accountants / 66 posts found
Self-employed liability
If you are a sole trader, or in a basic partnership, and if your business gets into financial difficulties, any liabilities that cannot be covered by the disposal of business assets may have to settled out of personal assets. In accountancy speak, you have unlimited liability; there is no protection for your personal assets. You have options. The Office for Tax Simplification has suggested, welcomed, the idea that sole traders can elect for a form of limited liability status that will allow them to protect their homes from any claim by business creditors. At present, this is pure conjecture. Mr [...]
Planning or regretting?
As we have outlined in recent posts, change is upon us and come the end of March next year, the combination of Brexit and the advent of Making Tax Digital (MTD) will change much that we have taken for granted. Apart from the cross-border considerations (import VAT, customs duties and the like) MTD will require all affected businesses to link with HMRC by using approved software. The time to figure out the best strategy to survive these changes need to be considered now. Businesses should be taking time out to draw up contingency plans, and if possible, before March 2019. [...]
Customs procedures with a “no deal” Brexit
This week we are paraphrasing, from HMRC’s guidance announcements, the likely changes to customs procedures if the so-called “no deal” scenario becomes a reality. Essentially, the two-way, free movement of goods between the UK and the EU will cease and the raft of changes that firms trading with the EU will need to accommodate are significant. Whilst the political process is deadlocked, or so it would seem, the information shared below is very much the worst possible out come for importers and exporters to the EU from a red-tape perspective. If the government is successful in negotiating a softer version [...]
Spreadsheets and VAT from April 2019
Making Tax Digital (MTD) is HMRC’s long running intention to make an electronic link with the accounting data of UK businesses. The idea is to draw in the data they need directly from your computers using links provided by your software developers for this purpose. Which is fine if you are using accounts software that will accommodate these changes. The first implementation deadline for MTD is 1 April 2019, when all businesses registered for VAT, and with turnover in excess of £85,000, will need to submit returns using HMRC’s MTD processes. Certainly, the accounts software that we use to prepare [...]
VAT before and after Brexit
Businesses that buy goods from the EU or export goods to the EU would be advised to read the recent guidance from HMRC that is published under the title: VAT for businesses if there is no Brexit deal The stated purpose of the document is reproduced below. The full text can be read online at https://www.gov.uk/government/publications/vat-for-businesses-if-theres-no-brexit-deal/vat-for-businesses-if-theres-no-brexit-deal The purpose of this notice is, in the event that the UK leaves the EU on 29 March 2019 with no agreement, to inform UK businesses of the implications for VAT rules for goods and services traded between the UK and EU member states. [...]
Where there’s a Will…
None of us relish our own demise which probably explains why approximately 70% of us have not made a Will. With no direction from your good selves, who will inherit your worldly goods if you die without making a Will? The legal jargon is dying intestate. Consider Louis, 75 years old and deeply into avoidance when it comes to considering his estate. Let speculate that he died recently, and his estate was subject to the rules and regulations that apply in England. He is married, and his estate is worth more than £1m. He has two children, Kate and Ian, [...]
What has “hope” got to do with it?
In a recent tax case, Pallister v Revenue & Customs, Pallister’s son (PJ) was left a share in his deceased parent’s investment property in June 2012. A local surveyor valued the property at £1.2m and this was the figure used to determine the deceased parent’s inheritance tax bill. Subsequently, the property was sold in March 2014 for £2.5m. HMRC were peeved. Less than two years had passed and PJ’s share of 88% in the property had seemingly increased in value by almost 100%. They therefore challenged the earlier valuation for inheritance tax purposes on the basis that “hope” [...]
New ideas from government think-tank
At the beginning of August, the Office for Tax Simplification (OTS) – a government department charged with coming up with new ideas to simplify our tax system – issued a number of reports and recommendations. They include a number of interesting topics and we have shared the conclusions below: Changes to capital allowances At present, businesses depreciate assets in their accounts and this process creates a reserve in their accounts such that when the assets are worn out, there is a fund of profits and cash to replace them. For tax purposes, this depreciation charge is added back in tax [...]
Undeclared offshore assets
From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received. The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. According to HMRC, over 17,000 people have already notified the department about tax due from sources of foreign income, such as their holiday homes [...]
Working from home?
We are often quizzed by clients who are contemplating working from home: what are the tax consequences? And in particular, will I have to pay capital gains tax? Capital gains tax Generally speaking, if your business use is limited to allocating space for a home office, then as long as there is duality of use, no capital gains tax complications should arise when you sell the property. Duality of use means that your home office: doubles as a spare bedroom, or a storage space for domestic items, or is a study or has a similar non-business as well [...]