Nichola's SME Tax W-update 31 March 2022

Hello,

As we approach the end of another tax year we have some useful guides for employers, while my top picks for this week's essential reading include our Capital Allowances 'What's new' and 'Working from home' update, which looks at some of HMRC's new guidance and examples. 

The rules on what expenses you can claim when working from home have been eased by HMRC during the Covid-19 enforced lock-downs. The period of easement now extends to 2023 and HMRC has added some new examples to their manuals to reflect the tax treatment of hybrid working. We take a closer look in our newly updated guide to this topic. I also note that a tax consultation on hybrid working which closed last December has yet to have any government response. 

Businesses have quite a considerable choice when it comes to making successful Capital Allowance claims. We have a new update which summarises and runs through all the different options to help you decide in which order to make your claims over the next year.

HMRC has brought out a new agent authority form 64-8, which needs to be used from today. The form now combines authorisation for both PAYE and CIS (Construction Industry Scheme) online too. 

Our pick of tax cases this week includes an appeal by one of Jasper Conran's businesses in a case that highlights the enduringly complex topics of distributions and what happens when HMRC tries to reclassify a payment for an asset as a distribution on the basis that that asset was overvalued. We suspect HMRC may appeal that one. 

Don't forget: the VAT rate changes tomorrow for those in the hospitality trade when the 12.5% rate reverts back to 20%. I will be helping a client reprogram their till so that we can ensure we are getting the right figures across under Making Tax Digital for VAT. I note that HMRC has been updating their Compliance manual to deal with the offence of till tampering, officially described as Electronic Sales Suppression. This is something that we should all be mindful of when we are preparing VAT and other returns.

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 (Freeview) 

New Form 64-8 for tax agent authorisation 
HMRC has updated form 64-8. Agents are advised to use the new form from 31 March 2022. It is used to authorise a tax agent to act on your behalf.

Employment tax: Reporting, dates & deadlines 2021-22
Our guide summarises the key deadlines and additional considerations for employers for the end of the 2021-22 tax year.

Editor's Pick (subscribers)

Working from home
UPDATE: What expenses can employees claim for homeworking? Are the rules the same for the self-employed? How do you make a claim? How does the COVID-19 easement work? New examples.

Capital Allowances: What's new 2022-23
What's new in Capital Allowances for 2022 and 2023? A summary of the different types of capital allowances currently available to UK business.

The Life of a Company (freeview)  

A new company? Start here...
This 'At a glance' freeview guide is essential reading for anyone thinking about starting up a new company.

An existing company? Start here...
This freeview 'At a glance' guide is essential reading for anyone who runs an existing company.

Ceasing trading?
Our freeview 'At a glance' guide. How a company can cease trading? What options are available when trade has ceased and the owner wants to retire?

Guides & Updates (subscribers)

Directors

A sale of the business: Where do I start?
If you are selling a company, do you sell its trade and other assets or do you, the shareholders, sell your shares? What are the available routes for company owners?

Employers

Covid-19: Employer-provided PPE and testing
UPDATE: The current income tax exemption and NICs disregard have been extended for 2022/23.

Salary sacrifice & optional remuneration schemes (OPRA)
UPDATE: What is a salary sacrifice or optional remuneration arrangement? How is it taxed? What benefits can still be used with a OPRA?

Private Client & Estate Planning 

SRT: Statutory Residence Test
UPDATE: Covid-19 temporary measures for those stranded due to the pandemic are to cease from 6 April 2022.

How to set up a UK trust
What are the tax implications of setting up a trust? What do I need to do as a settlor? What do the trustees need to do? 

Tax Cases (freeview)

Supreme Court overrules HMRC on GAAP   
In HMRC v NCL Investments Limited and another [2022] UKSC9, the Supreme Court found that the costs of issuing share options through an Employee Benefit Trust (EBT) were deductible under specific accounting rules, despite the fact that the costs had been recharged around group companies.

Conran sale without trade mark worth just £1
In Jasper Alexander Thirlby Conran and another v HMRC [2022] TC08391, the First Tier Tribunal (FTT) agreed with HMRC that the sale of the designer's optical business for £8.25 million was overvalued. Without licences to use Jasper Conran's valuable trade marks, the actual market value was just £1. The amount paid was not a distribution or subject to CGT for Mr Conran and the buyer, a related company was denied relief under the Intangibles rules

No CGT relief for FX loss
In Howard & Monique Rawlings v HMRC [2022] TC08384, an couple failed in their attempt to claim that foreign exchange differences on a foreign currency mortgage were an allowable adjustment for Capital Gains Tax (CGT) purposes.

VAT Cases (freeview)

FTT wrong to throw out case without explanation
In HMRC v Tasca Tankers Limited [2022] UKUT 00088, the Upper Tribunal (UT) held that the First Tier Tribunal had been wrong to strike out an appeal on the basis of no reasonable prospect of success. The judge failed to consider HMRC's case on Missing Trader Fraud and refused the application without valid reason.

Consultations & more news (freeview)

HMRC's Management of Tax Debt
The House of Commons Public Accounts Committee (PAC) recent enquiry into the 'HMRC's Management of Tax Debt' reveals that the PAC is not confident that HMRC has adequate plans in place in order to solve the £6.2 million tax debt crisis. It sets out its own recommendations.

OTS Review of Property Income Call for Evidence 
The Office of Tax Simplification (OTS) has published an online survey and a Call for Evidence as part of their Review of Property Income. The aim is to see if the current and often complicated regimes for the taxation of residential property can be simplified. The key area of review is the receipt of residential property income.

Consultation: Crypto-Asset Reporting Framework 
The OECD has published a consultation 'Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard' seeking views on the proposed global tax transparency framework and the proposed amendments to the Common Reporting Standard (CRS) that will bring these new financial assets into scope.

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

• 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?

Nichola's SME Tax W-update 24 March 2022

•  Spring Statement 2022: At a glance
• Agent update: March 2022
• Sanctions against Russia & Belarus
• Late payment interest rate rises to 3.25% 
• DIY homeowner suffers heavy penalties for failing to declare gains
• Serious Schedule 36 failures lead to tax-geared penalties
• Annual Expenses for employees: How to claim   
• Private client: What’s on? 2021-22
• Discovery Assessments
• Trust Registration Service
• National Insurance: What's the maximum payable?
• Family Investment Companies
• Pensions: Tax charge for excess contributions
• CPD: VAT: Land and Property ...More 

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