I had this question a year or so ago and as more people are taking to WFH maybe it will become more popular.
My advice then was that in order to build an office and claim any capital allowances, the company would need some sort of interest in the land either a lease or a licence to occupy at which point the client should consult a solicitor.
Alternatively the landowner should build the office and claim the allowances against the rent he would necessarily charge, with a consequent need for a tax return every year.
At this point you can see costs starting to rise which may be worth it, depending on the figures involved.
I have been working in corporate tax for over 35 years and while most redundancy questions concern the PAYE side, this exact question has been around since I started. The only W&E reason I have seen put forward for a deduction above the amount statute allows is that redundancies made by large employers can have an impact on the staff remaining. If the leavers are seen to be treated well, this can be good for the workforce.
It's not a very strong argument and virtually non existant for a PSC. And that's before you look at the PAYE side.
Around 40 years ago I started training with a firm of accountants and the first thing we did was to go on a bookkeeping course at Financial Training on Bramley Road, which others of a certain age may remember.
This exact question came up on about day 2 and the lecturer said not to worry it was asked every time the introductory course was run.
Good to see Frank Wood - Business Accounting, quoted in this case. When I started articles over 40 years ago the audit senior recommended buying that book for an explanation of the concepts I would come across. Quite correct as well.
Some firms have a policy of taking more junior staff along to client meetings. That is usually good training for seeing how you are expected to react to client's questions. It's also useful for the partner/manager who has someone to take notes.
Agreed that the question is not worded very well but I assume it is about the tax reconciliation for a company.
It will become clear if you think the logic all the way through.
When you calculate the corporation tax charge for the accounts, you add back the depreciation on all fixed assets.
In calculating the deferred tax, you will only apply that to the NBV and TWDV of those assets that qualify for capital allowances. In a simple case, the movement in the year on the deferred tax will be the depreciation less the capital allowances claimed, but crucially only the depreciation on the qualifying assets.
For your overall tax reconciliation the depreciation on qualifying assets will fall out as it is part of the deferred tax calculation but the depreciation on non qualifying assets is a reconciling item, as it is not allowed for CT and is not a timing difference for deferred tax.
That's the theory, though actually finding what the depreciation is, and the NBV on non qualifying assets can be quite difficult in practice.
I received texts from an unknown organisation asking me to call them about a client's tax liability. I just assumed it was a scam until the client received a letter from the same place. I still did not call them as to my mind they are a third party and I have a duty of confidentiality to the client. Happy to speak to HMRC and if they inform me that they have outsourced tax collection to a third party, I might speak to the third party (still not entirely sure about this.)
In any event why is the debt collector calling the tax payer's agent? They evidently do not understand how tax returns and payments are made, and presumably neither does HMRC if they are handing out agents' names and contact details.
There's an old story (possibly apocryphal) concerning one of the predecessors to the current firm of PwC, called Cooper Brothers. Apologies to old hands who will know it as it used to be repeated on initiation days at the other firms.
Cooper Brothers' office was in a street in the City called Gutter Lane, which is still there, off Cheapside.
The partners did not like the association with the address and wrote to the City authorities asking if the name of the street could be changed to Cooper Street. The City wrote back and understood the concerns but suggested instead that the firm changed their name to Gutter Brothers.
It is over ten years since I was either using them for a job or recruiting for a position but from the comments above, nothing has changed much.
One thing to beware of is that there is a massive churn in agents between the various agencies (certainly in London). If you find an individual agent who seems competent, you may find that they have moved onto another agency the next time you need them.
My answers
However simplistic this question might appear, I wish more company owners asked something similar before they withdraw funds from their company
I had this question a year or so ago and as more people are taking to WFH maybe it will become more popular.
My advice then was that in order to build an office and claim any capital allowances, the company would need some sort of interest in the land either a lease or a licence to occupy at which point the client should consult a solicitor.
Alternatively the landowner should build the office and claim the allowances against the rent he would necessarily charge, with a consequent need for a tax return every year.
At this point you can see costs starting to rise which may be worth it, depending on the figures involved.
I have been working in corporate tax for over 35 years and while most redundancy questions concern the PAYE side, this exact question has been around since I started. The only W&E reason I have seen put forward for a deduction above the amount statute allows is that redundancies made by large employers can have an impact on the staff remaining. If the leavers are seen to be treated well, this can be good for the workforce.
It's not a very strong argument and virtually non existant for a PSC. And that's before you look at the PAYE side.
Around 40 years ago I started training with a firm of accountants and the first thing we did was to go on a bookkeeping course at Financial Training on Bramley Road, which others of a certain age may remember.
This exact question came up on about day 2 and the lecturer said not to worry it was asked every time the introductory course was run.
Good to see Frank Wood - Business Accounting, quoted in this case. When I started articles over 40 years ago the audit senior recommended buying that book for an explanation of the concepts I would come across. Quite correct as well.
Some firms have a policy of taking more junior staff along to client meetings. That is usually good training for seeing how you are expected to react to client's questions. It's also useful for the partner/manager who has someone to take notes.
Agreed that the question is not worded very well but I assume it is about the tax reconciliation for a company.
It will become clear if you think the logic all the way through.
When you calculate the corporation tax charge for the accounts, you add back the depreciation on all fixed assets.
In calculating the deferred tax, you will only apply that to the NBV and TWDV of those assets that qualify for capital allowances. In a simple case, the movement in the year on the deferred tax will be the depreciation less the capital allowances claimed, but crucially only the depreciation on the qualifying assets.
For your overall tax reconciliation the depreciation on qualifying assets will fall out as it is part of the deferred tax calculation but the depreciation on non qualifying assets is a reconciling item, as it is not allowed for CT and is not a timing difference for deferred tax.
That's the theory, though actually finding what the depreciation is, and the NBV on non qualifying assets can be quite difficult in practice.
I received texts from an unknown organisation asking me to call them about a client's tax liability. I just assumed it was a scam until the client received a letter from the same place. I still did not call them as to my mind they are a third party and I have a duty of confidentiality to the client. Happy to speak to HMRC and if they inform me that they have outsourced tax collection to a third party, I might speak to the third party (still not entirely sure about this.)
In any event why is the debt collector calling the tax payer's agent? They evidently do not understand how tax returns and payments are made, and presumably neither does HMRC if they are handing out agents' names and contact details.
There's an old story (possibly apocryphal) concerning one of the predecessors to the current firm of PwC, called Cooper Brothers. Apologies to old hands who will know it as it used to be repeated on initiation days at the other firms.
Cooper Brothers' office was in a street in the City called Gutter Lane, which is still there, off Cheapside.
The partners did not like the association with the address and wrote to the City authorities asking if the name of the street could be changed to Cooper Street. The City wrote back and understood the concerns but suggested instead that the firm changed their name to Gutter Brothers.
It is over ten years since I was either using them for a job or recruiting for a position but from the comments above, nothing has changed much.
One thing to beware of is that there is a massive churn in agents between the various agencies (certainly in London). If you find an individual agent who seems competent, you may find that they have moved onto another agency the next time you need them.