VQOTW: FINANCIAL INTERMEDIARIES

My client is an independent mortgage advisor, who is not VAT registered. Her turnover is above £85,000 and all of her income is either commission, which is paid by UK lenders, and flat fees received from customers seeking a mortgage. (more…)

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VQOTW: RENOVATION OF AN EMPTY DWELLING

My client recently purchased an empty 3 bedroom bungalow that hasn’t been lived in for 4 years. He intends to spend £30k extending and refurbishing the property into a 4 bedroom house, which he and his family will move in to. (more…)

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VQOTW: MARGIN SCHEME

My client is a car dealer and operates the margin scheme. He has purchased a classic car which is a collectors’ item and has imported the car into the UK from the US. I understand that the car was involved in some historic event in the US. My client has been told that he can sell the car at the reduced rate of 5%. Is this correct?
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HR EXPERT: SEVERE WEATHER

My client had to close down work for two days last week due to impact of flooding caused by the severe weather. Do they have to pay staff who were scheduled to work on these days?
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VQOTW: QUALIFYING CARS

My client purchased a car for use in her business, which the dealer said was a qualifying car. My client took this to mean that she can recover the VAT but I disagree. Obviously my view has not gone down well with the client, but am I correct?
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VQOTW: PROPERTIES ON HAND AT DEREGISTRATION

One of my clients deregistered recently and has now received a letter from HMRC asking about a property that he bought four years ago for £150,000 and opted to tax. Although there was no VAT chargeable on the purchase, the property was empty at the time and in quite a poor condition as the seller was reluctant to spend money on it, so my client also spent £100,000 doing it up ready to let out. He opted to tax so that he would be able to recover the VAT on this refurbishment, and until deregistering has charged VAT on the rent. What does he need to do? As he has already cancelled his registration is he going to receive a huge assessment? The property is now worth around £300,000.
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THE NUMEROUS QUIRKS AND FOIBLES OF VAT

Are Jaffa Cakes biscuits or, as the name implies, cakes?
This question is one of the most famous examples of the kind of debate that happens frequently in the world of VAT because precise definitions can make the difference between sink or swim for businesses that sell the products under discussion. (more…)

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RESIDENCE AND DOMICILE

For most people living in the UK, the question of what income and gains should be included on their tax return is an easily answered question because they are both UK-domiciled and UK tax resident. Anyone domiciled and resident in the UK needs to report their worldwide income and capital gains on their return. (more…)

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September 2019 Tax Insider

Included in this months issue:

– Treasury to review tapered annual allowance as dispute rumbles on
– Retailers unite in call for business rates solution
– Javid ‘to broaden the apprenticeship levy into a wider skills levy’
– Reverse charge VAT for builders delayed for 12 months

Click here to read the article

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HR EXPERT: REASONABLE ADJUSTMENTS

My client has an employee who has just been diagnosed with multiple sclerosis and is concerned about the cost of making reasonable adjustments. Can they refuse to make adjustments because it would cost too much? (more…)

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VQOTW: ENERGY SAVING MATERIALS

My client is planning major renovations to her home to make it more “eco-friendly”. This will involve the installation of a number of energy-saving materials such as solar panels, insulation, and an air source pump to provide both heating and cooling functions. However, she has heard there are imminent changes to the VAT treatment of such supplies and is concerned she may miss out on current VAT reliefs. Please could you clarify? (more…)

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VQOTW: REVERSE CHARGE SERVICES FROM OVERSEAS

My client is an insurance company, they are VAT registered and partially exempt (85% exempt/15% taxable). They have invested £200,000 in bespoke computer software. The software was written for them by an Israeli company, who are renowned leaders in software security. HMRC have recently inspected the insurance business and made an assessment of £34,000. My client is confused as to how they have a VAT assessment on an invoice that didn’t even have any VAT on it. (more…)

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VQOTW: CULTURAL ADMISSIONS

My client is an amateur dramatic society operating via a company limited by guarantee. They own their own premises and charge admissions to their productions. The admissions have grown to £80,000 in the last 12 months, and alongside this income, they have £20,000 from bar sales and they also occasionally perform at other theatres. They don’t control the box office for these performances at other theatres; instead, they are paid a fixed fee by the theatre for performing, and income from this is £10,000. As their total sales are now £110,000 for the last 12 months, I’m assuming they have to register for VAT? (more…)

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VQOTW: DOMESTIC REVERSE CHARGES

I have recently been reading up about the domestic reverse charge for construction services which comes in in October 2019, including the helpful VQOTW (14 June 2019), but this has got me wondering whether there are any other reverse charges in the UK I should be aware of, and why they are increasingly being used by HMRC? (more…)

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TQOTW: SHARE REDUCTION

My client originally subscribed for 50,000 £1 shares when he set up his company. He now feels that the company is over capitalised and would like to return some of the share capital back to himself. He wonders whether the company could enter into a share buy-back or alternatively perhaps he could simply cancel some of the shares and receive the original capital. (more…)

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HMRC Enquiries: Private Residence Relief Problems

One of our clients contacted us to request assistance on a Private Residence Relief (PRR) case.

The client was a wealthy entrepreneur who had dabbled in the property development business and HMRC was now seeking to disallow PRR on the sale of their current home – not only because it was a substantially redeveloped property, but also because the property had an additional stretch of land attached to it which meant that the total area sold was over half a hectare. (more…)

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CONSTRUCTION INDUSTRY SCHEME

And upcoming changes for reverse charge VAT.
Few sectors have such an impact in the UK as the construction industry. It not only provides the fabric of our nation – the places where we live and work – but also underpins our entire economy. (more…)

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August 2019 Tax Insider

Included in this months issue:
– Demand for digital skills among businesses tipped to ‘skyrocket’
– Businesses urged to inform staff of tax-free childcare
– Rules on gifts made to loved ones should be simplified, says the OTS
– Treasury urged to rethink buy-to-let crackdown

Click here to read the article

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Tax Relief Webinar | Misconceptions Debunked

Following on from our recent webinar where we looked at a general overview of R&D, Capital Allowances and Patent Box Tax Reliefs, the next in our series of webinars will delve deeper into each relieves and as the title suggests, debunk some of the most common misconceptions. (more…)

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TQOTW: ENTREPRENEURS RELIEF FOR NEW INCORPORATIONS

I understand that Entrepreneurs Relief is now given for new incorporations so that, on incorporation, an existing sole trader would immediately meet the qualifying conditions even though they would not have owned shares in a qualifying company for a sufficient period. Is this correct?
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TQOTW: DATE OF SEPARATION FOR CGT

Jack and Jill started living apart in November 2018 but there was then no contemplation of a divorce. In May 2019 they discussed their situation and at that point in time decided to get divorced. They agreed to get divorced in January 2020. (more…)

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VQOTW: DISTANCE SELLING IN THE EU

My client is a small retailer specialising in bespoke leather goods, and all sales to date have been within the UK. In order to expand her customer base, she is launching a website and planning to sell through Amazon. Are there any VAT consequences she needs to consider?
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IDENTIFYING INEFFICIENCIES IN A BUSINESS

Accountants, as a breed, are fans of efficiency. We tend to appreciate optimised systems and abhor waste, whether it’s time, effort or resources being frittered away.
The concept of efficiency as we know it today is a product of the industrial revolution. That’s when engineers and manufacturers became obsessed with squeezing out maximum profit by the smart use of new machinery and the automation of processes.

Click here to read the full article.

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TAX IMPLICATIONS OF WORKING FROM HOME

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. (more…)

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MTD and Using Supplier Statements as Invoices

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. (more…)

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VQOTW: DEREGISTERING WHERE THE TRADING PREMISES HAS BEEN OPTED UNNECESSARILY

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.
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TQOTW: CAPITAL GAINS

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? (more…)

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VQOTW: PRIVATE TUITION

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.
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TQOTW: PROFESSIONAL FEES

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.
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