Member Since: 22nd Jun 2006
19th Oct 2015
CGT relief via EIS
As one who rarely deals with EIS may I ask a couple of questions:-
1) does the subscription to the company not have to be in 'cash' which would mean selling the property and buying it back?
2) is a property letting business a 'qualifying trade' for EIS?
20th Aug 2015
Just hope the new version.....
........is put together in a bit less of a rush than the previous shoddy effort and by someone who understands company accounts - e.g. - space for share premium accounts. I use commercial CT with HMRC for smaller/est clients to keep their costs down. I can't see my commercial supplier only coming out at £10 per co for the add-on capacity but I, and hopefully others, will make a point of letting people know who is responsible for the increases - assuming that the use of client's codes mentioned elsewhere doesn't prove possible - otherwise plus ca change...
3rd Aug 2015
Most of the 'difficulties' which Mr Harra and his cohorts talk of are because HMRC appears to make it their business to distance themselves from Agents - yes, I have heard of 'Working Together' and rightly or wrongly I consider it no more than a sideshow; unrepresentative and possibly even a token to deflect attention.
I have practised through the nineties and earlier when:-
a) one could contact a local inspector up to DI level merely by picking up the phone - the answer time was measured in seconds rather than minutes and hours - and speak to effectively fellow professionals;
b) one could attend local society meetings with HMRC - usually a party of inspectors and TOHGs and discuss issues not as a national committee a la 'Working together' but as a group of local accountants, thus, nationwide vastly increasing the amount of contact. In my estimation a better understanding was developed from both sides and I don't think anyone from either party was tempted to 'turn native';
c) Inspectors were local and knew their 'patch' and the taxpayers and agents therein - for better or for worse.
The tragedy of computerisation is that whilst, when it works, it speeds things up, it has led to an enormous gulf appearing between HMRC and taxpayers/professionals and until HMRC recognise that meaningful communication is what matters in tax, as in all walks of life, then they can thrash around with research etc and blame everyone but themselves but nothing is going to improve.
And yes, unless HMG outlaws them, agents will always be there because the vast majority of individuals and businessmen/women don't like dealing with tax.
10th Jun 2015
There could be quite a few people who didn't appeal within 30 days as they felt they had no excuse under the then-prevailing regime.
I would suggest they try a late appeal on just those grounds - otherwise HMRC's 'concession' is somewhat devalued.
25th Mar 2015
Another fine mess....
...... is where this lot is likely to end up.
As for the demise of accountants I would say highly unlikely as we are one of the few disciplines/professions who really can sort out these kind of things once they begin to go pear-shaped; or prevent them getting that far and I think the average person - i.e. who this lot is aimed at - recognises this.
Businessmen large or small - and particularly the latter - are generally not psychologically and/or educationally able to deal with bookkeeping/accounting/tax returns - if they were they would be doing it successfully now. As we already know as a profession, if one is trained there is nothing to it other than time and application - but otherwise it isn't that easy.
Things may change on the surface but the underlying challenges and needs won't.
10th Mar 2015
Not wishing to demoralise anyone but......
........with one particular client, after about five years of going through p&l account and balance
sheet, explaining things (or so I thought) and asking each year if everything made sense, after giving his usual assent in year 5 he then pointed to the balance sheet and remarked how fascinating it was that every year for five years the two totals matched each other. Hey ho.
15th Oct 2014
Again, there are issues. Some close companies merely let investment properties which wouldn't attract NIC as a self-employed activity so you would have to make an exception there, if nowhere else, unless you are just looking to increase taxation.
Maybe all IR35 needs is to be re-jigged so the burden of proof of independence goes back to the 'employer' - as is still the case with a non-company self-employed person - CIS being a prime example. The obvious problem would be as to whether employers would insist on PAYE only and squeeze rates of pay to compensate for the employer NIC instead of ensuring that the reality of engagements is independence. I wasn't privy to the deliberations surrounding the introduction of IR35 but have heard it said that pressure from big business caused the burden of proof to be put on the 'employee'. Maybe this was so or maybe the government wanted to avoid what I have just suggested.
15th Oct 2014
NIC on dividends
If close co dividends are to be subject to NICs then will it be just for IR35 type companies or all close companies? If the former then in trying to decide whom to NIC we are more or less back to square 1; If the latter then close companies not of the IR35 genre are going to be arbitrarily disadvantaged vis-a-vis non-close companies - not all close companies exist as service companies. So again it is a case of identifying who to apply NIC to - Square 1 again; or do you then introduce some arbitrary level of 'remuneration' which has to be NICable and beyond which dividends are acceptable (shades of Dawn Primarolo and her 'appropriate amount of tax'). Also, if NIC is to be applied should it not be at a rate equivalent to Class 2 for self-employed because bona-fide service companies are basically self-employed and all that will be achieved by imposing 12+13.8% NICs will be the rapid closure of a lot of small companies.
I don't know if it was just a(nother) Gordon Brown aberration but there was an obvious drive a few years ago to get small businesses into companies (remember 0% CT?) so is it in the government's thinking now to reverse all that - because full-blown NICs surely will?
All these things could have been done by now but haven't; possibly not just because a solution isn't that easy in practice but perhaps also because beyond HMRC there remains in government some desire to encourage small business with effectively lower tax rates (self employed have always enjoyed less NICs than the employed)?
11th Sep 2014
Thank you for that as I was unaware of the overturn and no, I don't know if it has been further appealed but, interestingly, I had a large amount of CIS penalties cancelled in an appeal after the date of the Upper Tribunal and the main grounds I had cited were 'disproportionality'.
10th Sep 2014
I don't think...
Would HMRC achieve much with an appeal?
The Bosher (lovely name for a small-time builder) case has decided that disproportionate penalties should be rescinded and despite my dislike for the way 'our hero' handled his CIS affairs the fine isn't justified in terms of loss to HMRC, scale of business etc etc.
I agree with other comments that this is likely to make a nonsense of CIS penalties but then they are something of a nonsense to begin with because in the age of human rights etc any system that mindlessly keeps adding penalties for effectively the same misdemeanour is on a par with the rack. The underlying problem is that CIS applies to an industry wherein paperwork and compliance are for many participants something culturally and mentally alien. So do you use stick/carrot or both to persuade people to comply? The Bosher decision would tend to indicate that the financial stick is only be used sparingly. Is there another form of stick? Or else how does one persuade....?