This edition includes articles on the new rules for capital gains tax on property and the shake-up to IR35 rules.
The Summer edition leads on changes to VAT for the construction sector and an article on the potential advantages of deferring your state pension.
The May edition details the changes to Entrepreneurs' Relief and the potential pitfalls when claiming Capital Allowances on some assets.
The Spring edition of the newsletter highlights changes to IR35 and capital allowances
This edition looks at VAT in the food sector and features an article on Inheritance Tax.
Making Tax Digital is on the horizon and this edition gives an overview of the changes.
Former BBC presenter Christa Ackroyd has lost her appeal against a ruling that she was an employee, not a freelance contractor, when she worked for the BBC via a personal service company.
The IR35 rules in broad terms mean that those working via a personal service company have to consider whether, if the services were provided by the individual contractor directly to the client, there would be a contract of employment.
Judges in the Upper Tier Tribunal upheld last year's First Tier Tribunal ruling that she was a BBC employee when she presented Look North in Yorkshire and was therefore liable to pay income tax and national insurance contributions.
The case related to the tax years 2006/07 to 2012/13, while she worked for the public broadcaster through her personal service company, Christa Ackroyd Media (CAM).
HMRC argued that she owed almost £420,000 in income tax and national insurance contributions, before corporation tax deductions. An HMRC spokesperson said they welcomed the judgment that the presenter was within the intermediary rules.
'Employment status is never a matter of choice; it is always dictated by the facts and when the wrong tax is being paid, we put things right.
It is right that an individual who works through a company, but would have been an employee if they were taken on directly, pays broadly the same amount of tax and national insurance contributions as employees.'
The IR35 rules were amended for Public Bodies (including the BBC) from April 2017 and the government will make similar changes for the private sector from April 2020.
HMRC says it is clamping down on the promoters and enablers of tax avoidance schemes in the wake of the loan charge controversy.
Penny Ciniewicz, Director General of Customer Compliance at HMRC, told the Treasury Select Committee that HMRC is 'doubling the resources' to tackle those in the 'avoidance supply chain'.
In response to questions about the loan charge, Ms Ciniewicz said:
'We have more than 100 current investigations into promoters [and enablers], and we're keeping a very close eye on the market for avoidance. We are spotting schemes as they emerge and we're tackling them.'
The loan charge policy is currently subject to an independent review. It came into effect on 6 April this year, and applies to anyone who used 'disguised remuneration' schemes. The legislation added a 45% non-refundable charge on all loans advanced through the schemes, unless the individual had agreed with HMRC to settle their tax affairs.
Internet link: ICAEW news
The government has abandoned its planned increase in probate fees. The increase in fees was originally expected to take effect from 1 April 2019. However, in March 2019 HMRC postponed the introduction of the increase, attributing the delay to pressure on Parliamentary time.
As part of the government's plans, estates that are valued between £50,000 and £300,000 would have been subject to a probate fee of £250. Fees were to rise thereafter to reach £6,000 for estates with a value above £2 million.
Currently, for estates valued at over £5,000, a grant application made by a solicitor is subject to a flat fee of £155. A grant application made by an individual is subject to a fee of £215.
The increase was included in a statutory instrument (SI) however the SI fell away on the prorogation of Parliament in September, but was reinstated when the prorogation was declared illegal.
The government has now announced that the planned increase will not take place. Instead there will be a review of court costs and how they can be covered by the actual service required.
Probate fees apply in in England and Wales.
Internet link: ICAEW post
According to a report published by the Charity Commision, the majority of UK charities admit fraud is a major risk, but are still failing to carry out basic tasks in order to protect themselves.
More than 3,300 charities took part in the Charity Commission's survey into fraud awareness, resilience and cyber security in the sector. Over two thirds of charities agree that fraud is a significant risk. Insider fraud is recognised as one of the biggest threats, the report stated.
The survey found that 85% of charities think they are doing everything they can to prevent fraud, but almost half do not have robust protections in place.
The Commission recommended some simple steps that charities could take to protect their funds, including introducing and enforcing basic financial controls. They should also make sure no single individual has oversight or control of financial arrangements, as effective segregation of duties is a crucial method of preventing and detecting fraud.
The Commission also recommends that employees, volunteers and trustees should be encouraged to speak out when they see something they feel uncomfortable about.
Internet link: GOV.UK news
HMRC has published the October 2019 issue of the Employer Bulletin which contains guidance on a number of issues relevant for employers. Topics in this edition include:
If you would like help with payroll matters please contact us.
Internet link: GOV.UK employer-bulletin-october-2019
With less than 100 days until the self assessment tax return deadline of 31 January 2020, HMRC is urging taxpayers to complete their tax returns early, in order to avoid the last minute rush.
HMRC report that last year more than 2,000 people submitted their tax returns on Christmas Day. Taxpayers should consider submitting their returns early to avoid the stress of a last minute rush.
Angela MacDonald, HMRC's Director General for Customer Services, said:
'The deadline for completing Self Assessment tax returns is only 100 days away, yet, so many of us wait until January to start the process. Avoid the last minute rush by completing your tax returns on time and then enjoy the upcoming festive period.
We want to help people get their tax returns right – starting the process early and giving yourself time to gather all the information you need will help avoid that stressful, late rush to file.'
Not all taxpayers need to complete a tax return as tax is automatically deducted from the majority of UK taxpayers' wages, pensions or savings. For people or businesses where tax is not automatically deducted, or when they may have earned additional untaxed income, they are required to complete a Self Assessment tax return each year.
HMRC is also reminding people who are liable for the High Income Child Benefit Charge that they may need to file a tax return before the deadline. Those with income over £50,000 who receive child benefit, or those whose partner gets it, are liable for the charge. Taxpayers can check their annual income via their P60 or Personal Tax Account, and use HMRC's child benefit tax calculator.
The deadline for filing paper tax returns was 31 October 2019 and the deadline for online tax returns and paying any tax owed is 31 January 2020. If taxpayers miss the deadline, they face a minimum £100 penalty for late submission.
Contact us for help with your self assessment tax return.
Internet link: GOV.UK news
HMRC has updated their guidance on how to recognise when contact from HMRC is genuine and how to recognise phishing or bogus emails and text messages.
Internet link: GOV.UK recognising phishing emails
HMRC has announced a one-year delay to the introduction of the VAT domestic reverse charge for building and construction services.
The reverse charge represents part of a government clamp-down on VAT fraud. According to the government, large amounts of VAT are lost through 'missing trader' fraud. As part of missing trader fraud, VAT is charged by a supplier, who then disappears, along with the output tax. The VAT is thus lost to HMRC. The construction industry is considered a particularly high-risk sector.
The reverse charge when introduced will not change the VAT liability but instead it will change the way that VAT is accounted for. In the future, the recipient of the services, rather than the supplier, will account for VAT on specified building and construction services. This is called a reverse charge. The reverse charge is a business-to-business charge, applying to VAT-registered businesses where payments are required to be reported through the Construction Industry Scheme (CIS).
The charge was due to come into effect on 1 October 2019. It has now been delayed by 12 months until 1 October 2020 due to fears that businesses in the construction sector were not ready.
HMRC says it remains 'committed to the introduction of the reverse charge', and has put a robust compliance strategy into place in order to tackle fraud in the construction sector.
Internet link: GOV.UK revenue and customs brief
The government has initiated a review of the Loan Charge and whether the policy is an appropriate way of dealing with disguised remuneration loan schemes used by individuals who entered directly into these schemes to avoid paying tax.
Sir Amyas Morse, the former Comptroller and Auditor General and Chief Executive of the National Audit Office (NAO), will lead an independent review of the Loan Charge.
The government has asked Sir Amyas Morse to report back by mid-November, giving taxpayers certainty ahead of the January Self Assessment deadline.
Internet link: GOV.UK news
The government has launched a consultation on proposals to give senior NHS doctors and nurses access to more flexible pensions. The proposals aim to offer senior clinicians more control over their pensions growth.
The consultation follows reports that senior NHS clinicians pension tax charges are making them retire early or change their working habits. The Department of Health and Social Care estimates that a third of consultants and GPs may be turning down extra shifts because of how the NHS Pension Scheme interacts with the wider pension tax rules.
The new proposals are designed to allow those affected to have freedom to individually control how much their pension fund grows, allowing them to maximise the amount they can save without facing significant pension tax bills having breached limits on tax relief.
The new proposals include:
The consultation closes on 1 November 2019.
Internet link: GOV.UK news