We have a good mix of cases this week, with yet another ‘wrong forms for SEIS’ case where this time the First Tier Tribunal (FTT) took a pragmatic approach and allowed shares to be issued under the Seed Enterprise Investment Scheme (SEIS) despite forms being incorrectly filed for Enterprise Investment Scheme (EIS) relief.
Loans from a remuneration trust were found to be taxable as dividends and not earnings. HMRC may decide to appeal this decision, though recent experience suggests HMRC might be coming round to the same conclusions as the FTT judge in open cases where the same scheme has been implemented. In VAT cases the Upper Tribunal agreed that haymaking was not an economic activity and the FTT found that membership fees for the Freemasons are not VAT exempt.
If you have corporate clients who have claimed under CJRS, make sure you read our update about how to complete their CT600 returns, it is not quite as straightforward as you think. There is a new Agent update from HMRC, our enhanced version is well worth a read.
The Office for Tax Simplification (OTS) has published a report on the proposed change to the tax year-end, concluding 31 December makes the most sense despite costing more than a move to 31 March. The OTS agrees with the professional bodies that making the change before Making Tax Digital for Income Tax is introduced is simply not practical.
In non-tax news, the government is consulting on Data Protection in a post-Brexit world. The consultation has a particular emphasis on the UK GDPR rules. Just as we are all finally getting to grips with these complex rules they may be about to change.
We also have published the results of our poll: 'Should the chancellor increase the £150 annual staff parties limit?' As 86.75% of our readers said 'Yes' we thought we might pass on your views to the Treasury ahead of the Autumn Budget. We all need something to cheer us up following nearly two years of COVID-19.
Lots more news, updates, CPD and details of our forthcoming Virtual Tax Partner Practical Tax Conference follow.
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Quick News (Freeview)
Companies: CJRS payments require accruals and cash accounting
HMRC have updated their CT600 guidance to cover the declaration requirements for Coronavirus Job Retention Scheme (CJRS) payments and advised that this will require the tracking on both the accruals and cash basis.
Consultation on 'Data: a new direction'
As part of its National data Strategy, the government has launched a consultation on reforms to create a pro-growth and trusted data regime.
COVID-19: Statutory sick pay scheme to end on 30 September
Legislation has been laid before parliament which will end the COVID-19 Statutory Sick Pay (SSP) rebate scheme on 30 September 2021. Eligible employers must claim their rebates by 31 December 2021.
Temporary insolvency measures ending
The temporary measures to support businesses from insolvency as a result of COVID-19 are being phased out from 1 October. New targeted measures are to be introduced to help smaller companies.
OTS explores change to UK tax year
The Office of Tax Simplification (OTS) has released a report entitled 'The UK tax year-end date: exploring the potential for change'. This report explores the benefits, costs and wider implications of a change to the UK tax year-end date.
Poll results: Should the chancellor increase the £150 annual staff parties (or functions) limit?
Discover what our readers think about the current annual limit on the provision of tax-free staff parties and events. Employer provisions last increased from £75 to £150 in 2003. Should we ask the Chancellor to increase the £150 annual staff parties (or functions) limit?
Editor's Pick (freeview)
Plastic Packaging Tax
UPDATE: What is Plastic Packaging Tax? Who does it apply to? HMRC have issued more guidance, including examples, about when UK businesses are liable to the tax and we have updated our freeview guide for this.
Agent update: September 2021
HMRC have issued their Agent Update for September 2021. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Virtual Tax Partner Practical Tax Conference
Get tax-fit with our Virtual Tax Partner pre-conference tax workouts! Our first ever Virtual Tax Partner 'VtaxP' practical tax conference takes place over two half-days on 12-13 October 2021. Buy your early bird tickets now to gain access to our pre-conference tax workouts.
Guides and Updates (subscribers)
High-Income Child Benefit Tax Charge
UPDATE: 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? New cases have been added to this guide.
When does a partnership exist?
UPDATE: When does a partnership exist? Why does it matter? What are the implications for different taxes?
Partnerships: How to prepare partnership and partners tax returns
How to prepare partnership returns. How are partnership profits calculated? How are corporate members of partnerships taxed? What are the differences between the tax treatment of individual and corporate partners?
Directors & Companies
Tax planning for university (parent's guide)
UPDATE: Our guide to the tax implications of planning for children's education.
UPDATE: How are loans made to and by a company taxed? What are the rules when loans are written down? What is the difference between a trading and non-trading loan relationship? What are the rules for connected party loans?
Working from home (directors)
UPDATE: What expenses can I claim for working from home? The same rules apply to home working directors as other employees. A director is more likely to be able to charge rent and there may be some additional issues and complications by virtue of their office.
Employers' NICs allowance
UPDATE: The Employers' National Insurance Contributions (NICs) allowance is an allowance given to small and medium-sized employers to offset against their annual Employers' National Insurance liabilities.
Termination, redundancy and leaving payments
How are redundancy and termination payments taxed? What amounts can be paid tax-free? What amounts are taxable as earnings?
Private Client & Estate Planning
IHT: Main Residence Nil-Rate Band (RNRB)
UPDATE: What is the Main Residence Nil-Rate band? When was it introduced? How does it work? Who can claim it?
Investment bonds: A tax guide
UPDATE: How are investment bonds taxed? What are the problems and pitfalls to be aware of?
Land & Property
SDLT: Residential property & dwellings
UPDATE: Several recent cases have been added about what is a dwelling for Multiple Dwellings Relief purposes.
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?
Wrong forms did not prevent SEIS relief
In Fashion on the Block Ltd v HMRC  TC08248, the First Tier Tribunal (FTT) adjudged that completing the wrong form was not an acceptable reason for HMRC's refusal to allow the issue of SEIS qualifying shares.
No relief for loan restructuring due to unallowable purpose
In Kwik-Fit Group Limited v HMRC  TC08226, the First Tier Tribunal (FTT) found that loans transferred between group companies following a reorganisation did not maintain their allowable purpose, meaning the interest was disallowed in part.
Loans from Remuneration Trust are not earnings
In Marlborough DP Ltd v HMRC  TC08246, the First Tier Tribunal (FTT) held that loans funded by a remuneration trust were not earnings or disguised remuneration taxable under part 7A of ITEPA 2003. They were taxable as distributions so no Corporation Tax deductions could be claimed by the contributing company.
VAT News & Guides
UPDATE: HMRC have amalgamated group VAT forms VAT50 (application for VAT group treatment) and VAT51 (application for VAT group treatment - company details) into a single VAT50/51 form.
Freemason membership fees still subject to VAT
In United Grand Lodge of England v HMRC  TC08250, the First Tier Tribunal (FTT) found that membership fees charged to Freemasons were not exempt from VAT.
Listed building's internal features prevent zero-rating
In Richmond Hill Developments (Jersey) Limited v HMRC  TC08232, the First Tier Tribunal (FTT) held that the substantial reconstruction of a listed building was not sufficient enough to meet the criteria for zero-rating and recovery of the related input tax.
Hay sales were not economic activity for VAT
In Babylon Farm Limited v HMRC  UKUT 0224, the Upper Tribunal (UT) found that the First Tier Tribunal (FTT) had erred in law but had been correct to find the appellant's hay supplies did not constitute an economic activity for VAT purposes.
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CPD for lunch
Byte-sized chunks of CPD for subscribers
- NEW CPD: Business Asset Disposal Relief
- NEW: CPD: Appeals: How to Appeal a Tax Penalty
- CPD: VAT: Land and Property
More at CPD Index
Missed last time's Web-update?
- Ouch! NICs & Dividend Tax rises hit wider than first thought
- Build Back Better: the government's tax plans for Health & Social Care
- Pension triple lock suspended
- Autumn Budget 2021 date announced
- Consultation: Strengthening the Pensions Regulator's Powers
- Associate Dentists to lose automatic trading status
- Teenagers still missing out on Child Trust Fund cash
- Trusts and Estates What’s New? September 2021
- Successful valuation challenge on share gift to charity
- Taxable benefits due on cars paid for by directors
- HMRC offers settlement opportunity to Eclipse Film Partnership members
- Clothing and workwear
- Views sought on Scottish Framework for Tax
- Scottish Income Tax: Am I a Scottish taxpayer?
- Partnership agreements: What should be considered?
- Employee Ownership Trusts: An exit route for owner-managers
- Company cars
- Adviser's Guide: Property Business: Profits and losses
- NEW CPD: Business Asset Disposal Relief ...More
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