Hello,
Now that the election period has concluded, we wait to see what changes in the tax world will be announced.
The new Chancellor, Rachel Reeves, previously indicated that a Budget would only be held with the accompanying Office for Budget Responsibility forecasts. These forecasts require 10 weeks’ notice. A Budget in late September, or October, is possible, but any date will need to negotiate party conference season. As time passes, November perhaps seems increasingly likely.
Slightly more imminently, second 2023-24 payments on accounts will fall due at the end of this month. Make sure that clients are aware of payments due in good time as, with late payment interest rates higher than they have been for many years, making a payment late can be costly.
HMRC have made several statistical releases and we have summarised some of the key takeaways. The number of individuals with company cars increased by 5.6% in 2022-23, while their average CO2 emissions continued to decline. This is a testament to the fact that tax charges on low and zero-emission vehicles remain fairly low. This week we feature our guide on the subject of company cars.
More interesting decisions from the tribunals have been published. One explores whether a collagen drink product was a 'food' for VAT purposes, while another looks at the meaning of the word ‘year’ in a pensions context. Curiously, in the context of the relevant legislation, a year was not 12 consecutive months!
Read on for more cases and news below. These include changes to how client’s VAT registration details must be updated from 5 August 2024, and the latest edition of HMRC’s Employer Bulletin, which contains some important updates for employers and agents.
Back soon
Nichola & the Team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
Employer Bulletin: July 2024
HMRC have published their Employer Bulletin for July 2024. We have summarised the key content for you, with links to our detailed guidance on the topics covered.
Payment on account deadline draws near
On 31 July 2024, second payments on account of 2023-24 Income Tax and Class 4 National Insurance liabilities fall due. This year, there’s potentially more to consider this year than usual.
Round-up of HMRC statistics
HMRC have recently released several sets of statistics. We summarise some of the key points relating to non-doms, company cars and employee share schemes.
Another CIS telephone service withdrawn
Subcontractors operating under the Construction Industry Scheme (CIS) will no longer be able to request payment deduction statements from HMRC's CIS helpline. From 1 July 2024, the request must be made by post.
Tax Cases
When a year is not a year
In Martin Laker v HMRC [2024] TC09224, the First Tier Tribunal (FTT) found that for pensions Fixed Protection 2012 purposes, a ‘year’ was not 12 consecutive months.
Paddock not residential for SDLT
In Mr Taher Suterwalla and Mrs Zahra Suterwalla v HMRC [2024] UT 00188, the Upper Tribunal (UT) upheld the First Tier Tribunal's (FTT's) decision that a paddock was not part of the grounds of a residential property.
Constructive trust meant earlier CGT disposal
In Roger William Morgan & Anor v HMRC [2024] TC09221, the First Tier Tribunal (FTT) found that the beneficial ownership of land was transferred to a development company under a constructive trust, a year before legal ownership changed.
Editor's Choice
Company cars
Company car tax. How do you work out car benefit? How do you work out car fuel benefit? Are there savings for low-emissions vehicles? How do you reduce car benefit? Cars and the tax tribunals and Top Tax Tips.
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?
Annual Investment Allowance (AIA): Related companies
What restrictions to AIA apply to companies? What does common control mean? When are companies related?
Guides & Updates
Self-Employed
Herd basis: Farming
The 'herd basis' recognises, for tax purposes, the economic nature of animals held for production as capital assets, rather than as trading stock. This can be of benefit to some farmers and result in tax savings.
Incorporation
Sale of occupational income: Anti-avoidance
What are the tax effects of the anti-avoidance sale of occupational income provisions? How do you tax a capital sum received on the sale of an individual's earnings?
Valuation: Goodwill
What valuation methods are suitable for valuing a business? What are the issues with goodwill and other intangibles? What does HMRC suggest? What do the courts think?
Directors & Companies
EIS: Enterprise Investment Scheme (Subscriber guide)
When can EIS relief be claimed? What are the conditions for EIS relief? What are the benefits of EIS relief?
Interest relief: Making a loan to a close company
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?
Mutual trading, members clubs and community trades
How are mutual traders, members clubs, associations and community trades treated for tax purposes?
Employers
Staff Suggestion Schemes
Employee suggestion schemes can provide tax-free benefits. How should they be structured? Who is eligible? How much can be claimed?
Cycles & cyclist's safety equipment
What tax breaks are available to you and your staff if you provide your workforce with eco-travel solutions?
Land & Property
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?
Joint property: Legal v beneficial ownership
What is the difference between legal and beneficial ownership? What are the tax consequences? Are the rules different for married couples and civil partners?
Penalties & Compliance
Notice to file a tax return: section 8(1) TMA 1970
A guide to explain the implications of a notice sent to an individual under s.8(1) TMA 1970 to file a tax return.
Overpayment Relief
What is Overpayment Relief? When can you claim Overpayment Relief? What are the conditions for a claim for Overpayment Relief? What are the time limits for a claim for Overpayment Relief?
Private Client & Estate Planning
CGT: Date of acquisition or disposal
When is the date of acquisition or disposal of an asset for Capital Gains Tax (CGT) purposes? When do special rules apply? Why does it matter?
Trusts & Estates: Exit charge reporting requirements
What is an exit charge or proportionate charge, and when does it apply?
Pensions: Tax rules and planning
What tax rules apply to pensions? What tax relief is available? What tax charges can arise? What planning opportunities are there?
VAT News & Cases
Collagen drink not a food for VAT
In Bottled Science Limited v HMRC [2024] TC09231, the First Tier Tribunal found that the collagen drink product 'Skinade' was not food for VAT purposes and therefore could not be zero-rated.
Company suppressed sales and purchases
In Good Choice 2016 Limited and Mrs Fang Bo Guo v HMRC [2024] TC09214, the First Tier Tribunal (FTT) upheld HMRC's VAT assessments and penalties along with Personal Liability Notices issued to the company's sole director. The company had suppressed sales and purchases.
Changing VAT registration details
HMRC announced that from 5 August 2024, any changes to clients’ VAT registration details must be made using the Agent Services Account, not by using form VAT484 or any other postal or electronic means.
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?
Tax Tools & Calculators
Tax tools & calculators
UPDATE: 2024/25 versions available now. We have a suite of useful tax tools that help agents, business owners and sole traders calculate their taxes.
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
- NEW: CPD: Change of basis periods: Transitional rules 2023-24 Returns
- CPD: VAT Penalties Update
- CPD: CGT Reporting and payment deadlines
More at CPD Index
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 wide range of expertise: covering direct and indirect tax, as well as accounting, R&D claims, reorganisations and much more.
Missed the Last Tax Update?
Ross Martin Tax SME News: 4 July 2024
- Ignorance of tax rules bolsters the tax gap
- Is a chatbot writing for HMRC?
- Loans to participator pitfalls
- Identity verification proposals for Companies House
- Concerns over s.455 charges on buy-outs
- No suspension for careless BADR claim
- Failed on ER won on BADR as trading had begun
- Partnership could not use the cash basis
- Incentive plan taxable on non-resident
- Loans to participator pitfalls NEW ...More
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