Just because a taxpayer sticks a family holiday to Florida on his SA return as travel & subsistence and it doesn't get selected for enquiry doesn't make it correct!
The amount of case law would suggest that HMRC would certainly challenge and be successful in arguing it was earnings liable to class 1 NIC when a directors loan is written off.
The question was in relation to company directors who are also shareholders. The shareholder at a shareholders meeting write the loan off The reason for the write off is to compensate the shareholders for a lack of a dividend!!
The reason for the question was due to being made aware of a FTT case and I wanted to see if anyone else had direct experience of writing off a loan through a shareholders meetings and not a directors meeting, the write off being challenged and the outcome being "not earnings"
If the employer pays an employee £4500 for 10,000 business miles completed using their own car.
The employer can then claim back 1/6 VAT using the following. 10,000 @ £0.13 ( actual monthly rate would be used) ...... Fuel receipts with a vat element equal to the vat claimed should be retained.
Even the vat compliance officer will tell you this during the review of the records!! Its defo the easiest way to do it
Watched a webinar about this on NexisLexis trolley by Neil Warren.
IT contractor back dates a VAT application, applies for FRS and gets a nice little windfall. Sure the application was backdated the full 4 years.
The end client simply pays the contractor for the VAT only invoices, reduces their own VAT liability on the next return. IT contractor apply FRS and accounts for VAT to HMRC and enjoys the windfall.
Boat is defo not missed if end client is happy to pay VAT only invoices as Mattix is suggesting. Its actually good advice by the advisor if he has spotted and put this in place....... Few phone calls to ask clients if its ok and job done.
The adjustment definately done to comparitives, ie previous year effectively making no def tax to carry forward. The journal removes deferred tax From PNL to a BS reserve. Taxcal (i think) actually done a paper on this around 18 months ago on AW which walks you through the process and the other adjustmenes needed to comply with FRS105! Search for it!
No disclosure needed either but you do need to remove the deffered tax as per FRS105 material or not!
An orderly hand over of a clients tax affairs would and should include a make up of items on the balance sheet which was not immediately obvious from a reading of the balance sheet items. Debtors, creditors, prepayments and accruals and so on!
The initial clearance letter would include requests for the above anyway!
My answers
Just because a taxpayer sticks a family holiday to Florida on his SA return as travel & subsistence and it doesn't get selected for enquiry doesn't make it correct!
The amount of case law would suggest that HMRC would certainly challenge and be successful in arguing it was earnings liable to class 1 NIC when a directors loan is written off.
The question was in relation to company directors who are also shareholders. The shareholder at a shareholders meeting write the loan off The reason for the write off is to compensate the shareholders for a lack of a dividend!!
The reason for the question was due to being made aware of a FTT case and I wanted to see if anyone else had direct experience of writing off a loan through a shareholders meetings and not a directors meeting, the write off being challenged and the outcome being "not earnings"
"I have yet to come across a single instance of HMRC trying to charge NI on the release of a director/shareholder loan."
Take it your not very busy today?
Iv found a number. Stewart Fraser Ltd v HMRC (2011) being one with comments by the FTT making interesting reading hence the idea of the original post.
There is also a cross enquiry compliance review into its 19 month so pretty certain there will be a challenge.
Thanks for comment
FFS............. V
Stewart Fraser Ltd v HMRC (2011)
I'm sure the creditors will be hoping for a result for the liquidators so a final dividend can be agreed sooner rather than later.
If the employer pays an employee £4500 for 10,000 business miles completed using their own car.
The employer can then claim back 1/6 VAT using the following. 10,000 @ £0.13 ( actual monthly rate would be used) ...... Fuel receipts with a vat element equal to the vat claimed should be retained.
Even the vat compliance officer will tell you this during the review of the records!! Its defo the easiest way to do it
And HMRC will agree to backdate the scheme
Of course they will..... Well within tine limits
Watched a webinar about this on NexisLexis trolley by Neil Warren.
IT contractor back dates a VAT application, applies for FRS and gets a nice little windfall. Sure the application was backdated the full 4 years.
The end client simply pays the contractor for the VAT only invoices, reduces their own VAT liability on the next return. IT contractor apply FRS and accounts for VAT to HMRC and enjoys the windfall.
Boat is defo not missed if end client is happy to pay VAT only invoices as Mattix is suggesting. Its actually good advice by the advisor if he has spotted and put this in place....... Few phone calls to ask clients if its ok and job done.
The adjustment definately done to comparitives, ie previous year effectively making no def tax to carry forward. The journal removes deferred tax From PNL to a BS reserve. Taxcal (i think) actually done a paper on this around 18 months ago on AW which walks you through the process and the other adjustmenes needed to comply with FRS105! Search for it!
No disclosure needed either but you do need to remove the deffered tax as per FRS105 material or not!
Totally disagree with much of your post.
An orderly hand over of a clients tax affairs would and should include a make up of items on the balance sheet which was not immediately obvious from a reading of the balance sheet items. Debtors, creditors, prepayments and accruals and so on!
The initial clearance letter would include requests for the above anyway!