Member Since: 7th May 2014
17th Feb 2021
As previously mentioned, the IR35 criteria have not really changed... other than to to shift the liability. However, this is causing so many blanket responses from large organisations - many of whom are adopting the approach that EVERY contractor is in-scope. Furthermore, when challenged, they send a copy of a CEST which bears no relation to the actual contract or contractor.
An example dates back to the aborted rollout in 2020 but still highly relevant now! A consultancy client of mine providing ad-hoc (and infrequent), relatively low-value, IT-related support (team of 6 staff - substitution possible) to a "large" client (and countless others beside). When challenged, they stated there was an exlusivity clause, but what they meant was that there was a confidentiality clause. Despite being challenged, they refused to back down stating that their head office had directed that all contractors are in-scope - regardless of circumstances. My client ended up walking away!
Rather than spending the money on a specialist team to tackle compliance, HMRC really should concentrate on educating the "employers" and their own "officers" in what compliance is! If this rollout is to be successful, it must be done properly. The contractor market is ESSENTIAL to the UK economy. Contractors (I would say the majority) are not all disguised employees, every company is not a PSC, and every sole trader is not a "worker". Any suggestions otherwise, or any attempts to apply blanket treatments can only be a bad thing IMO.
1st Jan 2021
QUOTE: "The same applies when agents are delayed in filing a return due to the pandemic and this will also be treated as a valid reasonable excuse."
Given HMRC's usual interpretation of a reasonable excuse, I would question whether penalties will be "cancelled easily" is true! HMRC have always been relatively specific in addressing reasonable excuses and rarely look at events (leading to late submissions) more than a week or so prior to the deadline.
By example, a few years ago, a client was admitted to hospital in late December and discharged in the 3rd week in January (and still convalescing on 31 Jan). The return was filed in the 2nd week of February. The appeal failed because the client wasn't IN hospital on 31 Jan! I'm sure this would have been overturned by the FTT but the client did not wish to pursue this over £100.
That said... clearly, if an agent is admitted to hospital with COVID and is on a ventilator on 31st January, HMRC would be likely to deem this reasonable.
However, the majority of agents (myself included - I hope I won't be on a ventilator on 31 Jan anyway) likely to file late will not fit that category. We are behind with filing due to the inordinate additional pressures caused by the implementation, claiming and related advice in relation to SEISS, CJRS, CBILS LA Grants, HR, as well as... assisting with employer redundancies, negotiation of rent reductions, negotiation of loan holidays, reading up (and advising clients) on changes to government policy (restrictions, tiers, adapting workplaces, COVID risk assessments, PPE), and generally being a listening ear!!! I DO NOT believe for 1 minute HMRC will deem this to be a reasonable excuse! I furthermore believe a large proportion of appeals will be rejected!
So, whilst I may be being overly cynical, I honestly believe HMRC's stance in not waiving or suspending penalties is for financial gain. Some tax payers will not know that COVID is a reasonable excuse (and pay the penalty), others can't be bothered to appeal (and pay the penaty), many appeals will fail as the excuse is not "reasonable enough" (most will pay the penalty at this stage), for those who take this to the FTT it will take months and a considerable amount of time and is hardly worth the effort for £100!
I really do believe HMRC are out of touch on this one. Furthermore, I believe their suggestion of extending appeals to agent COVID related matters will be restricted to agent illness (or at best, agent self isolation)... NOT the additonal pressures experienced by agents in relation to work, family and extra support!
29th Apr 2020
You're working, you can't be furloughed... unless you forward all calls and emails to your unpaid accountant? Then you can be furloughed for as long as you want! Right?
29th Apr 2020
Doesn't charitable status mean you will still need to have an income (be it donations or otherwise)?
I believe that means you won't meet the 5 tests set out by AWeb?!
29th Apr 2020
I am shocked and amazed that this question is still being asked!
On announcement of CJRS in March, this question was posed and the advice - nay DIRECTIVE from AWeb was along the lines of...
The crisis is NOT our clients fault. We must therefore support them financially and otherwise. After all, WE should have advised them better with crisis planning.
Advice was (for ALL CLIENTS - not just those in hardship)...
- Not to charge for specific advice e.g. CJRS)
- To cease charging entirely for ongoing work/ retainers
- To write off work in progress
- To pay clients retainers to cover their ongoing costs
- To cover clients for lost income
All of the above should continue until all client businesses are back to normal and 100% back on track - this will be years!
If we can do the above from reserves, fine. If not it was advised we take out loans in order that our clients don't have to.
I have carried out as above to point 3. Some clients (who are struggling) have insisted they pay the WIP (I have accepted and expect and deserve to be chastised on here for so doing!). However, another (who is trading fairly normally from a home-based businesses) has insisted I pay them the £10K rates grant that they have lost out on because I never advised them to have their home split into residential/ non-residential! I'm sure this is a regular issue but, it is correct - WE SHOULD have had the foresight and WE SHOULD have advised accordingly!
I will soon be starting on points 4 and 5. I know I am behind most of you on this and thoroughly deserve the possible litugation that will follow. However, I have no idea how I'll do this... given the combined loss of income claim for one week alone is around 5x the entire annual revenue of my practice! How are others handling this?
Clearly this will all be difficult/ nigh on impossible. However, if some accountants do as directed/ advised and others either; don't or cherry pick, we're likely to end up with years of litigation cases!!!
Finally, people keep mentionning Tesco! PLEASE STOP! Tesco is a business and is required to make profit!!! WE are neither!!! Furthermore, RetailWEB (I know it doesn't exist... that's not the point) has not DIRECTED Tesco to give food away for free OR to pay it's customers retainers or loss of income. We're this to change, or if Tesco were to cease being in business with a view to making profit, it would be a more equal for comparison.
So, to end a long post
- NO certainly DO NOT charge for CJRS
- DO NOT charge any fees for ongoing work
- WRITE OFF any old WIP
- PAY clients retainers
- PAY clients for lost income
It really can't be simpler than that? Can it?
20th Jun 2018
This crazy attempt at shifting the buck will not solve the issue of "missing VAT". Granted.. . in the case of Carillion, this would have avoided the loss of tax receipts but, is that really where the problem lies.
The way I see it, no reputable contractor would look to avoid paying VAT to subcontractors. Why would they? They claim it back and, in the case of new build, the output would be zero rated. Furthermore, the suggestion would be that the contractor is subcontracting for "cash" which would inevitably mean a much larger taxable profit.
Likewise, I can't see a subcontractor avoiding charging VAT to a registered contractor the NET value (and hence the true cost to the contractor) is the same with or without VAT.
However, I am not averse to seeing changes made in construction. The problem is that, missing VAT is more likely to occur in the final transaction (i.e. the ultimate client). How many large contractors seek to work "for cash"? I doubt there are many. However, how many smaller builders work "for cash"... either to undercut a reputable builder or... to avoid VAT registration altogether? I would suggest there are numerous examples!
Unfortunately, until the calls of the FMB, NHBC etc. are heard and consideration given to the suggestion of a reduced rate of VAT for extensions and refurbishments, the chasm between using a VAT registered builder and a non-registered one (or someone who is willing to ignore the law), is simply too attraction to the end client and/ or the disreputable builder.
Finally, and incidentally, having worked for a short while in Spain, I've experienced their attempt at RC. In all honesty, there is so much confusion about "who pays the VAT" that it gets to the stage where hardly anyone pays it! How in earth do HMRC police that?
21st Jul 2016
Oh... and one other bonus...
The client dashboard and system may be adapted using your Affinity account. Through simple logo uploads and modifications of simple css features (i.e. colours) you can have a dashboard which is personalised to your practice.
21st Jul 2016
I started using QuickFile a couple of years ago. I found, to my amazement, that it was simple enough for clients to use and is feature rich.
Admittedly, it's not one for all BUT for clients who are stuck in the rut of Excel entry, it prevents some of the balancing issues and complex calculations required of a "for all" spreadsheet solution.
Sales, purchases and general entries are similar to the key players. Reporting is limited to standard TB, P&L, Aged Debtors/ Creditors etc. but, as a lifelong Sage user I do realise that I use a mere handful of their many "standard" reports.
Sales invoices can be emailed in a straight forward and automated manner. However, for no additional cost (aside from normal merchant fees), invoices can be paid online through Paypal, Stripe, GoCardless and many other online payment gateways.
As for cost... a standalone client can use QuickFile for free (up to a transaction limit) whereas, to access using Affinity (their accountant's system), there are fees payable (from around £1-£3 per client per month). Larger clients are charged £45 per annum (up front) for the standalone system BUT, the same package works out to a little over £36 per annum (billed monthly in arrears and based on usage) when purchased through Affinity. I tend to bill my clients the £3 per month.
Clearly, there are some limitations and there is definitely a requirement in the market for some of the "bigger players". However, for the smaller client with a smaller budget, QuickFile is well worth a review. After-all, the client could easily save £3 per month in the processing fees associated with transactions which are simply "too complex" for a "simple bookkeeping spreadsheet".
Check QuickFile out at quickfile.co.uk where you can also see further information in relation to Affinity.
27th Jun 2016
I love the way Giles Mooney suggests Brexit is "optimistic for accountants".
It is only too true that clients are looking for advice from accountants (my email has gone into meltdown).
However, the fact is that I am simply unable to provide any advice (until such time as the answers are given on high) and will not provide clients with half-baked assumptions served up as "advice".
There are advisors who stated on Friday that they are "in the know", have a backdoor knowledge and can provide concrete answers. One client is already seeking to invoke Article 50 of my T&Cs to move to one such accountant.
In the meantime, what do we do whilst we watch our client base dwindle to those who state they are in the know. Is it possible that I am missing a trick and that there is indeed a blueprint out there for which I have no knowledge yet those who do have access to full information about concrete decisions regarding EU exit?