Insights

Weekly Tax Update 6 October 2021

  • Written By: Ami Jack
  • Published: Wed, 06 Oct 2021 17:00 GMT

Tax Update provides you with a round-up of the latest tax developments. Covering matters relevant to individuals, trusts, estates and businesses, it keeps you up-to-date with tax issues that may impact you or your business. If you would like to discuss any aspect in more detail, please speak to your usual Smith & Williamson contact. Alternatively, Ami Jack can introduce you to relevant specialist tax advisors within our firm.

1. General

1.1 HMRC Making Tax Digital update for agents

HMRC has published a general update for agents on Making Tax Digital (MTD). This covers forthcoming changes and current guidance.

The update includes changes to the Agent Services account, with screenshots, research on the impact of MTD for VAT, and guidance on the MTD for income tax self-assessment pilot.

www.tax.org.uk/making-tax-digital-update-for-agents-september-2021

2. Private client

2.1 Tax return processing delays for sole traders who received COVID-19 support

Some taxpayers who made claims under the Self Employment Income Support scheme (SEISS) may experience a delay in their returns being processed by HMRC.

HMRC has announced that, where 2020-21 returns have reported SEISS income in a way HMRC did not expect, taxpayers may see a delay in processing. It has now processed returns in this category submitted up to 19 June, and continues to work on the backlog. Some amendments submitted before this date are still awaiting processing, but HMRC expects to deal with them in the first week of October.

www.att.org.uk/technical/news/delays-processing-2020-21-self-assessment-tax-returns

2.2 Taxpayer loses appeal on NIC liability

The UT agreed with the FTT that payments made by an LLP to a member were made to him as a member, not an employee, so subject to self-employed NICs for which he was liable. The documents appointing him as a member of the LLP determined the tax treatment.

The taxpayer, who had been appointed as a member of an LLP, held that payments from the LLP were made to him as an employee rather than under the partnership profit sharing arrangement. The IT treatment was to be resolved separately, but he lost his appeal to the FTT that payments were made to him not as an LLP member, but as an employee, for NIC purposes. Liability for deducting NICs for employees lies with the employer, but the self-employed must pay their own.

The taxpayer appealed to the UT on the grounds that the FTT had mischaracterised his relationship with the LLP, and made errors in law. The UT considered the details of his appointment to the LLP and the documents signed by him at that time. It found that the FTT had not erred in law, and agreed with it that the correct characterisation of the taxpayer’s relationship with the LLP was that he was a member. Looking at the facts as a whole he was carrying on a business in common with the other LLP members with a view to profit. The appeal was dismissed.

Wilson v HMRC [2021] UKUT 0239 (TCC

www.gov.uk/tax-and-chancery-tribunal-decisions/peter-wilson-v-the-commissioners-for-hm-revenue-and-customs-2021-ukut-0239-tcc

3. Tax publications and webinars

3.1 Tax publications

The following Tax publications have been published.

Navigating tax changes for non-resident companies owning UK residential property

3.2 Tax podcasts

The following Tax podcasts are available now.

Offshore companies owning UK residential property

3.3 Webinars

The following client webinars are coming up over the next month.

13 October 2021: S&W Sessions: Tax Technology – how technology facilitates our personal and working lifestyle

https://smithandwilliamson.com/en/events/

4. And finally

4.1 Dig, dig, dig

Snow White’s singing dwarf friends came to mind this week when we read an article that led us to stare, if not into the abyss, then at least into the mine.
The Mayor of Miami was understandably delighted with a project that has already generated millions of dollars for the city: citizens mining cryptocurrency and sharing 30 per cent. of the new cryptocurrency they created with the municipality. The mayor speculated over this creating the possibility of running a government without citizens having to pay taxes. Our world reeled.

Not quite. The citizens may not pay tax, but they have to labour for it; not with a shovel and a pick, but with a hot computer. We’ve been here before. Regular readers will recall that we mooted the revival of the feudal tax of corvée as a Budget proposal back in May 2017. Corvée was, broadly, a tax that was met in the form of unpaid labour for the state. That’s what this is: it’s feudal cyber taxation. What an And finally result!
Heigh ho, heigh ho. It’s off to work we go!

www.washingtonpost.com/technology/2021/09/30/crypto-miamicoin/

View previous tax update

Ref: NTAJ14102192

Glossary

Organisations   Courts Taxes etc  
ATT – Association of Tax Technicians ICAEW - The Institute of Chartered Accountants in England and Wales CA – Court of Appeal ATED – Annual Tax on Enveloped Dwellings NIC – National Insurance Contribution
CIOT – Chartered Institute of Taxation ICAS - The Institute of Chartered Accountants of Scotland CJEU - Court of Justice of the European Union CGT – Capital Gains Tax PAYE – Pay As You Earn
EU – European Union OECD - Organisation for Economic Co-operation and Development FTT – First-tier Tribunal CT – Corporation Tax R&D – Research & Development
EC – European Commission OTS – Office of Tax Simplification HC – High Court IHT – Inheritance Tax SDLT – Stamp Duty Land Tax
HMRC – HM Revenue & Customs RS – Revenue Scotland SC – Supreme Court IT – Income Tax VAT – Value Added Tax
HMT – HM Treasury   UT – Upper Tribunal    

 

 

 

DISCLAIMER
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

 

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