My client has now received a refund of £900 daily penalties by not £400 fixed penalties. HMRC says it doesn't have discretion on the latter. The refund of the daily penalties is as a result of a review of representations arising from HMRC's customers and agents. So keep up the good work everyone who posted helpfully on this blog.
How churlish that they couldn't repay the whole penalty for a disposal so early in 2015/16!
Wanderer's link on the gov website says that the primary employment of the director is with the PSC and secondary employment with the public sector fee payer who will operate a BR tax code. What is my client to live on if her income suddenly drops by having 20% tax deducted from the full payment?
Point 15 of the item for which Wanderer provides a link
says PSC will still have to send in a FPS with the payment to the director shown as payments not subject to tax. My sole public sector client caught up in this will have to pay a monthly fee for her payroll support and a fee to me for her annual accounts. Do these produce a corporation tax loss as she has no income other than the public sector fee payments which are received after tax & Nic. The 5% to cover costs is abolished so does she have to pay this effectively out of her own pocket?
You are right. The no gain no loss has to be in the circumstance of a husband / wife transfer or some such, not just a gain that happens to be nil by reason of not selling the house for enough money to generate a gain in excess of costs and allowable deductions. I have received a letter from HMRC dated 30 January 2017 telling me that my appeal, dated 8 September 2016, is not accepted. It's taken nearly 5 months for them to reply. I understand from other contributors to this forum that HMRC are ruthless in their application of penalties so my client will need to pay up.
So just to be doubly clear. The sale of Vat-able goods to the USA are zero rated not exempt, so there is no problem with the reclaim of input tax. The decision to register for VAT is a voluntary one (despite actual turnover being well in excess of £83K) and recovery of input Tax would seem to be the main reason for doing it.
I also posted this query on the ICAEW tax faculty blog and have actioned the answer given there. In reality gain is zero (not £200). The £200 was calculated using the ready reckoner on the HMRC website which time apportions the gain. As the house had been owned for many years, time apportioning is bound to show that there is a gain (ie inflation), of which a very small part falls in the period April 2015 to October 2015 when the sale completed. Alternatively if the gain is worked out by comparing the actual value at April 2015 with proceeds when the sale was agreed in July we contend that there has been no appreciation in these 4 months, so the client can claim no gain no loss. In this case there is a clause in the 2016 Finance Act which removes the penalty for such disposals and backdates the provision to April 2015. I have appealed along these lines and await a response.
RPSM07109060 - Technical pages: Investments: Taxable property: Meaning of taxable property: Residential property Residential property Residential property can be in the UK or elsewhere and is
a building or structure that is used or suitable for use as a dwelling.any related land that is wholly or partly the garden for the building or structure,any related land that is wholly or partly grounds for the residential property and which is used or intended for use for a purpose connected with the enjoyment of the building,any building or structure on any such related land,
I think the pool building falls within this so is residential property.
My answers
My client has now received a refund of £900 daily penalties by not £400 fixed penalties. HMRC says it doesn't have discretion on the latter. The refund of the daily penalties is as a result of a review of representations arising from HMRC's customers and agents. So keep up the good work everyone who posted helpfully on this blog.
How churlish that they couldn't repay the whole penalty for a disposal so early in 2015/16!
Wanderer's link on the gov website says that the primary employment of the director is with the PSC and secondary employment with the public sector fee payer who will operate a BR tax code. What is my client to live on if her income suddenly drops by having 20% tax deducted from the full payment?
Point 15 of the item for which Wanderer provides a link
says PSC will still have to send in a FPS with the payment to the director shown as payments not subject to tax. My sole public sector client caught up in this will have to pay a monthly fee for her payroll support and a fee to me for her annual accounts. Do these produce a corporation tax loss as she has no income other than the public sector fee payments which are received after tax & Nic. The 5% to cover costs is abolished so does she have to pay this effectively out of her own pocket?
You are right. The no gain no loss has to be in the circumstance of a husband / wife transfer or some such, not just a gain that happens to be nil by reason of not selling the house for enough money to generate a gain in excess of costs and allowable deductions. I have received a letter from HMRC dated 30 January 2017 telling me that my appeal, dated 8 September 2016, is not accepted. It's taken nearly 5 months for them to reply. I understand from other contributors to this forum that HMRC are ruthless in their application of penalties so my client will need to pay up.
So just to be doubly clear. The sale of Vat-able goods to the USA are zero rated not exempt, so there is no problem with the reclaim of input tax. The decision to register for VAT is a voluntary one (despite actual turnover being well in excess of £83K) and recovery of input Tax would seem to be the main reason for doing it.
No - I use Digita software.
No - I use Digita software.
I also posted this query on the ICAEW tax faculty blog and have actioned the answer given there. In reality gain is zero (not £200). The £200 was calculated using the ready reckoner on the HMRC website which time apportions the gain. As the house had been owned for many years, time apportioning is bound to show that there is a gain (ie inflation), of which a very small part falls in the period April 2015 to October 2015 when the sale completed. Alternatively if the gain is worked out by comparing the actual value at April 2015 with proceeds when the sale was agreed in July we contend that there has been no appreciation in these 4 months, so the client can claim no gain no loss. In this case there is a clause in the 2016 Finance Act which removes the penalty for such disposals and backdates the provision to April 2015. I have appealed along these lines and await a response.
Eureka!
Indeed it's nice to have a Eureka moment once in a while
I've found it on HMRC website:
RPSM07109060 - Technical pages: Investments: Taxable property: Meaning of
taxable property: Residential property
Residential property
Residential property can be in the UK or elsewhere and is
a building or structure that is used or suitable for use as a dwelling.any related land that is wholly or partly the garden for the building or structure,any related land that is wholly or partly grounds for the residential property and which is used or intended for use for a purpose connected with the enjoyment of the building,any building or structure on any such related land,
I think the pool building falls within this so is residential property.