Hello,
This time, another Employer Bulletin, two GAAR panel opinions, a new development in the LLP salaried member rules, an 'E-invoicing' consultation, a closer look at 'exceptional circumstances' day-counting for Statutory Residence and another student union bar VAT case.
We have another Employer Bulletin, and this time HMRC are priming employers for another tax year-end. There, we have said it: 'the end of the tax year'. Mentioning that too soon after the end of Self Assessment is a bit like talking about Christmas in August.
Our understanding and interpretation of the meaning of the anti-avoidance LLP Salaried Members rules continue to evolve. This week, we hear that HMRC are reversing a recent update to their guidance on Condition C, in which the Targeted Anti-Avoidance Rule (TAAR) is invoked if a member tops up their capital contribution. Meanwhile, Condition B of the members' rules, "Does a member exert 'significant influence' over the affairs of the LLP?" is being thoroughly tested. Bluecrest Capital Management have lodged an appeal with the Supreme Court, who will now act as the final arbiter in the matter
The government has opened its anticipated consultation on 'E-invoicing'. This is going to apply to business-to-business (B2B) transactions. At this stage, it is considering different models, but the policy intention is clear, it's time for the UK to play catch up and lose paper-based systems.
Of the two new opinions released by the GAAR Panel, one covers old ground, a scheme to claim Inheritance Tax (IHT) exemption by gifting company shares to an employee benefit trust (EBT). They released something very similar back in 2020. This might leave 'the man on the Clapham Omnibus' feeling thoroughly exasperated. I imagine he's crying "Why is it that EBTs crop up so often in tax avoidance schemes?". Well, the answer to that is that EBTs are not all bad, it's just that some of the IHT legislation is almost impenetrable to the non-specialist. Hence the reason why people try their luck and we are now on the second iteration of the Loan Charge review.
Thinking of upcoming changes to Capital Gains Tax (CGT) rates, do check out our Share Transactions index, it's featured in Editor's Choice. There was a surge in M&A activity before the Autumn Budget, don't leave things too late.
Lots more news and updates below.
Nichola and the team
Your Virtual Tax Partner®: online PRACTICAL support for accountants, tax advisers BY accountants and tax advisers.
Quick News
Employer Bulletin: February 2025
HMRC have published the Employer Bulletin for February 2025 which includes advance planning for the tax year-end. We have summarised the key content for you, with links to our detailed guidance on the topics covered.
HMRC acknowledge 2023-24 was a difficult period for complaints
HMRC and the Valuation Office Agency (VOA) have responded to the 'Adjudicator's Office annual report 2024' acknowledging that this was a difficult period with serious challenges in delivering customer services.
GAAR opinion: Creation and sale of pension obligation
The General Anti-Abuse Rule (GAAR) Panel has issued an opinion on an employee reward arrangement involving the creation and subsequent sale of pension obligations to another employee, with the consideration for taking on each obligation being discharged by payment to the other employee.
GAAR Opinion: IHT planning gift of shares into employee trust
The General Anti-Abuse Rule (GAAR) advisory panel issued, on 18 February 2025, a new opinion on ‘Reducing an estate's value for inheritance tax by acquiring shares in a company and gifting those shares to an employee trust’. A 2020 opinion by the panel was on a similar theme.
E-invoicing consultation
HMRC and the Department for Business and Trade (DBT) have launched a consultation 'Promoting electronic invoicing across UK businesses and the public sector'. Views are sought on standardising electronic invoicing and increasing its adoption in the UK.
Tax Cases
CoA reinstates FTT decision in 'exceptional circumstances' SRT case
In A Taxpayer v HMRC [2025] EWCA CIV 106, the Court of Appeal found that a taxpayer was eligible for non-resident status for UK Income Tax purposes due to ‘exceptional circumstances’ relating to her sister’s ill health.
Bar humbug: no VAT exemption for students
In Anglia Ruskin Students’ Union v HMRC [2025] EWHC 296 (Admin), an application for judicial review of HMRC’s decision that a student café was a ‘bar’ and therefore did not qualify for a VAT extra-statutory concession exempting sales from VAT was denied.
Editor's Choice
Partnerships What's New 2024/25
UPDATED: What's new for partnerships in 2024-25? What are the issues on Basis Year reform? What is the fuss about hybrid structures? Where are we on partnership tax appeals?
An Index to Share Transactions incl. Reorganisations, Demergers & Share Exchanges
What tax relief applies in a share transaction? When do you need a company reorganisation or reconstruction? What tax reliefs apply to a company reorganisation, a share for share exchange, reconstruction or other transaction involving shares?
We're hiring: you looking? Tax Adviser/Consultant
We are recruiting for a Tax Adviser-Tax Writer to come and join our friendly team at 2020 Innovation and work in the Virtual Tax Partner (VtaxP) advisory service and on rossmartin.co.uk.
CPD: What's in your 2025 training program?
20:20 Innovation Tax Product Review (CPD)
Join Sharon Cooke and Nichola Ross Martin for a webinar in which we look at ways in which accountants can obtain timely and relevant tax knowledge, resources and support from the 20:20 Innovation portfolio of products and services. When? February 27th 2025 ...More
Guides & Updates
Self-employed
Compare software for Making Tax Digital for Income Tax
UPDATE: What software is available for MTD for Income Tax? What's the cheapest software I can use for MTD for Income Tax? What is the best value software that I can use? What to consider before choosing software?
Incorporation
Incorporation: Businesses & Trades
How to transfer an existing sole trader's business by incorporation into a company.
Capital allowances: On incorporation
What is the capital allowance position when an existing business is incorporated? What elections can be made?
Directors & Companies
A company? Start here
FREEVIEW: 'At a glance' guide is essential reading for anyone who runs an existing company.
Ceasing trading: What are your options?
What are your options if you are going to cease trading? What processes must be followed if you want to close down a company? What are the tax, company and insolvency law requirements?
Private Client & Estate Planning
IHT: Transfers of value
What is a transfer of value for Inheritance Tax (IHT) purposes?
UK Trusts
What is a trust? What types of trust are there? How are UK trusts taxed?
Employers
PAYE: Starter checklist new employee 2024-25
Freeview PAYE starter checklist. Use this form if you are taking on a new employee. Taking on a new employee? What PAYE code to use? What NIC secondary threshold applies?
Penalties & Compliance
Client Briefing: How to avoid penalties for carelessness?
Client briefing: how do you avoid penalties for carelessness when preparing your tax return?
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, as HMRC does not consider that they work and you may end up with a significant tax liability if you engage with the scheme suppliers.
VAT News & Cases
VAT phishing email warning
The Chartered Institute of Taxation (CIOT) is warning that VAT phishing emails are resurging with HMRC reiterating that they do not embed web links in their communications.
Post-deregistration VAT recovery
When can VAT be recovered following deregistration? How is such VAT recovered?
Energy-Saving Materials
The supply and fitting of energy-saving materials in residential accommodation attracts the zero rate of VAT. What does it apply to? What are the qualifying conditions? What case law is there on this topic?
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
CPD for lunch: Byte-sized chunks of lunchtime CPD (free for our Subscribers)
- CPD: Income Tax and Trusts
- Free Study Skills Session - Preparing for Your Tax Exams
- CPD: Change of basis periods: Transitional rules 2023-24 Returns
- NEW: Family Investment Companies & succession planning
- How to run the most tax-efficient business 2024/25.
- Purchase of Own Shares: all the details.
- Anti-money Laundering Update and Firm-Wide Risk Assessment ...More...
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 Tax News 13 February 2025
- Off-Payroll Working threshold increase
- ATED one-to-many letters
- HMRC's interest rate decreases
- £15.4 billion annual cost of business tax compliance
- HMRC's Schedule 36 notice was valid
- Kittel test not met for VAT fraud
- Deposit Return Scheme: Drink containers
- Capital allowances: On incorporation UPDATE
- Trusts & Estates: What’s New 2024/25 UPDATE
- Overpayment Relief ...More
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