Well done to anyone managing to work in this heat! We have lots of updates for you this week, mainly for employers, trusts and Self Assessment return preparers.
It transpires that HMRC's guidance on the tax consequences for employers and employees, when employees are reimbursed for their electricity costs for home charging of employer-provided electric vehicles, might not be correct. The Institute of Chartered Accountants in England and Wales (ICAEW) have noted a discrepancy, see our guide to Electric Vehicles below, which explains the points.
Thinking about the rising cost of electricity, this is not exactly easy to measure from an employee perspective. It would be handy if HMRC were to provide some kind of scale rate per vehicle. Unfortunately, the trouble facing so many of us currently is that we have little idea of what our costs actually are and with rapidly changing energy prices a fixed scale rate might not be fair on the taxpayer. Various tax bodies note that most of HMRC's fixed rates need to be adjusted for the cost of rising inflation; after all, HMRC is not slow to adjust late payment interest.
Further important points this week: the anti-money laundering (AML) regulations now extend to trust and company formation agents. I was just listening to BBC Radio 4's 'You and Yours' programme which is highlighting the continuing use of 'ghost companies' by criminals. These are companies that are not actually operating from where they say they are and they are used for various illegal activities. Companies House clearly needs to up its game to prevent this. It is, as a department, involved in formation and appointment and thus it should also be within the regulations.
Finally, VAT correction: there is now an online service that replaces the paper VAT652 form.
News, cases and updates below.
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)
Trusts and Estates: What’s New 2022/23
HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version together with a reminder of upcoming and recent changes.
Employer Bulletin: August 2022
HMRC have published their Employer Bulletin for August 2022. We have summarised the key content for you, with links to our detailed guidance on the topics covered.
Another HMRC late payment interest rate increase
Following the Bank of England’s recent announcement increasing the base rate, HMRC have announced that their late payment interest rate will also increase by 0.50%, to 4.25%, from 23 August 2022.
Self Assessment 2021-22 returns: Updated online filing exclusions
Many taxpayers will be unable to file their Self Assessment returns online for the year ended 5 April 2022 due to software specification issues from HMRC. An updated list of filing exclusions for individuals, as of 2 August 2022, has recently been published.
Compare software for Making Tax Digital for Income Tax
UPDATE: a further three software providers have been approved by HMRC.
HMRC Statistics: CGT and Tax Relief costings
HMRC have released further annual statistical updates covering Capital Gains Tax and Tax Relief. We summarise some of the key points, interesting figures and the costs of providing a range of tax reliefs.
Editor's Pick (Freeview)
Electric Vehicles: Update 2022
UPDATE: With the increased recent focus on climate change and the government’s plan to ban new petrol and diesel car sales by 2030, we provide an update of the tax issues businesses and their employees should consider when acquiring or providing an electric vehicle.
COVID-19: Taxation of coronavirus support payments
UPDATE: Now includes HMRC FAQ covering common errors.
Guides & Updates (Subscribers)
Trust Registration Service
UPDATE: Link to HMRC's examples added in advance of filing deadline by 1 September 2022.
AML: Money Laundering Regulations: Accountants' Registration
UPDATE: September 2022 changes to the Money Laundering Regulations (MLR) mean that trust, company and partnership formation agents fall within Anti-Money Laundering (AML). AML checks also extend to limited partnerships and crypto-asset transfers.
Allowances: Trading and Property
UPDATE: What are the trading and property allowances? Who can claim them? What are the restrictions?
Land & property
Restricting mortgage interest relief (subscriber guide)
UPDATE: Since April 2020, individual landlords' tax relief for finance costs on residential property has been limited to the basic rate of Income Tax. How is the relief calculated? How were the provisions introduced?
SDLT: Stamp Duty Land Tax, start here
UPDATE: What is SDLT? What are the SDLT rates? What is exempt from SDLT? What reliefs are available? When are returns due? When can you amend a return?
SDLT: Multiple Dwellings Relief (MDR)
UPDATE: What is Multiple Dwellings Relief (MDR) for Stamp Duty Land Tax purposes? When does it apply and how is it claimed?
LBTT: Additional Dwelling Supplement
UPDATE: Comments on new cases added.
Companies & Shareholders
R&D Tax Relief: Overview
UPDATE: What is R&D Relief? How does it work? Why does the size of the company matter? What is sub-contracted R&D? How do I write an R&D Report?
Managed Service Companies & tax
What is a Managed Service Company (MSC)? What rules apply to MSC's? Can you avoid being MSC provider? What is the accountancy exemption from the MSC rules?
When can an employee or director deduct the cost of their legal fees against any employment related compensation recevied following a legal dispute with their employer? What are the rules on termination of an employment?
Exemption for paid and reimbursed expenses
What exemptions apply for paid and reimbursed employee expenses? What are the rules?
Private Client & Estate Planning
National Insurance: What's the maximum payable?
UPDATE: How are National Insurance Contributions (NICs) limited? What is the maximum payable? What different rules apply to employment and self-employment income?
What are chattels? Is it a wasting or non-wasting chattel? How are capital gains on chattels taxed?
Tax Cases (Freeview)
No tax relief for lawyers' success fee in case against the Met
In HMRC v Keith Murphy  EWCA Civ 1112 the Court of Appeal decided that a success fee and indemnity premium to be paid out of an employment-related compensation settlement were not deductible for PAYE: neither cost were incurred necessarily in performance of the employee's duties as a serving Met police officer.
VAT Cases & Guides
Input VAT: What constitutes a valid claim (& VAT invoice)?
UPDATE: What is Input VAT? Who can claim it? What is needed for a valid claim? What needs to be included on a VAT invoice and can you make a claim without one?
Registering for VAT
UPDATE: HMRC's new VAT Registration Service for agents launched on 1 August 2022.
Correcting VAT errors
UPDATE: HMRC launched an online VAT error correction service on 8 August 2022.
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
- NEW: CPD: How to avoid the High Income Child Benefit Charge (HICBC)
- NEW: CPD: MBOs: How should they be structured?
- NEW: CPD: Setting up a corporate group
- NEW: CPD: VAT update 2022
More at CPD Index
Missed last time's Web-update?
- OTS reviewing tax implications of hybrid and distance working
- HMRC’s statistics on non-doms and IHT
- Call for Evidence: Tax Reliefs
- Global tax with the good, bad and the ugly
- ICAEW firms receive record fines
- Property profits & losses: Toolkit (2022-23)
- No CGT deduction for collective legal costs
- NTLR debits on $4 billion loan disallowed due to unallowable purpose
- Opting to tax land and property
- Land: future consideration (overage)
- General Anti-Abuse Rule (GAAR)
- Director's Tax Planning toolkit 2022-23
- Do I pay a salary or dividend?
- Gardens: selling or developing
- ABC shares: setting up share classes with different rights for directors & employees
- SRT: Split Year Treatment
- Annual Investment Allowance (AIA)
- Online Marketplaces: Joint and several liability ...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.