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9am Lowdown

9am Lowdown: Scots abroad, Uber and Trump

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24th May 2017
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Good morning – Richard here with the hot news hitting the accounting world. Today’s Lowdown features the news that Scottish people abroad may face inaccurate tax bills.

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ATT urges Scots abroad to contact HMRC

Scottish people living abroad could be paying the wrong amount of tax, the ATT has warned.

According to HMRC regulations, a Scottish person should be regarded as a UK taxpayer and not a Scottish taxpayer if they are classed as a non-UK resident. However, if HMRC holds a Scottish address for a non-UK resident, the ATT has warned that HMRC may incorrectly determine them to be liable for Scottish rates of income tax.

Yvette Nunn, co-chair of ATT’s technical steering group, said: “We would urge relevant individuals or their advisers to contact HMRC to give an overseas address and perhaps ask that they keep the Scottish address as a postal address only. Otherwise the risk is their tax return will be rejected and they may pay more tax than they should because of an assumption that they are a Scottish taxpayer rather than a UK taxpayer.”

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Uber's accounting error underpays drivers

Uber is back in the headlines this morning after an accounting mistake has caused New York City drivers to be underpaid by “tens of millions” for years.

According to Quartz, Uber applied a 25% service fee for UberX rides in New York City to the gross fare. But an update in 2014 to Uber’s terms of service Uber told drivers it calculated that commission based on the net fare.

Uber has promised to pay every driver “every penny they are owed – plus interest-as quickly as possible”. Rachel Holt, Uber’s general manager for the US and Canada, said in a statement. “We are working hard to regain driver trust, and that means being transparent, sticking to our word, and making the Uber experience better from end to end.”

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Trump based 2018 budget on an accounting trick

Donald Trump’s 2018 budget proposal is based on an accounting trick, according to Slate.

The Trump administration wants to reduce the budget deficit after 10 years. To do this, Trump’s Treasury secretary forecasts the tax cuts and deregulation would lead to 3% economic growth per year and allow the government to collect $2trn in tax revenue.  

Writing in the Washington Post, Lawrence Summers, the former Treasury secretary and National Economic Council director, called Trump’s budget ‘simply ludicrous’. Summers says the proposal is an elementary double count.  

“This is a mistake no serious business person would make. It appears to be the most egregious accounting error in a presidential budget in the nearly 40 years I have been tracking them.”

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By Paul Soper
26th May 2017 15:27

The point concerning whether a taxpayer is Scottish or not is not confined to non-UK resident taxpayers - although if a person is not UK resident they CANNOT be a Scottish taxpayer. The legislation bases the taxpayer's status on their 'sole or main residence' (with all of the complications that can ensue from that) but then HMRC simply assumes that this is the same as the taxpayer's postal address (and even encourages employers to exhort employees to keep their postal address up to date. This year whether you are Scottish or not will make a difference of a maximum of £400 - in future years the difference could become a lot more and a new business could spring up in Berwick on Tweed of English postal addresses for canny scots...
From April 2019 the Welsh will join the party with room for even more geographic confusion... and up to now HMRC have concentrated on the employer/employee consequences but this affects all non savings non dividend income so affects sole traders, partners and landlords as well...

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