Nichola's SME Tax W-update 23 February 2023

Hello,

This time we have new Agent and Employer updates, another reminder to top up voluntary NICs, and a new remuneration optimising calculator.

Money Saving Expert Martin Lewis's Pension show on BBC on Tuesday night was almost certainly behind a sudden surge in the number of people attempting to access the Government Gateway's National Insurance Contributions (NICs) gap reporting function on Wednesday. We estimate some 15 million people may want to check their records for gaps. A gap in NICs can impact the level of your entitlement to the State Pension, and the rules change on 6 April.

What remuneration strategy are you offering your SME-owning clients in 2023/24? The go-to 'low salary-high dividend' approach needs to be reviewed inline with April's changes to Corporation Tax rates and dividend tax and the squeezing of allowances. Bearing all these changes in mind, I have made a new calculator which works out an efficient remuneration strategy for you. It calculates all the taxes for you: Income Tax, National Insurance and Corporation Tax, and it allows you to play around with different sizes of salary, claiming an Employers National Insurance allowance or not, and adjusting your Corporation Tax computation for associated companies.

We all like the sound of the Scottish Deposit Return Scheme (DRS), a simple scheme designed to encourage recycling. Needless to say the VAT implications of the scheme are far from simple. This scheme is due to come to England, Wales and Northern Ireland in 2025.

More news and updates for you below.

That's all for now,

Back soon, 

Nichola Ross Martin CTA (Fellow) FCA
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)  

Employer Bulletin: February 2023
HMRC have published their Employer Bulletin for February 2023. We have summarised the key content for you, with links to our detailed guidance on the topics covered. 

Agent Update: February 2023 
HMRC have issued their Agent Update for February 2023. We have summarised the key content for you with links to our detailed guidance on the topics covered. 

Advisory fuel rates from 1 March 2023  
HMRC have published new advisory fuel rates for company car drivers which apply from 1 March 2023. 

Pension: Review National Insurance records by 5 April 2023
Individuals intending to claim the State Pension in the future should check, before 5 April 2023, their National Insurance Contributions (NICs) record for gaps. Transitional arrangements ending on 5 April 2023 currently mean that voluntary NICs contributions can be made as far back as 2006, rather than the usual six years.

HMRC advise longer lead times for PAYE direct debits 
HMRC have informed the ICAEW that from next month the lead time to process any new PAYE direct debits will be longer than previously advised.

Scottish Deposit Return Scheme
The Scottish Deposit Return Scheme (DRS), will be introduced from 16 August 2023. It is an environmentally ambitious scheme for single-use drinks containers and HMRC have confirmed the VAT treatment.

Editor's Pick 

Extracting profits as salary or salary plus dividend combinations calc 2023-24 
NEW: Work out your OMB's ultimate remuneration strategy. This calculator works out Income Tax, National Insurance and Corporation Tax payable on a range of salary or salary plus dividend combinations, and also works through different Corporation tax rates for all size companies and adjusts for associated companies and the Employer's NICs allowance in 2023/24.

An Index to Reorganisations, Demergers & Share transactions
Forming a group? Planning a management buyout? Removing a subsidiary? What exactly is a company reorganisation or reconstruction and what tax reliefs apply to a company reorganisation or other transaction involving shares?

Tax Tools 

Tax Calculators
Come and check out our innovative range of Virtual Tax Partner tax calculators: are available (mainly) to paid subscribers to this service.

Tax Tools
FREE add-on for subscribers, or available separately

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.  

Guides & Updates

Self-Employed 

Brewers: Tax Overview
How are brewers and gin makers taxed? What expenses can they claim for tax purposes? How is their income taxed? What are the VAT rules for brewers and gin makers? 

Doctors and Dentists: Tax Overview
What expenses can doctors and dentists claim for tax purposes? How is income accounted for? Are there any special tax and accounting rules? What are the rules for VAT? 

Directors

Employer-Financed Retirement Benefits Scheme (EFRBS) (Freeview)
What are Employer-Financed Retirement Benefits Schemes (EFRBS or EFURBS)? How do they work? What are the tax implications and consequences? 

How to gift your shares to the family
How can you gift your private company shares to members of your own family? What are the tax implications? What reliefs apply? 

Land & Property

Land & Property VAT (Subscriber guide)
UPDATE: Reviewed following amendments to VAT Notice 708.

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?

Companies

R&D: Staff costs, subcontractors & reimbursed expenses
What staff costs qualify for relief? Who are externally provided workers? Can you claim sub-contractor costs? Do reimbursed employee costs qualify?

Social Investment Tax Relief 
UPDATE: What is SITR?  What are the qualifying conditions for SITR?  What relief is available? How is it different to Community Investment Tax Relief (CITR)?

Capital Allowances

Greenhouses & polytunnels: Capital allowances
Can I claim capital allowances on a glasshouse, greenhouse or polytunnel? 

Private Client & Estate Planning

IHT: Estate planning checklist
This checklist covers some of the essential planning points that taxpayers should know when planning for their estate and Inheritance Tax (IHT).

IHT Agricultural Property Relief
UPDATE: What is Agricultural Property Relief (APR)? When does it apply? What are the conditions and restrictions of the relief? 

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• NEW: CPD: Associated Companies
• CPD: Directors Tax Update 2022-23
• CPD: Land and Property Update 2022-23
• CPD: Employers' tax update: 2022-2023

More at CPD Index

Tax Cases & Guides  

Supreme Court confirm e-newspapers were standard rated  
In News Corp UK & Ireland v HMRC [2023] UKSC7, the Supreme Court (SC) found electronic versions of newspapers were standard rated for VAT purposes prior to 1 May 2020.

Penalties (VAT)
When do penalties apply for VAT? What penalties are charged and how can they be mitigated?

Tax Queries?

UK Agent for registration of Overseas Entities
Do you require assistance in the registration and verification of an overseas entity that owns UK land or property?

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.  

Missed last time's Web-update?

Nichola's SME Tax W-update 16 February 2022 

• Why the government didn’t go ahead with Online Sales Tax
• HMRC sends further one-to-many letters 
• Outcome of Reforming Non-Domestic Rates in Wales consultation 
• LBTT: ADS changes
• Not possible to assign film scheme income
• HMRC challenges legality of CBD sales
• Late filing excuses not reasonable   
• Conservatory roof panels not insulation for VAT
• Matchmaking service is not a consultancy for VAT 
• Salary v Dividends: what are your options in 2023/24
• Accounting periods and tax basis periods
• Purchase( repurchase) of own shares
• AIA & WDA: Rules where there is a change of rate
• CGT: Holdover/gift relief
• Residential Property gains
• How to appeal a tax penalty (subscriber version)
• Mandatory Disclosure (DAC6): Do you need to make a report?
• Wholly and exclusively…toolkit
• Replacement of Domestic Items Relief (subscriber guide)  ...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.