SME Tax News

Despite amendments to its proposals the Government's Disguised Remuneration legislation has been branded "far too complicated" by the Chartered Institute of Taxation (CIOT). It "risks creating problems as well as solving them".

HM Revenue & Customs (HMRC) has created new Taskforces in three regions of the UK order to tackle tax evasion in high risk sectors. First to be targeted are restaurants in London, the North West and Scotland.

We have quite a wide selection of interesting news items and updates this week.

The PAYE tolerance for adjustments to tax has decreased from £300 back to £50.

HMRC have released a YouTube video to explain ‘Penalties for inaccuracies in documents and returns’.

This week we have a very short news round up because of the extended holidays.

HMRC's new EBT settlement offer seems to be a very practical measure. Having watched the market in EBTs develop over the years it seems quite extraordinary that it took so long to cap "the leak" and hence we have a huge number of unresolved cases. Without a settlement strategy HMRC would be hard pressed to finance litigation.

Otherwise on the site we have an associated company "special" - lots of guidance and new checklists covering the new rules and some of the new oddities that they bring too.

Best wishes

Nichola

Nichola Ross Martin FCA
Tax Director

www.rossmartin.co.uk
Your online Virtual Tax Partner: practical support for accountants, tax advisers and their clients

 


News and FREEview

Employee Benefit trusts: settlement opportunity
Ongoing or potential EBT enquiry? HMRC offers cost effective solution...More

Authorised mileage rates (own vehicle)
HMRC issues revised tables for 2011-12 - the 10,000 limit does not apply for NICs the higher rate applies to all miles.

What is an associated company?
A new summary of the rules from 1 April with links.

Business Records Checks - what now?
HMRC's latest pilot is just a test run.

Budget highlights (for SMEs and their owners)
More than a Budget summary; we summarise the key changes in tax coming in 2011-12.

PAYE Update April/May 2011
Our rolling update for employers.

What now for ESC C16?
What changes and when?


Guides and updates

For PAID subscribers (because you are so special :)

Recent minor updates

Entertaining (business guide)
UPDATED: new definitions for VAT on overseas customers

Entertaining (employer's guide)
UPDATE: new definitions for VAT on overseas customers.

 

Updated for 2011-12

Do I pay a salary or dividend? and we have illustrated the optimal figures for 2011-12, with comparison to the previous year.

Will I save more tax if I trade through a company?
A summary and discussion of the key issues to go over with clients.

Will I pay less tax if I trade via an LLP?
Although partnerships offer flexibility, following changes to the main corpororation tax rate the answer may depend on the level of your income.


Keeping up to date:

Finance Act 2011: tax planner
Click here for Budget updates. This is a CPD powerbooster: our rolling planner keeps you abreast of key changes in tax legislation as they are made and proposed in each Finance Act and Bill for 2010/11, 2011/12 and 2012/13.


New Practical tax guides

ABC shares: family companies
NEW: a guide that examines the tax consequences of creating new share classes.


Incorporation
A NEW section of the site with NEW guides on valuation of goodwill, tax avoidance issues, and worked examples to help you choose the right CGT relief.

Goodwill & incorporation: tax issues
NEW: HMRC challenge goodwill where it is overvalued. This can be difficult to prove, so any attack is limited to cases of obvious abuse.

Valuation (of goodwill) for incorporation
NEW: methods vary considerably from business to business.

Anti-avoidance: sale of occupational income
NEW: an income tax charge may arise where certain sources of income are disposed of from capital.


"Back to basics": what expenses can I claim for?

Business gifts
NEW: we examine the rules including a useful concession that allows a firm to donate to local associations.

What expenses can I claim: guides for the self-employed
Take a tour: a summary of our guides and updates



Tax penalties and compliance

"Spot the difference"

Reasonable excuse
NEW: this is needed to mitigate penalties for compliance failures

Reasonable care
UPDATE: prove that you have taken reasonable care in order to avoid tax geared penalties

Tax penalties: grounds for appeal
ESSENTIAL READING: recent decisions feature taxpayer carelessness and HMRC's judgement in suspending penalties.


Private client specials

Tax planning for the 2010/11 year-end
NEW: for private clients

Pensions: tax rules and planning
With so little time remaining to contribute in 2010/11, pay heed to the transitional rules for the Annual Allowance. Note also carry forward measures.


Companies and directors

Running an LLP in tandem with a company
NEW: an interesting topic that brings with it a whole range of tax issues.

Company and shareholder year-end tax planner
UPDATE: a summary of the key planning points - don't just save this for the year-end these apply all year too.

Dividends: formalities for companies
NEW: essentials for discussion with directors.

Is it worth restructuring to save tax?
UPDATE: a five minute tax briefing designed to add value to meetings.

PAYE & Settlement Agreements - (how to gross up for)
Do you pay an employee's personal bill, or do you provide the benefit and pay the tax on that instead?


Recently added and updated:

Purchase (repurchase) of own shares
NEW: tips and practical points together with detailed links

Purchase of own shares out of capital (checklist)
UPDATE: a step by step guide to the Companies Act and tax requirements.

PAYE & NICs review
NEW toolkit/selling opportunity: perform a PAYE and NICs review on your clients before HMRC do.

What are earnings for NICs purposes?
UPDATE: when remuneration planning goes wrong and we have NICs on dividends and loan write offs.

Entrepreneurs' Relief
UPDATED: planning points and pitfalls with illustrations to make qualifying conditions clearer.

Accounts health check (self-employed)
UPDATED: a general re-write with more interactive links.

Know your client & money laundering checks
UPDATED: this now comes with new "prompts". Essential reading.

Enterprise Investment Scheme (EIS)
UPDATE: recent decisions: EIS not denied on an MBO, clarification on values for shares/loan stock.

What is a small company?
NEW: a handy little aid memoire, should you ever be worrying about tax rates, transfer pricing or are just curious.

NIC repayments on motoring allowances
UPDATED: HMRC to appeal case on NICs refunds on motoring allowances.


Take a tour of the site...

Private client & estate planning
This section covers personal and family tax matters as well as CGT and estate planning.
Directors: tax-efficient remuneration
These guides consider the different methods for extracting funds from a company.

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Joint property elections
Including a note on transfer of legal title and beneficial ownership.

Working from home (self-employed)
UPDATED: we have partially rewritten our classic tax guide to clarify some aspects of measurement of useage.

Company cars
UPDATED: new tax Tribunal cases on shared ownership and new section on car schemes.

Selling the business: deferred consideration and earn outs
UPDATED: the 2010 changes to Entrepeneurs' Relief moved the goalposts. This is a handy quick guide and overview of the different tax consequences for the seller.

Can I charge my company rent for use of my home?
UPDATED: yes you can, but read this first.

CGT: Main Private Residence Relief
UPDATED: this is so topical that we have added a "quality of occupation" checklist.

Furnished Holiday Letting
UPDATED: new loss rules from 2011/12 and new measures from 2012/13


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More Guides and Updates

 

Materiality and tax penalties
NEW: a tricky topic.

NIC holiday for new employers
A new note: guidance on what is a new business.

iXBRL: a guide for advisers
NEW: we have been reviewing software, what are you using?

Tax penalties: failure to make a return (late filing)
What applies and when - links to old and new penalties for SA, CT and CIS.

Tax penalties: self-assessment late filing
A quick guide to the penalties that apply for 2009/10 returns.

DOTAS: are you an introducer?
NEW..and why does it matter?

Tax penalties: DOTAS
These penalties are separate from the new tax penalty and compliance regime.

Employer-Financed Retirement Benefits Scheme (EFRBS)
UPDATED: for Finance Bill 2011 proposals.

Entertaining: the double tax trap
A quick guide for directors

Entertaining: employee expenses
A quick guide for employers

Gifts & trivial benefits
UPDATED: all change we have some new trivial benefits and of course changes in the VAT rules.

CIS: penalties
UPDATED: this is an invaluable guide to the old rules v. new rules, transitional arrangements, workings and much more.

2011/12 tax rates and allowances
New rates and allowances published

Practical Tax Toolkits (part freeview)

Our Practical Tax Toolkits include tax planning tips and advice, essential reading for advisers:

Toolkits for the self-employed
This includes our Tax Healthcheck

Toolkits for companies
From compliance to associated companies to profit extraction.

Samples (freeview)

Property profits & losses: toolkit
NEW: this is our re-write of HMRC's toolkit, unsurprisingly we go into rather more detail on what you can claim!

Directors' loan accounts: toolkit
UPDATED: our popular version of HMRC's toolkit with a new section on NICs, for advisers.


Some more of our favourites

Interest Relief: Loan to Buy an Interest in a Close Company
Part of our directors' series. Pay close attention to a company's activities in these changeable times.

What are earnings for NICs purposes?
Part of our employers' series. Essential know-how for anyone wondering how they can avoid NICs.


Close Companies: Transactions in securities
A summary of the changes and guidance with particular emphasis on ESC C16.

Tax on leaving payments
At a glance guide to this difficult topic...More

Is it a trade or a business?
Practical back to basics for advisers, great for tea time reading...More

Pool cars
A quick guide for employers. There is no taxable benefit to an employee when a company car qualifies as a pool car.
Can I back-claim capital allowances on residential property?
An explanation of the ins and outs of our complicated capital allowances regime...More

Unlawful, illegal or ultra vires dividends
A look at the tax treatment for directors and shareholders...More

Goodwill and the intangibles regime
An explanation of rules for connected party trades straddling 1 April 2002. Can you apportion goodwill?

An adviser's guide to Settlements
Tax anti-avoidance rules: crammed full of examples, planning points and pitfalls, together with a summary of the leading tax cases.

Adviser's Tax Penalty Planner
New late filing penalties for CIS, SA and CT are all due to start this time next year. Have you discussed them with your clients and changed your letters of engagement?

 

Share based incentives (part freeview)

EMI: checklist
This does what it says on the wrapper.

Designing an EMI share option scheme
Need some help? Please ask for details.

Share scheme basics for small companies FREEVIEW
While company values are low a share scheme can be a very tax efficient method of rewarding staff. We explain the basics of an unapproved share scheme.

Enterprise Management Incentive (EMI) FREEVIEW
A share option scheme is ideal for smaller companies.


 

Buying and selling businesses

Capital gains reliefs: disposal of business assets
What relief to use where and how to incorporate a business.

Selling the business: where do I start?
A guide for you to discuss with your clients.

How to value a business
An adviser's guide that explores the different methods used for valuing private companies with worked examples.

Purchase of own shares – out of capital
Our unique guide explains the fiddly bits.

The Advisers' Guide to the PAYE Fiasco

Our one-off special contains:

  • A Summary of guidance to give to clients who are affected by PAYE by under or over payments
  • PAYE deadlines
  • ESC A19
  • Overpayment relief
  • NIC deadlines
  • Links to LITRG

Virtual Tax Partner

Our Virtual Tax Partner service provides one-to-one practical support for accountants and advisers nationally. Need help with an enquiry, a valuation, a share scheme or buy-back? Want a second opinion, or assistance in drafting a difficult letter or computation? The Virtual Tax Partner peer review and mentoring service is discounted for subscribers. Give us a ring.

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