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Double cab pick-up: a car or van? The answer might lie in the number of passenger doors, but even the physicist Erwin Schrödinger might have been bemused to find that HMRC has announced that soon it will no longer interpret the meaning of 'car' for Benefit In Kind (BIK) and capital allowance purposes in line with the VAT definition. It will, during a transitional period, accept that cars may be vans, meaning that advantage can be taken of the current rules for a time.
We have summarised more interesting cases. One concerns a taxpayer who did not anticipate a Capital Gains Tax (CGT) liability arising when transferring properties to a company owned by his wife. It was found that he could not unwind the transaction for CGT purposes.
In what feels like deja vu, the First Tier Tribunal (FTT) had to consider cakes and confectionery for VAT in Duelfuel Nutrition Limited. As is often the case, the taste and texture of the products had to be examined... unfortunately for the tribunal judge, the products were more than a year out of date! That may have contributed to the "slightly unpleasant mouth feel and dryness" experienced.
Stamp Duty Land Tax (SDLT) continues to throw up some fascinating tax appeals. One problem faced by buyers is that there is a short period of time to amend returns (just 12 months). This means that if you and HMRC disagree about the subject matter of your purchase and you concede in HMRC's favour, you have no method of changing what you might have claimed on the return. This is a major issue when it comes to late claims for Multiple Dwellings Relief (MDR) as both our cases on SDLT this week serve to illustrate.
Don't miss our business owners' year-end checklist this week. We have a new Company one next time.
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Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
Order your double cab pick-up now
From 1 July 2024, HMRC is going to reclassify double cab pick-ups as ‘cars’ for employment benefit and capital allowance purposes. Pick-ups acquired or ordered before 1 July will benefit from a transition period.
New guidance from HMRC on R&D changes
Amid mixed calls to delay the introduction of new Research & Development (R&D) rules, HMRC have published draft guidance on new rules for Contractors and Externally Provided Workers (EPWs).
Have you declared all share disposals?
HMRC have information on taxpayers who have disposed of shares. In their latest one-to-many letter, they are writing to individuals who omitted share disposals from their tax returns.
Tax Cases
Property transfer could not be rescinded for CGT
A taxpayer who mistakenly believed that no Capital Gains Tax (CGT) would arise when transferring properties to a company owned by his wife was unable to unwind the transaction for CGT purposes. His CGT liability remained.
SDLT hard-edged: no scope for a late MDR claim
The Upper Tribunal has confirmed a major unfairness in the Stamp Duty Land Tax (SDLT) rules. If you have submitted a return on the basis that properties are non-residential and subsequently the subject matter is confirmed residential property, there is no mechanism to go back and claim Multiple Dwelling Relief (MDR) after the 12-month return amendment period.
SDLT and overpayment relief made clear
Can you make a late claim for Stamp Duty Land Tax (SDLT) relief? Ten appellants joined forces to test the tax rules on making a late claim for Multiple Dwelling Relief (MDR). The FTT found that their late claims were a result of 'making a mistake' with a tax claim and thus they were defeated by the basic rules for Overpayment Relief.
Editor's Choice (subscribers)
Tax Planning for the 2023/24 year-end: Business Owners
NEW: A checklist of key deadlines and topical issues to consider for SMEs and their owners. What tax returns and claims are due before the end of the tax year? What are my tax filing requirements?
Guides & Updates (subscription content)
Self-Employed
Motor expenses (self-employed)
What expenses can you claim for motor and travel if you are self-employed? Why are there different versions of the rules? Which method is most beneficial for me?
Directors & Companies
R&D: Research and Development Expenditure Credit (RDEC)
What is the R&D Expenditure Credit (RDEC) Large Company Scheme for R&D relief? How does it work?
Travel rules for owner-managers
When are travel costs allowable? What are the temporary workplace rules and what is a permanent workplace? What other expenses can be claimed?
Employers
P11Ds: Employers' checklist & top tips
Top Tips for employers on preparing form P11D together with a checklist.
CIS: Contractors and Subcontractors
What is the Construction Industry Scheme? Who does it apply to? How does it work?
Private Client & Estate Planning
IHT: Estate planning checklist
UPDATE: This checklist covers some of the essential planning points that taxpayers should know when planning for their estate and Inheritance Tax (IHT).
CGT: Date of acquisition or disposal
UPDATE: commentary on the Edward Newfield v HMRC [2024] TC09058 case added.
Land & Property
SDLT: Exempt transfers
Stamp Duty Land Tax is paid on the purchase of an interest in land as a percentage of the purchase consideration. There are a number of transactions that will be exempt from SDLT.
Penalties & Compliance
Discovery Assessments: SDLT
When can HMRC issue a Stamp Duty Land Tax (SDLT) assessment outside of the normal statutory time limits? What conditions must be met?
Client Briefing: How to avoid penalties for carelessness?
When HMRC spots an error or mistake in a tax return which has led to an under-assessment of tax, HMRC is entitled to consider whether a penalty applies.
Overseas & Residence
Foreign Currency Gains
This guide provides a brief overview of the taxation of foreign currency. Are individuals and companies taxed differently? Are there any exemptions? What is not included within the rules?
Requirement to Correct (Offshore Matters)
What is the Requirement to Correct (RTC)? What are the terms of the RTC. what penalties apply? What are the discovery rules?
VAT News & Cases
Sports nutrition bars were standard-rated
Cakes? Confectionary? Something else? The First Tier Tribunal recently found that twin packs of sports nutrition bars containing a flapjack and cake bar or brownie were standard-rated for VAT purposes, being confectionery.
Energy-Saving Materials
UPDATE: The supply and fitting of energy-saving materials in residential accommodation attracts a zero rate of VAT. What does it apply to? What are the qualifying conditions? What case law is there on this topic?
Business splitting and VAT (single business directions)
Many businesses are looking for ways to avoid hitting the VAT threshold. One option is business splitting, What is business splitting and why is it used? What are the pitfalls if not done correctly?
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.
CPD for Lunch
Byte-sized chunks of lunchtime CPD for subscribers
- CPD: Dividend Taxation
- 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 8 February 2023
- HMRC targets undeclared dividends
- Tax and taxis: Is there a new 'taxi tax'?
- Tax Data Card 2024-25
- Military service tax defence
- Rooms over garage were not a dwelling
- Cosmetic treatments were not medical care
- VAT recoverable on Land Rovers
- Partnership agreements: What should be considered?
- SDLT: Multiple Dwellings Relief (MDR)
- Childcare: Free and Tax-free Childcare
- Private Clients' Tax Planning for the 2023-24 Year-end NEW
- Capital Allowances: What's new 2023-24 NEW
- Managed Service Companies (MSCs): are you a MSC provider? UPDATE
- Farming: Tax Overview UPDATE
- Payrolling Benefits in Kind UPDATE
- Pensions: Tax rules and planning UPDATE
- Cars & Vans: VAT UPDATE ...More
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