Member Since: 6th Dec 2001
20th Jul 2006
We run a payroll bureau and add a charge for each P45 or P46 processed (ie leavers and starters)
15th Jun 2005
prior year adjustment
Any changes to a company's accounts that affect the previous year's stated balances require the previous year's accounts to be restated - but the net effect is that this year's accounts go in with different comparatives. The accounts also require a note that states how, why, what and how much.
It may also means that you have to file amended tax returns for you personally - unless you completed the CGT pages when you initially incorporated.
On a different tack. Be careful how you value goodwill as the Revenue will contest anything they see as an overvalue.
Also, from your question it is not clear if you are up-to-speed on questions like holdover relief for gift of business assets and the Capital gains implications. If not, find out.
15th Jun 2005
How long is a piece of string?
Because the UK tax system is based around self-assessment it is up to the directors to decide if they are happy with the valuation they have got already. But a wise tax partner once said to me, always get a couple of valuations and still be prepared for the District Valuer to challenge the price.
The local inspector who looks at the case has the discretion to refer the value to the District Valuer, but if you are talking about a significant value or where a small increase in value could tip the balance into a tax liability or a sale to a connected party then it will almost always be referred.
I would have thought it would be referred as there is no independant third party to the transaction and therefore the taxman will want to satisfy themselves that you are not taking the property out on the cheap.
You will also need to be careful of the duty of care on the pension trustees - this will almost certainly mean getting more than one professional valuation - else the trustees could be sued for the loss to the pension fund. Oh and the pensions regulator would be the one suing the trustees, the accountants, the lawyers and anyone else within reach!
15th Jun 2005
back to basics
I think you need to go back to basics here. The costs incurred are the director's not the company's. Either the director has transactions to his loan account that need to be cleared in the usual way - or - the company has provided him with a benefit in kind which is valued at the cost to the company. ie the value passing through the bank account, with a P11d reporting requirement and 12.8% nic charge.
The question of any business usage is a separate point and the only available route for reimbursement is the Revenue's approved mileage rates. - which would partially cover any entry in the director's loan account.
Next time, remind the director that the company's bank account is the company's money and not his. Spend your own money on your own costs and then reclaim what you can using mileage or expense claims.
4th Apr 2005
waiveng bye bye to your dividend
To make sure that you don't have an issue with HMIT, I would ensure that the meeting minutes refer to
1) paying a dividend of £x, after allowing for the dividend waiver.
2) noting that the dividend waiver was in place and that no notice revoking the waiver had been received by the time of the meeting.
Otherwise you might find that HMIT expect to see the amount voted split by the number of shares in issue - and therefore a smaller amount of cash is available to be paid to the shareholder who hasn't waived the dividend rights! ie dividend voted of £100 on the 100 shares in issue. Amount paid is £50 as 50% shareholder has waived dividend rights.
As far as I am aware no dividend voucher is required - as no dividend is payable because of the waiver.
Incidentally, the waiver must have been executed as a deed before the meeting to propose the dividends.
15th Feb 2005
more complicated than that!
Sorry, but its more complicated than that.
If the non-resident director caries out his duties abroad then he is not liable to PAYE/NI on income from a UK employer, but if he carries out his duties in the UK then he is liable. See para 5.19 in booklet IR20.
To answer the direct question, you need to submit a NI number trace request using form CA6855. This should generate a NI number - but as the DSS is not the most reliable government department at replying to post this might take a while or never!
7th Oct 2004
Most union subs are tax deductible in part
Most union subs are tax deductible, but for some of them the deduction is reduced. This is under S201 ICTA or S343 ITEPA and is on the basis that the union concerned is a professional association.
The Revenue have a list of approved professional associations or unions. However, where only part of the sub is allowable the don't give the relevant percentages on the web site (unless of course someone else has found it!). If I remember correctly this is called list 3.
18th Jun 2003
The legislation refers to transactions, knowledge, or suspicion that arises during an accountant's profession. So it appears to ignore conversations down the pub or on the golf course, but otherwise it is any information that comes your way - so yes you would have to be a whistleblower on your own employer or face a fine or jail or both!
As regards spouses salaries, the amount of the salary is up to the company's officers (ie the husband!) to determine. As accountants we need to consider if the company can take a tax deduction if the salary is not paid 'for the purposes of the company's trade'. If the salary is clearly at odds with the extent to which the spouse works for the business then no tax deduction is available - money laundering does not change the tax regulations. So if you would disallow the spouse's salary in the tax comp where is the tax evasion?
10th Jun 2003
First unpaid tax collectors - now unpaid policemen too
From the little amount of guidance information that is available at the moment it is clear that accountants (note not limited to certified or chartered but all accountants in practice), those that give tax advice and company formation agents are between a rock and a hard place.
Not only do we have to report if we have knowledge of the proceeds of crime, terrorism, etc, or if there is a transaction or circumstances that we are suspicious of but also if we didn't realise at the time but should have that a transaction was suspicious. Not having a de-minimus limit for reporting transactions may be the smaller of the two worries.
As it stands we have to report our staff & ourself for making personal phone calls but not having a p11d benefit as well as keeping in the spirit of the law and reporting dodgy clients - and yes what is the impact of this on fee protection insurance and client relations? Expensive I expect.
What can you do - lobby your MP quick before the UK legislation is completely in place!
22nd Apr 2003
and don't forget national minimum wage
Although, having said that it is my understanding that it does not apply to a director who does not have a contract of employement! If anyone knows the derivation of this I would be interested.
It is interesting to note that the IR definition of higher paid for P11d is £8,500 pa and the national minimum wage of £4.20 an hour for a 40 hour week equates to £8,736 - so it therefore follows that everybody must now be higher paid! Isn't there a bit of left hand / right hand government thinking here!
But seriously, my suggestion is that you pay a salary of £90 per week, ie £1 over the NI/Tax threshold. The director pays 21p per week, the company a futher 12p, but the individual gets a full nic stamp for pension purposes and qualifies for SSP, SMP, jobseekers allowance, etc, etc.