The main tax news item from an otherwise fairly quiet September is the announcement that the date of this year’s Budget is Monday 29 October.
Here is our summary of the other tax news items and announcements from September which we believe will be of most interest to our readers.
Venture Capital Schemes
The HMRC guidance Use a venture capital scheme to raise money for your company has been updated. It includes details of how the various schemes (Enterprise Investment Scheme, Seed Enterprise Investment Scheme, Social Investment Tax Relief and Venture Capital Trusts) work, who can apply and the tax reliefs available.
There is also more detailed updated guidance on the Enterprise Investment Scheme here.
Class 2 National Insurance
The proposed abolition of Class 2 national insurance contributions has been postponed until a date, yet to announce, after the end of the current parliament.
The stated reason for the postponement is to allow the Government more time to consider the impact on the State Pensions due to self-employed individuals with low profits.
Other proposed changes to the national insurance regime, such as termination payments and sporting testimonials are expected to proceed as originally planned.
The HMRC App
HMRC have announced changes to the ‘Help to Save’ content of the HMRC app.
The app enables taxpayers to (amongst other things) renew tax credits, see estimates of tax liabilities and track correspondence and forms. More details and links to the Appstore for iOS and the Google Play Store for Android can be found here.
Revised guidance for employers has been issued. It explains how to set up a salary sacrifice arrangement and how to calculate the tax and national insurance contributions on the arrangements.
The guidance also includes a new email address for non-statutory clearance applications together with a reminder that HMRC will only confirm the tax and national insurance implications after the arrangements have been put in place. There is no facility for advance clearance.
TAX CASE DECISIONS
Naghshineh  UKFTT 0453 (TC) – Farming losses
The taxpayer acquired a farm business in 1995 and suffered losses each year until 2012-13. The Tribunal was asked to consider whether the special rules for restrictions on farm losses for income tax purposes should apply. The taxpayer won his case largely due to the influence of the written and oral evidence of an expert witness. Although the particular facts of the case will not necessarily create any kind of precedent, the case does demonstrate how effective the introduction of expert evidence can be.
Soleimani-Mafi  UKFTT 0451 (TC) – Penalties
In a decision which seems unduly harsh and out of step with previous decisions, the Tribunal decided that failure to seek professional advice on the tax implications of a declaration of trust can amount to deliberate behaviour for penalty purposes.
George  UKFTT 0509 (TC) – Entrepreneurs’ relief
Mr. George owned 6.9% of the ordinary share capital of a company but the shares had no voting rights. He was promised voting rights in February 2012 but the necessary resolutions were not carried until January 2013. The company was sold in August 2013. The Tribunal decided that any voting rights or right to acquire voting rights owned by Mr. George did not meet the qualifying condition for entrepreneurs’ relief purposes that the voting rights were by virtue of the holding of shares.
Commercial Software for MTD
HMRC’s list of MTD software suppliers published in January this year has been updated. This covers software suppliers not just for VAT returns but for EC sales list submission too.
Making Tax Digital: How VAT Businesses and Other VAT Entities Can Get Ready
HMRC’s latest publication on 17 September covers the use of spreadsheets, bridging software and a link to the latest list of MTD software providers.
Letters on ‘no deal’ Brexit Advice for Businesses only Trading with the EU
HMRC had released two letters, one for businesses in the UK excluding Northern Ireland and one specifically for Northern Ireland. They discuss the situation for businesses trading only within the EU if we leave without a deal.
Digital services to consumers – Proposed legislative changes
HMRC has released two changes, although still in draft form, to digital services by businesses to consumers.
The first introduces a threshold of €10,000 relating to sales to the EU which would allow businesses that do not breach this threshold to account for UK VAT on the relevant sales rather than accounting for sales in all the relevant states.
The second will allow certain non-EU VAT registered businesses which are registered for other reasons to use the MOSS scheme on sales of digital services to consumers in the EU member states.
Revenue and Customs Brief 9 (2018) VAT
Damp proofing products – Remember that the changes in policy regarding damp proofing products described in this brief came into effect in September. This prevents the reduced rate under ‘energy saving materials’ being applied to damp proofing treatments for dwellings.
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