Nichola's SME Tax W-update 25 May 2023

Hello

We have a diverse collection of news items for you this week. We pondered as to whether your average SME owner or adviser would be interested in 'Tonnage Tax'. At least one of us had seen this apply to a client of a small practice and we concluded that as this is something of a rarity: a new election to apply this tax, it was better to mention it than to stay silent on the matter.

Looking to fund a start-up? Do take note of HMRC’s latest statistics on investor reliefs. Some £28 billion has been raised to date under the Enterprise Investment Scheme (EIS). This scheme provides investors with both Income Tax and Capital Gains Tax (CGT) relief. The most popular sector for new investment over the past year is predictably in the information and communication sector. Directors of small company start-ups may also consider the Seed Enterprise Investment Scheme (SEIS). Unlike the EIS, there is no restriction on directors investing under the scheme, providing, of course, they meet the other investor tests.

Following news that the ICAEW is reintroducing ‘verifiable’ CPD we have looked at what we might be able to do to automate verification. Please complete a short CPD poll if you have an opinion.

We have three new CPD webinars out this week and as usual we have our pick of topical tax cases. One featuring the denial of a negligible value claim is noteworthy. It reveals how important it can be to read over the precise requirements of the actual legislation when making any claim. Our government is getting lot better in providing up-to-date versions of the tax legislation these days. 

Enjoy yet another bank holiday Monday,

More news, updates and guides 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)  

CPD: Complete our poll
We would love your views on Continuing Professional Development (CPD)? 

EIS, SEIS & SITR grow in popularity
HMRC's latest statistics reveal trends in business investment under the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Social Investment Tax Relief (SITR) scheme. 

How to submit P11Ds online when you are not the PAYE agent
The new mandatory online filing of P11Ds may cause problems with HMRC’s systems where the agent filing the forms is not also the agent for PAYE and RTI. HMRC have provided a workaround.

ICAEW changes to a verifiable CPD model
Members will soon have to complete a minimum number of hours of 'verifiable' CPD, depending on your role as an accountant.

Employed? Claim expenses via HMRC's portal
HMRC is urging employees that they can claim for employment-related expenses directly from the Gov.uk website each year. Currently 70% of claimants are using repayment agents, who often take a hefty cut of any tax refund due.

Tonnage Tax: New election window
Existing shipping companies and groups have a new opportunity to elect into the Tonnage Tax regime for Corporation Tax between 1 June 2023 and 30 November 2024.

Crown Dependencies agree to adopt global minimum tax rate 
Jersey, Guernsey and the Isle of Man have jointly agreed to adopt the 15% global minimum tax rate, as set out as part of the OECD's Pillar two.

Non-financial reporting and company thresholds review
The Department for Business and Trade has launched a call for evidence ‘to explores the costs and benefits of producing non-financial information, and whether the company size thresholds remain appropriate.

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

Tax Cases (Freeview) 

Doctor's employment expenses were unevidenced & unnecessary
In Dr Harry Nduka v HMRC [2023] TC8818, the First Tier Tribunal (FTT) denied claims for employment expenses. The items in question were not necessarily required for use in performing the duties of the doctor’s employment.

Wrong wording rules out CGT negligible value claim
In Robert Williams v HMRC [2023] TC08820, the First Tier Tribunal (FTT) found that it had no jurisdiction to consider HMRC’s refusal of a negligible value claim that was not in the form required by HMRC.

Sch 55 Late Payment penalty rules continue to confuse
In Peter Marano v HMRC [2023] UKUT 113, the Upper Tribunal (UT) found that the First Tier Tribunal (FTT) had failed to consider both notification of a capital gain and also the date when tax was paid and when deciding whether any 'special circumstances' could mitigate Late Payment penalties under Sch 55 FA 2009.

Editor's Pick (Subscribers)

Which investment relief: IR, BADR, SEIS or EIS?
UPDATE: What is the difference between Business Asset Disposal Relief (BADR) and Investors' Relief? How do they compare to investments in the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS)?  

Tax Tools 

VtaxP Tax Workouts 2023
BOOK NOW: Tax planning for Digital Nomads & OMB tax update 2023: Our new season of Virtual Tax Partner ®;Tax (VtaxP) Workouts commences with an exploration of exciting new innovations in working and the workplace.

Tax calculators
FREE for subscribers: We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes. 

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 (subscription content)

Self-Employed 

Accountancy & tax fees  
Is tax relief available on accountancy and tax advisory fees? What costs need to be disallowed?

Losses, trade losses and sideways relief 
UPDATE: How can trade losses be utilised? What are the restrictions?

Employers

Payrolling of benefits
UPDATE: The value of certain taxable Benefits In Kind can be included in taxable pay when calculating the PAYE deducted from payments of wages and salaries to employees. 

Employer pension contributions
Is there a taxable employment benefit if an employer makes contributions to an employee's pension scheme? What are the rules for employer pension contributions?

Directors & Companies

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

Unlawful, illegal or ultra vires dividends
Is there a tax charge on an unlawful/illegal or ultra vires dividend? Unlawful means illegal or ultra vires. A typical example is where a dividend is not paid out of distributable reserves.

Land & Property

De-enveloping property  
How do you transfer a property held by a company to its shareholders? What is ‘de-enveloping’? How do you avoid excessive tax charges?

Capital allowances

Short-life assets
UPDATE: What is a short-life asset? How to plan for short-life assets, what can be included and what are the exceptions? 

Enhanced Capital Allowances: Energy saving plant (inc. vehicles)
UPDATE: What are Enhanced Capital Allowances (ECAs)? What is energy-saving plant and machinery? What allowances are available?  

Dwelling house for capital allowances
What is a dwelling house for capital allowance purposes? Can capital allowances be claimed in respect of a dwelling house? What expenditure qualifies?  

Private Client & Estate Planning

Giving your home to your children
This guide considers some of the consequences of gifting the home to adult children and how to ensure the gift will be valid for Inheritance Tax (IHT) purposes.

Negligible value claims
What is a negligible value claim? When and how can a claim be made?

Penalties & Compliance

How to appeal a tax penalty (subscriber version)
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?

Making a tax disclosure (Digital Disclosure Service)
UPDATE: How to disclose errors or mistakes in direct taxes and notify HMRC of an under assessement. What time limits apply? What about VAT and SDLT? A practical guide to making a tax disclosure using HMRC's online system.

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• UPDATE: CPD: Non-Resident CGT: UK Property  
• UPDATE: CPD: Dividend Taxation
• UPDATE: CPD: Stamp Duty Land Tax
• CPD: Navigating the rise in Corporation Tax

More at CPD Index

VAT Cases & Guides

DIY Housebuilder secures extra VAT refunds
In Steven James Mort v HMRC [2023] TC 8801, the First Tier Tribunal (FTT) partially allowed an appeal under the VAT DIY Housebuilders scheme, finding that items for which HMRC had disallowed a refund on the basis that they should have been zero-rated, had been correctly standard-rated, meaning a refund was due.

Correcting VAT Errors
UPDATE: What are the VAT error correction time limits? Can you correct errors through the VAT return? Do you have to notify HMRC?

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 18 May 2022

• VAT registration helpline to close
• Employment related securities: what's new?
• CJRS appeal allowed: bank statement provided sufficient evidence of wage bill
• The Supreme Court clarifies the meaning of a tunnel and an aquaduct for Capital Allowances
• Government slow to issue fines for non-complicance with the Registration of Oversea Entities regime
• VAT: Transfer of a business as a going concern
• Gardens: selling or developing ...More

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