Nichola's SME Tax W-update 7 July 2022

Hello

Amidst a very exciting day at Westminster, we hope that you have some time for tax! We have a Corporation Tax ‘what’s new’ for 2022 for you this week and news of Making Tax Digital software and requirements.

A new chancellor was appointed yesterday. Will he cut taxes as soon as he promises? With rising inflation, interest rates and wage demands, it is difficult to see how much room there is for any tax cuts. Business owners will note that Corporation Tax is rising by 6% next year and this comes on top of the 1.25% rise in both National Insurance and Dividend Tax rates.

We note that HM Treasury seems to have spotted one ‘fix’ for the public finances and is currently consulting to change the risk rating for banks and insurance companies as a method of reducing their capital requirements. This will apparently allow them to pass on more loans to borrowers and invest in public infrastructure projects. Call me a total sceptic but these businesses have a higher capital requirement following the 2009 bank crisis due to the fact that they turned out not quite as trustworthy as they perhaps should have been. Reducing risk creates a windfall for shareholders and there is no actual mechanism by which government can force any of these industries into a set investment policy. Another policy change that is also of a worryingly risky nature is an idea to deregulate small insurance companies to allow more players to enter the market. I suspect that this not to attract actual insurance companies but for the benefit of hedge funds who join the legislation later this year.

Making Tax Digital: I had a chat with John Hemming, he is founder of Cirrostratus, a MTD functional cashbook. He has pledged to keep his product free at the point of entry. He also notes that HMRC is expecting that your data will be fixed once submitted, and this represents a particular problem for software developers as well as for accountants who might need to make adjustments later in the year

Lots more exciting content, new CPD and updates below. 

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) 

MTD draft legislation confirms three-line account
HMRC has opened a consultation ‘Tertiary legislation for Making Tax Digital for Income Tax’ inviting views on draft legislation for landlords and sole traders under Making Tax Digital (MTD) for Income Tax.

Live Corporate Criminal Offences investigations halve 
HMRC have released additional data on the number of live cases being investigated and reviewed under the Corporate Criminal Offences (CCO) regime for the failure to prevent the facilitation of tax evasion. It has seven ongoing investigations, half the number of cases in May 2021. 

Wales: Licensing of visitor accommodation and LTT changes 
The First Minister of Wales, Mark Drakeford and the leader of Plaid Cymru, Adam Price, have announced a package of measures intended to address the high numbers of second homes in Wales.

Consultation on sovereign immunity from direct taxation 
HM Treasury has published a consultation ‘Sovereign immunity from direct taxation: consultation on policy design’ which outlines the government’s proposal to legislate for, and better target, the UK’s exemption from direct tax for foreign sovereign investors, from April 2024.

Editor's Pick (Subscribers) 

Company Tax: What’s new? 2022 
NEW: A summary of the latest developments in tax for companies and their owners.

Editor's Pick (Freeview) 

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. 

Compare software for Making Tax Digital for Income Tax
Just three players in the market, so far. What software can I can use for entry into the Making Tax Digital pilot? What is the best value software can I use for Making Tax Digital for Self Assessment? 

Guides & Updates (Subscribers) 

Land & property 

Non-Resident Landlord Scheme
UPDATE: HMRC have released guidance which covers when and what accounts are required to accompany NRL returns now they are prepared on Corporation Tax principles.

Adviser's Guide: Property Business, profits and losses
What is property income? How is it taxed? How are profits calculated? How are losses relieved? Is NI paid on property income? Is property income classed as a business activity? 

Self-employed

Making Tax Digital for Income Tax: Data required by HMRC 
NEW: Making Tax Digital for Income Tax: the schedule and likely categories of information. 

Companies & Shareholders

Directors' responsibilities and duties
UPDATE: This is a freeview 'At a glance' guide to directors' duties and responsibilities. 

Directors' loan accounts: Toolkit (subscribers)
UPDATE: HM Revenue & Customs (HMRC) have a director's loan accounts toolkit for advisers. This is our enhanced version with planning points. 

Employers 

Termination, redundancy and leaving payments
UPDATE: How are redundancy and termination payments taxed? What amounts can be paid tax-free? What amounts are taxable as earnings?

Childcare: Employer provision
What support can employers give to parents?  Are childcare vouchers still available? Can employers pay for nursery costs for their staff?  What are the tax implications of employer-provided childcare?

Income, claims & reliefs

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? 

Private Client & Estate Planning 

CGT: Connected persons
UPDATE: Who is a connected person for Capital Gains Tax (CGT) purposes? Why does this matter?

Tax Cases (Freeview)

Sky football commentator scored as being an IR35 employee
In Alan Parry Productions Ltd v HMRC [2022] TC08519, the First Tier Tribunal (FTT) held that the control and mutuality of obligation tests were satisfied. The terms of Mr Parry’s contracts with BSkyB were consistent with him being an employee.

Court of Appeal dismisses Land Remediation Relief claim 
In Northern Gas Networks Ltd v HMRC [2022] EWCA Civ 910, the Court of Appeal (CoA) found that Land Remediation Relief was not available to a company as its continued pumping of gas through ageing pipelines had contributed to the contamination.

FTT decides value of shares gifted to charity 
In Nicholas Close, Andrew Nuttall and Graham Chisnall v HMRC [2022] TC8518, the First Tier Tribunal (FTT) adjudged that the market value of shares gifted to charity on which income tax relief was available was 12.1p per share, lower than the 50p figure claimed by the taxpayers.

VAT Cases & Guides 

Education & VAT
UPDATE: What rate of VAT applies to education? What sort of services are classed as education? What do you do if you have multiple supplies including education? What cases are there on VAT and education?

Mixed supplies: Single or Multiple supply?
UPDATE: Is a mixed supply a single or multiple supply for VAT purposes? What tests and case law apply?

Energy-saving materials
UPDATE: The supply and fitting of energy-saving materials in residential accommodation attracts a reduced rate of VAT. What does it apply to? What are the qualifying conditions? What case law is there on this topic?

Tax Tools 

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

• NEW: CPD: Setting up a corporate group
• NEW: CPD: VAT update 2022
• CPD: Change of Basis Periods Part 2. Transitional rules

More at CPD Index

Missed last time's Web-update?

Nichola's SME Tax W-update 30 June 2022

• HMRC consult on repayment agent protections   
• Call for evidence: Tourist accommodation registration scheme in England 
• New 2022-23 CPD programme
• Women in Parliament: equality in the heart of democracy
• Women in Finance Charter: loss of momentum?
• Investing in Women attracts Angels
• Penalty near-miss for submitting RTI returns too early 
• Discovery invalid due to 'invented' till receipts
• Deregistration
• Property profits & losses: Toolkit (2022-23) 
• LLP v Company: which will save me tax? 
• Farming: Overview
• MTD: Data required by HMRC
• Groups
• S.8(1) notice to file a tax return
• Materiality and tax
• CPD: VAT update 2022  ...More 

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