Nichola's SME Tax Update 21 December 2023

Season's Greetings

This week, we combine some festive-themed elements with Artificial Intelligence (AI). On the more serious tax front, we take a look at the Scottish and Welsh budgets and have some top tips for various types of taxpayer.

Following this week's publication of Scotland's Budget, some higher-rate Scottish taxpayers and company owners will be staggered to find that they will now have up to ten different rates of tax to apply when they complete their Self Assessment tax returns next year. The ten rates occur due to the creation of a new Income Tax Advanced Rate which applies from next April and are combined with the dividend tax rates.

The Welsh draft budget was not nearly so sensational. No changes were announced to Income Tax or Land Transaction Tax (LTT). A new Welsh LTT consultation does consider modification of the current LTT higher rates three-year exception and refund period. 

HMRC has issued press releases calling on seasonal workers to check that they are being paid the National Minimum Wage. It has provided new guidance to employees on claiming tax relief for annual expenses of employment and telephone help is at hand for those who are struggling with 'online'. Of interest to any companies that have had repayments of loans made to their participators and wish to reclaim the s.455 tax paid, is news that tax agents can now claim directly through their agent services account.

As we come to the end of 2023, we have joined forces with ChatGPT to assist us in creating a unique Christmas Tax Quiz. Naturally, it obliged in a matter of seconds. Unlike all good tax students, it appears to have neglected to take extra time to re-read the questions and then to re-check its answers accordingly. See if you can beat it!

We also asked it to write us an alternative Christmas editorial and poem, bearing in mind that it was 'trained' on a large quantity of data and its choice of words is based on statistical analysis it reveals what a sentimental lot we all are!

Wishing you all a very Merry Christmas, or, if that is not something you celebrate, then wishing you Happy Holidays. We hope that you all manage to take a decent break from your desks and catch up with friends and family!

Nichola & the Team

www.rossmartin.co.uk

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

Quick News

Christmas Quiz 2023: Human v AI
This year's seasonal fun from here at rossmartin.co.uk comes in the form of a Christmas Tax Quiz set by ChatGPT.

Scottish Budget for 2024-25 
Scottish Deputy First Minister Shona Robison announced the draft Scottish Budget for 2024-25 on 19 December 2023. A new Income Tax Advanced Rate of 45% will be introduced, meaning that, for example, a person with dividend income alongside employment, self-employment or rental income, has up to ten Income Tax rates to consider. 

Draft Welsh Budget 2024-25 
The Welsh Government released their Draft Budget for 2024-25 on 19 December 2023.

Seasonal worker? Check your payslip
A reminder that employers may accidentally be underpaying temporary staff engaged in seasonal jobs. Employees should check their wage slips to ensure that the actual hours paid are those worked.

Employees: how to claim annual employment expenses against income  
Update: HMRC provides new details for its criteria for telephone claims. 

Welsh LTT consultations 
The Welsh Government has launched two new Land Transaction Tax (LTT) consultations. The first explores extending the LTT higher rates three-year exception and refund period, in specific circumstances. The second consultation looks at introducing LTT relief for special tax sites, such as Freeports and Investment Zones. 

Editor's Choice 

Joint property, beneficial ownership & legal title: at a glance
What is the difference between legal and beneficial ownership? How are the different forms of ownership taxed?

Joint income: Splitting income within the family
Spitting different forms of income around a family to save tax may work well if planned correctly. This guide explores key issues and considers HMRC's approach as a result of a tax enquiry.

Tax Tools 

Tax calculators
UPDATED for NICs changes: 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)

Gifts (to staff, customers & charities)
What is the tax position of a gift made to your staff or to customers? Can you obtain tax relief on the cost of a gift to your staff?

Directors & Companies 

How to reclaim s.455 tax paid on loans to participators
UPDATE: How do I reclaim s.455 tax on loans to participators? Which form do I use? Where can I find the link?

Private Client & Estate Planning

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.

Cultural Gifts Scheme and Acceptance in Lieu
What is the Cultural Gifts Scheme? When does it apply? What are the advantages?

Land & Property

Welsh LTT vs SDLT: Comparing the rates and additional dwellings charge
How does Welsh Land Transaction Tax (LTT) compare to Stamp Duty Land Tax (SDLT)? What are the key similarities and differences?

Devolved Taxes

Welsh Income Tax 
Since 6 April 2019, Wales has been able to set its own Welsh Rate of Income Tax. 

Scottish Income Tax
From 6 April 2016, Scotland set its Income Tax rates. What is the rate of Scottish Income Tax? What implications does it have? 

VAT News 

Agents and principals
UPDATE: What is an agent for VAT purposes? What is a principal? When do the agency rules apply? 

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? 

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 14 December 2023

• Employer Bulletin: December 2023 
• Former shareholder’s payments to employees were taxable 
• Nudges: Pandora papers, online sellers & take-aways
• VAT and Energy-Saving Materials consultation responses 
• Tax calculators UPDATE
• Companies: Share Valuation UPDATE
• Can I charge my company rent for use of my home? UPDATE
• CGT: Date of acquisition or disposal UPDATE
• Property profits & losses: Toolkit (2023-24) UPDATE
• Flat (fixed) rate expenses or actual cost toolkit
• When does a partnership exist?
• Staff parties and annual functions
• Interest relief: Making a loan to a close company
• Foreign income and residency pages: FAQs
• Disposal values & rules
• Partial exemption & input VAT ...More

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