You can claim anything if the cost is 'wholly and exclusively' incurred for the purposes of a trade. If an expense is incurred for more than one purpose, i.e. part business, part private, you can apportion it and claim the business element, but you can only to that if you are able to identify a part or proportion of the expense that's incurred wholly and exclusively for the purposes of the trade.
One might apportion this type of cost.
Bit of a minefield if you are not savvy.
Unsure if I can post a link here, there are good guides on this topic but see this one for an intro into the topic. Might be sensible to appoint an accountant if you are starting out so as to ensure that you navigate the minefield accounting for tax purposes. https://www.rossmartin.co.uk/what-expenses-can-i-claim4/18-expenses-arti...
I agree that its something of a shocker of a decision. I guess that we all have bad days, but to get it all so wrong is unusual. I can't find the original FTT decision and it would be good to review that. Does anyone have a link?
I have had the same issue with Taxfiler: a case of 'reported but in the wrong box. Extremely annoying that the Other business income box [box 10 on the short return or box 16 on the long version ] fails to provide identical wording to the HMRC's SA return.
As noted above this should say "Any other business income (include coronavirus support payments such as CJRS, but not SEISS)", but instead Taxfiler just gives us "Any other business income (including Coronavirus Job Retention Scheme payments)".
I can see our name is being taken in vain and I think I need to clear the waters.
The relevant part of PIM2120 says:
"...The normal legal and professional fees incurred on the renewal of a lease are also allowable if the lease is for less than 50 years. But any proportion of the legal and professional costs that relate to the payment of a premium on the renewal of a lease are not deductible.
Where a replacement lease follows closely on a previous one, and is in broadly similar terms, a change of tenant will not normally make the associated legal and professional costs disallowable. Any proportion of the legal or other costs that relate to the payment of a premium on the renewal of a lease will, of course, remain disallowable.
If, however, the property concerned is put to some substantial use other than letting, such as occupation by the owner between lets, or where, say, a long lease replaces a short lease, the legal and other costs will be capital expenditure. In such circumstances, the expenditure is analogous to a physical alteration or improvement to the landlord’s capital asset..."
Reading the whole of that, it can be seen that para 1, relates to short leases, para 2, short or long, para 3, short or long.
Our note said this, on the topic of allowed legal expenses:
Renewals of short leases (less than 50 years) are allowed (this echo's HMRC's para 1)
Renewals or replacements of long leases (50 years or more) are allowed where there is continuity of the old lease, and the renewal is drawn up in similar terms to the old. (this paraphrases HMRC's para 2).
We also added in Disallowed legal expenses 'Proportion of costs that relate to a payment of premium'
I don't believe that our author's paraphasing changes the meaning, as HMRC's para 2 cannot be only talking about short leases because it is unnecessary to do so when para 1 says that they are allowable.
I therefore wholly object to being told that we are wrong because our author is simply agreeing with HMRC.
I can see our name is being taken in vain and I think I need to clear the waters.
The relevant part of PIM2120 says:
"...The normal legal and professional fees incurred on the renewal of a lease are also allowable if the lease is for less than 50 years. But any proportion of the legal and professional costs that relate to the payment of a premium on the renewal of a lease are not deductible.
Where a replacement lease follows closely on a previous one, and is in broadly similar terms, a change of tenant will not normally make the associated legal and professional costs disallowable. Any proportion of the legal or other costs that relate to the payment of a premium on the renewal of a lease will, of course, remain disallowable.
If, however, the property concerned is put to some substantial use other than letting, such as occupation by the owner between lets, or where, say, a long lease replaces a short lease, the legal and other costs will be capital expenditure. In such circumstances, the expenditure is analogous to a physical alteration or improvement to the landlord’s capital asset..."
Reading the whole of that, it can be seen that para 1, relates to short leases, para 2, short or long, para 3, short or long.
Our note said this, on the topic of allowed legal expenses:
Renewals of short leases (less than 50 years) are allowed (this echo's HMRC's para 1)
Renewals or replacements of long leases (50 years or more) are allowed where there is continuity of the old lease, and the renewal is drawn up in similar terms to the old. (this paraphrases HMRC's para 2).
We also added in Disallowed legal expenses 'Proportion of costs that relate to a payment of premium'
I don't believe that our author's paraphasing changes the meaning, as HMRC's para 2 cannot be only talking about short leases because it is unnecessary to do so when para 1 says that they are allowable.
I therefore wholly object to being told that we are wrong because our author is simply agreeing with HMRC.
I would guess that quite a few people will have run into problems. I don't mind admitting that I, a qualified accountant of a very long time who thought that they knew their own software inside out discovered that my new MTD returns were throwing up all kinds of oddities - first off it claimed that figures were 'adjusted' when they were not - this is apparently a rounding issue which the software is investigating! So I have no idea about that, but it will be a real worry once the software starts 'talking to HMRC' if it is making errors internally... Then I had a whole section called 'Late Claims' - it transpired that I was not doing something called 'publishing' my old style returns when I created a return and PDF'd it before entering it into HMRC's system (I was not using the software to submit to HMRC pre-MTD as I tried a couple of times and got errors and then got a surcharge warning for not realising it has not filed - once bitten twice shy and all that). I notice from the forums for the software that hundreds of people seem to have had this issue with so called late claims. I ended up having to go back and run a couple of year's returns again and try and work out what on earth was happening. After three days I gave up, I doubt that there is any major loss to HMRC but there was a huge loss to us in terms of my time. I have kept a record of my pathetic efforts to sign up for MTD, see https://www.rossmartin.co.uk/making-tax-digital-vat I still cannot get one of our own companies properly signed up and that is very, very irritating. So yes, if people are not thoroughly investigating what is happening to their so-called 'Late claims' its very likely that their first returns will be wrong.
We have just fallen foul of their extraordinary terms. It seems hard to believe that a company of the size of Lexis Nexis is still trying this on after all this time.
Page 51 of this government handout has an example of an unfair contract term. My advice would to defend any claim via the court if needed and use another supplier.
I would recommend www.rossmartin.co.uk I am of course biased in my recommendation and this is the service I use every day: ). We found that we were not using Lexis stuff at all.
I am posting this across the numerous threads on this topic. Its now 2019...(yes, obvs, but it seems that this problem back in 2009). We have just fallen foul of their extraordinary terms. It seems hard to believe that a company of the size of Lexis Nexis is still trying this on after all this time.
Page 51 of this government handout - full link below, has an example of an unfair contract term. My advice would to defend any claim via the court if needed and use another supplier.
I would recommend www.rossmartin.co.uk as an alternative information and news service. I am of course biased in my recommendation and this is the service I use every day: ) We found that we were not using Lexis stuff at all. https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
We have just fallen foul of their extraordinary terms, it is now 2019... It seems hard to believe that a company of the size of Lexis Nexis is still trying this on after all this time. Page 51 of this government handout has an example of an unfair contract term. My advice would to defend any claim via the court if needed and use another supplier. I would recommend www.rossmartin.co.uk I am of course biased in my recommendation and this is the service I use every day: ). We found that we were not using Lexis stuff at all. https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
We have just fallen foul of their extraordinary terms, it is now 2019... It seems hard to believe that a company of the size of Lexis Nexis is still trying this on after all this time. Page 51 of this government handout has an example of an unfair contract term. My advice would to defend any claim via the court if needed and use another supplier. I would recommend www.rossmartin.co.uk I am of course biased in my recommendation and this is the service I use every day: ). We found that we were not using Lexis stuff at all. https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
My answers
You can claim anything if the cost is 'wholly and exclusively' incurred for the purposes of a trade. If an expense is incurred for more than one purpose, i.e. part business, part private, you can apportion it and claim the business element, but you can only to that if you are able to identify a part or proportion of the expense that's incurred wholly and exclusively for the purposes of the trade.
One might apportion this type of cost.
Bit of a minefield if you are not savvy.
Unsure if I can post a link here, there are good guides on this topic but see this one for an intro into the topic. Might be sensible to appoint an accountant if you are starting out so as to ensure that you navigate the minefield accounting for tax purposes. https://www.rossmartin.co.uk/what-expenses-can-i-claim4/18-expenses-arti...
I agree that its something of a shocker of a decision. I guess that we all have bad days, but to get it all so wrong is unusual. I can't find the original FTT decision and it would be good to review that. Does anyone have a link?
I have had the same issue with Taxfiler: a case of 'reported but in the wrong box. Extremely annoying that the Other business income box [box 10 on the short return or box 16 on the long version ] fails to provide identical wording to the HMRC's SA return.
As noted above this should say "Any other business income (include coronavirus support payments such as CJRS, but not SEISS)", but instead Taxfiler just gives us "Any other business income (including Coronavirus Job Retention Scheme payments)".
I can see our name is being taken in vain and I think I need to clear the waters.
The relevant part of PIM2120 says:
"...The normal legal and professional fees incurred on the renewal of a lease are also allowable if the lease is for less than 50 years. But any proportion of the legal and professional costs that relate to the payment of a premium on the renewal of a lease are not deductible.
Where a replacement lease follows closely on a previous one, and is in broadly similar terms, a change of tenant will not normally make the associated legal and professional costs disallowable. Any proportion of the legal or other costs that relate to the payment of a premium on the renewal of a lease will, of course, remain disallowable.
If, however, the property concerned is put to some substantial use other than letting, such as occupation by the owner between lets, or where, say, a long lease replaces a short lease, the legal and other costs will be capital expenditure. In such circumstances, the expenditure is analogous to a physical alteration or improvement to the landlord’s capital asset..."
Reading the whole of that, it can be seen that para 1, relates to short leases, para 2, short or long, para 3, short or long.
Our note said this, on the topic of allowed legal expenses:
Renewals of short leases (less than 50 years) are allowed (this echo's HMRC's para 1)
Renewals or replacements of long leases (50 years or more) are allowed where there is continuity of the old lease, and the renewal is drawn up in similar terms to the old. (this paraphrases HMRC's para 2).
We also added in Disallowed legal expenses 'Proportion of costs that relate to a payment of premium'
I don't believe that our author's paraphasing changes the meaning, as HMRC's para 2 cannot be only talking about short leases because it is unnecessary to do so when para 1 says that they are allowable.
I therefore wholly object to being told that we are wrong because our author is simply agreeing with HMRC.
I can see our name is being taken in vain and I think I need to clear the waters.
The relevant part of PIM2120 says:
"...The normal legal and professional fees incurred on the renewal of a lease are also allowable if the lease is for less than 50 years. But any proportion of the legal and professional costs that relate to the payment of a premium on the renewal of a lease are not deductible.
Where a replacement lease follows closely on a previous one, and is in broadly similar terms, a change of tenant will not normally make the associated legal and professional costs disallowable. Any proportion of the legal or other costs that relate to the payment of a premium on the renewal of a lease will, of course, remain disallowable.
If, however, the property concerned is put to some substantial use other than letting, such as occupation by the owner between lets, or where, say, a long lease replaces a short lease, the legal and other costs will be capital expenditure. In such circumstances, the expenditure is analogous to a physical alteration or improvement to the landlord’s capital asset..."
Reading the whole of that, it can be seen that para 1, relates to short leases, para 2, short or long, para 3, short or long.
Our note said this, on the topic of allowed legal expenses:
Renewals of short leases (less than 50 years) are allowed (this echo's HMRC's para 1)
Renewals or replacements of long leases (50 years or more) are allowed where there is continuity of the old lease, and the renewal is drawn up in similar terms to the old. (this paraphrases HMRC's para 2).
We also added in Disallowed legal expenses 'Proportion of costs that relate to a payment of premium'
I don't believe that our author's paraphasing changes the meaning, as HMRC's para 2 cannot be only talking about short leases because it is unnecessary to do so when para 1 says that they are allowable.
I therefore wholly object to being told that we are wrong because our author is simply agreeing with HMRC.
I would guess that quite a few people will have run into problems. I don't mind admitting that I, a qualified accountant of a very long time who thought that they knew their own software inside out discovered that my new MTD returns were throwing up all kinds of oddities - first off it claimed that figures were 'adjusted' when they were not - this is apparently a rounding issue which the software is investigating! So I have no idea about that, but it will be a real worry once the software starts 'talking to HMRC' if it is making errors internally... Then I had a whole section called 'Late Claims' - it transpired that I was not doing something called 'publishing' my old style returns when I created a return and PDF'd it before entering it into HMRC's system (I was not using the software to submit to HMRC pre-MTD as I tried a couple of times and got errors and then got a surcharge warning for not realising it has not filed - once bitten twice shy and all that). I notice from the forums for the software that hundreds of people seem to have had this issue with so called late claims. I ended up having to go back and run a couple of year's returns again and try and work out what on earth was happening. After three days I gave up, I doubt that there is any major loss to HMRC but there was a huge loss to us in terms of my time. I have kept a record of my pathetic efforts to sign up for MTD, see https://www.rossmartin.co.uk/making-tax-digital-vat I still cannot get one of our own companies properly signed up and that is very, very irritating. So yes, if people are not thoroughly investigating what is happening to their so-called 'Late claims' its very likely that their first returns will be wrong.
We have just fallen foul of their extraordinary terms. It seems hard to believe that a company of the size of Lexis Nexis is still trying this on after all this time.
Page 51 of this government handout has an example of an unfair contract term. My advice would to defend any claim via the court if needed and use another supplier.
I would recommend www.rossmartin.co.uk I am of course biased in my recommendation and this is the service I use every day: ). We found that we were not using Lexis stuff at all.
https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
I am posting this across the numerous threads on this topic. Its now 2019...(yes, obvs, but it seems that this problem back in 2009). We have just fallen foul of their extraordinary terms. It seems hard to believe that a company of the size of Lexis Nexis is still trying this on after all this time.
Page 51 of this government handout - full link below, has an example of an unfair contract term. My advice would to defend any claim via the court if needed and use another supplier.
I would recommend www.rossmartin.co.uk as an alternative information and news service. I am of course biased in my recommendation and this is the service I use every day: ) We found that we were not using Lexis stuff at all.
https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
We have just fallen foul of their extraordinary terms, it is now 2019... It seems hard to believe that a company of the size of Lexis Nexis is still trying this on after all this time. Page 51 of this government handout has an example of an unfair contract term. My advice would to defend any claim via the court if needed and use another supplier. I would recommend www.rossmartin.co.uk I am of course biased in my recommendation and this is the service I use every day: ). We found that we were not using Lexis stuff at all. https://assets.publishing.service.gov.uk/government/uploads/system/uploa...
We have just fallen foul of their extraordinary terms, it is now 2019... It seems hard to believe that a company of the size of Lexis Nexis is still trying this on after all this time. Page 51 of this government handout has an example of an unfair contract term. My advice would to defend any claim via the court if needed and use another supplier. I would recommend www.rossmartin.co.uk I am of course biased in my recommendation and this is the service I use every day: ). We found that we were not using Lexis stuff at all. https://assets.publishing.service.gov.uk/government/uploads/system/uploa...