Sage Taxation Surgery with Rebecca Bennyworth
With Self-Assessment tax returns deadline extended until 02 February, and to help you through the process, Rebecca Benneyworth will be on hand to discuss the latest developments, service issues and work-arounds in relation to the filing deadline for Sage Taxation Customers.
Drop into the surgery to post your question and Rebecca will respond as soon as she is free. The facility will be available during office hours and through the filing peak weekend, up to close of business on 02 February.
If you are a Sage Taxation Customer and would like to contribute - please register here. You will be sent an email with a link to the Q&A once it has launched.
Not a Sage customer? You can still read the questions and answers below.
Can't see the chat box below? Email us on editor@accountingweb.co.uk and let us know.
Title: 5:18 Rebecca Benneyworth
OK I've got two on the go now. I'll answer Tim first.
Tim's thinking of a trading loss, and hoping to get some relief for it by effectively classifying the rental profit as a trading profit and thus gaining an offset of the trading loss brought forward. This is governed by case law - the Salisbury House Estates case if I remember correctly. EDIT - Reference is Salisbury House Estates Ltd v Fry [1930] 15 TC 266
Guidance is in HMRC's Business Income Manual at BIM41010. You'll have to meet the various conditions set down in the case - which I can't seem to find now. Sorry, I've been slow coming back because I have been searching my bookcase. Anyhow the case is about "surplus business accommodation" which I don't think that trading stock will count as.
Tim's thinking of a trading loss, and hoping to get some relief for it by effectively classifying the rental profit as a trading profit and thus gaining an offset of the trading loss brought forward. This is governed by case law - the Salisbury House Estates case if I remember correctly. EDIT - Reference is Salisbury House Estates Ltd v Fry [1930] 15 TC 266
Guidance is in HMRC's Business Income Manual at BIM41010. You'll have to meet the various conditions set down in the case - which I can't seem to find now. Sorry, I've been slow coming back because I have been searching my bookcase. Anyhow the case is about "surplus business accommodation" which I don't think that trading stock will count as.
Title: 4:09 Comment From TIm Ackers
Hi Rebecca. A building development trade (Ltd Coy)incurs a trading loss in a year principally as a result of a write down in the valuation of trading stock. As a short term measure in the following year, due to bad market conditions, the buildings give rise to some rental income. Can the b/fwd loss be relieved against the rental income?
Title: 4:09 John Stokdyk
Good afternoon, Rebecca. If things are still quiet on Friday morning, we've got a query here from an AccountingWEB member who has asked for help with a CGT issue:
http://www.accountingweb.co.uk/anyanswers/question/how-treat-further-distribution-liquidator
"A client made a substantial capital gain some years ago and rolled it over into an EIS investment. The EIS company subsequently went into liquidation (not a disaster - there's actually a further gain on the EIS investment). During 2009/2010 the liquidator made a distribution to shareholders and the client declared the resulting realised gain on his SA Tax Return, offsetting the whole of the available cost. In October 2010 the liquidator made a further (final) distribution.
"Should this additional gain be declared by amending the 2009/2010 Tax Return or should it be shown on the 2010/2011 Tax Return (without any related cost), thereby getting the advantage of a further year's exempt amount for CGT? What if the original EIS distribution had occurred in 2008/2009, so that the 'window' for amending that Tax Return had already closed? Any guidance would be greatly appreciated."
http://www.accountingweb.co.uk/anyanswers/question/how-treat-further-distribution-liquidator
"A client made a substantial capital gain some years ago and rolled it over into an EIS investment. The EIS company subsequently went into liquidation (not a disaster - there's actually a further gain on the EIS investment). During 2009/2010 the liquidator made a distribution to shareholders and the client declared the resulting realised gain on his SA Tax Return, offsetting the whole of the available cost. In October 2010 the liquidator made a further (final) distribution.
"Should this additional gain be declared by amending the 2009/2010 Tax Return or should it be shown on the 2010/2011 Tax Return (without any related cost), thereby getting the advantage of a further year's exempt amount for CGT? What if the original EIS distribution had occurred in 2008/2009, so that the 'window' for amending that Tax Return had already closed? Any guidance would be greatly appreciated."
Title: 2:41 Rebecca Benneyworth
Just letting you all know that I am here - it's all quiet here - maybe you're all furiously doing tax returns!
Title: 12:02 Rebecca Benneyworth
Just taking a lunch break - back by 2pm at the latest!
Title: 10:42 Rebecca Benneyworth
Hi Shaun. This is a bit messy, and to be honest the easiest way is to amend last year's return with a date of cessation and then you are justified in not completing the self employment pages on 2011 return. You can re-file 2010 up to 31 January and that will regularise the position. Then the 2011 return will include an employment page as director of the company (even if no income drawn). Hope that helps.
I have a client who incorporated his business in February 2010, he therefore ceased his self employment in 2009/10 and I did not inform HMRC on last 2010 Tax Return. There will be no self employed figures to put on 2011 Tax Return, do I just notify HMRC in box 19; Any Other Information or should I complete nil self employed pages and notify HMRC on there.
Title: 10:37 Rebecca Benneyworth
OK in Stephen's situation we have accommodation provided to a relative who is paying towards the running costs - or indeed it appears paying the full running costs. I guess Stephen has a surplus at the end of the year. You will probably need to check what the agreement with the "tenant" is - did they agree to pay the services you have listed in which case I think the surplus is a creditor; did they agree to pay £x per week as a contribution to the services - what would happen if there is a shortfall? Might the surplus be a contribution to council tax or are they paying that themselves? So in short it's only rent if that's what the parties agree - you'll have to get your client to be a bit more formalised even if it is a close relative.
If you supply a house to a member of your family and they contribute a weekly amount to cover electricity gas telephone, if there is a surplus should this be treated as rent?
Title: 10:30 Rebecca Benneyworth
Tim's question - transition from tax credits to universal credit. Well sadly I'm "following" the Welfare Refom Bill on the Parliament website, so getting daily emails about what is going on!! As many know I'm very much into tax credits so when I advise Lexis Nexis about their programme for 2013 you can be sure I will be suggesting including some content on this. Transition starts in 2013 and is fully in by 2014, so there is time yet. The main advice at the moment is that everyone should ensure that (old) tax credit claims are made where possible as they will then benefit from the transitional rules as we mopve over - trust me that will be a big benefit! So the rules are not yet final and when they are I'll be talking about them!
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Hi Rebecca,
Hi Rebecca,
Its that time of year again!
A client, a graphic designer was working for graphic design company X under paye up till about 4 years ago, when my client bought a seperate business (Stationery etc) owned by company X, and has since then been operating the "Stationery" business through her own Ltd company.
Company X has now asked my client to "come back" to work part time (about 25 hours per week) carrying out the same work as previously. My client will continue to operate her "Stationery" business. - Question- As i am not quite up to date with the current tax case position, would it be possible for my client to carry out this part time work through her company, ie treat company X as just another customer of her own company, or will she have to be treated as an employee of Company X.
Thanks in advance.
PS Rebecca we all miss you on the northern ireland CPD