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INSIDER JUNE 2019

Tax Insider l

Included in this month’s issue:

– SMALL BUSINESS OWNERS HIT OUT AT ‘UNFAIR’ UK TAX SYSTEM
– RETIREES TAXED £4BN MORE THAN PREVIOUSLY THOUGHT
– GOVT. URGED TO INTRODUCE STAMP DUTY TAX BREAK FOR DOWNSIZING
– CBI: ‘UNSUSTAINABLE’ BUSINESS RATES SYSTEM IN NEED OF REFORM

Click here for the full article.

TAX IMPLICATIONS OF WORKING FROM HOME

Tax l

Working from home offers all kinds of benefits, from the opportunity to create the perfect environment in which you can be most productive, to the improvements to work-life balance that come with ditching the commute.

THE SCOURGE OF LATE PAYMENTS

Budgets, Businesses l

When you supply goods and services, you expect to be paid, and promptly, but Britain has a deeply embedded culture of late payments. Indeed, for some businesses, delaying payment is an essential part of the business model.

MTD and Using Supplier Statements as Invoices

Accounting l

Digital record keeping requirements: Treatment of supplier statements or individual invoices

The Croner Taxwise VAT Advice line has received numerous calls from accountants whose clients receive large numbers of invoices from single suppliers, such as builder’s merchants or drugs companies.

VAT returns for those clients have historically been prepared based on the supplier statements ( often a monthly summary), rather than the individual invoices. However, the concern until now has been that the MTD requirement relating to digital record keeping of supplies received required each supply received to be recorded individually – an exceptionally onerous task.

The good news is that HMRC have recently updated the MTD VAT Notice 700/22, and this point is now specifically covered in paragraph 4.3.3.1. The update advises that while it remains HMRC’s view that best practice would be to digitally record the individual supplies, to manage risk of missed or duplicated entries, they accept that additional work for a business in capturing individual supplies digitally could in itself lead to data entry errors. On this basis, HMRC advise they can accept the recording of totals from a supplier statement where all the supplies on the statement relate to the same VAT period and the total VAT charged at each rate is shown. If a business does choose this option, they are also required to cross-reference all supplies on the supplier statement to invoices received, but HMRC go on to confirm this can be done outside of the digital records.

Link to Notice 700/22

VQOTW: DEREGISTERING WHERE THE TRADING PREMISES HAS BEEN OPTED UNNECESSARILY

VAT l

My client is a small independent retailer selling mobile phones and accessories, with turnover below the VAT registration threshold. Last year, in September 2018, they bought the premises they were occupying from their landlord. The landlord had opted to tax and the purchase price was £100,000 plus VAT. In order to recover the VAT, the client VAT registered and notified their own option to tax. The client’s turnover has remained below the threshold, and they have asked me whether they can deregister, and what the consequences of that would be.

TQOTW: CAPITAL GAINS

Tax l

My client owns a joint share in the freehold of a building which consists of five flats. One of the flats is occupied by my client under a 999-year lease.
The freeholders are to grant a new long lease over another flat in the building. My client understands that this will be a capital gains disposal event, but has queried whether a measure of principal private residence relief would be due to him, given that the disposal is out of the freehold interest he owns that includes his main residence.

Can you please confirm how to approach my client’s capital gains position, whether any main residence relief would be due to him in these circumstances and how this would be calculated?

VQOTW: PRIVATE TUITION

VAT l

My client is a Limited Company and runs a swim school, teaching children. The client’s turnover is close to £85,000. I would like to confirm that my client is making exempt supplies of education and therefore does not need to VAT register.

TQOTW: PROFESSIONAL FEES

Tax l

My clients have inquired about the possibility of claiming relief for expenses incurred in connection with closing down their company. In particular, they would like to know whether they could get tax relief for professional advice that they have taken and whether they can arrange for the company to make pension contributions on behalf of employees.

HR EXPERT: JURY SERVICE

HR l

My client has been informed by an employee that they have been summoned to attend jury service, what are the rules around this?

VQOTW: HOME OFFICE

VAT l

My client is the director of an interior design company. The company rents a small unit for storing stock, but this space is not really suitable for use as an office. She is exploring the possibility of having a home-office erected in her garden. Could you please advise on the VAT recoverability of such a project?

VQOTW: FLAT RATE PRE-REGISTRATION VAT

VAT l

My client is about to register for VAT and wants to use the flat rate scheme as she meets the conditions and it would be beneficial to her. However, her intention is to register for normal VAT initially, in order to recover pre-registration input tax, and then after the first return has been filed, switch to the flat rate scheme. Is this acceptable or will HMRC challenge it?

Tax Insider May 2019

Tax Insider l

Included in this months issue:
– MPs call for break-up of big four’s accountancy services
– HMRC announces delay to probate fee increase
– Landlords feeling the pinch as tax measures begin to bite
– First VAT-registered businesses enter into making tax digital

Read the full article here.

ACCOUNTING FOR CHARITIES

Accounting l

If you’re in charge of running a charity, you’ll know how it differs from operating a business and how its motives and goals vary.
Non-profit organisations are treated very differently under the law, and managing a charity’s accounts can offer some unique challenges as a result.

Read the full article here.

RISK ASSESSMENT AND CONTINGENCY PLANNING

Businesses l

It has been a challenging and eventful three years for UK businesses with a series of high-profile incidents highlighting how situations can change suddenly and often without warning.
From the continued pressure of uncertainty relating to Brexit, terrorism, fire, extreme weather and cyber-attacks, how would your business cope if it was affected by something similar?

Read the full article here.

VQOTW: MTD AND CASH ACCOUNTING

VAT l

My client is a wedding and party planner, and is compulsorily VAT registered operating the cash accounting scheme. Their current system is not particularly sophisticated and they only operate using a manual cashbook. I am in the process of ensuring they are MTD compliant for their 07/19 return, but want to keep things as simple as possible for them. Can they continue to operate a cashbook in a spreadsheet format and submit via bridging software?

VQOTW: 28 DAY RULE

VAT l

My client runs a small bed and breakfast and a furnished apartment which to date has been let on an Airbnb basis with a daily linen change and cleaning service. Normally she would account for VAT on all of these stays. Now she has received an enquiry from a construction company about exclusive use of both for a period of 12 months to house some of its employees working away from home. Should she still charge VAT?

VQOTW: INPUT TAX ON RE-REGISTERING FOR VAT

VAT l

My client is a bathroom fitter and was VAT registered from January 2017 to March 2018 as he had a contract with a large developer to fit en-suites into new-build dwellings. His supplies were mostly zero-rated and he received repayments of VAT from HMRC. He bought a new commercial vehicle and specialist tooling in August 2016 on which he recovered the VAT as pre-registration input tax. On his final return, for the tax period ending 31st March 2018, he accounted for VAT on all the assets and stock on hand as a deemed supply.

TQOTW: PPR – SELLING NOW OR DELAYING

Tax l

This question is based on a call to the Advice Lines where a client never had the intention to be a landlord for very long. He had fallen into those circumstances because it had been difficult to find a buyer for his property when he moved home – not an uncommon situation. His hesitation to sell the property once the market improved resulted purely from the mortgage redemption fee that would be triggered.

TQOTW: ENTREPRENEUR’S’ RELIEF

Tax l

We recently received a question to the advice lines regarding a family company and the availability of entrepreneur’s’ relief (ER) with regard to different classes of shares in issue.
A total of 11,000 shares are in issue made up of A and B shares. Mother and father own 10,000 A shares and their adult child owns the other 1,000 B shares.

The A shares have full voting rights, full dividend and full rights on disposal of the company. The B shares have full voting rights, full dividend and no rights on disposal of the company.

HR EXPERT: WORK EXPERIENCE

HR l

My client is considering taking on a 15-year-old schoolchild for a 2-week work experience placement. What sort of things do they need to consider?

Registering For Making Tax Digital For VAT

VAT l

The moment has come: if your business has a taxable turnover above the VAT-registration threshold, which is currently £85,000, you’re now obliged to keep records in digital form and to file your VAT returns using HMRC-approved software.

Tax Insider April 2019

Tax, Tax Insider l

Included in this month’s article:
– GOVERNMENT CONSULTS ON NEW STAMP DUTY SURCHARGE
– THOUSANDS FACE HUGE TAX AVOIDANCE BILLS
– MINISTERS GIVE THUMBS-UP FOR PROBATE REVAMP
– APPRENTICESHIP ‘STARTS’ FALL BY A QUARTER

April 2019, Personal Tax Planning

Personal Tax l

With the Brexit process rumbling on, Making Tax Digital finally coming into force, and Easter around the corner, now is the time to put your financial plans in place for 2019/20.

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