HMRC / 27 posts found
A possible, unwelcome increase in service charges
From 1 November 2018, owners of properties on estates or sites that are obliged to pay service charges to a management company - for example, for the maintenance of common areas, gardens, or the employment of a site warden or caretaker - may be in for an unwelcome surprise. It would seem that HMRC have applied a concession in the past that allowed the management companies to treat service charges collected on behalf of a landlord as part of an exempt supply for VAT purposes – in other words, when the management company charged a resident, no VAT was [...]
Keep private bank accounts private
Many small businesses, including landlords, use personal bank accounts to lodge business receipts and make business payments. If traders in this situation are subject to a HMRC enquiry into their business affairs, HMRC would be entitled to request sight of all bank accounts that record business transactions even if those accounts are essentially, personal bank accounts. As many of the transactions in these accounts are personal, you may need to explain to HMRC where credits to the account came from and provide evidence that the credits are nothing to do with your business. Without this confirmation or evidence, [...]
Exclusivity and tax relief
In order to qualify as a deduction for tax purposes we have to demonstrate that the expenditure was incurred “wholly and exclusively” for the purposes of our business or employment. We will also need to consider a further criterion: where the expenditure has a duality of purpose. In a 1980’s case, a barrister claimed for the cost of business suits which she insisted were only used for business purposes. To her delight, the lower courts agreed, but HMRC were having none of it and pursued their case to the House of Lords where the taxpayer’s claim and appeal was dismissed. [...]
Importing goods from outside the EU
Although the Brexit issue is not yet decided it may be salutary for businesses to consider the changes they will need to face if we depart with a no-deal Brexit. We have touched on these issues in past articles posted on this blog, but today we have reproduced the present regulations you will need to consider if you import from outside the EU – with a no-deal Brexit these, or similar processes, will need to be applied to imports from the EU. Within the EU most goods: are in free circulation, can be imported with minimal customs control, have no [...]
Did your goat eat your accounts?
Companies House have published a list of bizarre excuses for the late filing of their statutory accounts. They include: “goats ate my accounts” “I found my wife in the bath with my accountant” “pirates stole my accounts” “we delivered the accounts to the betting office next door to Companies House” “a volcano erupted and prevented me from filing” “slugs ate my accounts” “it was Valentine’s Day” “my company was more successful than I thought it would be, so I was too busy to file” As you would expect, Companies House issued late filing penalties and any appeals were [...]
Not so trivial
Options for reducing the impact of taxation on our earnings are somewhat limited. That said, there are still opportunities that will keep you the right side of the law and will increase the take home pay of employees. One such opportunity available to employers is to pay so-called trivial benefits. The benefits may be of small value, but never-the-less, even small tax-free payments will be gratefully received. To qualify as tax-free, the benefits paid to employees need to fit the following criteria: they cost £50 or less to provide, the payments are not made in cash or by [...]
Selling the garden shed?
When you are selling your home, you are likely to be selling a range of fixtures and fittings. For example: • White goods, washing machines, fridges, cookers etc, • Furniture, • Carpets, • Curtains, • Garden equipment, • Leisure or fitness equipment, jacuzzi etc, • And the garden shed. If identified in the sale contract, any value attributed to these personal assets, or chattels, will not attract a stamp duty charge for your purchaser. Accordingly, if you are selling at a value that just tips your property into the next band for stamp duty purposes, being able to allocate part [...]
Evidence or assertion?
In a recent tax case, three taxpayers asserted that cleaning costs of work clothes amounted to £2,200 a year and HMRC disagreed. The facts were compelling, each of the appellants worked in the drainage or sewage industry and to maintain personal hygiene washed work clothing on a daily basis. Why shouldn’t they claim for the costs of keeping their work apparel clean? Claims were based on the purchase of sanitising and washing products, wear and tear on their home washing machines and an apportioned cost of home electricity charges. Importantly, no receipts were kept. To succeed in their tax claim, [...]
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” [...]
Boosting recycling through the tax system
The government has announced that it has received record-breaking support from members of the public to counter the blight of plastic waste. Here’s what they said: Individuals, businesses and campaign groups have expressed overwhelming support for action on tackling the impact of plastics on our environment. The backing comes as HM Treasury publishes the summary of responses to its recent call for evidence on how tax can be used to reduce plastic waste. The call attracted an unprecedented 162,000 responses, the highest in the Treasury’s history. The Chancellor, Philip Hammond, has reiterated the department’s commitment to act through the tax system [...]