July, SDLT is payable on the acquisition of residential property costing more than £250,000. 

When to amend tax returns for SEISS: HMRC guidance 
HMRC have published guidance on when taxpayers may need to amend their tax returns in respect of Self Employment Income Support Scheme (SEISS) grants.

Companies: Claim form for extended loss carrybacks
HMRC have now provided access to a new online form to be used by companies to make de minimis claims under the new temporary extended loss carryback rules.

Non-domicile loan collateral: HMRC changes guidance on remittance
HMRC have made an unpublicised change to their guidance on how much of a non-domiciled person's foreign income or gains should be treated as remitted if it used as collateral for loans with a UK purpose. 

Poll Result: Should we change the tax year-end?
The results of the Poll are in: a clear preference is revealed...More

Editor's Pick  

An Index to Reorganisations, Demergers & Share transactions (Freeview)
NEW: Reorganising a business or its share capital? What process do you need? Start here to find out and link to practical tax guides, checklists, case studies and tax clearance templates.

Guides and Updates (subscribers) 

Self Assessment

Students & Tax
UPDATE: There are no special tax rules for students, although there are a few pitfalls to watch out for. As we move into the summer students getting holiday jobs and businesses employing them need to understand what these are.

High-Income Child Benefit Tax Charge
What is the High-Income Child Benefit Charge? Who pays it? Can you appeal against an assessment? Are there any useful cases from the tax tribunals? 

Directors

Interest paid to directors and individuals
This guide summarises the tax treatment for the company of interest paid to directors or other individuals. 

Issuing new shares (planning and pitfalls)
A practical guide on how to issue new shares in a company together with a summary of some of the pitfalls if an issue fails to qualify for tax purposes. 

Companies

SEIS & EIS: Share issue checklist
A checklist for the issue and allotment of shares under the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS).

SEIS & EIS: Qualifying trades & activities
UPDATE: What is a qualifying trade or activity for Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) relief? What are excluded activities?

Employers

COVID-19: Employees working from home
Working from home: a guide for employees working from home due to Coronavirus.  

Salary sacrifice & optional remuneration schemes (OPRA)
What is a salary sacrifice or optional remuneration arrangement? How is it taxed?

Private Client & Estate Planning

Trusts & Estates: Ten-year charge reporting requirements
What is the ten-year charge (or principal or periodic charge) and when does it apply to a trust? 

Remittance basis (overseas income)
What is the remittance basis? Who can claim it and when? What are the advantages of claiming the remittance basis and how much is the remittance basis charge?

Pensions: Unauthorised payment charges
What is an unauthorised pension payment? When does a tax charge arise? Who pays the charge? 

Land & Property

Advisers guide to Property Profits & Losses
UPDATE: what's new for 2020-21 and beyond.

SDLT: Residential property higher rates
UPDATE: What Stamp Duty Land Tax (SDLT) rate applies for the purchase of a second home? What is the SDLT higher rate? Are there any reliefs from the SDLT higher rate?

Tax Cases 

Farm property renovation: Capital, not revenue
In Messrs Elliot Balnakeil v HMRC [2021] TC08143, the First Tier Tribunal (FTT) found that farmhouse and bothy renovation costs were capital in nature and not allowable deductions for Income Tax purposes. 

Trapped in a tax investigation
In Gearslutz.com Limited & Julian Standen v HMRC [2021] TC08119, a company and its director failed to terminate a tax investigation with a Closure Notice. Enquiring into a suspiciously late capitalisation of intangible property after incorporation, the taxpayer had failed to provide HMRC with enough information to be able to raise valid assessments.

VAT News, Cases & Guides

MVD: New points-based penalties system
Finance Act 2021 has introduced a new points-based system for penalties to take effect from 1 April 2022 for VAT.

Receipt of subsidies did not restrict VAT recovery 
In Colin Newell v HMRC [2021] TC08149, the First Tier Tribunal (FTT) found that the receipt of subsidy income by a biomass business did not restrict input VAT recovery.

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? 

Place of supply: Goods
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.

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

• NEW: CPD: Appeals: How to Appeal a Tax Penalty
• NEW: CPD: VAT: Land and Property
• NEW CPD: Family Investment Companies
• NEW CPD: Agricultural Property Relief

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 1 July 2021 

• Investigations into COVID-19 support schemes: 12k and counting
• September enforcement deadline for bad debt collection
• COVID-related tax fraud costs us billions says PAC
• New Checklist for making Statutory Clearance applications
• CGT: reporting & payment
• An Index to Reorganisations, Demergers & Share transactions 
• HICBC is not income under the Discovery rules
• Costs of claiming against an employer are not taxable earnings
• COVID-19: Option to tax deadline extended
• R & C Brief 10 (2021): Repayment of VAT to overseas businesses not established in the EU and not VAT registered in the UK 
• New build: no planning permission no VAT zero-rating
• Reorganisations & Reconstructions
• MTD: Toolkit for accountants
• Employer's What's On: June 2021
• An index to Capital Gains Tax reliefs
• NEW: CPD: VAT: Land and Property ...More

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