This is our last newswire of the year. We have lots of useful news on new COVID-19 support, the Welsh budget and interest rate changes, together with case reports and updates. I am also very worried about Making Tax Digital (MTD) and the proposal for quarterly payment of Income Tax.
I have been reconciling various taxpayer accounts to HMRC's records, as one does from time to time. I have looked at VAT, Income Tax and Corporation Tax accounts. In nearly every case I am hampered by a fundamental problem: we, as in tax agents and taxpayers, are not shown the whole picture of a taxpayer's account by HMRC. This is not a new problem, but it's nearly 2022 and we are being forced to work in the dark ages! We are given selective information and then that is undermined as something or someone in HMRC makes peculiar allocations of payments. I genuinely do not understand what happens to accidental overpayments. They are not shown as being made and they often seem to disappear in the 'ether'.
I have written an article highlighting some mystifying errors on HMRC's new MTD for VAT Agent Services Account. If you have similar issues do add a comment. I note that HMRC has updated what we can see for PAYE, and that is helpful. What we need is a transaction history on each tax account. When do we want it? Now!
I hope that you all have a Merry Christmas, or if you do not celebrate that, that you have a very enjoyable seasonal break.
Nichola Ross Martin FCA CTA (Fellow)
Your Virtual Tax Partner® online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News (Freeview)
Not wishing to blow the candles out on the fun we have put together a Festive timetable for tax advisers and accountants.
Warning! Gremlins hit HMRC's Making VAT Digital
Something is going wrong in payment allocation and return recording in HMRC's Making Tax Digital for VAT records. There is growing evidence of 'glitches' on the account.
Future of insolvency regulation includes independent oversight
The government has published 'The future of insolvency' in which it proposes an independent insolvency business watchdog. The industry was labelled as the 'wild west' by a cross-section of MPs earlier this year, and the document outlines wide-ranging changes to the sector.
HMRC increase late payment interest rate
Following the Bank of England’s decision to increase the base rate, HMRC have announced that their late payment interest rate will increase by 0.25% to 2.85% from 4 January 2022.
Welsh Budget 2022-23: Summary
Welsh Government Finance Minister Rebecca Evans announced the draft Welsh Budget for 2022-23 on 21 December 2021.
Consultation: Land Transaction Tax, second homes and holiday lets
As part of the 2022-23 budget, the Welsh Government have launched a consultation ‘Local variation to land transaction tax rates for second homes, short-term holiday lets and potentially other additional residential properties’ seeking views on possible Land Transaction Tax (LTT) changes.
New COVID-19 support package for businesses affected by Omicron
Chancellor Rishi Sunak has announced a new £1billion grant support package for those businesses most impacted by the Omicron COVID-19 variant.
Trusts and Estates: What’s New December 2021
HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version.
Editor's Pick (subscribers)
Tax planning for directors (Editor's choice)
Some of our favourite tax guides, toolkits & checklists for directors
Starting in business? Start here
Starting in business? Our 'At a glance' guide takes you through the key steps in getting started for tax, with links helping you drill down for more detail.
Guides and Updates (subscribers)
Employment status: Partners
What is the employment status of a partner in a partnership or a member of a LLP? Are partners/members employed or self-employed?
Freeports: Tax breaks
UPDATE: Regulations have been made to designate a further three Freeport tax sites with effect from 30 December 2021.
Plastic Packaging Tax
UPDATE: What is Plastic Packaging Tax? Who does it apply to? Are small businesses subject to Plastic Packaging Tax? The guide has been updated for recent HMRC examples.
Accounts: Tax health check
A handy checklist to assist you in preparing accounts and to highlight key areas of discussion with your sole trader clients
Expenses: Index to different trades and professions
Last minute tax returns? Click on a trade to check that you have claimed all you can.
Land and Property
Different ways of taxing UK property
UPDATE: This guide summarises the different ways of taxing income and gains in respect of the exploitation of UK property.
CGT: how to report and pay
How do you report your capital gains? What return do you use? There are different ways for individuals to report capital gains depending on whether you are resident, or non-resident, and whether you are in or out of Self Assessment.
Directors and Companies
Director's loan accounts toolkit
Overdrawn loan account? Getting caught out by 'bed and breakfasting' rules? HMRC do a director's loan accounts toolkit for advisers. This is our enhanced version with planning points, tips and examples.
Training and course fees
UPDATE: Can you receive tax relief on the cost of training? Can employees' obtain tax relief on training?
Private Client and Estate Planning
How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK?
UPDATE: How do you tax Bitcoin? Are cryptocurrency or cryptoasset gains or profits, taxable? Can you obtain tax relief if you make losses on Bitcoin?
Entrepreneurs' Relief available on disposal of partnership assets
In Christopher Thomson v HMRC  TC08337A, the First Tier Tribunal (FTT) allowed an Entrepreneurs’ Relief claim on the disposal of a partnership asset as the property disposal was part of the wider disposal of the partnership business even though that process had lasted over 20 years.
Director escapes high tax penalties due to ignorance of tax law
In JT Quinns Limited & Queen-Rose Green v HMRC  TC08338, disallowed personal expenses put through a company's books resulted in tax assessments for the company and its director, including an s.455 tax charge. The director's lack of understanding of the basic principles of finance and tax and reliance on her accountant meant that tax penalties were downgraded for careless rather than deliberate behaviour.
VAT Cases and Guides
Share sale was actually a fundraising activity for taxable supplies
In Hotel La Tour v HMRC  TC08335, the First Tier Tribunal (FTT) found that the sale of a subsidiary was a means of fundraising that could be directly linked to future trading activities. This allowed the input VAT on associated professional fees to be reclaimed.
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!
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
- CPD: Business Asset Disposal Relief
- CPD: Appeals: How to Appeal a Tax Penalty
- CPD: VAT: Land and Property
More at CPD Index
Missed last time's Web-update?
- Scottish Budget 2022-23: Summary
- Self Assessment 2020-21 returns: Updated online filing exclusions
- Call for evidence on penalties and compliance for ISAs
- Agent update: December 2021
- R&D expenditure not subsidised
- Scope of Schedule 36 notice reduced by FTT
- Pension contribution not wholly and exclusively for trade
- A fact could not be remade by FTT and VAT penalty due
- Church of England spiritual retreats are standard rated
- Medical benefits and health checks
- Basis Period Reform
- Directors: Tax planning toolkit for 2021/22
- Do I have to file a tax return?
- Farming: Overview
- R&D: SME Tax Credit scheme
- Working from home (employer/ee)
- PRR: Private Residence Relief ...More
Come and join our Cloud
Subscribe (and UNLOCK the whole site) A single user annual subscription is £425 (+ VAT).
What do you get?
- We keep YOU up to date in SME tax.
- FULL access to www.rossmartin.co.uk: your firm's favourite TAX INTRANET containing over 3,500 actively maintained tax guides, briefings, toolkits and checklists.
- Want to know more? Commission your own articles and checklists.
- 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.