Hello,

The football is over, but if you think that you can relax a bit, not a chance! The first clauses for the new draft Finance Act for 2022 are due to be published on 20 July.

Our review of tax appeal cases this week features several cautionary tales. At the lower end of the tax penalty scale, the Higher-Income Child Benefit Charge (HICBC) continues to trip up taxpayers. Ignorance of the HICBC is no longer a reasonable excuse for failing to pay the charge. 

When your company is failing it might seem pointless to make a fully considered appeal against something like a VAT assessment. This is a very risky tactic, as in certain situations HMRC has the power to issue a Personal Liability Notice (PLN) on the directors to recover lost VAT. If the company has failed to appeal the amount of the penalty, the director’s notice will be for the full amount of the assessment. In a VAT case reported this week, a PLN was issued for  more than £130k. 

The Stamp Duty Land Tax (SDLT) regime befuddles even multi-millionaire property developers. The Candy Brothers entered into a double lease planning scheme, which aimed to avoid certain pitfalls of property law, this had an extremely negative tax effect and cost them £48m in lost SDLT. An appeal seems likely given the amount of money involved.

We have lots of topical updates to our notes and guides below. If you are thinking of subscribing to our service, then come on and give it a go! 

Finally, we are in the process of planning our first Virtual Tax Partner practical tax conference. Keep 12th and 13th October as dates for your diary. More details to come next time.

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

Another consultation on Probate Fees
The Ministry of Justice (MOJ) has launched a new consultation on probate fees which proposes a small increase to the current fees and a single flat rate fee regardless of who is making the application or the value of the estate.

Consultations on UK's future listings regime
HM Treasury has published ‘UK Prospectus Regime: a consultation’. It overlaps with a similar paper from the Financial Conduct Authority (FCA), ‘Primary Markets Effectiveness Review, a consultation’ released on the same day.

CGT: HMRC issue FAQs on UK property reporting service 
Following recent concerns around how it works in certain circumstances, HMRC have now issued a set of Frequently Asked Questions (FAQs) for the Capital Gains Tax (CGT) online property reporting service.

Editor's Pick  

Disposal values & rules
UPDATED: What is a disposal for capital allowance purposes? What is the tax consequence of a disposal? What value needs to be accounted for? 

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

Capital Reduction Index: (freeview)
Ways of returning capital to shareholders, with a look at different tax treatments.

Guides and Updates (subscribers) 

Self Assessment

Losses, trading and sideways
UPDATED: Who can claim losses, what are the restrictions, what types of business are unable to claim.

Losses (sideways): Restriction for uncommercial trades
UPDATED: What are the restrictions to sideways loss relief? When do they apply? What is an uncommercial trade?

Directors

Leaving payments and directors
UPDATE: How are leaving payments to directors taxed? What are the planning opportunities and pitfalls?

Unlawful, illegal or ultra vires dividends
Is there a tax charge on an unlawful/illegal or ultra vires dividend? When is a dividend illegal or ultra vires? 

Companies

Valuation: Companies
UPDATE: When might a tax valuation be required? What are the main principles in valuing unquoted companies?

Patent Box
UPDATE: What is the Patent Box regime? When does it apply? What are the benefits?

How to start a company
UPDATE: How do you go about creating a company? What do you need to do start a company? A practical guide on how to form (incorporate) a private limited company covering the key points that you need to consider. 

Employers

Construction Industry Scheme Penalties
UPDATE:HMRC has now provided details of the differing penalty scales in connection with penalties for 'false registration'.

Laundry costs
UPDATE: Can employees claim tax relief on their laundry costs? How much can employees claim?

PAYE Codes: Starters/leavers & 0T code
UPDATE: This is a freeview 'At a glance' guide to which PAYE code to use for starters or leavers.  

Private Client & Estate Planning

Investment bonds: A tax guide
UPDATE: How are investment bonds taxed? What are the problems and pitfalls to be aware of?

Pensions: Tax rules and planning
UPDATE: What tax rules apply to pensions? What tax relief is available? What tax charges can arise? What planning opportunities are there?

Negligible value claims
UPDATE: What is a negligible value claim? When and how can a claim be made?

Land & Property

SDLT: Leases
UPDATE: What Stamp Duty Land Tax (SDLT) rates do I pay on leases? When do I notify HMRC?

SDLT: Residential property & dwellings
UPDATE: What is residential property for Stamp Duty Land Tax (SDLT)? What tax rate applies?  What garden and grounds are subject to higher rates of SDLT?

CGT: Residential property - signpost
UPDATE: How are income and gains from UK residential property taxed?  What taxes do I need to think about for UK residential property?

Tax Cases 

FTT determines value of shares  
In Neil McArthur & Thomas Bloxham v HMRC [2021] TC08186, the First Tier Tribunal (FTT) determined the market value of shares that had been gifted to charity after discounting two conflicting expert witnesses.

Lack of awareness of High-Income Child Benefit Charge is not a reasonable excuse
In Diana Cuffie v HMRC [2021] TC08191, the First Tier Tribunal (FTT) dismissed the taxpayer’s appeal against failure to notify penalties in respect of the High-Income Child Benefit Charge.

Sour taste to Candy’s £48m SDLT amendment
In HMRC v Christian Peter Candy UKUT 0170, the Upper Tribunal (UT) allowed HMRC's appeal, finding an SDLT return could not be amended outside the standard 12-month window which denied a multi-million-pound SDLT repayment.

No FTT error; no qualifying annexe, no MDR  
In Keith Fiander and Samantha Brower v HMRC UKUT 0156, the Upper Tribunal (UT) confirmed that Multiple Dwelling Relief was not available for the purchase of a detached house with an annexe.  

VAT News, Cases & Guides

EU Advocate General rules that VAT deductions require a VAT invoice   
In C-156/20 Zipvit Limited v HMRC, the EU Advocate General (AG), on referral from the Supreme Court, ruled that whilst the principle of deduction for VAT existed even when no VAT had been charged, no deduction was possible without a VAT invoice.

Sole director personally liable for VAT penalties
In Daniel O'Doherty v HMRC [2021] TC08193, the First Tier Tribunal (FTT) rejected the appeal of a sole director of a company who was issued with a Personal Liability Notice (PLN) for the VAT penalties raised by HMRC on his company. He was unable to provide any evidence to show the underlying assessments were wrong.

What constitutes a valid VAT invoice?
What needs to be included on a VAT invoice? Can you claim back VAT without an invoice? What evidence do you need to claim input VAT? A valid VAT invoice is required to reclaim input VAT. HMRC have discretion to allow defective invoices.  

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 8 July 2021 

  • SDLT: End of the holiday
  • When to amend tax returns for SEISS: HMRC guidance
  • Companies: Claim form for extended loss carryback
  • Non-domicile loan collateral: HMRC changes guidance on remittance
  • Poll Result: Should we change the tax year-end?
  • Farm property renovation: Capital, not revenue
  • Trapped in a tax investigation
  • MVD: New points-based penalties system
  • Receipt of subsidies did not restrict VAT recovery 
  • Students & Tax
  • High-Income Child Benefit Tax Charge
  • Interest paid to directors and individuals
  • SEIS & EIS: Share issue checklist
  • Salary sacrifice & optional remuneration schemes (OPRA)
  • Trusts & Estates: Ten-year charge reporting requirements 
  • Advisers guide to Property Profits & Losses ...More

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What do you get?

  • We keep YOU up to date in SME tax.
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  • Structured CPD our detailed SME tax updates "for Advisers Only" provide topical summaries and planning notes our webcasts provide you with structured CPD at your desk.
  • Regular client tax briefings: these cover the latest business and employment tax issues and are designed to assist you plan meetings and improve your client services.

 


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