Happy New Tax Year
We start the year with a packed update containing some really useful new guides and updates to assist you in the preparation of tax returns, payroll and to fullfilling essential Continuing Professional Development (CPD) requirements. We ask whether HMRC is calling time on payroll umbrella providers, and what it means to be non-domiciled for tax purposes?
HMRC's crackdown on those accountants it accuses of running Managed Service Companies (MSCs) is in evidence following a 2019 decision of the Court of Appeal which found that there is an extremely fine line between the provision of packaged MSCs and packaged accounting services. If you are setting up your own payroll umbrella service for freelancers, we strongly recommend obtaining a detailed legal opinion as to your status for the purposes of the MSC rules.
As you may be aware, not only has the rate of National Insurance increased by 1.25% for 2022-23, but there are also changes to the Employer and Employee NICs thresholds. The employee thresholds change in July, which adds a curve when trying to create examples for optimal salaries. The results might surprise some of you!
The chancellor has a non-domiciled wife, that is hardly news. What does non-dom status really mean in tax and how can you become deemed UK domiciled?
A couple of reminders: Gift Aid; if you overlooked making a charitable donation before 5 April 2022, you can still make one now and carry it back to the previous tax year.
If you run a company that has property that is subject to the ATED charge, do not forget that you need to do a re-evaluation as at 1 April.
We are working through updating our guides: next week we compare different pay combinations. We are also bringing out new season CPD online and via our webinars.
Nichola Ross Martin FCA CTA (Fellow)
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Quick News (Freeview)
Accountants: are you a MSC provider?
When do the Managed Service Company rules apply to accountants? What exemption exists? What happens if you are a MSC provider? HMRC is investigating several firms following a landmark decision of the Court of Appeal
ATED: Don’t forget to revalue your property at 1 April 2022
Properties subject to the Annual Tax on Enveloped Dwellings (ATED) charge must be revalued every five years. The next revaluation date is 1 April 2022.
Calendar of tax deadlines and new tax measures
UPDATE: This is a freeview 'At a glance' rolling calendar of common recurring tax deadlines, new tax measures and other tax significant events.
Editor's Pick (subscribers)
Salary 2022/23 (avoiding NICs)
What amount of salary can be paid by an employer to a director or shareholder and avoiding or reducing National Insurance Contributions (NICs)? Is it beneficial to pay a slightly higher salary to claim the Employer's NICs allowance and pay some NICs?
Tax Planning for the 2021/22 year-end
NEW: This is our year-end and new tax year checklist and toolkit for individual Private Clients rolled forward for the new tax year. It can be used in conjunction with our checklists for directors, employers and self-employed individuals.
Guides & Updates (subscribers)
Overseas & Residence
SRT: Statutory Residence Test
What is the statutory residency test? Why is it important and how does it work?
Non-domicile status, deemed domicile & tax
Who is non-UK domiciled? What does this mean for UK Income Tax, Capital Gains Tax and Inheritance Tax? What reliefs are available to non-doms?
Non-Domiciles Tax Toolkit
This toolkit provides an outline of the tax compliance issues for non-UK domiciled (non-dom) individuals.
Employers' NICs Allowance
UPDATE: new NICs rates and threholds apply for 2022-23. We consider how to structure your pay to make use of the NICs allowance and review who can use this exemption.
Managed Service Companies
What is a Managed Service Company (MSC)? What rules apply to MSCs? Can you avoid being a MSC provider?
PAYE: Starter checklist new employee 2022-23
NEW: Freeview PAYE starter checklist. Use this form if you are taking on a new employee. This is our (improved) version of HMRC's New Employee Starter checklist, updated for the 2022-23 tax year.
What is the 2022/23 PAYE tax code?
What is the 2022/23 PAYE tax code? A Freeview guide to which code to use and what the various types of codes mean.
Private Client & Estate Planning
Tax Returns: To-do list before/after 5 April 2022
NEW: What tax returns and claims are due before the end of the tax year? What are my tax filing requirements? This is a checklist of key deadlines for SMEs and their owners.
Unexplained Wealth Orders
Updated for changes introduced by Economic Crime (Transparency and Enforcement) Act 2022.
Land & Property
Property profits & losses: Toolkit (2022-23)
Our Property profits & losses toolkit takes HMRC's version and adds a great deal more information about what you can claim as an individual.
Annual Tax on Enveloped Dwelling
UPDATE: The new relief for the Homes for Ukraine Scheme has effect from 1 April 2022.
Register of Overseas Entities
The Register of Overseas Entities will require overseas owners of UK property to register and report their beneficial ownership. These provisions will apply to many existing landowners and failure to comply could result in prison sentences.
Tax Cases (freeview)
FTT: Schedule 36 notices not reasonably required
In Jack George Yerou and Panayiota Yerou v HMRC  TC08410/V, the First Tier Tribunal (FTT) allowed an appeal against Schedule 36 information notices. The information requested was not reasonably required as it was unlikely to bring an end to the underlying tax dispute.
No CGT deduction for notional expenditure
In The Wakelyn Trust v HMRC  TC8375 the First Tier Tribunal denied a deduction for enhancement expenditure for the value of releasing a lessee from a lease. No expenditure had been incurred.
Company payments not 'on behalf' of owner
In Peter Lowe & Civic Environmental Systems Ltd v HMRC  UKUT 00084, the Upper Tribunal (UT) dismissed the appellant's claim to deduct enhancement expenditure incurred by his company when calculating the gain on a property disposal. There was no evidence the payments were made on his behalf.
VAT Cases & Guides (freeview)
Revenue & Customs Brief 7 (2022): Claiming a repayment of overpaid import VAT on dental prostheses
HMRC have published Revenue & Customs Brief 7 (2022): ‘Claiming a repayment of overpaid import VAT on the importation of dental prostheses into the UK’, following a backdated VAT exemption being introduced.
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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?
- New Form 64-8 for tax agent authorisation
- Employment tax: Reporting, dates & deadlines 2021-22
- Supreme Court overrules HMRC on GAAP
- Conran sale without trade mark worth just £1
- No CGT relief for FX loss
- HMRC's Management of Tax Debt
- OTS Review of Property Income Call for Evidence
- Consultation: Crypto-Asset Reporting Framework
- Capital Allowances: What's new 2022-23
- Working from home
- Salary sacrifice & optional remuneration schemes (OPRA)
- SRT: Statutory Residence Test
- CPD: VAT: Land and Property ...More
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