VQOTW: HOME OFFICE

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?
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VQOTW: FLAT RATE PRE-REGISTRATION VAT

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?
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May 2019 Tax Insider

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.

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ACCOUNTING FOR CHARITIES

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.

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RISK ASSESSMENT AND CONTINGENCY PLANNING

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.

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VQOTW: MTD AND CASH ACCOUNTING

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?
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VQOTW: 28 DAY RULE

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?
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VQOTW: INPUT TAX ON RE-REGISTERING FOR VAT

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.
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TQOTW: PPR – SELLING NOW OR DELAYING

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.
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TQOTW: ENTREPRENEUR’S’ RELIEF

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. (more…)

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Registering For Making Tax Digital For VAT

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. (more…)

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April 2019 Tax Insider

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
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Landlord Tax Changes – updated for 2019

Recent budgets have seen several significant changes to the taxation of income from letting out residential property. These changes are likely to impact on the taxation of all current property landlords, as well as future decisions as to whether to remain or become a landlord. (more…)

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VQOTW: BUILDING MATERIALS

My client is a builders’ merchant and has supplied steel sheets to a customer who is building his own home. The customer has provided my client with a copy of the planning consent supporting the demolition of an existing property and the construction of a new dwelling. Can my client zero-rate the supply of the steel?
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TQOTW: DEEMED DOMICILE & AUTOMATIC REMITTANCE

My client is a long-term resident of the UK for tax purposes. However, she is non-domiciled and has been using the remittance basis for her foreign income as it is below £2,000. As she will now have been here for 15 of the previous 20 tax years, will she be caught by the Deemed Domicile rules?
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VQOTW: CHARITY FUNDRAISING

Over the last few years, my client and a couple of his friends have run a small local beer and cider festival; any profits they make are given to local charities. They sell a few tickets in advance and have sponsorship/advertising income, but most sales occur on the day of the event. In the last few years, they have been below the VAT registration threshold, but with the number of people attending increasing year on year and the wonderful summer we had in 2018, they did exceed the VAT registration threshold by £800. As all the profits are donated to charity, can the client benefit from the charity fundraising exemption?
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HR EXPERT: CHANGE IN NMW

My client is wary of the new National Minimum Wage rates that will come into effect from 1st April. What things do they need to consider from an employment law perspective?
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TQOTW: Irrecoverable Loans

My client has made a directors loan to his personal company (he is the majority shareholder) which now cannot be repaid. Is there a loss for CGT and if so, is it a ‘clogged loss?’
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TQOTW: Electric Car Charging

My client is an expanding local mobile care business and they are increasingly aware of the pollution that cars emit into the environment. With this in mind, they have been asked by their team whether they can look at changing the company cars to hybrid or electric cars and whether there are any incentives to do so.

Here we look at some of the recent changes and existing exemptions that may help them to make their minds up. (more…)

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HR Expert: Personal Hygiene

My client has received a number of complaints from customers and staff about the personal hygiene of one of their employees. As this is a sensitive topic how should they go about addressing this with the individual? (more…)

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The politics of tax breaks

If there’s one thing accountants love, it’s identifying obscure tax reliefs to which you may be entitled and using them to reduce your tax bills.

Tax reliefs, or tax breaks as they are sometimes called, aren’t without controversy, however. There are too many of them, say critics, and they deny the public purse much-needed funds.

Read the full aeticle here.

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VQOTW: ONLINE TRADERS SELLING TO GERMANY USING AMAZON

My client is an online retailer, selling through Amazon and other online marketplaces. They have recently received correspondence from Amazon with regard to the online sales they make to customers in Germany. It appears that Amazon is insisting that my client must VAT register in Germany if they want to continue to sell to German customers via Amazon. Can you advise what has prompted this action?
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TQOTW: SELF-ASSESSMENT PENALTIES

Now that the self-assessment filing date of 31 January has passed once again, I would like to be able to understand and explain to clients the penalty regime that will apply if their returns have not been filed on time.
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February 2019 Tax Insider

Included in this months issue:

– Auto-enrolment fines rise 146%
– Dual-registration service passes 200,000 milestone
– Partners hit by avoidable ISA tax charge
– Think tank proposes tax changes to save £7bn (more…)

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Changes to Probate in 2019

From April 2019, some estates in England and Wales could be required to pay almost £6,000 for a service that currently costs less than 4% of that amount.

This is because of a proposed change to the fees families must pay to administer the estate of someone who has died. (more…)

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The Risks of a Tax Investigation

It’s a fact – humans are bad at assessing risk. We’re terrified of things that rarely happen (plane crashes, power station meltdowns) but relatively blasé about things that are statistically more likely to harm us, such as unwashed lettuce.

The likelihood of HMRC swooping to investigate your business’s tax affairs seems to be a particularly difficult risk to quantify. (more…)

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VQOTW: CHANGE IN POLICY FOR RETAINED DEPOSITS

My client and her husband run a boutique hotel in partnership. Due to the location and quirky nature of the décor, they are increasingly getting requests to host celebrations and parties in addition to overnight accommodation. As the financial outlay in preparing and staging the events can be quite considerable, the client asks for a 25% deposit up-front, which is non-refundable if the event is cancelled. Please, could you advise on the VAT treatment and time of supply implications of these deposit payments? (more…)

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VAT Question of the Week: Input VAT – Too Late to Claim?

My client has been approached by a builder, who carried out repair work to the client’s factory some years ago. The builder was late registering for VAT and is now looking to issue VAT only invoices to my client for the supplies in question. I have several concerns: is the supplier liable to account for the VAT if the supplies were made more than 4 years ago? Is my client obliged to pay and if so can he now recover the VAT given that the original invoices were dated more than 4 years ago?
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Tax Question of the Week: Property Swap

Jack and Jill jointly own two investment properties and wish to swap their interests so that they each have ownership of one of the properties. As tenants in common they currently equally own Cornfield with a market value of £210,000 and the original cost of £50,000 and Wheatfield with a market value of £200,000 and the original cost of £49,000. Jack is to have Cornfield and Jill is to have Wheatfield. What are the CGT and SDLT implications?
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