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Payroll is not an accountancy service

Providing a payroll service is not an accountancy service. Therefore the service did not need to register under Money Laundering Regulations 2007. The payroll service registered under protest and was immediately fined £500 for late registration. The service appealed. It said it did not provide accountancy services but simply calculated payroll for clients. It did […]

Posing as a solictor

Nicholas Moss was jailed for 21 months for pretending to be a solicitor to avoid paying a £19,000 tax debt. He appeared at Willesden County Court in June 2012 as a solicitor to represent his “client” and lost. In November 2012 he sent a forged letter to HMRC, ostensibly from a High Court judge quashing […]

EU VAT regime

The European Commission has published a paper on simplifying the rules for VAT within the EU. There are three different schemes for claiming a VAT rebate on supplies between member states. The original idea of the single market was that output tax would be charged and input tax claimed regardless of the countries from or […]

VAT gap is 16% in EU

The VAT gap in the EU is 16% according to figures published by the European Commission for 2012. This represents the difference between VAT that should have been collected in the member state and the amount that was collected. The figure includes insolvencies, statistical errors, delayed payments and legal tax avoidance in addition to deliberate […]

Fair competition can be tax avoidance

A commercial decision to compete fairly could still be tax avoidance. In 1999/2000, many companies involved in tele-betting moved to Gibraltar because it had a more favourable tax regime. The case concerned a company that moved to Gibraltar so as not to be commercially disadvantaged against its competitors. Without such a move, the business would […]

Place of supply

The place of supply is the country from which goods are despatched. A company in Italy made metal parts that were finished in France. They were then sold to a customer also in France. The issue was whether the goods were supplied from Italy or France. If supplied from Italy the company could claim a […]

Simplified filing for micro-entities

From October 2014, there are simplified filing requirements for companies that are micro-entities. The change applies from October 2014 for HMRC and from November 2014 for Companies House. A micro-entity is one that meets these criteria: – turnover no more than £632,000 – balance sheet shows assets of no more than £316,000 – no more than […]

New coding-out limits

New coding-out limits apply from 6 April 2015. The regulations have now been passed as Income Tax (PAYE) (Amendment No 4) Regulations SI 2014 No 2689. The change was announced in the 2013 Budget. If an employee owes tax up to a certain limit, HMRC may “code out” that tax instead of sending a tax […]

Tribunal decision binds HMRC

A decision by a tribunal on a matter of fact is binding unless that decision is so perverse that no reasonable tribunal could have come to that decision. It is not possible to appeal against a tribunal decision on the grounds that it is wrong or another decision is better. An appeal may only be […]

Books in different formats

The European Court of Justice has held that different rates of tax on different forms of books can be justified. Most countries in the EU have lower rates of VAT on printed books than they do for other formats such as audio books or online books. In the UK, printed books are zero-rated whereas other […]

Executor is individual for tax purposes

An executor is an individual for tax purposes even if the executor is a corporate body. As such, the executor in any form may stand in the shoes of the deceased to make a claim for loss relief or negligible value. The first tier tribunal held that an executor was an individual for the purposes […]

Changes to intestacy provisions

The law on intestacy changes on 1 October 2014. Intestacy is when a person dies without leaving a will. The property then passes according to the laws of intestacy. In effect, the state writes the person’s will. From 1 October 2014, is someone dies, leaving a spouse (including a civil partner) and children, the spouse […]

Access to Work schemes

The Access to Work (AtW) scheme should be reflected in tax computations, according to advice from the Low Incomes Tax Reform Group. AtW is a scheme delivered by JobCentre Plus that gives practical advice and support to disabled people who are employed, self-employed or seeking work. The programme may contribute to the costs of services […]

Change scope of national insurance

From 6 April 2015, it is put beyond doubt that rent income is not subject to class 2 national insurance. Strictly speaking, national insurance is not a tax at all but a compulsory insurance policy. However, since its introducion in 1912 it has evolved from having the nature of insurance to that of tax, though […]

Associate companies must still be counted

From April 2015, there is only rate of corporation tax of 20%. This is the first time there has been a single rate since 1972 (when the rate was 40%). As a result the small profits rate is abolished, along with marginal relief calculations where the adjusted profit lies between £300,000 and £1.5 million. (This […]

Dangers of a corporate partner

Partnerships that have a corporate member could be unaware of an anti-avoidance provision introduced by Finance Act 2014 Sch 17. It has become a common practice for partnerships, including LLPs, to have a partner that is not an individual. Commonly this partner is a limited company. The advantage is that profits can be sheltered in […]

Coffee shop is not an office

Using a coffee shop as an office does not make it tax deductible, according to Berg Kaprow Lewis writing in Brass Tax. Entertaining a client is specifically disallowed as a business expense. A client tried to argue that buying a coffee and croissant was less expensive and more congenial than hiring an office. That did […]

Negative employment income

A person can claim loss relief if their income from employment is negative. However, this situation is so rare in practice that a recent example caused problems for the courts. Just as it is possible to make a loss from self-employment, it is possible to make a loss from employment. Examples include a sales person […]

Protection against identity theft

Identity theft is when someone steals your identity to access your bank accounts or to obtain goods or services at your expense. There are steps that can be taken to minimise the risk: – be careful what information you publish on-line including on social media. This can be used to build up a profile of […]

Cashback card OK for £2,400 spending

National Westminster Bank and its parent company Royal Bank of Scotland have launched a new cashback card. It has an annual fee of £24. It offers 1% cashback on all supermarket purchases (other than road fuel) and 0.5% on other purchases. Some non-supermarket retailers are also within the scope of 1%. This means that someone […]

Tea machines give poor value

Tea machines often give poor value, according to Which? magazine of November 2014. A standard tea bag for use with a kettle costs from 2p. Machines usually require tea or coffee to be dispensed in specialist packagaing that costs from 20p. In a blind test, the magazine found that machines were regarded as giving inferior […]

Scottish and Irish bank notes

A survey by Which? magazine found that 73% of people think Scottish and Irish banknotes are legal tender in England and Wales. 20% think they are not, and 7% of people don’t know. Of people who tendered Scottish or Irish banknotes, 26% found shops refused to accept the notes and another 32% did so reluctantly […]

What business is farming

Farming is a trade. As such it qualifies for capital allowances, loss relief and business property relief. An article by John Ward in Taxation of 30 October 2014 highlights some of the current issues for farming businesses. Many arable farmers have reduced their scope. They may let the land be used for pasture or may try […]

Maximising IHT nil band in will

A will should always be clear as precisely how much beneficiaries should receive. Wills should be revised to reflect changes in the law. Where the will is ambiguous, the courts will interpret it. A woman made a will, a clause of which stated “my trustees shall set aside out of my residuary estate assets or […]