Member Since: 3rd Nov 2006
11th Aug 2015
Why the fixation with first time buyers ?
I think I've posted this remark before. Germany and many other countries get by perfectly fine without everybody expecting to own their own home. I suppose what I've just written is like swearing in public !
However the economics of high house prices are not dictated by whether buy to let buyers are in the market or not, but by the shortage of actual houses and flats in relation to the number of people who want to live in them.
How the houses are ultimately financed is irrelevant. Having buy to let as a market option actually accelerates the speed at which the market will adjust by building more of the things.
That good ole supply and demand thing...Artificially lowering the price of housing by shutting out sources of capital to finance them will result in fewer builds and a longer time for the shortage to be ironed out.
20th Jul 2015
We've had double taxation for many years.
Tax and NIC on your earnings, for example. Since 1958.
Or duty and VAT on your beer. Since 1973.
Let's keep our complaints real.
Good point. We have to consider it an extra tax.
Which makes the chancellor's boast of "lowest corporation tax rate in the developed world" a bit of a hollow claim.
Even when the headline rate reaches 18%, the real rate will be 25.5% minimum.
I will repeat, UK shareholders should now buy foreign company shares, and foreign shareholders should buy UK company shares.
In fact I wonder if it is even legal under EU rules to charge UK shareholders in a UK Company more tax on profits than a foreign shareholder ?
20th Jul 2015
Principle of double taxation
Now that the principal of double taxation for the same profit has been firmly established by our cleverly fleecing chancellor, it is more than likely that the 7.5% rate won't last long, and will have a life of its own. Expect 10% in a budget sometime soon, followed by 12.5%, 15% and so on.
So forget all the strategies for minimising, sell up and take any money out at 10% ER CGT before it's too late for that too.
Overseas buyers, who won't have to pay the double tax, will now be more interested in buying UK company shares than their UK owners will be in retaining them.
13th Jul 2015
There's quite a few facts missing, maybe to be inferred :
Are the directors also 50:50 shareholders ?
If the business is worth < £5000, and there is £10,000 in the bank, who is the creditor for >£5000 ? The Vatman ? the taxman ? one of the directors or shareholders ( you say there are no trade creditors as such ) ?
They have to be careful not to confuse company money with their own money. One shareholder can't just normally use the bank account to buy out the other shareholder ( well he can, but he would be borrowing money from the company to do so, which also has tax implications ). He would normally pay out dividends from profits ( are there any ? ), but then his partner would get half of that anyway. Then he would use that nett money, after tax, to buy his partner's shares
If there are no profits accumulated, it looks like their best bet is to pay off whoever the creditor for > £5000 is, pay themselves the remaining cash as dividend ( if profits are available) or wages, and cease trading, applying to have the company struck off after a period of non-trading. Meanwhile the partner who wishes to stay in business can restart on his own.
29th Jun 2015
Used to be called a whitewash
We did just that when I set up a new holding company with a new business partner to buy out my former company. The new holding company borrowed some of the money from its future subsidiary's cash reserves, and we had to go through a procedure called a whitewash with our accountants to satisfy the Revenue that the transaction was legit. That was 7 years ago. The loan is still outstanding. I have since been told that the whitewash procedure is no longer required in such cases.
26th Nov 2014
Is it a fiction ?
My implied point being that if HMRC actually show it grossed up on my Self Assessment summary, then I feel the client in Latvia is fully entitled to take the same view, declare the dividend grossed up, and reclaim the tax credit as tax paid by them, albeit indirectly as CT in the client's name by the company. If the local tax officials query it, the first line of defence is to show the tax credit vouchers. It is real tax that has really been paid in the client's name. It is at least worth entering into the discussion.
If on the other hand, it is considered a fiction, then the client should show only the net amount of dividend on their local tax return, and claim nothing back.
What they should avoid doing is showing the gross and then not claiming the amount of the tax credit back. This is a sure way to guarantee you will be taxed twice.
The reason we call the tax credit "fiction", is that HMG, in their usual shoddy approach to such matters, have legislated to prevent non-tax-payers like OAPs, pension funds and so forth from reclaiming real tax they have paid through the ownership of company shares. It's only standard and higher rate taxpayers who seem to end up even-stevens with the dividend tax credit system, and not those who need to be, and should be, outside the tax catch.
26th Nov 2014
Tax credit is not fiction
I seem to remember that when I do my SA return, the summary that I get back from HMRC shows my dividend income grossed up, as part of their calculation of my total taxable income. So is it a fiction, if HMRC think it's real ... ?
10th Oct 2014
Outside the Scope
"Outside the Scope" is a dangerous phrase. It has a specific technical meaning in UK VAT legislation and it does not include this type of sales.
A B2B supply of services in the EU but outside the UK is still "within the scope", (because if it were supplied in the UK it would be VATable) but VAT is not chargeable to the customer and therefore not payable to HMRC.
I believe to qualify for this, you need to make sure the customer in Italy is VAT registered over there and obtain their VAT number.
You will then also need to declare the sale of services to this customer in your EC Sales List, assuming your sales to EU customers total over a certain amount. ( https://www.gov.uk/vat-how-to-report-your-eu-sales ).
Also you cannot exclude this turnover from your total in your VAT Return.
9th Oct 2014
Our auditors usually ask us questions that in effect are asking us to confirm that we have correctly separated reimbursed subsistence from entertainment and querying travel invoices that might seem excessive. We have to actively confirm to them that all is ok !
15th Aug 2014
Forgot the VAT ?
Shouldn't 3p per mile +5% VAT should be reimbursable ?