This week we take a closer look at the tax incentives provided to help us reduce our CO2 emissions. HMRC has a new Employer Bulletin, tax film schemes reach the Court of Appeal, and our tax conference tickets go on sale.

According to the UN report on climate change, we all need to act now in order to reverse the harmful effects of global warming. We thought that we would start off our action with the 'low hanging fruit' and review the tax aspects of electric vehicles. We have a freeview guide for you.

There is always a debate as to whether it is better for the environment to keep driving an old petrol engine, rather than to buy a new car, as the production of a new car and disposal are hardly emission free processes. Some EU countries have subsidised car scrappage schemes in the past and this remains an option for our government. Without doubt, we need to consume less, and it would really be useful to see some accurate data on the environmental costs of production and disposal.

If you do not bother to keep proper records for VAT and HMRC discovers this fact, you may well receive a "Best Judgement" assessment. We have a couple of cases on this topic this week. Making Tax Digital for VAT is an effective way of ensuring VAT compliance, but only if you manage to include those all important digital links from point of sale to booking records. Newly registered businesses must ensure that they have digital links in their VAT bookkeeping system from the start of registration.

We have put up some BUY NOW buttons for our 2021 Virtual Tax Partner practical tax conference. Early birds will gain access to our pre-conference workouts, these are on-off training sessions on a variety of exciting topics in small groups with our different tax teams and are really good value bonus material. 

Lots more news and interesting cases below.

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 (Freeview)

Basis period reform: What could it mean for MTD? 
Proposed changes to the basis period rules, which are currently being consulted on, could result in some self-employed businesses being mandated into Making Tax Digital for Income Tax sooner than expected.

India dumps retrospect tax-grab law
India is scraps its 2012 decision to impose retrospective taxes on foreign companies' investments. It has also offered a $1 billion tax refund to the British company Cairn Energy that had successfully begun to seize Indian-state assets internationally.

Employer Bulletin: August 2021 
HMRC have published their Employer Bulletin for August 2021. We have summarised the key content for you, with links to our detailed guidance on the topics covered. 

2021 Virtual Tax Partner Conference
NEW: our Virtual Tax Partner 'VtaxP' practical tax conference takes place over two half-days on 12-13 October 2021. Make a note in your diaries!

Editor's Pick  (subscribers)

Making Tax Digital: Survival guide (for the self-employed & landlords)
This is a freeview 'at a glance' guide for the many self-employed taxpayers, company owners and property landlords who are unaware of HM Revenue and Custom's radical plans to transform the tax online filing system.

Electric Vehicles: Update 
NEW: With the increased recent focus on Climate change and the government’s plan to ban petrol and diesel cars by 2030, we provide an update of the tax issues businesses and their employees should consider when acquiring or providing an electric vehicle.

Guides and Updates (subscribers) 

Self Assessment

Averaging claims
UPDATE: When can profits be averaged? What trades does averaging apply to? How are averaging adjustments calculated and made?

Farming: Overview
UPDATE: What is farming? What are the tax consequences and tax considerations of farming?  

Disguised remuneration loan charge
UPDATE: What is disguised remuneration? What is the loan charge? When does the loan charge apply? Will the loan charge affect me?

Badges of Trade: Are you trading or not?
Are you trading, running a business, or just buying and selling investments? The 'Badges of Trade' are a set of indicators, built up over time by the courts, to decide when an activity is a trading or investment activity.

Directors & Companies

Shares, securities & options: Tax compliance
What are the filing requirements for share-based remuneration? What needs reporting? When does it need reporting?  What penalties are there for late filing?

Issuing new shares (planning and pitfalls)
UPDATE: 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.

Capital allowances

Dwelling house for capital allowances
UPDATE: What is a dwelling house for capital allowance purposes? Can capital allowances be claimed in respect of a dwelling house? What expenditure qualifies?  

Super-deduction & First Year Allowances 
UPDATE: What is the new Super-deduction allowance? When does it apply and what is the rate of allowance? What other First Year Allowances (FYAs) are available?


Employment status & tax: Directors & non-executive directors
What is the tax status of a director? How are non-executive directors taxed?

Private Client & Estate Planning

CGT: Holdover/Gift Relief
UPDATE: Holdover relief is available when an individual makes a gift to another person (individual or company). When is the relief available? What are the conditions that apply? What restrictions are there?

CGT: Loans to traders relief
What is loans to traders relief? When can it be claimed? What are the conditions of the relief? 

Land & Property

Replacement of Domestic Items Relief (subscriber guide)
UPDATE: What is Replacement of Domestic Items Relief? When can it apply and what conditions must be met? 

Joint property: legal v beneficial ownership
UPDATE: What is the difference between legal and beneficial ownership? What are the tax consequences? Are the rules different for married couples?

Tax Cases 

CA: Ingenious film partnerships were trading 
In Ingenious Games LLP & Ors v HMRC [2021] EWCA Civ 1180 the Court of Appeal (CA) overturned the ruling of the Upper Tribunal that the LLP film and video game scheme partnerships were not trading and undertaken with a view to profit, although the original claims for losses were still denied.

FTT finds planning permission not enough to secure MDR
In Ladson Preston Limited, AKA Developments Greenview Limited v HMRC [2021] TC08197, the FTT held that planning permission was not capable of satisfying the requirement of being "in the process of construction" in order for Multiple Dwellings Relief (MDR) to apply.

VAT News, Cases & Guides

No evidence of suppression of takings: no best judgement
In Brough East Yorkshire Limited v HMRC [2021] TC08213, a Chinese takeaway successfully appealed a £34k VAT assessment. HMRC's one-night invigilation of the food outlet failed to note suppression of cash and the methodology in making the assessments was flawed by poor sampling and failure to adjust for price changes.

Suspected fraud does not reverse burden of proof in VAT best judgement
In Awards Drinks Limited (in liquidation) v HMRC [2021] EWCA Civ 1235, an appeal against a VAT best judgement failed due to a lack of credible evidence from the company and its director.

VAT and the sharing economy: Summary of responses 
HM Treasury has published a summary of responses to their call for evidence ‘VAT and the Sharing Economy’ which opened in December 2020.

Correcting VAT errors
What are the VAT error correction time limits? Can you correct errors through the VAT return? Do you have to notify HMRC?

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 5 August 2021 

  • 2021 Virtual Tax Partner Conference
  • Consultation: Reporting rules for Digital Platforms 
  • Home Office and DWP £117m IR35 failure
  • IR35 in the private sector: is your business ‘Small’?
  • HMRC concludes research on Family Investment Companies 
  • HMRC guidance on registering and managing an estate
  • Treasury review of AML regime with consultation on AML amendments
  • £15m to support local government audit changes
  • First round of Community Ownership funding opens 
  • Capital Allowances: Potato storage facility is plant 
  • Discovery invalid, no carelessness and out of time 
  • Agent action validated enquiry notice 
  • CIS: Failure of reasonable care costs contractors £1.7m
  • COVID-19: Option to tax deadline extended
  • Opting to tax land and property
  • Cash or accruals accounting toolkit
  • Pension contributions: Personal or company?
  • What expenditure qualifies for plant & machinery allowances?
  • Profits from dealing in or developing land ...More

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