Hello
What a week! Quite apart from Brexit (and the football...), life for our totally digital business is always a bundle of laughs: we've had two days of power cuts, Windows 10 upgrade issues and DNS errors. The show goes on! We are back this time with some 'back-to-basics' guides, a look at what Brexit means for tax, HMRC's Agent update, a couple of cases and updates to our guides.
A key difficulty for business owners is they may be VAT cash accounting and their accounting turnover is calculated on an accruals basis. We summarise a case this week where the failure to reconcile VAT returns to accounting turnover cost £17k in VAT. You can see what may have happened.
Many modern software packages place emphasis on cashflow and not on invoiced sales and then many accountants are on a 'race to the bottom' with fixed fee packages. Some are charging absurdly low rates. The fairly simple act of preparing a quarterly reconciliation is often omitted when time runs out and you have had a problem elsewhere in bookkeeping. It's ironic as you can quite easily program software to reconcile VAT outputs to turnover, and some packages do this for you - although none of ours do. The main problem, therefore, in most cases is time, or lack of it. We all need to allow sufficient time to do the job and to also charge for the time it takes to do things accurately, otherwise you have the expensive cost of an appeal to the tribunal and maybe a tax penalty or two.
Finally, it is difficult not to be distracted by politics. Brexit now seems like old news as we wait to see who is stabbing who in the back today as the Tory and Labour parties act out their own versions of Sky Atlantic's 'Game of Thrones.' Although you may not be a fan of the TV series (or ever seen it), it has some interesting similarities to our little part of the world. There's a powerful blond queen from across the water, a new female warden of the North and potentially a new woman in power 'down south'; although let's hope that Teresa May or perhaps Andrea Leadsom won't go to the same extremes as Cersei Lannister (who blew up her enemies). A week though is a long time in politics and it is quite likely that I am already out of date before I even finish this sentence...
Back soon
Nichola Ross Martin FCA Tax Director
Your Virtual Tax Partner®: online PRACTICAL support for accountants & tax advisers BY accountants & tax advisers
Quick news (freeview)
HMRC's Brexit message: Carry on as normal
HMRC has recorded a message on its phonelines to reassure taxpayers that the EU referendum result of Brexit heralds no immediate changes to the UK's tax system.
Brexit: what might it mean for tax?
A look at which of our laws are EU dependant and what changes may be on the cards.
HMRC: Agent Update June 2016
We have summarised the key content for you with links to our detailed guidance on the topics covered.
Case Update
HMRC dating error costs £653,000 in tax
In Mabbutt v HMRC a taxpayer won his appeal against a closure notice demanding £653,000 unpaid tax after HMRC used the wrong date in the enquiry notice.
Discovery assessment: UT victory for HMRC
In Pattullo v HMRC [2016] UKUT 0270 the Upper Tribunal (UT) held that a discovery assessment into a CGT avoidance scheme was valid.
Lack of turnover reconciliation leads to VAT assessment
In Wholesale Clearance UK Ltd v HMRC [2016] UKFTT the company was assessed to additional VAT on the difference between its accounting and VAT Return turnover.
Practical Tax Guides & Updates
(for subscribers)
Starting a new business?
Badges of Trade: are you trading ot not?
NEW: A hobby? A one off? When are you trading? A review of the Badges of Trade with case references and examples.
Record keeping & tax: what, how and until when?
NEW: Although HMRC's Making Tax Digital will bring about future changes, this guide provides a handy summary of the records you currently need to keep across the various taxes and how long you need to keep them.
Property investment and letting
Furnished Holiday Letting
It's summer, maybe the holiday home in Europe is on hold but the rest of the work and the UK is looking more promissing.
Property Profits and Losses: an Adviser guide
This has become a complicated topic during the course of recent years. This guide explains all the changes and links to further guidance on topics such as jointly held property, elections, the replacement cost basis etc.
Buy to let ownership: personal or limited company?
What works better, holding a buy-to-let property investment personally or via a company?
Buy to let: incorporation
How to guide, step by step with examples.
CGT: the different ways of taxing UK residential property
There are different rules and reliefs depending on who or what the owner is and where they are located. It is absurd that we need to create a table to explain this: check out this handy guide.
Overseas
Remittance basis (overseas income)
UPDATE: amended for the effect of bank and building society interest no longer being taxed at source.
CPD 'for lunch'
Bite-sized chunks of structured CPD
Savings income 2016/17
NEW: our webcast takes you through the new allowances with worked examples.
VAT essentials for start-ups
NEW: this is part of the talk from Accountex. Don't ignore VAT when you start in business, you may regret it in later years.
Editor's choice
The Directors' Tax Planning Toolkit 2016/17
Don't leave home without a link to this on your tablet: ideal for client meetings
Designing a share scheme
What share schemes are most suitable for your SMEs: start here.
Finance Bill 2016: tax update and rolling planner
Keep up to date with all developments and announcements for the 2016/17 tax year and beyond with our rolling planner.
The dividend tax index
Links to all our guides on dividend tax.
Land & Property: an Adviser's Tax Update May 2016
A summary of all the latest news and updates from all areas of property taxation with links to our detailed guidance on each topic.
Missed last time's update?
Nichola's SME Tax Update 23 June 2016
Features:
- VAT: Buy-to-lets
- VAT and partnerships
- Online marketplaces
- Non-resident directors
- Dividend tax for non-UK residents
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