Happy New Year!
We start the year with last minute tips for Self Assessment and a new Agent Update; noting that the Spring Budget is set for 6 March and that a new condoc considers transparency for land-holding trusts.
January 1st heralded several changes to tax reliefs for creative industries which are renamed as Audio-Visual Expenditure Credits and Video Games Expenditure Credit. Our review of tribunal decisions features VAT and freemasonry membership fees. We also have cases on disqualified claims for Research & Development (R&D) reliefs and Seed Enterprise Investment Relief (SEIS).
Ever invested in a SEIS or EIS company? It can be a bit of a gamble, not least because the tax rules are so complicated and you personally have no right of appeal when a company fails to qualify. The decision in the Legend of the Golden Temple (and others) SEIS appeal is a great read because it reviews in some detail not only the risk-to-capital condition, the trading condition and the shares requirement, but also the disqualifying arrangements rule. The other direct tax case we highlight this week features a company that made a R&D Expenditure Credit (RDEC) claim but had unfortunately failed to note that it could only do so if it filed accounts on the going concern basis. A very costly mistake when your claim is for nearly £2m.
On the VAT front the Upper Tribunal has decided that membership fees received by the United Grand Lodge of England are subject to VAT as its philosophical, philanthropic and civic aims can be divided into two types and its non-philanthropic aims are not a main aim. Give me VAT and chocolate biscuits any day!
The new style Audio-Visual & Video Expenditure Credits now work a bit more like the RDEC, and we shall produce more detailed guides in due course. We are uncertain how many companies are actually making creative industry tax claims as we have only fielded fewer than five queries on this topic. With the slot length for a high-end TV programme being reduced to 20 minutes (it was previously 30 minutes), surely more TV companies will be eyeing up this tax relief? It's definitely a golden age for TV programme making.
As parents can now make claims for Child Benefit online, this is a good opportunity to flag up the High Income Child Benefit Charge (HICBC). This applies if one of the parents has an income over £50k. More detail in our guide listed below.
As you may have noticed, we have updated our website over Christmas. Please be patient as we iron out any creases and my apologies for the odd 404 error, we are chasing down those bad links! It's been a big update, and the template will be brightened up in due course too. Our mobile site is back with its 'hamburger' menu. If you were not aware of the term, that is the menu that has three lines and looks a little bit like a burger.
Back soon
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
Spring Budget 2024 date confirmed and representations invited
The Chancellor, Jeremy Hunt, has announced that he will present his Spring Budget on Wednesday 6 March 2024. HM Treasury is inviting representations for the budget, from stakeholders.
Agent Update: December 2023
HMRC have issued their Agent Update for December 2023. We have summarised the key content for you with links to our detailed guidance on the topics covered.
Consultation: Lifting the veil of secrecy for land-holding trusts
A new consultation ‘Transparency of land ownership involving trusts’ has been launched. It explores widening access to trust information held on the Register of Overseas Entities, as well as considering how the ownership of land by trusts can be made more transparent.
Audio-Visual & Video Games Expenditure Credits
Adjust your tax guides: From 1 January 2024 Audio-Visual Expenditure Credit (AVEC) has replaced Film Tax Relief, High-End TV Tax Relief, Animation Tax Relief, and Children’s TV Tax Relief. Video Games Expenditure Credit replaces Video Games Relief.
Tax Cases
Artificial fragmentation: no SEIS
In The Legend of the Golden Temple & Others v HMRC [2023] TC08999 ten companies created by a common director were disqualified from the Seed Enterprise Investment Scheme (SEIS), for failing to meet the risk-to-capital condition, the trading condition and the shares requirement. Creating ten companies to perform the work of one evidenced a Disqualifying Arrangement too.
No going concern: no RDEC
In MW High Tech Projects UK Limited v HMRC [2023] TC09011 a company was unable to make a valid claim for an Research and Development Expenditure Credit (RDEC) as it had failed to prepare accounts on the 'going concern' basis.
Editor's Choice (subscribers)
Risk to Capital: EIS, SEIS, VCT
UPDATE: Just why do so many start ups fail to meet this key condition?
Foreign income and residency pages: FAQs
How do you complete the foreign and residency pages of the Self Assessment return?
How to work out the High-Income Child Benefit Tax charge
UPDATE: How do you work out the High-Income Child Benefit Tax Charge?
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)
Self-Employed
Online sellers: Tax Overview
UPDATE: What are the tax implications of being an online seller? When does a hobby become a business? What expenses can online sellers claim for tax purposes? Are there special rules for taxing income? What are the VAT rules for online sellers?
Losses, trade losses and sideways relief
How can trade losses be utilised? What are the restrictions?
Partnerships
Partnerships: How to prepare partnership and partners tax returns
How to prepare partnership returns. How are partnership profits calculated? How are corporate members of partnerships taxed? What are the differences between the tax treatment of individual and corporate partners?
Partnerships: Capital Gains Tax
How does Capital Gains Tax (CGT) work for partners and partnerships? What is HMRC’s Statement of Practice D12? How are transactions between partners treated? What if the partners are connected persons for CGT?
Directors & Companies
Directors' Loan Account Toolkit
HM Revenue & Customs (HMRC) have a director's loan accounts toolkit for advisers. This is our enhanced version with planning points.
Calculating Corporation Tax: New rules
How do you calculate Corporation Tax? What is the small profits rate? How do you calculate Marginal Tax relief? How do you adjust for Associated Companies? What is meant by Control? What are Augmented profits? A guide for companies which have an accounting period which either straddles or commences on or after 1 April 2023.
Private Client & Estate Planning
Investment bonds & tax
How are investment bonds taxed? What is an investment bond? What is a chargeable event gain and how is it calculated? How do notional tax credits work? How is top slicing relief calculated? What is deficiency relief?
CGT: Connected persons
Who is a connected person for Capital Gains Tax (CGT) purposes? Why does this matter?
CGT: Death
What are the Capital Gains Tax implications on death? What is the 'tax-free uplift' on death?
Land & Property
Furnished Holiday Letting
UPDATE: What is Furnished Holiday Letting? How do you qualify for Furnished Holiday Letting? What are the rules for Furnished Holiday Letting?
VAT News & Cases
Freemason membership fees subject to VAT
In United Grand Lodge of England v HMRC [2023] UKUT 00307, the Upper Tribunal (UT) found that membership fees charged to Freemasons were not exempt from VAT.
VAT fraud: What is the Kittel principle?
UPDATE: 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: Maximising Expense Deductions for Businesses
- CPD: CGT Reporting and payment deadlines
- CPD: Corporation Tax Part 1: Rates and Challenges
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 21 December 2023
- Christmas Quiz 2023: Human v AI
- Scottish Budget for 2024-25
- Draft Welsh Budget 2024-25
- Seasonal worker? Check your payslip
- Employees: how to claim annual employment expenses against income
- Welsh LTT consultations
- Joint property, beneficial ownership & legal title: at a glance
- Gifts (to staff, customers & charities)
- How to reclaim s.455 tax paid on loans to participators
- Self Assessment Return 2022/23: What's new?
- Cultural Gifts Scheme and Acceptance in Lieu
- Welsh Income Tax
- Scottish Income Tax
- Input VAT: What constitutes a valid claim (& VAT invoice)? ...More
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