Employing Artificial Intelligence to answer questions with your data
HMRC have made almost 40 updates to their Check Employment Status for Tax (CEST) tool this month to make it ‘clearer, reduce user error and consider more detailed information’ by including and making changes to around 30 questions. HMRC have announced that they will uphold a result the tool provides; as long as the information input into the tool is accurate, and that it is the only tool they will do this for. Consequently, this has left many businesses thinking that they need to use CEST in order for HMRC to stand by the outcome.
Over the years the UK has continued to drive towards a more competitive Corporate Tax (CT) regime. This has been achieved by various means, including lowering the headline rate to 17% from April 2020, which will be amongst the lowest rates of the G20 countries. Compare this to a rate of 28% from a decade ago, it is encouraging for foreign investors! In addition, the UK has generous tax incentives to encourage UK innovation in the form of Research & Development and Patent Box Relief. There have also been changes in the legislation designed to encourage utilising the UK as a “Holding Company” location, including some relaxations to the Substantial Shareholdings Exemption (SSE) legislation which in many cases now makes it easier for UK Holding companies to obtain CT relief when selling subsidiaries, and other investments.
Research and Development (“R&D”) tax relief is a government initiative to support businesses investing in innovative activities. There are two R&D tax relief schemes that companies can claim under – the SME scheme and the large company or RDEC scheme. Both are beneficial to companies in either reducing a tax liability or creating a payable tax credit.
No longer content with targeting landlords directly for any unpaid tax, HMRC have now decided to change tactics, and instead issue letters to individual tenants, quizzing them on the tax status of their landlords. The aim is to establish whether rental income has been correctly declared, and tax has been paid, in cases where they think the property is owned by an overseas landlord, company or trust.
Whether your business was one of the majority of VAT registered businesses required to file via HMRC’s new MTD platform with effect from 1 April 2019, or you were granted a deferral until 1 October, the first phase of Making Tax Digital (“MTD”) is now a reality for all businesses. This first phase, digital submission, was the easy bit... provided that you had functional compatible software or had access to a bridging solution, submission of the 9 box VAT return information to HMRC was straight forward.