I work with many GP practices, and this arrangement does come up from time to time.
Yes, there might be some tax savings by using a PSC to invoice the practice for some non-clinical work, especially if you involve other family members in the PSC, but the main issue HMRC would have is IR35/off-payroll working (bearing in mind that the small organisation exemption does not apply to GPs).
In HMRC equiries into GP Practices (which are fairly rare) the question of off-payroll working does come up, usually in connection with locums, but would also be a case in point if a GP partner was also being paid through a third party company/LLP/Partnership for non-clinical work. This should make an alert HMRC Officer take note and look for any artificial pricing or other artificial tax arrangements.
I would ask the GP and the GP Practice to utilise the HMRC CEST tool to make sure any arrangements do not fall foul of the rules (notwithstanding the weakness in the CEST tool, but its still good practice).
I wouldn't say HMRC turn a blind eye to it - its just that they don't have the manpower to look at these things.
Well done for having the energy (and time) to carry on with this. I hope you ultimately succeed. But to have to go so far and over such a long period of time....... !!
Surely, surely, there is some common sense to be found within HMRC and/or the Adjudicator's office.....
Sorry to add to your concerns, but I would just make you aware of a potential ATED issue that might arise should any of the properties be valued at more than £500k. This affects construction/development companies where a property is built with the intention of selling, but is then let by the builder.
An ATED return for new build properties must be submitted within 90 days of the earliest of first occupation or first becoming a dwelling for Council Tax purposes. As this event may have occurred some time ago, penalties will have already accrued. ATED returns should be submitted ASAP.
Hopefully, the properties are not worth more than £500k each......
HMRC do use that phrase - I think in the context of electricity being supplied by a company owned charger, to/used by a company car, that is itself used for business and private travelling. The electricity used to power the EV for the private journeys does not give rise to a BIK as the electricity is not considered as being a 'fuel'.
Hi SK321,
Do you already submit an annual Tax Return? If your wife is claiming Child Benefit, and you earn £70k pa (excluding the divs from the company) then hopefully you are already paying the Child Benefit back by way of the High Income Child Benefit Charge?
To add to earlier comments - if you engage a professional on proper business terms you need to have confidence in the advice being provided. If, for some reason, you doubt their competency then you need to instruct someone else. A recommendation is a good starting point - not the cheapest person you can find.
But the 'discount' is only 20%. Unfortunately, I've sold a house at open MV where the Estate Agent assured me the open MV was 20% higher when I signed up with him!!!
Perhaps the landlord has heard about the hassle and professional costs when trying to submit, and generally deal with a 30 day CGT return, (half joking), but add to that the cost of Estate Agents fees, and being messed around by time-wasting buyers, and the problem of what the MV ACTUALLY is when the property goes on the market, so decides that she will strike an arms length deal with the tenant. No hassle, quick sale, less costs to pay out.......
Perhaps the value is depressed because of tenants rights under the tenancy agreement?
See CGCG14541 - Consideration for disposal: market value rule: at arm's length
A bargain made at arm’s length is a normal commercial transaction between two or more persons. All of the parties involved will be trying to obtain the best deal for themselves in their particular circumstances.
This does not mean that a bad bargain cannot be a bargain made at arm’s length. For example Mr A may wish to sell his property quickly so that he can go and live in Malta. Mr B knows that Mr A wants to sell his property quickly so he offers him a low price for a quick sale. No-one else makes an offer. Mr A accepts the price Mr B has offered. This may not have been the best possible price which Mr A could have achieved if he had left the property on the market for longer but he was still trying to achieve the best deal possible for himself. It was a bargain made at arm’s length.
My answers
I work with many GP practices, and this arrangement does come up from time to time.
Yes, there might be some tax savings by using a PSC to invoice the practice for some non-clinical work, especially if you involve other family members in the PSC, but the main issue HMRC would have is IR35/off-payroll working (bearing in mind that the small organisation exemption does not apply to GPs).
In HMRC equiries into GP Practices (which are fairly rare) the question of off-payroll working does come up, usually in connection with locums, but would also be a case in point if a GP partner was also being paid through a third party company/LLP/Partnership for non-clinical work. This should make an alert HMRC Officer take note and look for any artificial pricing or other artificial tax arrangements.
I would ask the GP and the GP Practice to utilise the HMRC CEST tool to make sure any arrangements do not fall foul of the rules (notwithstanding the weakness in the CEST tool, but its still good practice).
I wouldn't say HMRC turn a blind eye to it - its just that they don't have the manpower to look at these things.
Well done for having the energy (and time) to carry on with this. I hope you ultimately succeed. But to have to go so far and over such a long period of time....... !!
Surely, surely, there is some common sense to be found within HMRC and/or the Adjudicator's office.....
......but probably not.
Sorry to add to your concerns, but I would just make you aware of a potential ATED issue that might arise should any of the properties be valued at more than £500k. This affects construction/development companies where a property is built with the intention of selling, but is then let by the builder.
An ATED return for new build properties must be submitted within 90 days of the earliest of first occupation or first becoming a dwelling for Council Tax purposes. As this event may have occurred some time ago, penalties will have already accrued. ATED returns should be submitted ASAP.
Hopefully, the properties are not worth more than £500k each......
Try searching solagp
HMRC do use that phrase - I think in the context of electricity being supplied by a company owned charger, to/used by a company car, that is itself used for business and private travelling. The electricity used to power the EV for the private journeys does not give rise to a BIK as the electricity is not considered as being a 'fuel'.
We hope to be thought of as nice, generous employers, so we give £50 vouchers at random times of the year - just as a surprise.
Gift - 'a thing given willingly to someone without payment; a present.'
I've stopped for lunch. I'll do it :)
Hi SK321,
Do you already submit an annual Tax Return? If your wife is claiming Child Benefit, and you earn £70k pa (excluding the divs from the company) then hopefully you are already paying the Child Benefit back by way of the High Income Child Benefit Charge?
To add to earlier comments - if you engage a professional on proper business terms you need to have confidence in the advice being provided. If, for some reason, you doubt their competency then you need to instruct someone else. A recommendation is a good starting point - not the cheapest person you can find.
There are lots of unknowns (as always) - hence the use of 'perhaps' in my answer.
But I would recommend a look at CG14542 by the OP and a discussion with the client.
But the 'discount' is only 20%. Unfortunately, I've sold a house at open MV where the Estate Agent assured me the open MV was 20% higher when I signed up with him!!!
Perhaps the landlord has heard about the hassle and professional costs when trying to submit, and generally deal with a 30 day CGT return, (half joking), but add to that the cost of Estate Agents fees, and being messed around by time-wasting buyers, and the problem of what the MV ACTUALLY is when the property goes on the market, so decides that she will strike an arms length deal with the tenant. No hassle, quick sale, less costs to pay out.......
Perhaps the value is depressed because of tenants rights under the tenancy agreement?
See CGCG14541 - Consideration for disposal: market value rule: at arm's length
A bargain made at arm’s length is a normal commercial transaction between two or more persons. All of the parties involved will be trying to obtain the best deal for themselves in their particular circumstances.
This does not mean that a bad bargain cannot be a bargain made at arm’s length. For example Mr A may wish to sell his property quickly so that he can go and live in Malta. Mr B knows that Mr A wants to sell his property quickly so he offers him a low price for a quick sale. No-one else makes an offer. Mr A accepts the price Mr B has offered. This may not have been the best possible price which Mr A could have achieved if he had left the property on the market for longer but he was still trying to achieve the best deal possible for himself. It was a bargain made at arm’s length.