Data Protection Complaints and AccessThe fax number of the DPU is 0191 2253098. Expect them to take 40 days to reply.
This link takes you to their instructions:-
There is a FAQ entry on the Revenue website alluding to child benefit issues and identity theft. Remember the lost CDs fiasco?
You could also complain to the Information Commissioner if you think your staff data has been mis used by HMRC.
Here is the link:-
Don't expect much joy though as the Commissioners powers are not very effective against the government's own failures.
Eggs in a basketBe wary of putting all your eggs in one basket. One software house = opportunity to exploit. Your business will become reliant on their product and support, warts and all.
Is the software ready for the new accounting electonic data transfer standards of XBRL? Can it electonically file all the forms of return to Companies House and HMRC?
Has the software house recently changed hands and is the software going to be fully supported going forward?
Closing down unreasonable enquiryYou can apply yourself to close the enquiry. Set out the reasons clearly to the Clerk to the General Commissioners or the Special Commissioners. If the latter are selected the Revenue will have to think very carefully about being heavy handed. You can copy your application to HMRC if you wish but you are not obliged to do so.
The application is made under TMA 70/S28A(6);TMA 70/S28B(6);FA 98/SCH 18/PARA 33(3); TMA 70/SCH 1A/PARA 7(6) depending on the type of business represented.
The Commissioners cannot at this stage determine whether the officer is correct but can order the closure of the enquiry and therefore the stop the Revenue's opportunity to keep raising questions.
Expect the officer to wield the blunt instrument of amending the self assessment. Expect him also to start formal penalty proceedings based on his views.You then amend the figures to your version. His only avenue is then to list the case for hearing again.
The onus of proof is that of the appelant, this is you.Does your invoice stack up ? Why does the client not remember the contractor's contact details? How will they stand up if called before the Commissioners?Were they listed in any commercial directories? How did they approach your client for the work? Can you answer all these points so that the balance of evidence points to the money having been paid to the cleaning firm? If not back off now and accept the adjustment.
If you don't want to go down this route at this stage ask the Revenue to conduct a peer review of the case by an independent HMRC inspector and tell them you think the present enquiry officer is being unreasonable.
How long has the enquiry been running? If it is more than eighteen months the pressure is on HMRC to produce results or close the enquiry and go away.
Deemed payment and CT reliefLet us assume you are correcting the P35 for IR 35 purposes. Let us also assume that you are correct in treating them as within IR35 legislation.The deemed payment and secondary NIC are relievable for CT in the period in which they are treated as paid.
If this creates a loss for CT purposes you may make a claim under S393 ICTA 1988 to carry it back 12 months in the normal way. It is probably best to file two CT600s at the same time using your long period accounts and showing how you arrived at the deemed payment adjustment.
A claim should be made under Paragraph 13 Schedule 12 Finance Act 2000/Section 58 ITEPA 2003 and Regulation 6(3) SI 2000 No. 727 for the dividend not to be taxed -see HMRC Manual ESM3272.
Arrangements?I agree with Gary and would also point out that loss relief could be denied if arrangements exist, see Section 410 ICTA 1988.
Once the loss making company is inside the group you should be able to Group relieve any current period losses provided the accounting periods are co-terminous. The losses brought forward would normally be carried forward and used when the new group company returns to profit. They would not be available for relief around the group.
Wait until the Pre Budget Report?Rumour control suggests Stamp Duty on shares may be abolished altogether.
Property Rental PartnershipYou need to refer to the legislation relating to the taxation of partnership rental profits at:- (ICTA88/S15 (1) 1 (3), ITTOIA05/S859 (2))
Case law tends to point to rental business not being taxed as trading income ordinarily see Salisbury House Estates Ltd v Fry  15TC266, Griffiths v Jackson  56TC583. If it is not trading income then it is not subjected to Class 4 National Insurance.
When you prepare the adjusted tax computations you should split out the rental income and rental expenses and show these separately on the partnership property tax return pages.
If on the other hand the rental receipts are small and from surplus accommodation and you do not want the bother of splitting them out see HMRC manual BIM41015.
Associated Company ProblemThe associated company problem that you describe is common. It does not matter if the second company is located in the UK or elsewhere,it will still count for tax purposes.
If proper work was done by the second company for the first company you might be able to consider management charges from the second to the first to equalise profits.
You might also consider using an alternative business vehicle for the second enterprise such as an LLP, especially since the turnover is so small in relation to the main company.
I guess you didn't use a Branch structure because of the conflict of interest you mention.
Penalty MitigationTedIn my experience HMRC will not pursue penalties in such cases where there is no loss of tax to the Exchequer.
Let us assume your client is telling the truth. You need to obtain his US ITIN. An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the US Internal Revenue Service. It is a nine-digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX.IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).ITINs are issued regardless of immigration status because both resident and non-resident aliens may have U.S. tax return and payment responsibilities under the Internal Revenue Code.Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception.
Once you have this you can obtain a signed authority from your client to get sight of the US tax returns which will prove the US tax paid. Provided the tax is sufficient and covered under the US /UK DTA you will obtain the appropriate offset and reduce the liability in the UK to NIL.
You can contact the IRS in the UK initially by telephone onPhone ServiceTel: (0207) 894-04769 a.m. to Noon. Monday through FridayFAX: (0207) 495-4224
or by mail atInternal Revenue ServiceUnited States Embassy 24/31 Grosvenor SquareLondon W1A 1AE
Milsted Langdon LLP has considerable experience in investigation work and would be happy to accept instructions from you.
Small Pool Write offYou are correct in thinking that the £1000 small pool limit is time apportioned. This is intended as a permanent feature not a transistional measure. It is supposedly designed to reduce red-tape. See Budget Note 15.The legislation is contained in CAA 2001 as amended by Finance Act 2008.You do not have to take the full £1000 as a compulsory write off in a full year if it suits you to delay claims.
CAA 2001 S56A Writing-down allowances for small pools(1) This section applies in relation to the main pool and the special rate pool.
(2) Where the amount by which AQE ( available (qualifying expenditure) exceeds TDR (total disposal receipts) is less than or equal to the small pool limit, the amount of the writing-down allowance to which a person is entitled for a chargeable period is the amount by which AQE exceeds TDR.
(3) The small pool limit is £1,000, except that—
(a) if the chargeable period is more or less than a year, it is proportionately increased or reduced, and
(b) if the qualifying activity has been carried on for part only of the chargeable period, it is proportionately reduced.
(4) A person claiming a writing-down allowance under this section may require the allowance to be reduced to a specified amount.
(5) The Treasury may by order substitute for the amount for the time being specified in subsection (3) such other amount as it thinks fit.
(6) An order under subsection (5) may make such incidental, supplemental, consequential and transitional provision as the Treasury thinks fit.”
(4) In section 59(1) (definition of unrelieved qualifying expenditure)—
(a) after “that period” insert “(a)”, and
(b) after “TDR” insert “, and
(b) where section 56A(2) applies, the person does not claim a writing-down allowance of the amount by which AQE exceeds TDR.”
(5) The amendments made by this section have effect—
(a) for corporation tax purposes, in relation to chargeable periods beginning on or after 1 April 2008, and
(b) for income tax purposes, in relation to chargeable periods beginning on or after 6 April 2008.
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