Member Since: 12th Jul 2009
25th Apr 2017
25th Apr 2017
I remember having this conversation with a colleague a while back and believe the answer is the lower rate; i.e. that applicable to the shares. I am not sure if that has since been ironed out as it as a bit of a loophole.
28th Mar 2016
HMRC have absolutely no interest in whether you hold a letter of engagement.
If you want them to speak to you directly, yes you need to get the agent authorisation in place.
4th Nov 2015
Has there actually been a cessation?
In strictness, if the trade ceased then any losses from that trade to the date of cessation will lapse.
If there are further expenses prior to commencement of new trade then you should be able to bring those into account for the new trade.
The problem is in deciding when the trade ceased, and indeed whether it did at all. There is probably an argument that the trade continued; a lack of director time, income and expenditure is not necessarily an indication of cessation. If a gilt edged opportunity arose then presumably the director would have been quick to refocus his attention here. The continuation of the website, and perhaps the payment of debts, tax, etc perhaps also helps the argument for a continuing trade.
It really depends upon the facts but if you can justify a continuation I would probably go with that as you can just continue with claiming expenses as you were and limit the risk of any losses being wasted.
If it was a just lull in activity rather than a cessation of trade then HMRC certainly need not be informed. They won't understand the concept of a temporary break or period of non-trading, they will just see a cessation.
1st Nov 2015
So is the conclusion here that, even at £500pm, it would have been correct not to report the monthly payments under RTI until YTD salary exceeded the annual LEL?
I thought CA44 was just in reference to the calculation of NIC. Doesn't the RTI reporting requirement remain?
30th Oct 2015
Why would there be fines?
Nothing is late, nothing was incorrect.
I would have thought that if HMRC issued penalties you could get them overturned quite easily.
Although I suppose it is HMRC we are talking about.
15th Mar 2015
I think it was only the first property where you have mentioned intentions. I think this is important. Based on the stated intention of the first property it doesnt sound like the activities were in the nature of trade but there are other factors to consider (badges of trade). I wonder what the son's usual trade is as well.
If you are happy the development on first property did not amount to a trade you would only then consider PPR rules. Intention is again important there. I am not actually clear if the son or parents ever resided at property one, let alone whether they ever intended it as a permanent home, or if they had other residences at this time.
With the other properties the same considerations also apply. Although, at the time of property two it seems apparent that there was another parental residence. Not sure if any elections made, perhaps this is still possible - two year window - so consider some protective elections.
Property three seems hard to place as a residence if uninhabitable. Seems a bit odd that he lived somewhere uninhabitable, but I dont know Counxil Tax definition of uninhabitable. I doubt HMRC would love the idea of him having best of both worlds. If sormone sleeps on a building site for convenience or lack of options, that doesnt sound like a residence to me - but its self assessment.
Property four as has been said seems difficult to say qualifies for PPR based on facts given. The fact he hasnt lived there may not be an issue, thought there was a 12 month period of non occupation due to redecoration allowed -but the intention to live there needs to have existed.
I think you need to set out the rules to your client and establish intentions before advising. They need to be aware HMRC could expect them to prove what they say and will look at all evidence. You might want to think about disclosing all transactions on tax returns, even if going down PPR route, to limit HMRC's discovery powers.
14th Mar 2015
With the accruals basis you would apportion the rent and expenses to the tax year to which they relate. Wouldn't 21 March 2014 to 5 April 2014 be 16 days?
HMRC will accept using a cash basis where gross receipts are under £15k for the year. If that works out better for you, maybe consider using that? Could make your net profits lower.
13th Mar 2015
Sounds like you have a point
... but bearing in mind you have only been asked to comment on the CGT, I would be careful about what you say and ask for in respect of the form 17 as you are potentially opening a can of worms.
I would be more keen to talk about incorporation of the letting business.
12th Mar 2015
Reason of employment
S114 ITEPA doesn't require the car to belong to the employer.
Presumably company B has made the car available to the employee due to their employment with company A.
HMRC's take on it is here: