r
_

Tip of the day

High Dividends Brings IR35 Risk

In one of those Public Accounts Committee circus events, it has emerged that HMRC monitor dividend levels as part of their IR35 policing. The inference is that if you have a company and you take a large proportion of your company’s turnover by way of dividend, you may be working for one company and be liable […]

Read more

RTI Concession Announced for the Smallest Employers

Categorised by HMRC as micro employers, any with less than 10 employees are going to have ‘soft’ Real Time Information (RTI) reporting until the beginning of the 2016/17 tax year. Don’t get too excited, you are not let off. Instead of sending a return in every time you pay someone, micro employers will be able […]

Read more

Autumn Statement 2013 – Politics Suggest 2014 Should be Better

There was so little in what George Osborne introduced last week.  The conclusion has to be that more will come next year, which is his last chance to impress us before the next general election.

Read more

Autumn Statement 2013 – Corporate Members of LLPs

Back in June, I tipped about HMRC’s plans to scupper the artificial transfer of profits and losses within LLP’s into and out of the hands of corporate members. Unsurprisingly, what started as consultation had now reached finance bill status, as announced last Thursday by our George. The transfer of ‘excessive’ profits is outlawed with immediate […]

Read more

Autumn Statement – Some Relief for Rates

He had to do something, and that’s just what George Osborne has done to give a bit of relief to those crippled by non-domestic rates. Properly targeted at small businesses and at retail, the following come in from April 2014: A cap on how rates are going to go up in the future – gee, […]

Read more

Autumn Statement 2013 – Start ‘Planning’ Now For 2015 – Part 2

In keeping with his fiscally neutral stance, George Osborne gives very little away. There has been so much media coverage about bringing back some form of married couples allowance.  Now that we know what it is, it was hardly worth the wait for the announcement and we can definitely wait for the implementation in 2015. […]

Read more

Autumn Statement 2013 – Start ‘Planning’ Now For 2015 – Part 1

The measure introduced by George Osborne on Thursday that ‘interested’ (and I use that term quite ironically) me most was the relief from employers national insurance on employees under 21. As this does not come in until April 2015, there is no point in going out and recruiting the young just yet.  In order for them to […]

Read more

Autumn Statement 2013 – The Knee Jerk

Quick reaction before I have had chance to go through all the documents released today is that there ain’t a lot there. A tad disappointing when we really need to get businesses investing, George Osborne has given us an ‘as you were’ ‘pre-budget report’ with no new announcements that are going to have any meaningful […]

Read more

Autumn Statement 2013 – PPR Changes to Watch Out For

Kind of came out of nowhere this, but it could have an impact on any capital gains on second property disposals from April 2014. This only applies when you have lived in the property at some point. Current rules, infamously exploited by MPs, allow for principal private residence relief (PPR) on the last 3 years of […]

Read more

Personal Representatives Should Notify HMRC of Date of Death

A sombre one for today, but any tip to avoid penalties is well worth stating. HMRC admin is not always great. Upon death, a self assessment tax return should be re-issued in the name of the personal representative. If the Revenue do not get this bit right, they can’t impose the penalty regime.  But only if […]

Read more

Get Your Tax Return in This Month If You Want to ‘Code Out’

Coding out is the expression used to refer to where an amount under £3000 is not paid on 31st January, but is instead collected in a future year’s PAYE coding notice. If you owe HMRC up to £3000 and you really don’t want to have to pay it this 31st January, you need to get […]

Read more

Watch the Timing of Setting Up a Direct Debit to Pay VAT

HMRC penalties make them the world’s second worst set of robbing bastards, sandwiched between solicitors and the banks. The worst penalties of all are levied on the late payment of VAT returns. In order to minimise your chances of being late, setting up a direct debit can be a prudent thing to do. Customs themselves […]

Read more

VAT and a Scary Retrospective Registration Case

A recent VAT tribunal case has found against the taxpayer and turned her into a VATpayer, as well. Our hero argued that she was merely acting as a broker or agent in introducing cleaners and tradesmen to owners of holiday lets.  If she was properly an agent, then she would not have had a contract with the […]

Read more

Get Your Tax Codes Right

This is one for anyone operating a PAYE scheme. It is your responsibility to apply the correct tax code. If you do not and you do not stop enough income tax from an employee, the Revenue will come after you in the first instance to collect the underpayment of tax.  You can then seek to […]

Read more

Are You on the List?

HMRC have finally gone and done it. One of their flagship measures to combat tax avoidance is to publicly humiliate ‘deliberate tax defaulters’ by publishing details of them and their offences on the world-wide web. I have checked and I am not on it.  Neither is anyone I know.  But if you are reading this […]

Read more

Court Confirms The Employer Pays Evaded Tax, Not Employee

A recent case saw a FTSE100 company being ordered to compensate HMRC for lost tax revenues when it had to accept that a tax scheme had failed. The employer had hoped that as it was the employees who had benefitted most from the arrangement, that it would be them that the court would instruct to […]

Read more

Terms and Conditions

If you don’t know your customers, you can’t trust them.  If you can’t trust them, you need to have terms and conditions that they subscribe to.  You may need to rely on your t’s and c’s in the case of a dispute. If you do know your customers and you trust them, why would you […]

Read more

Post-Cessation Receipts

Yesterday introduced the notion of making a late tax claim for expenses after you have stopped trading. Sadly, the other side of the coin applies in that HMRC want you to pay tax on income that comes your way even after you have packed in and gone home for good. The planning tip, here, is that […]

Read more

You’ve Got to be Able to Laugh

It really does help, you know. Business is hard.  It can be intennse.  A little bit of laughter along the way can make the difference that keeps you sane. It has just worked for me.  I spend a fair bit of time reading articles on tax.  Keeps my eye in.  Just read one that dealt […]

Read more

It’s All In The Wording

We see this so many times in tax law.  It’s not so much about what you meant to say.  It matters what you actually did say. A simple warranty in a simple purchase and sale agreement went to court with the taxpayer appealing HMRC’s decision to refuse capital gains tax relief on a warranty payment.  […]

Read more

Want to Write Off Goodwill Over a Shorter Term? Embrace the New FRSSE

Life and business is all about winners and losers. Yesterday, we saw how the new Financial Reporting Standard for Smaller Entities (FRSSE) is going to make losers out of those who want their goodwill to last and last. Today, we look at those lucky companies who are buying goodwill from a third party (or that was […]

Read more

Want to Write Goodwill Off Over a Longer Term? Beware the New FRSSE

It used to be that accounting standards allowed you to a maximum of 20 years to write goodwill off over. If you acquired goodwill from a connected person and therefore cannot claim tax relief on its write-down then your priority turns to not allowing the write-down to make a mess of your profit and loss account.  […]

Read more

Paying Out a Departing Shareholder

If you first instinct is that this needs to come from the pocket of the continuing shareholder(s), you need to be aware that Companies Act 2006 made it a lot easier for the pay-out to come from the company, itself. It used to be that you needed a court order to get permission for a company […]

Read more

Recycle Your Mortgage Through Selling Shares to Your Spouse

This is one for owners of close companies who have a mortgage but as yet have not involved your spouse in the company’s shareholding structure. As you can get tax relief on a loan taken out to buy shares in a close company, then you can swap loans about to fit. Take a loan out […]

Read more

Recycle Your Mortgage Through A Loan to Your Personal Company

No tax relief on a loan to buy your main home. Tax relief on a loan taken out to lend monies to your personal company. If you have a mortgage and your company owes you money and you are thinking about remortgageing, then have the company pay your loan back, you then pay your mortgage […]

Read more

Get Tax Relief on Your Mortgage via a Buy-to-Let

Very simple tax planning, this. No tax relief on a loan to buy your main home. Tax relief on a loan to buy a rental property. Therefore, borrow on the rental property and use the advance to invest in your main home. So long as the loan is secured on the buy-to-let, you will get […]

Read more

Tax Relief on Your Mortgage

Now that mortgages are once more becoming easier to obtain, there are a number of angles to consider if you are in business. Ordinarily, no tax relief is available on interest paid on a mortgage on your home. Over the next three days, I want to show that under some circumstances, you can play around […]

Read more

Annual Limits on Pension Contributions

HMRC have been publicising the threat of imposing tax charges on excessive pension contributions, so I thought this was a good time to revisit just how much you can put in in any one year. The limit for 2013/14 is £50,000. From 2014/15 it will be £40,000. These are subject to an overriding limit of […]

Read more

Health Professionals the Next in HMRC’s Sights

The latest in a series of ‘amnesties’ offered by the Revenue was announced today as health and wellbeing professionals (not doctors and dentists) are the new flavour of the month. This ‘amnesty’ is a campaign to collect tax in that particular trade sector. If you don’t come forward before 31st December, you will be subject to […]

Read more

Go In Prepared

In a recent tax case, HMRC defeated a claim for loss relief by a football club on the grounds that there was no expectation of profit. This is a fair enough principle.  If you are not going for profit, then you can’t profit from the resulting loss. Motive and intention are however, difficult to assess. […]

Read more

New National Minimum Wage Rates

As of today, national minimum wage rates have increased as follows: Aged 21 + £6.31 an hour Aged 18 – 20 £5.03 an hour Aged 16 – 17 £3.72 an hour  

Read more

Never send an example of your tax return to the Revenue

A recent First Tier Tribunal case highlights the dangers of writing to HMRC. The taxpayer was intending to submit an electronic tax return before the 31st January. Unsure that they had done it right, the taxpayer printed their intended submission and sent it to HMRC for them to cast their eye over and give pre-submission feedback. HMRC […]

Read more

Always Worth Arguing With HMRC

In a recent case that went before the First Tier Tribunal, we heard the story of a taxpayer who had wanted to conduct her trade through a limited company but had forgotten to set the company up before her first sale. As the company did not exist, HMRC said that it could not be said to have […]

Read more

4th September 2013 – The Day That Proving Trading Status Just Got Easier

A recent First Tier Tribunal ruled that “commerciality was not necessary to constitute a trade”. Trading status is a big thing in tax.  It can get you to lots of nice reliefs and avoid you lots of nasty taxes. In this particular case, the taxpayer was after industrial buildings allowances that are only available on […]

Read more

16th September 2013, The Day it Became Easier to Switch Banks?

From today, there is a new system to smooth the transition from one bank to another. The Payments Council has developed a framework through which the two banks will talk to each other and transfer standing orders, direct debits etc. So, if logistical difficulties have put you off switching in the past, you may decide it […]

Read more

Annual Investment Allowance – Prioritise Assets When Spend Exceeds £250k

Hopefully by now, you’ve all got the message that (until the end of 2014) you have full tax relief on the first £250k of capital expenditure. But what if you spend more than £250k? If that happens, then make sure you have considered the rates of capital allowances that your new purchases are entitled to.  […]

Read more

Under One month to Go for Higher Earning Child Benefit Recipients Register for Self Assessment

If you earn > £50000, you are the higher earner in your household and someone in your household receives child benefit, you need to pay back some or all of that benefit through a self assessment tax return. If you are not already in the self assessment regime, you will need to register by the […]

Read more

Last Call for NICs Holiday

Any business (outside the South-East) created between 22nd June 2010 and 5th September 2012 has been let off the first £5k of employers national insurance on the first 10 employees for the first year of employing people. So, if you started a business between those dates and you started employing people after the 5th September 2012, today is your last chance to take […]

Read more

New HMRC Powers to Access Your Card Processors’ Data

From 1st September, HMRC will have for the very first time legal access to the card receipts for any UK trader. They will sort data by trader and then be able to compare what they can see has actually happened with what you say has happened when you report on your VAT and self assessment tax […]

Read more

Employee Shareholder Contracts

As of 1st September 2013, there is an intriguing new employment status, that of the employee shareholder. Simplified down to its basics, the employer gives the employee £2000 worth of shares and the employee signs a contract that gives up rights to unfair dismissal and statutory redundancy pay. There are 2 clear points of attraction […]

Read more