Nichola's SME Tax W-update 30 November 2023

Hello,

This week we have more details from last week's Autumn Statement and we note that the latest Finance Bill has now been published covering the proposed changes. As this bill is well over three hundred pages long it might take us a minute to go through it all!

The Public Accounts Committee (PAC) have issued their latest report on Making Tax Digital (MTD) which reveals grave concerns over the project’s spiralling costs, design flaws and missed deadlines. The report highlights the unacceptable costs to date, £640 million, and unacceptable delays in implementation at seven years and counting. The PAC has recommended that HMRC must detail how they will hold senior leaders accountable and what consequences there will be for any further timetable and budget overruns.

This comes alongside the publication of an HMRC review into MTD for Income tax Self Assessment (ITSA) for small businesses which resulted in some small changes to the proposed rules at last week’s Autumn Statement. Whether and when those with income below £30,000 will join MTD for ITSA is still up in the air.

The sharp-eyed amongst you will note an absence of cases this week. The tribunals have been quiet, though we do have an interesting VAT case. Was the supply of diesel in respect of hired plant, for VAT purposes, separate from the supply of plant hire since a reduced rating applied to the fuel? What did the FTT decide? Find out below.

There are now 41 working days to go until the 31 January 2024 Self Assessment filing deadline, assuming that all bank holidays are taken over Christmas (and we know some of you do like to file a few tax returns on Christmas day!). With this in mind check out this week's special section of carefully curated guides to help you with your tax return preparation.

Farewell November, we look forward to the next challenge as December takes us into a new year.

More news, cases and updates are below. Do check out the Editor's Choice.

Back soon

The Team

www.rossmartin.co.uk

Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.

Quick News (Freeview)  

MPs issue recommendations on Making Tax Digital
The Public Accounts Committee's (PAC) report on ‘Progress in Making Tax Digital’ reveals grave concerns over the project’s spiralling costs, design flaws and missed deadlines. It has issued five recommendations for HMRC to follow.

Expanding the cash basis, consultation responses 
HMRC have published responses to the consultation ‘Expanding the cash basis’  which asked for taxpayer views on various options to extend and simplify the Self-employed Cash Basis, a simplified way of calculating taxable profits for Income Tax purposes. 

Permanent Full Expensing consultation
As announced as part of the Autumn Statement, the government has published a technical consultation on changes to the capital allowances system, with the aim of simplifying the tax system.

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

HMRC reports on review of MTD for ITSA for small businesses
HMRC have published the outcome of their review into how Making Tax Digital (MTD) for Income Tax will address the needs of small businesses, which has resulted in some proposed changes to how it will be introduced in 2026.

Call for Evidence: UK visual effects sector
As part of the Autumn Statement, the Chancellor announced more generous reliefs for Audio-Visual expenditure and published a Call for Evidence to consult on the policy design.

Editor's Choice

Energy Price Guarantee for domestic users
The Energy Price Guarantee (EPG), introduced in October 2022, applies to domestic electricity and gas consumers. The Chancellor announced further changes in the Autumn Statement 2022 and Spring Budget 2023. The guarantee is in place until March 2024.

Business Asset Disposal Relief (Entrepreneurs' Relief): Disposal of shares or securities in a company
When can you claim Business Asset Disposal Relief (BADR) on a share sale? What is the rate of Business Asset Disposal Relief (Entrepreneurs' Relief)? How do you claim BADR? What case law is there on BADR?

Self Assessment Guides 

Self Assessment Return 2022/23: What's new?
2023 Self Assessment toolkit: top tips for completing tax returns for the year ending 5 April 2023.

Online filing exclusions for 2022-23 tax returns
Some taxpayers will be unable to file their Self Assessment returns online for the year ended 5 April 2023, due to software specification issues from HMRC. Lists of filing exclusions for individuals, partnerships, trusts and estates have recently been published.

CGT: How to calculate a capital gain or loss
How do you calculate a capital gain or loss? What costs are deductible? Can you set losses against capital gains?

Foreign income and residency pages: FAQs
How do you complete the foreign and residency pages of the Self Assessment return?

Top Slicing Relief: How you slice it
What is Top Slicing Relief? When does it apply?

Tax Tools 

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
How can trade losses be utilised? What are the restrictions?

Employers

Agency Workers: Employment intermediaries rules (subscribers)
What are the tax rules for Employment Intermediaries and Agencies? Are agency workers subject to PAYE? 

Tips, gratuities and troncs
How are tips, gratuities and troncs taxed? What are the rules for National Insurance Contributions (NICs)?

Directors & Companies 

Leaving payments and directors
How are leaving payments to directors taxed? What are the planning opportunities and pitfalls?

Striking off a company: Step-by-step
What are the steps required to strike off a company? What are the tax implications?

Interest relief: Making a loan to a close company
In certain circumstances, individuals can claim tax relief for interest paid on a loan where the funds are used by a close company or used to buy an interest in a close company. Which loans qualify? What is a business purpose? 

Private Client & Estate Planning

Named tax avoidance schemes, promoters, enablers
UPDATE: HMRC publishes a list of Named tax avoidance schemes, promoters, enablers and suppliers. It is not recommended that taxpayers use any of these schemes.  The most recent update was on 17 November 2023. HMRC added Bluestar Financial Solutions Limited and Excala Solutions Limited.

PRR: Private Residence Relief
What is Private Residence relief (PRR)? What are the qualifying conditions? Can you claim relief on two homes? How do you claim PRR? Can you claim PRR if you develop your garden?

Land & Property

Restricting mortgage interest relief: client guide
This is a briefing note to go over with your clients to explain the rules on restricting tax relief on residential buy-to-let properties.

Annual Tax on Enveloped Dwellings (ATED)
What is the Annual Tax on Enveloped Dwellings (ATED)? Who does ATED apply to? What relief is available and how is it claimed? What are the ATED return filing dates?

VAT News & Cases

Fuel and hired plant were separate supplies for VAT 
In Gap Group Limited v HMRC [2023] TC08991, the First Tier Tribunal (FTT) found that the supply of diesel in respect of hired plant was, for VAT purposes, separate from the supply of plant hire. Reduced rating applied to the fuel.

VAT fraud: What is the Kittel principle?
What is the VAT Kittel principle? What happens when the Kittel principle applies? What tests do HMRC and the tribunals apply? How can I protect my business?

CPD for Lunch

Byte-sized chunks of lunchtime CPD for subscribers

• CPD: Corporation Tax Part 1: Rates and Challenges
• CPD: Corporation Tax Part 2 Associated Companies
• CPD: Corporation Tax Part 3 Augmented Profits & Marginal Relief

More at CPD Index

CPD Workouts

Two hours of CPD: Unravelling the diverse tax rules over a range of topical subjects

• VtaxP Tax Workouts 2023: AML Essentials update & IHT and Family Investment Company case studies
• VtaxP Tax Workouts 2023: Tax Update for OMBs & Taxing the Digital Nomad

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 23 November 2023

• Autumn Statement 2023: At a glance
• Autumn Statement 2023: Corporation Tax
• Agent Update: November 2023 
• Transfer of Assets Abroad rules cannot apply to a transfer by a company
• HMRC assessments upheld as incorrect CIS status used
• Three renovated family homes in five years was not trading 
• VAT: Live screenings are not the same as attending the theatre 
• Valuations (non-tax): Businesses
• Partnership agreements: What should be considered?
• Image rights and tax
• Striking off a company: Step-by-step
• State benefits: Tax-free and taxable NEW
• SDLT: Amending returns & refunds
• SRT: Split Year Treatment
• Disposal values & rules ...More

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