This week we have a guide to the Plastic Packaging Tax; according to the policy background to this new tax, it aims to provide a “clear” economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging. Whether this tax is going to make any difference to the vast amount of plastic that is created on a daily basis remains to be seen. At this stage it's one small step in the right direction.

We also take a look at a couple of other new measures this week.

  • There is a new Economic Crime (Anti-Money Laundering) Levy; this will be paid as a fixed-fee based on the size band an AML-regulated entity falls into according to UK revenue.
  • There is also a measure that introduces enhanced late-filing penalties where tax information is deliberately withheld from HMRC by failing to file returns on time. This measure was due to be introduced back in 2019 but was put on hold because government was so busy at that time with Brexit.
  • There is the news that Freeports will be designated from tomorrow.

In terms of tax guides and updates, we have a new guide for those dealing with Estates on Income Tax and Capital Gains Tax and, we have been adding more FAQs to existing guides as we update them. Like the new Estates guide, much of the inspiration for guides and the FAQs come from your queries on our Virtual Tax Partner sister site. Do keep asking questions!

We continue to review the courts and tribunals for topical tax cases. CHF PIP! PLC's Enterprise Investment Scheme (EIS) appeal this week caught my eye: no relief was allowed for the investors as although the company was trading, there was scant evidence to show that this was on a commercial basis.

More case and updates for you, so do please read on.

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)

New limit to flat fees on pensions 
The Department for Work and Pensions (DWP) has announced that a £100 de minimis threshold will be introduced in April 2022 meaning that pension providers will no longer be able to charge a flat fee to all pension savers.

Economic Crime (Anti-Money Laundering) Levy
Finance Bill 2022 introduces an Economic Crime (Anti-Money Laundering) Levy payable as a fixed fee by entities subject to the Money Laundering Regulations and based on entity size. Small entities will be fully exempt.

Editor's Pick 

Plastic Packaging Tax
NEW: What is Plastic Packaging Tax? Who does it apply to? Are small businesses subject to Plastic Packaging Tax?

Freeports: Tax breaks
UPDATE: The first three Freeport Tax sites will be designated on 19 November 2021, meaning businesses in those areas can benefit from the Freeport-specific tax reliefs.

Guides and Updates (subscribers)  

Self Assessment 

2020/21 Self Assessment Tax Return Toolkit
Top-tips on filing your latest tax return

EIS: Enterprise Investment Scheme (Subscriber guide)
When can EIS relief be claimed?  What are the conditions for EIS relief?  What are the benefits of EIS relief?

Land and Property  

Profits from dealing in or developing land
A very handy guide to the rules which replaced the old transactions in land provisions and extended UK taxation to all profits from trading in and developing UK land, regardless of residence.

Stamp Duty Land Tax: Residential Property Higher Rates
UPDATE: Purchasing a property with an annex? Will higher rates apply? How does the subsidiary dwelling relief interact with higher rates and multiple dwellings relief? 

Directors & Companies   

Incorporation of an existing business
UPDATE: A handy refresher of the rules. How to transfer an existing sole trader's business by incorporation into a company.

Companies: permanent establishment & residence
UPDATE: what are the issues in trying to relocate your business?


PAYE Codes: Starters/leavers & 0T code
UPDATE: What tax code should be used for new starters and leavers? Can I use a P45 tax code from a previous tax year? How should payments on leaving employment be taxed? 

PAYE Settlement Agreements
UPDATE: What are PAYE Settlement Agreements? How do they work? What can be included? 

Private Client & Estate Planning 

Estates: How to deal with Income Tax and Capital Gains Tax 
NEW: How do executors deal with income and capital gains arising on the deceased’s estate? What allowances and reliefs are available?

CGT: Rollover (Incorporation) Relief
UPDATE: Incorporation Relief allows gains made on incorporation to be deferred. What assets are included? How does the relief work?


Penalties: Late Filing (deliberately withholding information)
NEW: Finance Act 2021 introduces a slightly modified system of enhanced late filing penalties where tax information is deliberately withheld from HMRC by failing to file returns on time. This measure had been included in the draft Finance Bill for 2019 but was later dropped.

Tax Cases   

Late appeal: taxpayer failed to provide evidence
In Shane de Silva v HMRC [2021] UKUT 0275, the Upper Tier Tribunal refused to allow a late tax appeal, the taxpayer had failed to explain the reasons behind a period of delay of between 551 and 1338 days.

Lack of documents did not invalidate Schedule 36 Notice 
In William Lawson v HMRC [2021] TC08298 the First Tier Tribunal (FTT) dismissed an appeal against a Schedule 36 information notice. The information requested was reasonably required to check Mr Lawson’s tax position as HMRC had reason to think he may have underdeclared his income. 

FTT has no jurisdiction if there is no appealable decision 
In Fieldmuir Ltd t/a Centurion Freight Services v HMRC [2021] TC8309 the First Tier Tribunal (FTT) partially allowed an appeal relating to the refusal of HMRC to repay PAYE and NIC’s on allowances paid to lorry drivers. The tribunal could hear the case for a repayment of NIC’s but not for income tax as there was no HMRC decision to appeal.

No EIS relief for non-commercial trade  
In CHF PIP! PLC v HMRC [2021] TC08305 the First Tier Tribunal (FTT) found that a company's issue of shares to investors did not qualify for EIS relief, as despite the company trading that trade was not undertaken on a commercial basis with a view to profit.

VAT Cases & Guides 

Best VAT Flat Rate error leads to HMRC 'best judgement' assessments  
In Swiss Dawn Consultants Ltd v HMRC [2021] TC08311 a VAT registered taxpayer misunderstood the workings of the VAT flat rate scheme and calculated VAT on net sales. HMRC had no choice but to make best judgement assessments to recover unpaid VAT.

VAT Flat Rate Scheme
What is the VAT Flat Rate Scheme (FRS)? Who can apply? How do you apply? What are the rules? What are the rules for capital expenditure and pre-registration VAT? 


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 11 November 2021

  • Misuse of registered office
  • Furnished Holiday Letting: further COVID guidance 
  • HMRC warning crypto investors about their CGT obligations
  • Dormant company? Inform HMRC online
  • Basis period reform: Consultation responses
  • Consultation: Corporate re-domiciliation 
  • Official rate of interest
  • Late pension protection notification refused 
  • Sky Sports presenter was an employee 
  • Sale of storage pods to investors is exempt supply
  • EU court rules learning to swim is not education
  • Cambridge rowers beat HMRC in VAT case
  • Sport and physical recreation
  • Joint & Several Liability of Company Directors etc
  • Overseas Workday Relief (OWR) 
  • Accounting periods and tax basis periods
  • Non-resident directors: earnings, expenses and reporting requirements
  • Married couple v. unmarried couple (taxation of couples)
  • CGT: Date of acquisition or disposal ...More 

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