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EdgeNews l et t er I s s ue5 Augus t / Sept ember2015
I nt hi si s s ue
Edi t or i al I ha dagr ea ti deaf ol l owi ngwr i t i ngt her ec enta r t i c l eont he unf a i r nes sofa c c el er a t edpa y mentnot i c es( “ APN’ s ” ) ; a v a i l a bl eher e . I wonderhowma nypol i t i c i a nsha v er ec ei v edAPN’ s( none? ) a ndi ft ha ta s s umpt i oni sc or r ec t , howwoul dt heyl i k ea t a s t eoft hei rownmedi c i ner ega r di ngwel l doc ument ed pot ent i a l a bus eoft het a xs y s t em, s owhynotha v e:
Ant onL ane , Managi ngP ar t ne r -Pol i t i c i a n’ spa ya nde x pe ns e spl a c e di nt oar i ngf e nc e dpot ; -Ani nde pe nde ntr e v i e wboa r dc ons i s t i ngof me mbe r sof t hepubl i ca ppoi nt e dt o r e v i e wpol i t i c i a n’ spe r f or ma nc ea ndpa yc r i t e r i a ; a nd -( Mor ei mpor t a nt l y ) ar e v i e wof pol i t i c i a nse x pe ns e sbe f or ea c t ua l l ypa y i ngt he m. Anot he rgr e a ti de ai st of or c epol i t i c i a nst os pe ndha l f of t he i rs umme rr e c e s sonwor k e x pe r i e nc e : a f t e ra l l s omedon’ tk nowmuc hmor et ha na t t e ndi ngoneort wouni v e r s i t i e s a ndma na gi ngourf a i rc ount r y . Whya mI a t t a c k i ngpol i t i c i a ns ?I ’ m notr e a l l y ! Indt he ma ne ndl e s ss our c eof a mus e me nt ori si tbe mus e me nt ?Wha t e v e rI j e s t , y ouha v et ot hi nkt ha tt he ya r edoi ngs ome t hi ngr i ght . Af t e ra l l , weha v eas t r onge re c onomya ndt hehous i ngma r k e ti sgr owi nga ga i n.Admi t t e dl y , Gr e e c ea ndChi nawi l l ha v et he i ri n ue nc eonus , a l t houghI t hi nki ti ss a f et oa c c e ptt ha twe a r ei nabe t t e rpl a c et ha nt her e s tof E ur ope . T her e s tof E ur opei showe v e rwa i t i nga tCa l a i st oc omet oE ngl a nd, whi c hc oul dc ha nget he pos i t i ondr a ma t i c a l l y .F or t una t e l yT he r e s aMa ywe ntt oCa l a i st ot a c k l et hemi gr a ntc r i s i s a ndanumbe rof i ni t i a t i v e swe r ea gr e e d.I twa sr e por t e dt ha tbot hF r e nc ha ndBr i t i s hpol i c e t e a msa r ewor k i ngwe l l t oge t he r . I wonde rwhe t he rt heBr i t i s hpol i c ea r ea c t ua l l yi nCa l a i s gi v e nt heF r e nc ha ppr oa c ha ppe a r e dt obet ol e tt he m outof F r a nc ea ndi nt oE ngl a nd.I r e t r a c tt ha tc omme nt ; i ti sobv i ous l yunf a i ra l t houghs l i ght l yi r oni ct ha tt heUKGov e r nme nt s pe nt£7m ont hepe r i me t e rf e nc i nga tCa l a i s( t ha nk sf ort ha toneBe r na r dCa z e nue v e ) . Ma ya ndCa z e nue v ea l s oi ns pe c t e ds e c ur i t yme a s ur e s( t hef ol l owi ngi snotwha twa sa c t ua l l y s pok e na ndI ha v ema det hi supi nt hena meof humour ) : Ma y :“ Doy oul i k et hebe a ut i f ul pe r i me t e rf e nc e ? ” Ca z e nue v e :“ I ti swonde r f ul a ndI c oul dn’ tt hi nkof abe t t e rwa yof s pe ndi ngt heUKt a x pa y e r ’ smone yot he rt ha nonmyne x te x pe ns ec l a i m”
-T axr i s kupda t e - Ther et ur noft heCodeof Pr ac t i c e9( ” COP9” ) - Ac c el er a t edPa y ment Not i c es( ” APNs ” )ar es o unf ai r - Remuner a t i onpl anni ng: whoi sl i abl e? - Pl anni ngf ordea t h -T ax a t i onf orpr oper t y -F eepr ot ec t i oni ns ur anc e s er vi c e -T axc ompl i anc eda t est o r emember - EdgeNews Don’ tf or gett of ol l owus ons oc i al medi a: @Edge T ax edget ax l l p Edge T ax L L P +Edget ax
Ma y :“ Ohy oudoj e s ta ndhe r ei swhe r eBr i t a i na r ebui l di ngourne wc omma ndc e nt r e ” Ca z e nue v e : “ Ohe x c e l l e nt , I a m gl a dt he£22m weha v epl e dge dwi l l bes pe nts owe l l .Ca n t heUKGov e r nme ntbuyy ouac r oi s s a ntort we nt y ? ” We l l t heUKi sawonde r f ul pl a c es oy ouc a n’ tbl a met heupt o800, 000mi gr a nt sawe e k t r y i ngt oc omehe r e .Wha tmi ghtbei nt e r e s t i ngi showHMRCwi l l c ol l e c tt het a x e sonf ut ur e ghos te mpl oy e e sa ndt hos eope r a t i ngi nt hehi dde ne c onomy . F or t una t e l yt hea r t i c l eonwhoi sl i a bl et oP AYE( ’ Re mune r a t i onpl a nni ng: whoi sl i a bl e ? ’ ) a nd ‘ S umme rL ov i ng’ ma yi ndi c a t es omec ons i de r a t i onst one we nt r a nt st ot hehi dde n e c onomy .
Vi s i tourwebs i t ef ormor e ar t i c l esbyc l i c ki ngt hel i nkher e: www. edget ax . c om orbys c anni ngt hebar c odebel ow:
Ne ws l e t t e r T axRi s kUpdat e
SummerLovi ng: The Ret ur noft heCodeof Pr ac t i c e9( COP9) KeyPoi nt s : -COP9c a npr ov i deagua r a nt eea ga i ns tc r i mi na l pr os ec ut i on f ort a xoffenc esa l r ea dyc ommi t t ed; -HMRCwi l l r eques ta ni ni t i a l meet i nga ndwi l l e x pec ta n out l i nedi s c l os ur eoft het a xi r r egul a r i t i es , f ori nf or ma t i onon meet i ngsc l i c kher e; -Adi s c l os ur er epor twi l l needt obepr epa r eda nds ubmi t t edt o HMRCwi t hi nas t r i c tt i mepa r a met er ; -HMRCwi l l e x pec tr egul a rupda t es ; -Pa y ment sona c c ountoft a xi r r egul a r i t i eswi l l needt obe c ons i der eda ndpa i d.
T hebi gge s ta ndmos tc onc e r ni ngupda t ei st ha tHMRCha sbe e n i s s ui ngc odeof pr a c t i c eni nenot i c e s( whe r ef r a udi ss us pe c t e d) . Notma nya r ei s s ue dbyHMRC( a soppos e dt ot he m be i ngr e que s t e dbya dv i s e r s ) a ndc e r t a i nl yov e rt hel a s tt woy e a r st he numbe rs e e mst oha v ef a l l e nwhi l s ta t t e nt i oni sdi r e c t e da ts e t t l e me ntoppor t uni t i e s .S ot os e ea ur r yof ne wCOP9si sas ur pr i s ea ndma yi ndi c a t eane wl i neof HMRCa t t e nt i on. Weha v ea l s os e e na ni nc r e a s ei nt henumbe rof e nqui r i e si nt o t hos ewhoha v enotde c l a r e dr e nt a l i nc omeorga i nsonl e tpr ope r t y .T hel e tpr ope r t yc a mpa i gni ss t i l l ope na l t houghl e t t e r sa r e be i ngi s s ue dt ope r s onswhoha v enote mbr a c e dt hec a mpa i gn. Obv i ous l yHMRCa r ea bl et ot i el a ndr e gi s t r yr e c or dswi t ht he e l e c t or a l r ol ea ndc ounc i l t a xr e c or dsa swe l l a sr e c e i v i ngi nf or ma t i onf r om not i c e spr ov i de dt opr ope r t yma na ge me nta ge n c i e s .I ts e e mss e ns i bl et oge tona nddi s c l os ea si ti sonl ya ma t t e rof t i mebe f or eKnoc kKnoc k ! HMRCha v ewon£45m i nas e c ondc a s ea ga i ns tAbbe yNa t i ona l : T hes c he mei nv ol v e dt hei s s ueof s ha r e swi t hs pe c icr i ght s , whi c hi nt e nde dt oc r e a t eat a xde duc t i onf orc or por a t i ont a x . T heT r i buna l f oundt ha tnode duc t i onwa sduebe c a us et he r e wa snol os st owhi c ht her e l e v a ntl e gi s l a t i ona ppl i e d. HMRCa l s owona ga i ns tRe e dE mpl oy me nta ndwec ons i de rt ha t c a s ei nt hea r t i c l e‘ Re mune r a t i onpl a nni ng: whoi sl i a bl e ? ’ Anot he rs uc c e s sf orHMRCwa st hej udi c i a l r e v i e wr e l a t i ngt o APN’ s , whi c hwec omme ntoni nt hea r t i c l e‘ T oughl uc k : a c c e l e r a t e dpa y me ntnot i c e sa r es ounf a i r ’ .T hepe r s pe c t i v ema ybe c onc e r ni ngf ora l l t hos ewhoi mpl e me nt e dpl a nni ngs c he me s . I npa r t i c ul a rt hos ewhodi dnote mbr a c et heE mpl oy e eBe net S e t t l e me ntOppor t uni t y( “ E BT S O” ) a r enow ndi ngAPN’ sr e a c hi ngt he m.
Wewer eha ppi l yget t i ngr ea dyf ort hes ummermont hsa nd l ook i ngf or wa r dt oaper i odwher ewec oul dc hur noutwor k wi t houtt heus ua l di s t r a c t i ons . T hephonedoes n’ tr i nga smuc h dur i nghol i da ys ea s on. Howev er , s omet hi ngr a t hers i ni s t erha s ha ppenedov ert hepa s tt woweek s . F i r s t l y , t her eha sbeena nunpr ec edent ednumberofCodeOf Pr a c t i c eni ne( “ COP9” ) c a s el et t er si s s ueda ndnewc l i ent s ndi ngt hei rwa yt ous .S ec ondl y , t heba c k gr oundt ot heopeni ngof t hos ec a s esunderCOP9c ompa r edt owha tha shi s t or i c a l l ybeen t hes equenc eofev ent si sal i t t l eunus ua l .I fy oua r es ubj ec tt oor ha v ec l i ent swhoa r e( orc oul dbe) s ubj ec tt oa nenqui r y , I enc our a gey out or ea don. COP9i si s s uedwher eHMRCs us pec tf r a ud.T ha ts us pi c i oni s f oundedonev i denc eobt a i nedf r om i nf or ma t i oni nHMRC’ s pos s es s i on( s eeoura r t i c l e: HMRC ndi ngNemo) .I na ddi t i on, I ns pec t or sma na gi ngCOP9c a s eswi l l ha v ea c c es st oHMRC’ s Connec ts of t wa r es y s t em. Connec tha sa c c es st omor et ha n1bnr ec or dsf r om t a x pa y er s a ndt hi r dpa r t i es .I nf or ma t i oni nc l udesi nc ome , i nt er es tf r om ba nka c c ount sa ndot hers our c es , t a x espa i da ndunpa i d, l a nd r egi s t r yi nf or ma t i on, bor dera genc yi nf or ma t i on, bus i nes sowner s hi p, a c c ount s , da t af r om t a xa ut hor i t i esi not herc ount r i es . T hes of t wa r eus esa na l y t i c st os potc onnec t i onst ha ts howt r ue l ev el ofi nc omea nds pendi ngt ha tc a nr ev ea l t a xi r r egul a r i t i es . Whya r es oma nyc a s esbei ngopenednowwhenov ert her ec ent y ea r sv er yf ewCOP9c a s esha v ebeenopened?
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Ne ws l e t t e r T hef ol l owi ngr e a s onss pr i ngt omi nd: 1. Wepr e di c t e dl a s ty e a rt ha te nqui r i e swoul d, a sar e s ul tof HMRCt a s k f or c e smov i ngt ot heS out hWe s ta ndWa l e s , i nc r e a s e ; 2. HMRCha v ebe e nr e or ga ni s i ngi nv e s t i ga t i ont e a ms t hr oughoutt heUKpool i ngs pe c i a l i s ti nv e s t i ga t or s , t a x s pe c i a l i s t s , c r i mi na l i nv e s t i ga t or sa ndl i t i ga t or st ot a c k l et a x e v a s i on; 3. T het a r ge t sf orc r i mi na l pr os e c ut i onsha v es i gnic a nt l y i nc r e a s e d; a nd 4. COP9ma ybeapr e l udet oc r i mi na l i nv e s t i ga t i on. T hec a s e sweha v es e e na r eal i t t l eunus ua l i nt ha ta c c ount a nt s we r eha ndl i nge x i s t i ngt a xe nqui r i e si nama nne rt ha twoul d a ppe a rt oa l l t obes a t i s f a c t or y .T hei s s uet he r e f or emus tbe t ha tHMRCa r ea wa r eofs ome t hi ngt ha tt he ybe l i e v et hea c c ount a nti s n’ t .S o, whi l s tt hee x i s t i nge nqui r ya ppe a r st obe ma na ge dv e r ywe l l , HMRCa l r e a dybe l i e v et ha tt het a x pa y e ri s notgoi ngt oc oope r a t e .T hi st he or yi sf ur t he rs uppor t e dby t hef a c tt ha tHMRCha v ec ons i de r a bl ei nf or ma t i oni nt he i r pos s e s s i ona c c e s s i bl et hr oughConne c t . I nOc t obe r2014, HMRCpubl i s he d“ Me a s ur i ngt a xga ps2014 e di t i on” , whi c hi sr a t he rus e f ul i ne s t a bl i s hi ngwhe r et he ywi l l c ons i de rma k i nge nqui r i e sa ndpot e nt i a l l yi s s ui ngCOP9. T a xga pbyt y peof t a x :
T a xga pbyc us t omergr oup:
I tdoes n’ tt a k eageni usl ongt oes t a bl i s ht ha tc onc ent r a t ed effor t ss houl dbea l l oc a t edt obus i nes s es( bot hS ME sa nd L a r ge) a ndi nc omet a xa ndVATs houl dbet hes ubj ec tofi nv es t i ga t i ons .I twoul dt her ef or ebepr udentt oa doptal i t t l e c a ut i onwher eaVATi ns pec t i oni spl a nnedorenqui r y opened.
Wher et her ec i pi entc hoos esnott oc ooper a t e , HMRCwi l l i nv es t i ga t ea ndma y : -I nv es t i ga t ewi t hav i ewt oc r i mi na l i nv es t i ga t i on; -Obt a i n na nc i a l a ndbus i nes si nf or ma t i onf r om t hi r d pa r t i es ; -T a k ea c t i ont opr ot ec tt heRev enuei nc l udi ng: -As s es st het a xt heyc ons i derdue; -Commenc el ega l pr oc eedi ngst os ec ur ea s s et s ; a nd -S eek na nc i a l s ec ur i t ya ga i ns tc er t a i nunpa i dt a x esa nd dut i es . I fi r r egul a r i t i esa r epr ov en, i ti sl i k el yt oa t t r a c thi gherpena l t i es a sar es ul toft hel a c kofc ooper a t i on. UnderCOP9, t heCommi s s i oner sofHMRCr es er v ec ompl et edi s c r et i ont opur s ueac r i mi na l i nv es t i ga t i onwi t hav i ewt opr os ec ut i on.T her ec i pi entofaCOP9not i c eha st heoppor t uni t yt o ma k eac ompl et ea nda c c ur a t edi s c l os ur eoft a xi r r egul a r i t i es : t hos ea r i s i ngf r om del i ber a t ea ndnondel i ber a t ec onduc t . HMRCr es er v et her i ghtt os t a r tac r i mi na l i nv es t i ga t i onwher e: -T her ei saf a i l ur et oma k eaf ul l di s c l os ur e; -Ma t er i a l l yf a l s eormi s l ea di ngs t a t ement sa r ema de; or -F a l s edoc ument sa r epr ov i ded. UnderCOP9, HMRCoffert hec ha nc et oma k eaf ul l di s c l os ur e underac ont r a c t ua l a r r a ngementc a l l edaCont r a c t ua l Di s c l os ur eF a c i l i t y( “ CDF ” ) . T hos ei s s uedwi t hCOP9ha v e60da y st or es pondonc ea nofferi sma de . I faf ul l di s c l os ur ei sma de , HMRC wi l l notpur s ueac r i mi na l i nv es t i ga t i onwi t hav i ewt opr os ec ut i on. I fy ouorac l i entha sbeenorpot ent i a l l yc oul dbei s s uedwi t ha COP9, pl ea s edonothes i t a t et oc ont a c tusf ora dv i c e .
Whi l s ta neduc a t edgues spoi nt st owa r dsa r ea soft a xr i s k s , a c l i ents houl dn’ ts i mpl ya s s umet ha tHMRCwon’ tk nowor ndouta bouta not heri r r egul a r i t y . HMRCdonoti nf or ma r ec i pi entofaCOP9enqui r ynot i c eonwha tt hei rs us pi c i ons a r ebec a us ei ti sf ort ha tr ec i pi entt oc hoos et oma k eaf ul l a ndc ompl et edi s c l os ur e .
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Ne ws l e t t e r T oughl uc k: Ac c el er at ed PaymentNot i c esar es o unf ai r T her ei snol ega l pos s i bi l i t yt ha tourGov er nment , a ndmor e i mpor t a nt l y , HMRCc oul dbeunr ea s ona bl e .I tmus tbeobv i ous t oev er yt a x pa y ert ha ta c c el er a t edpa y mentnot i c es( “ APNs ” ) a r e whol l ywonder f ul a ndf ort hegr ea t ergoodofourna t i on.T her e i snopos s i bi l i t yofc ont endi ngt ha tHMRCha v ef a i r l yi nt r oduc ed newl egi s l a t i ont ha t “ c ha ngest heunder l y i ngec onomi c soft a x a v oi da nc e ” .T hi sv i ewha sbeendemons t r a t edi nar ec entj udi c i a l r ev i ewc a s ewher eus er sofa na v oi da nc es c hemec ha l l engedAPNs . I nt hec a s ebet weenNi gel Rowe , Al ecDa v i dWor r a l &Ot her s a ndT heCommi s s i oner sf orHMRev enuea ndCus t omshea r d bet weent he14t ha nd17t hJ ul y2015, i twa sc l a i medt ha t HMRC’ sa c t i onsi ni s s ui ngt hea c c el er a t edpa y ment snot i c es wer eunr ea s ona bl e , br ea c hedna t ur a l j us t i c ea ndr epr es ent ed a na bus eoft het a x pa y er sr i ght sundert heE ur opea nConv ent i ononHuma nRi ght st oaf a i rt r i a l a ndpr ot ec t i onofpr oper t y . I twa sa l s oc l a i medi tt ooka wa yt hel egi t i ma t ee x pec t a t i ont hey ha dwhent heyj oi nedt hea v oi da nc es c heme; t ha tt hey woul dn’ tha v et opa yt a xbef or et hedi s put eha dbeenr es ol v ed. I c a nwhol l yunder s t a ndt heups eta nddi s a ppoi nt menta tt he l egi s l a t i on, i npa r t i c ul a rwher et het a xpl a nni ng( ora v oi da nc e a si ti snowk nown) wa sl a r gel yc ons i der eda c c ept a bl ea tt he t i mei twa si mpl ement ed.I tma yev enbec ons i der edgr os s l y depr es s i ngwher eHMRCha dbeena wa r eoft hea v oi da nc ef ora dec a deormor e .T hi si st hepos i t i onf ort hos ewhoent er edi nt o l ms c hemes , r es ea r c ha nddev el opments c hemes , bus i nes s pr oper t yr enov a t i ona l l owa nc es c hemes , empl oy eebenet t r us t sa ndc ount l es sot hera r r a ngement s . Br oa dl y , t hef ol l owi ngwa sf ound: -T heAPNsha dbeenl a wf ul l yi s s ued; -T hes t a t ut or ypr oc es sf orgi v i nga c c el er a t edpa y mentnot i c es wa snotunf a i rori ns uffic i entt oa c hi ev ej us t i c e; -T hea c c el er a t edpa y mentdi dnoti nv ol v ea nydet er mi na t i on ofna l l i a bi l i t y , buta ddr es s edwhet hert het a xs houl dbe hel dpendi ngr es ol ut i onoft hedi s put e; -T heAPNsdi dnotdepr i v et het a x pa y er soft hei rs t a t ut or y r i ghtt oc ha l l enget heunder l y i ngt a xl i a bi l i t i es ; -T her eha dbeennobr ea c hoft het a x pa y er s ' pr oc edur a l or s ubs t a nt i v el egi t i ma t ee x pec t a t i ons ; -T hedec i s i ont ogi v et heAPNsi sal a wf ul e x er c i s eoft he s t a t ut or ydi s c r et i onc onf er r edbyt heAc t . Ref er r i ngt omyea r l i erc ommentont heups eta nddi s a ppoi nt mentoft hos ef a c edwi t hAPNs , i t ’ sc l ea rt ha tt hec our t sdon’ t s y mpa t hi s e .
T her ewa snoev i denc et os uppor tt hec ont ent i ont ha tpr a c t i c e ha dbeena mbi guous , wi des pr ea d, es t a bl i s heda ndr ec ogni z ed s uffic i ent l yt odemons t r a t et ha tt a x pa y er sc oul dc ont i nuea c c ept i ngt het r ea t ment . E v eni ft het a x pa y er sc oul dha v ei dent i eda ne x pec t a t i onba s eduponpr ev i ousl egi s l a t i onorpr a c t i c e i tc oul dnotgi v er i s et oac ommonl a wr i ghtc ons t r a i ni ngPa r l i a ment ' sc ons t i t ut i ona l powert oena c tpr i ma r yl egi s l a t i on whi c hc ha ngedt hepr ev i ouspos i t i on. Rea l l y ?S oi ti sc ompl et el yf a i ri nl a wt ha tHMRCt ooka tl ea s t oneornea r l yt wodec a dest odos omet hi nga boutpl a nni ng t heywer ef ul l ya wa r eof .HMRCwi l l c ont endt ha tundert he t henl a w, t heyha denqui r edi nt os i t ua t i onsa ndt her ef or e equa l l yt a x pa y er swoul dha v ebeena wa r eofapot ent i a l v i ew t ha ts uc hpl a nni ngwa snotc ons i der eda c c ept a bl e . S t oppr es s , t hec our t sha v ef a v our edt het a x pa y eri nmos tE BTc a s esa l t houghweha v er ec ent l yha dt heE BTs et t l ementoppor t uni t y , whi c hi seffec t i v el yHMRCi ns omec a s esi gnor i ngpr ev i ousc a s e l a wa nds eek i ngt a xa ny wa y .F ur t her mor e , t a x pa y er sc ur r ent l y c ons i dert hec our t swi l lndawa yofdeny i ngt a xa dv a nt a ges duet ot hepol i t i c a l env i r onment .T her ea l i t yi swher eAPNsa r e i s s uedora r eont hei rwa y , t hepa i na ndups etneedst obes et a s i dea ndt hei s s uea tha nddea l twi t h. T hea ffor da bi l i t yofAPNsi st hema i ni s s ue: al otofpeopl e nev ere x pec t edt hel egi s l a t i v ec ha ngea ndc ons i der edt het a x pl a nni ngeffec t i v e( es pec i a l l ywher ei mpl ement edanumberof y ea r sa go) s os pentori nv es t edt het a xt ha twoul dha v eot her wi s ebeendue( a ndpa i dal oti nf ees ) . Pa y mentwi l l bedue90da y sa f t ert heda t ey our ec ei v et hea c c el er a t edpa y mentnot i c e . Wher et her ea r er epr es ent a t i onsobj ec t i ngt ot hea c c el er a t edpa y mentnot i c e , t heda t et hepa y menti sduema yc ha nge .Al t houghgi v ent her ec entJ udi c i a l Rev i ew, t hepos s i bl er ea l i t yi st ha tpa y mentwi l l needt obe ma dea ndnotpa y i ngwi l l r es ul ti npena l t i es . I ft her ea r egoi ngt obepr obl emspa y i ng, i tma ybepos s i bl et o negot i a t eapa y menta r r a ngementwi t hHMRC.Al s o, i fs uc c es s t hr oughl i t i ga t i oni sc ons i der edf ut i l e , t hepr oa c t i v ea ndmos t effec t i v epr opos i t i onwoul dbet ot a k ef or wa r dadi s c l os ur et o HMRCoft het a xi r r egul a r i t i es .Of t enhowev er , t her epr es ent a t i v ema na gi ngc ommuni c a t i onswi t hHMRCi st hepr omot eror pr ov i deroft hepl a nni ng.T hi si ns t a nt l yr es ul t si nwa r ni ng a l a r mss i nc et her ea r ec on i c t sofi nt er es t .I a m noti na nywa y s ugges t i ngt ha ti ti sunf a i rf ors uc hapr ov i dert oc ha r gef ore x a mpl e , goi ngt oJ udi c i a l Rev i ew, a l t hough, I s us pec tt hec l i ent wi l l ha t et hei nc ur r enc eoff ur t herf eesmer el yt obel ef ti napos i t i onofha v i ngt oi nc urmor epr of es s i ona l f eesonf ut ur er epr es ent a t i onswi t hHMRC… Cont a c tusf oranoobl i ga t i ona ndi mpor t a nt l yi ndependent di s c us s i onont a xpl a nni ngi mpl ement eda nda s s oc i a t edr i s k s .
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Ne ws l e t t e r Remuner at i onPl anni ng: Whoi sl i abl e? T hehea dl i ner ea ds : Oneof t heUK’ sl ar ge s t e mpl oy me nt age nc i e s , Re e d, hasbe e n f oundl i abl ef or upt o£ 1 5 8mi l l i onof unpai dt axdueont hes al ar i e sof t hous andsof t e mpor ar ywor k e r si t e mpl oy e d, k nownas “ e mpl oy e dt e mps ” . T heCour tofAppea l ha sba c k edt heUpper T i er T r i buna l a ndt he F i r s tT i er T r i buna l ’ sj udgment ndi ngt ha tP AYEa ndNI Cs houl d ha v ebeenpa i dont heent i r et yofempl oy edt emps ’ s a l a r i esbet ween1998a nd2006. T her a mic a t i onsoft hec a s ea r eenor mousa ndy ouha v et oa s kt heques t i on, howdoy ous i mpl y nd £158m t opa yHMRC? I nt hi sweek’ sar t i c l e, weexpl or et hei mpl i c at i onsoft he ReedCas eandal s ol ookathowHMRCmayenf or c er ec over yofPAYE. T heReedc a s e , whi c hi ss umma r i s edi nt hea ppendi c es( c l i c k her et os eea ppendi c esonourwebs i t e) , r a i s esanumberof i s s uest ha tc oul da ppl yt oma nyc ompa ni es :
Per s onsc har geabl et ot axonemol ument s S ec t i on13I T E P A2003c on r mst ha tt heper s onl i a bl ef ora ny t a xonempl oy menti nc omei st het a x a bl eper s on–br oa dl yt he per s ont owhom t heempl oy menti nc omer el a t es . Anempl oy eri sdr a wni nt ot hepr oc es sbyt her egul a t i onsi nc l udedi nPa r t11r equi r i nga nempl oy ert ooper a t eP AYEon P AYEempl oy menti nc ome . Rec over y HMRCgener a l l ys eekr ec ov er yofP AYEf r om t heempl oy era t t het i met hel i a bi l i t ya r os e .T hedeni t i onofempl oy erma y needt obec ons i der edi nc ompl e xs i t ua t i onsa l t hough“ empl oy ment ” i sdeneda s“ empl oy mentunderac ont r a c tofs er v i c e ” . Whet hert her ei sa nempl oy mentunderac ont r a c tofs er v i c ei sev enmor ec ompl e xa sar ec entempl oy ments t a t usr ev i ewedr ev ea l ed! Mos tP AYEl i a bi l i t i esa r ei dent ieda spa r tofa nempl oy erc ompl i a nc er ev i ewora nenqui r y . T hel i a bi l i t yi snor ma l l ya gr eedby wa yofc ont r a c ts et t l ementt oi nc l udei nt er es ta ndpena l t i es a ndf or ma l a s s es s ment sa r enotr a i s ed. Regul at i on80
1. Obv i ous l ya ndmos tev i dent l y , umbr el l a s , a genc i esa nd ot herbus i nes s est ha tha v ea n“ empl oy mentbus i nes s ” wi l l be c onc er nedwhet hert hei rdi s pens a t i onsa r ev a l i d; or
Mor er ec ent l ywher er emuner a t i onpl a nni ngha sbeeni dent i ed, HMRCpr ot ec tt hei rpos i t i onbyr a i s i ngf or ma l a s s es s ment s ( “ r egul a t i on80” ) .
2. I ft heyha v es a l a r ys a c r ic ea r r a ngement s , whet hert hey wor k .Apot ent i a l empl oy mentbus i nes si nc l udesa nywhi c h s uppl i es“ wor k er s ” ; a nd
T heper i odc ov er edbya na s s es s mentwoul dnor ma l l ybef our y ea r sf orP AYE , buti fHMRCc ons i der edt heempl oy erha dbeen c a r el es st hi sma ye x t endt os i xy ea r s .
3. F ort hos ebus i nes s esa ndma nyot her swi t hP AYEl i a bi l i t i es , howdoy oupa yt hem a ndhowdoHMRCenf or c epa y ment . T hi si s s uema ya ppl yt ot hos ewhooper a t ed: a . E mpl oy eebenett r us t s ; b. E mpl oy er na nc esr et i r ementbenets c hemes ; c . Remuner a t i ont r us t s ; d. Redeema bl epr ef er enc es ha r er emuner a t i onpl a nni ng a ndma nyot her s .
Wher eHMRCc ons i dert ha tt her ema ybet a xpa y a bl ebya n empl oy erwhi c hha snei t herbeenpa i dnorc er t iedbyHMRC. I nt hi ss i t ua t i on, HMRCma ydet er mi net hea mountoft ha tt a x t ot hebes toft hei rj udgmentc ons equent l ys er v i ngadet er mi na t i onnot i c e .
Whoi sl i abl et oPAYE? T hepr i or i t yor derofc ol l ec t i oni snor ma l l y : -E mpl oy er ; -T hi r dpa r t y ; a nd -E mpl oy ee . However , c ant hepos i t i onbedi ffer entwher eper s onshave par t i c i pat edi nt axpl anni ng?
Ca r el es s HMRCpr ov i dee x a mpl esoft a k i ngr ea s ona bl ec a r ei nc l udi ng: -“ Ar r ange me nt sors y s t e ms( s uc hasc ompr e he ns i v ei nt e r nal ac c ount i ngs y s t e msandc ont r ol swi t hs pe c icr e f e r e nc et o t axs e ns i t i v ear e as ) e x i s t t hat , i f f ol l owe d, c oul dr e as onabl ybe e x pe c t e dt opr oduc eanac c ur at ebas i sf ort hec al c ul at i onof t ax duebyt hei nt e r nal t axde par t me nt , ore x t e r nal age nt ,and -de s pi t et heabov e , i nac c ur ac i e sar i s ei npr oc e s s i ngorc odi ng i t e mst hr ought hepe r s on ’ sac c ount i ngs y s t e mwhi c hr e s ul ti na mi s s t at e me nt of t axl i abi l i t y , and -t hee ffe c t of t hei nac c ur ac i e si snot s i gnic ant i nr e l at i ont o t hepe r s on ’ sov e r al l t axl i abi l i t yf or t her e l e v ant t axpe r i od. ”
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Ne ws l e t t e r Notmuc hhel pr ea l l ya l t houghi t ’ sa ppa r entt ha tr ea s ona bl e c a r ei sa ppl y i ngamodes ta mountofeffor tt ogett hi ngsr i ght . T hec a s eofJ RHa ns on2012ma ybeofmor ehel pwher ea dv i s er sa r eus ed.I thel dt ha tr el y i ngonac ompet enta dv i s erwho wa sgi v enaf ul l s etoff a c t sbef or egi v i ngt hea dv i c ei ss uffic i ent i nmos tc a s est oc ons t i t ut et a k i ngr ea s ona bl ec a r e . Howev er , wher et a xpl a nni ngi sunder t a k en, wha tl ev el ofc a r e i sr ea s ona bl e?F ore x a mpl e , i ft hepl a nni ngi si nr ec ei ptof Queen’ sCouns el ’ sopi ni on, doest ha tc ons t i t ut er ea s ona bl e c a r e?T hepr obl em i sf ur t herc ompl i c a t edi nt hes i t ua t i onof pr omot edt a xs c hemesbec a us egener a l l y , t hepr omot er ( ma y bewi t hav i ewt oma x i mi s i ngpr ot a bi l i t yf ort hems el v es ) gener a l l ys oughtonea l l enc ompa s s i ngopi ni onf r om Queen’ s Couns el .S uc hopi ni onsa r eba s edon“ a s s umedf a c t s ” , whi c h ma ynota ppl ypr ec i s el yt ot hes i t ua t i onoft heper s onent er i ng t hepl a nni ng.S ev er a l ques t i onsa r i s e: 1. Woul dt hepr omot erha v et her es pons i bi l i t yt odr a wt ot hea t t ent i onoft heus eroft hepl a nni ngt ha tt heopi ni ont hey wa i v edi nf r ontoft hem ma ynota ppl yt ot hem a si ti snots pec ic ? 2. Di dt hepr omot erpr ov i des epa r a t ea dv i c ewhi c hc oul dbe r el i edont oes t a bl i s hr ea s ona bl ec a r eha dbeent a k en? 3. I ft hepr omot erdi dnei t heroft hea bov e , woul dt hec l i ent ha v ea na r gumentt ha tt hepr omot erora dv i s erf a i l edi nt hei r dut yofc a r e? HMR M Ca r el i k el yt oc ont endt ha tanons pec icQCopi ni ondoes nota s s i s tt heempl oy ert oev i denc et heyha v edoneev er y t hi ng t ov er i f yt hepos i t i ona ndt her ef or et heyha v ebeenc a r el es s . Wher et hel i a bi l i t yi snots et t l edbyt heempl oy eri ti snor ma l l y pa s s edt ot heDebtMa na gementUni tt or ec ov er .HMRCwi l l f ol l owas etofpr oc edur est or ec ov erc ul mi na t i ngi ndi s t r a i nt ov ergoodsora s s et shel dbyt heempl oy er . I fr ec ov er ybyt hi s met hodi snots uc c es s f ul , t hene x ts t epwoul dbel ega l a c t i oni n t heCount yCour tort or ef ert hec a s et ot heHMRCE nf or c ement a ndI ns ol v enc yS er v i c e .T her es ul tc oul dbeapet i t i onf ori ns ol v enc y . T hepr oc es sus edt ot a k eaf a i ra mountoft i mea l t hough mor er ec ent l y , HMRCs eem t obea c t i ngal otqui c k er !Anes t i ma t edt i mes c a l ei sbet weens i xmont hsa ndt woy ea r s . I fHMRCbel i ev et hec ont r ol l er s( i . e . s ha r ehol der s ) oft heent i t y ha v er emov eda s s et sorbenet t edper s ona l l yf r om t hepa y ment sma de , r ec ov er yoft hedebtma y bes oughtel s ewher e . Rec over yf r om t hi r dpar t i es Wher et her ea r ec or por a t eent i t i esundert hec ommonc ont r ol , HMRCma yf or mt hev i ewt ha tt her out i ngoft hepa y ment sha s beenma det oa v oi dempl oy erl i a bi l i t i es .
S c ena r i oswher eHMRCma yl ookt or ec ov erf r om t hi r dpa r t i es i nc l udewher e: -F undsf r om t het hi r dpa r t ya r ema dea v a i l a bl et ot he empl oy ert oena bl epa y ment st obema de; -As s et sha v ebeent r a ns f er r edt oat hi r dpa r t yf r om t he empl oy era f t ert heev ent ; -As s et sa r et r a ns f er r edoutt oadi ffer entt hi r dpa r t ya l s ounder c ommonc ont r ol ; -I ndi v i dua l si nv ol v edha v eempl oy ment sorhol doffic ewi t h t het hi r dpa r t ya ndt ha tt hi r dpa r t yma ybet heempl oy er ; a nd -I ft heempl oy erf a l l swi t hi nt hedeni t i onofama na ged s er v i c ec ompa ny , t hedebtt r a ns f erl egi s l a t i onc a nbeut i l i s ed. Rec ov er yf r om t hi r dpa r t i esi snotwi t houtpr obl ems( i . e . es t a bl i s hi ngev i denc e) a ndi ns t ea dHMRCma ys eekr ec ov er ydi r ec t l y f r om t hei ndi v i dua l c onc er ned. I ft ha ti ndi v i dua l i sadi r ec t or , c a s el a we x i s t st ha ta l l owsHMRC t opur s ueadi r ec t orf orac ompa nydebt( s eeCI RvNa s h[ 2003] EWHC686( Ch) ) . Rec over yf r om di r ec t or s T hef ol l owi ngc a s esi l l us t r a t ehowHMRCma yr ec ov erf r om a di r ec t or : -CI RvNas h2003: Ac ompa nywenti nt ol i qui da t i oni nJ a nua r y1997. Oneofi t sdi r ec t or swa sac ont r ol l i ngdi r ec t orofa s ec ondc ompa nyunt i l Dec ember1996, whenher es i gneda nd wa ss uc c eededbyhi ss on. Hewa sr ea ppoi nt edadi r ec t ori n J ul y1997a ndr ema i nedadi r ec t orunt i l t ha tc ompa nywent i nt ol i qui da t i oni nDec ember1997. T heRev enuec ont endedt ha t , byv i r t ueofI ns ol v enc yAc t1986 hewa sl i a bl ef ort het a xdebt sofbot hc ompa ni es . I twa shel d t ha tt hec ompa ni eswer ea s s oc i a t edwi t hi nt hemea ni ngofs 216, a ndt ha tt hedi r ec t or( f a t her ) ha dbeeni nv ol v edi nt he ma na gementofbot hc ompa ni esa ta l l ma t er i a l t i mes . -HMRCvBent onDi ggi ns : Ac ompa nywenti nt ol i qui da t i on i nJ une2001. I t sc ont r ol l i ngdi r ec t ora c qui r edt hec ompa ny ' s a s s et sa ndc a r r i edonas i mi l a rbus i nes sa sas ol et r a der . I nS ept ember2001hei nc or por a t edas ec ondc ompa nywi t has i mi l a r na me , whi c hc a r r i edont hebus i nes sunt i l i twenti nt ol i qui da t i oni nS ept ember2003. T heRev enuet ookpr oc eedi ngs a ga i ns tB, c ont endi ngt ha t , byv i r t ueofI ns ol v enc yAc t1986he wa sl i a bl ef ort het a xdebt soft hes ec ondc ompa ny . I twa shel d t ha tt hena mesoft het woc ompa ni eswer es os i mi l a rt ha tt her e wa sapr oba bi l i t yt ha tmember soft hepubl i c , c ompa r i ngt he na mesi nt her el ev a ntc ont e x t , woul da s s oc i a t et hec ompa ni es wi t hea c hot her . Bot hc a s esc ons i der edS ec t i on216a nd217oft heI ns ol v enc y Ac t1986, whi c hbr oa dl yma k eaper s onper s ona l l yr es pons i bl e f ora l l t her el ev a ntdebt sofac ompa nyi fa ta nyt i mei nc ont r a v ent i onofs ec t i on216–us i ngt hes a meors i mi l a rbus i nes s na me . 6
Ne ws l e t t e r S i mi l a rpr ov i s i onsa ppl ywher et her ei swr ongf ul t r a di ng: t her e c a nbeaper s ona l e x pos ur ewher et hec ompa nyc ont i nuest o t r a dewher ei ti ss a yi ns ol v ent .T heques t i ont ha ta r i s esi s whet hera“ k nown” t a xl i a bi l i t ywoul dha v er es ul t edi nt hec i r c ums t a nc esoft hec ompa nybei ngi ns ol v ent . Rec over yf r om anempl oyee Wher eHMRCs us pec tt ha ta nempl oy ee( i nc l udi ngdi r ec t or sor offic ehol der s ) ha sent er edi nt oa na r r a ngementwi t ht hei rempl oy ert oa v oi di nc omet a x , t heyc oul dopena nenqui r yunder CodeofPr a c t i c e8i nt ot heper s ona l t a xa ffa i r soft hei ndi v i dua l . HMR M Cwi l l under t a k eaf or ma l enqui r yi nt ot hea r r a ngement st o det er mi newhet hert heybel i ev et ha tapr opor t i onoft he i nc omepa i dt ot hei ndi v i dua l wa snotpr oper l ys ubj ec tt o i nc omet a x . I fHMRCha v er a i s eda s s es s ment sont heempl oy era ndt het a x r ema i nsunpa i df or30da y s , t heyc a ndi r ec tt ha ta ni ndi v i dua l ( s ) behel dr es pons i bl ef ort het a xwher e: -T hepa y ment sa r er ec ei v edk nowi ngt ha tt heempl oy erha d wi l f ul l yf a i l edt odeduc tt hea mountoft a xwhi c hs houl dha v e beendeduc t edf r om t hos epa y ment s . Wi l f ul l yf a i l ed T hec a s eofRvCI R( e xp. Chi s ol m) 1981denedwi l f ul a si nt ent i ona l ordel i ber a t e . T hepr i nc i pl ewa se x t endedt oi nc l udet he v i ewt ha tadi r ec t orr ec ei v i ngapa y mentwi t houtdeduc t i onof P AYEmus tha v ek nowna boutt ha tf a i l ur e( RvCI Re xpS i ms 1987, RvCI Re xp. Key s1987, a ndRvCI Re xp. Mc Vei gh1986) . T hegener a l pos i t i ona ppea r st obet ha twher et hedi r ec t or s / of c er sa ndempl oy eesa r ea wa r et ha tP AYEi snotoper a t eda ndi n pa r t i c ul a rwher et heya r et her ec i pi ent sofpa y ment snots ubj ec tt oP AYE , t heyha v ewi l f ul l yf a i l ed. HMRCc oul di ns t ea di s s ueaReg72or81det er mi na t i on.
Re gul at i on8 1 T hi sr egul a t i ona ppl i eswher et a xi sdet er mi nedunderReg80 a ndi snotpa i dwi t hi n30da y sf or mt heda t et hedet er mi na t i on i s na l .Oneoft woc ondi t i onsi nr el a t i ont ot heempl oy ee needt obemet .T he r s tc ondi t i oni st ha tt heI nl a ndRev enue a r eoft heopi ni ont ha tt heempl oy eeha sr ec ei v edt hos epa y ment sk nowi ngt ha tt heempl oy erha swi l f ul l yf a i l edt odeduc t P AYE .T hes ec ondc ondi t i oni st ha tt heunpa i dt a xr epr es ent s a na mountf orwhi c ht heempl oy erwa sr equi r edt oa c c ounti n r el a t i ont oanot i ona l pa y mentt ot heempl oy ee . Re g7 2pr oc e dur e Onc eaReg72det er mi na t i oni sr a i s ed, HMRCf or egot hei rr i ght ofr ec ov er yf r om t heempl oy er : t heya r et her ef or eunus ua l . HMRCwi l l c ons i deri s s ui ngaReg72wher ec odeofpr a c t i c e8i s i s s ued. T her egul a t i ona ppl i esi fi ta ppea r st oHMRCt ha tt hededuc t i bl ea mounte x c eedst hea mounta c t ua l l ydeduc t ed; a ndone oft woc ondi t i onsa r emet . T he r s ti st ha tt heempl oy ers a t i sest heI nl a ndRev enue: -T heempl oy ert ookr ea s ona bl ec a r et oc ompl ywi t ht hes e Regul a t i ons ; a nd -T hef a i l ur et odeduc tt hee x c es swa sduet oa ner r orma dei n goodf a i t h. T hes ec ondi st ha tHMRCa r eoft heopi ni ont ha tt heempl oy ee ha sr ec ei v edr el ev a ntpa y ment sk nowi ngt ha tt heempl oy er wi l f ul l yf a i l edt odeduc tt hea mountoft a xwhi c hs houl dha v e beendeduc t edf r om t hos epa y ment s . Rec over yofNI C S i mi l a rl egi s l a t i one x i s t sf ort her ec ov er yofNI C, a l t houghi t s houl dbenot edt ha ts eek i ngr ec ov er yf r om a ni ndi v i dua l f or a nempl oy er ’ sl i a bi l i t yma ybepr obl ema t i c .F ore x a mpl et o i s s ueaper s ona l l i a bi l i t ynot i c e , t heev i denc emus tdemons t r a t et hel os si sa t t r i but a bl et oaf r a udornegl ec tonpa r tofa n offic eroft hec ompa ny .
7
Ne ws l e t t e r Pl anni ngf ordeat h F ol l owi ngal ongweek endl ec t ur i ng, i toc c ur r edweha v enotr emi ndedoura udi enc ea boutpl a nni ngf ordea t h.E s t a t epl a nni nga ndt a k i ngr ea s ona bl es t epst omi t i ga t ei nher i t a nc et a x ( “ I HT” ) a r es t i l l a v a i l a bl ewi t houts i gnic a ntr i s k sofHMRCa l l egi ngy oua r eaha r denedt a xc r i mi na l .Bywa yofr emi nder , wes et outbel ows omet hought sa l t houghwewoul denc our a geea c h per s onwi s hi ngt opl a n, t oha v et hei ra ffa i r sc ons i der edhol i s t i c a l l y . Webel i ev et hi smea nsc ons i der i ngl ega l s ol ut i onsa nd na nc i a l pr oduc t sa tt hes a met i me–i tmi ghtnotbea ppr opr i a t e t oa c c epta na nc i a l pr oduc twhi c hhel pses t a t epl a nni ngwi t houtk nowi ngt hea s s oc i a t edr i s k sa nda l l t hepot ent i a l a l t er na t i v es ol ut i ons . Al s o, pl a nni ngs houl dt a k ei nt oa c c ountt heus eoff a mi l yc ompa ni es , f a mi l ypa r t ner s hi psa ndt r us t s .I npa r t i c ul a r , t her ea r e l ot sofwa y st os t r uc t ur es ha r ehol di ngs , c l a s s esofs ha r es( f ore x a mpl egr owt hs ha r esori nc omey i el di ngs ha r es ) , pa r t ner s hi pi nt er es ta ndbenec i a l i nt er es t . Whens houl dI s t ar tes t at epl anni ng? I fy ouha v ea s s et sa ndpot ent i a l benec i a r i est henpl a nni ng s houl dc ommenc e .T hepr es s ur ema ybemor ewheny ouha v e c hi l dr ena ndwheny ougetma r r i edordi v or c ed.Att hev er y l ea s t , aWi l l s eemsa ppr opr i a t e .Howev er , t ha ti spl a nni ngon dea t ha ndher ea tE dgewepr ef erpl a nni ngdur i ngl i f et i mea nd ma k i ngt heWi l l t i dyupy ourl i f et i mepl a n. Upt os a yf t yy ea r sofa gei ti spr oba bl yc hea pert oi ns ur es o ma y bepl a nni ngwi l l bel i mi t edupt ot ha ta ge .Howev er , when s omeoner ea c hes f t yt heys houl ds t a r tmor es er i ousc ons i der a t i ons .T hi si s n’ tbec a us edea t hi sl oomi ngbutbec a us ees t a t e pl a nni ngwi t hl i t t l er i s kt a k est i mea ndc ons i der a t i on. Wi l l s I ti sof t ens t a t edt ha taWi l l s houl dbet he r s ts t epi na nyes t a t epl a nni nge x er c i s e .Per s ona l l y , i ts eemswr ongt opl a nwha t ha ppensondea t hwheny ouha v en’ ts or t edoutwha ty oua r e doi ngdur i ngy ourl i f et i me .Ma y bei ti sac unni ngt heor yof Wi l l wr i t er st ogetoneWi l l a tt heout s etofmeet i ngac l i enta ndone a f t erl i f et i mepl a nni ngi ss or t ed.Wel l t ha tmi ghtbet hec a s e butf ewWi l l wr i t er sc ons i derwha tpeopl es houl ddodur i ng t hei rl i f et i me . Ha v i ngawi l l mea nsy oua v oi dr el y i ngont hei nt es t a c yr ul es t ha tc omei nt opl a ywher et her ei snowi l l . E ffec t i v el yt hel a w dec i deswha tha ppenst ot hees t a t e , whi c hc a nl ea dt o na nc i a l a nx i et yf ort hes ur v i v i ngs pous eorc i v i l pa r t ner( orl i v i ngi ns i n pa r t ner ) a l ongwi t hpos s i bl eI HTc ha r ges . I ti si mpor t a ntf ort hos ewhoa r en’ tma r r i edwi t hc hi l dr ent o a l s oc ons i derWi l l s , s i nc eundert her ul esofi nt es t a c yt hees t a t e woul dpa s st ot hei rpa r ent s
I HTLi abi l i t y I ti swor t hk nowi ngwha ty ourpot ent i a l I HTl i a bi l i t yi s .T hec ur r entni l r a t eba ndi s£325, 000a l t houghr ec entbudgetc ha nges wi l l pot ent i a l l yenha nc et hea mount . Newmea s ur eswi l l bei nt r oduc eddes i gnedt or emov et hema j or i t yoff a mi l yhomes f r om t heI HTnetwher et her es i denc ei sl ef tt oc hi l dr enor gr a ndc hi l dr enondea t h.Ana ddi t i ona l ni l r a t eba nd( NRB) wi l l bei nt r oduc edf r om Apr i l 2017t ha tc a nonl ybeus edi nc on nec t i onwi t ht hema i nr es i denc e . Howev er , i nt er es t i ngt hi ngsc a nbedonewi t hot hera s s et ses pec i a l l yi ft heyqua l i f yf orI HTr el i eft or educ et hev a l ueoft he es t a t e . Whi l s tt r a ns f er sbet weens pous esa ndc i v i l pa r t ner sa r ee x empt f r om I HTc ons i der a t i ons houl dbegi v ent ogener a t i ons k i ppi ng ( nott oc hi l dr enbutt ogr a ndc hi l dr enornott os pous ebutt o c hi l dr en) .Al s o, f ors pous esa ndc i v i l pa r t ner swher et heNRBi s notus edont he r s tdea t h, t hev a l ueoft hees t a t eont he s ec onddea t ht ha twi l l bee x emptf r om I HTdoubl est o £650, 000. I si twor t hma r r i a ge? Ex empt i ons Whi l s tt hee x empt i onsa r enotov er l ye x c i t i ng, t heydoper mi t s t r a t egi cpl a nni ngt obema deov eraper i odoft i me , i npa r t i c ul a rwher ev ehi c l esa r eus eds uc ha sf a mi l yi nv es t mentc ompa ni es , f a mi l ypa r t ner s hi psa ndofc our s et r us t s . T her ei sa na nnua l a l l owa nc eof£3, 000ay ea r , whi c hwi l l bei mmedi a t el ye x emptf r om I HTa ndi fy ouha v en’ tus edt hepr ev i ousy ea r ’ sa l l owa nc ey ouc a nc a r r yt ha tf or wa r doney ea ronl y . T her ei sa l s oas ma l l gi f te x empt i onupt o£250t oa sma ny peopl ea sy oul i k e . Weddi nggi f t supt o£5, 000f orpa r ent s , £2, 500f orgr a ndpa r ent sa nd£1, 000f orev er y oneel s ea r eel i gi bl ea swel l , a sa r edona t i onst oqua l i f y i ngc ha r i t i esa ndpol i t i c a l pa r t i es . Anyout r i ghtgi f tofa nya s s et st oa ni ndi v i dua l wi l l a l s obe e x empta sl onga sy ous ur v i v ef ors ev eny ea r sf r om t heda t eof t hegi f t ; apot ent i a l l ye x emptt r a ns f er s( “ PET” ) . 8
Ne ws l e t t e r Gi f t soutofex c es si nc ome
Di s c ount edGi f tT r us t s
Gi f t soutofi nc omea r ef r eef r om I HT . T heymus tf or m pa r tof nor ma l e x pendi t ur e , bema deoutofi nc omea ndt heyc a nnot r educ ey ourc a pi t a l .
T hes ea r er egul a t edpr oduc t sa ndr equi r ea dv i c et obegi v enby a na nc i a l a dv i s era l t houghwec a nc ommentont het a xpos i t i on.
T hi se x c l us i oni sa ni mpor t a ntt ool i npl a nni ngt oa s s i s tpr ev ent i ngt hees t a t egr owi ngi nv a l uea ndc a nbes t r a t egi c a l l yus ed wi t hs omeoft hev ehi c l esa l r ea dyment i oned.
Di s c ount edgi f tt r us t sper mi ta c c es st oac a pi t a l t hr ought a x f r eewi t hdr a wa l swhi l egi v i ngt her i ghtt oc a pi t a l / gr owt h/ i nc omet oat r us t . T hes et r us t spr ov i dea ni mmedi a t eI HTs a v i ng wi t ht her ema i ni ngc a pi t a l bei nge x empta f t ers ev eny ea r s whi l er et a i ni ngar i ghtt owi t hdr a wa l s .
Capi t al Gai nsT ax( “ CGT” ) Gi f t sa r edi s pos a l sf orCGTpur pos esa l t houghs omea s s et sma y notgi v er i s et oaga i n, bewi t hi nt hea nnua l e x empt i onorbe ent i t l edt ohol dov err el i efet c . T hegi f tc oul da l s obes t r uc t ur ed, f ore x a mpl ei nt hec a s eofa n i nv es t mentc ompa ny ; i tmi ghtbea tl ea s tas t a r t i ngpoi ntt o gi v et hegr owt hi nv a l uea wa y–c a pi t a l gr owt hs ha r es . I ns ur anc e S omewoul dc omment( a ndI a m one) t ha ti ns ur a nc ec ompa ni esa r ei nt hebus i nes sofr ec ei v i ngpr emi umsa ndnotpa y i ng out .Howev er , l i f ei ns ur a nc ec oul dbea ppr opr i a t edependi ng ona ge , l i a bi l i t yt oI HTa ndc os t .T hepol i c ys houl dbedes i gned t opa yas um ( equa l t ot het a xl i a bi l i t yorgr ea t er ) i nt ot r us t wher ei ti se x emptf r om I HTa ndwi l l bea v a i l a bl ef orbenec i a r i est opa yt het a xdue . T hepa y mentoft hedea t hbenetwi l l ha ppeni mmedi a t el yf ol l owi ngdea t ha ndt hef undswi l l be a v a i l a bl et opa yt het a xwi t houta nyneedt owa i tf orgr a ntof pr oba t e . T r us t sorot hervehi c l es T hedeba t eonus i ngt r us t swi l l i nv ol v es omec ompl e x i t i esa l t houghwher et heyownbus i nes spr oper t y( qua l i f y i ngf orr el i ef f r om I HT) ora r ewi t hi nt heNRBorbui l tupus i nge x empt i ons , t hebenet sa r emor ea ppea l i ng.I ti spos s i bl et ogi f ta n a mountupt ot heNRBof£325, 000peri ndi v i dua l i nt odi s c r et i ona r yt r us ta ndt hi sc a nt henber epea t edev er ys ev eny ea r s . Mor ec a nbegi v ent oadi s c r et i ona r yt r us ta l t hougha ny t hi ng a bov et hea l l owa nc e/ e x empt i onswoul di nc ural i f et i met r a ns f er t a xof20perc enti fnoot herr el i efa ppl i es .I ti st her ef or ei mpor t a ntt oes t a bl i s hi fat r us ti st her i ghtv ehi c l eorwhet hera f a mi l yc ompa nyorpa r t ner s hi pi sbet t er .I ns omes c ena r i osi t mi ghtbewi s et oc ons i dermuc hmor ec ompl i c a t eds t r uc t ur es– s omeoft heoffs hor et hi ngsy ouhea ra boutbutdon’ ta c t ua l l y under s t a ndora ppea rt ober i s k y .
Bus i nes sPr oper t yRel i ef( “ BPR” ) Wher et r a di ngc ompa ni esa r eowned, t hepl a nni ngc a nget v er yi nt er es t i nga ndc a ni nv ol v es a l ea ndpur c ha s ea r r a ngement swi t ht r us t sorot herf a mi l ypl a nni ngv ehi c l es .I ti sa l s o pos s i bl et oi nv es ti nc er t a i ndi s c r et i ona r yma na gements er v i c est ha tpr ov i dei nv es t menti nt oqua l i f y i ngs ha r es . Af t ert wo y ea r sofowner s hi pt hea s s et ss houl dqua l i f yf orbus i nes spr oper t yr el i efa ndbeout s i det hec ha r get oI HT . F i na nc i a l a dv i c e wi l l needt obes oughtont hei nv es t menta l t hought her ei s s omei nt er es t i ngs t r uc t ur i ngt ha tc a nbedonewi t ht hes ha r es onc equa l i f y i ng( a f t er2y ea r s ) , whi c hmea nst heydon’ tha v et o bek eptunt i l dea t h! Char i t y Gi f t st oCha r i t ya r ee x emptf r om I HT , buti fy ougi v e10perc ent ofy ournetes t a t e( t het ot a l es t a t ev a l uel es st he£325, 000 ni l r a t eba nd) t hent her a t eofI HTt ha ta ppl i est ot her ema i ni ng es t a t ef a l l st o36perc ent . Doy ouwa ntt ogi v et ha tmuc ht oc ha r i t y ?Y ouma yev enwa nt t oc r ea t ey ourownc ha r i t y ! Conc l us i ons E s t a t epl a nni nga ndI HTpl a nni nga r et wos epa r a t es t r a t egi es t ha tobv i ous l yi nt er a c tc ons i der a bl y .Ana dv i s erneedst obe f a mi l i a rwi t hl ot sofdi ffer entc onc ept sa ndbea bl et ot hi nkc r ea t i v el y .I HTpl a nni ngi snot( j us t ) f ort hef a i nthea r t edbut s houl dbec ons i der edea r l yoni nl i f ea ndr egul a r l yr ev i ewed.A Wi l l dea l swi t hy oures t a t eondea t h–i ti sgener a l l yt ool a t et o domuc hpl a nni ngwheny oua r edea d.
9
Ne ws l e t t e r T axat i onofPr oper t y
TheAc c r ual sBas i s
Wi t ht hel etpr oper t yc a mpa i gns t i l l open, wet houghti twoul dbe us ef ul t obot hourc l i ent sa ndpr of es s i ona l c ont a c t s , t or unas er i es ofa r t i c l eswi t hi nournews l et t er st ha thi ghl i ghts omeoft he c ommona r ea sofr i s kwi t hi npr oper t ybus i nes s es .
Undergener a l l ya c c ept eda c c ount i ngpr i nc i pl es( “ GAAP” ) , t hepr ot s ofapr oper t ybus i nes sa r et a x edont hea c c r ua l sba s i s . T hi smea ns t ha tf ora ni ndi v i dua l , t heys houl da c c ountf ori nc omea nde x pens es i nr el a t i ont ot het a xy ea r( 6Apr i l t o5Apr i l ) t ha tt heyr el a t et o, whet hera c t ua l l yr ec ei v eda nde x pens edornot .
T hi sa r t i c l ewi l l f or m pa r tofa nongoi ngr ev i ewoft a x a t i oni s s ues wi t hi npr oper t ybus i nes s es , a ndwe ’ dwel c omea nyf eedba c korr eques t st oc ov ers pec ict opi c s . T hea r t i c l eswi l l a l s oc ov erpr opos edc ha ngesr ec ent l ya nnounc edi nt he2015budget . T hea r t i c l eswi l l pr i ma r i l yl ooka ts omet a x a t i oni s s uesf ori ndi v i dua l sa ndpa r t ner s hi pswi t hr ent a l pr oper t yi nc ome . T her ea r es i mi l a r i t i es , bot hl ega l l ya ndf ort a x a t i on, i nhowa nenv el oped( hel di n ac or por a t es t r uc t ur e) pr oper t ybus i nes ss houl dbea c c ount edf or . I nt hi smont h’ sf oc uswewi l l l ooka tt r a di ngv er s usi nv es t menta nd na nc ea r r a ngement s . Ne x tmont hwewi l l l ooka tc a pi t a l v er s us r ev enuee x pendi t ur ea swel l a sr ec enta ndpr opos edc ha ngesi n t r ea t mentofe x pens esi nr el a t i ont or epa i r sa ndr enewa l s . T r adi ngver s usi nves t ment Any onea c qui r i ngpr oper t ywi t ha ni nt ent i ont or ec ei v el ongt er m r ent a l i nc omei sus ua l l yr ega r deda sapr oper t yi nv es t or . I nc ont r a s t , wher eapr oper t yi spur c ha s ed, ha sapr oc es sa ppl i edt oi t ( e . g. r ef ur bi s hmentordev el opment ) a ndi ss ol di nar el a t i v el y s hor ts pa c eoft i me , t hent hea c t i v i t yi st r ea t eda sat r a di ngone . Whet herat a x pa y eri st r a di ngori nv es t i ngc a nha v eas i gnic a nt effec tont hei rt a xpos i t i on. Wher eat r a dee x i s t s , t hepr o tons a l e wi l l bes ubj ec tt oi nc omet a x . Ani nv es t menta c t i v i t ydi s pos a l i s us ua l l ys ubj ec tt ot hel owerc a pi t a l ga i nst a x( “ CGT” ) r a t es . Al i mi t edc ompa nywi l l pa yc or por a t i ont a xoni t spr ot s . T hewa t er sc a nbec omemuddi ed. Ane x a mpl ei swher eat a x pa y er ha s na nc ei s s uesa ndneedst os el l a na s s et( l a ndorpr oper t y ) i nt endeda sac a pi t a l i nv es t menta ndr ea l i s esac ha r gea bl ega i nf or CGTpur pos es . HMRCma yc ha l l enget ha tt hega i ni ss ubj ec tt o i nc omet a xbec a us eoft hes hor thol di ngper i od. T her ef or e , at a x pa y ers houl da l wa y sc l ea r l yr ec or dt hei ri nt ent i onwi t ha nypr oper t ya c qui s i t i on, a ndofc our s e , s eeka ppr opr i a t ea dv i c epr i ort o a c qui s i t i onordi s pos a l . Whet herapr oper t ywa sa c qui r edf orat r a di ngori nv es t mentpur pos ec a nbec omeev enmor es ens i t i v ewher eal os sa r i s esondi s pos a l . Al os sona ni nv es t mentpr oper t yc a nonl ybec a r r i edf or wa r da ga i ns tf ut ur ega i nsoft hes a mebus i nes s( l os s esont hec es s a t i onofa ni nv es t mentpr oper t ybus i nes sa r el os tf or ev er ) , wher ea sal os sonapr oper t ya c qui r edf orat r a di ngpur pos e , c a nbe offs eta ga i ns ta l l ot heri nc omeoft hec ur r entorpr ev i oust a xy ea S i nc eApr i l 2013, ac a ponunl i mi t edi nc omet a xr el i ef sha sbeeni n pl a c es oat a x pa y erwhor ea l i s esat r a di ngl os si ne x c es sof£50, 000 wi l l onl ygetr el i efont hegr ea t erof£50, 000or25%oft hei ra dj us t edneti nc ome . Af ur t hera r t i c l eonl os sr el i efwi l l ber el ea s edi na f ut ur enews l et t er .
F ore x a mpl e , at ena nc yorl ea s ec ont r a c t ua l l yobl i gesat ena ntt opa y £18, 000i nr entf ort het wel v emont hper i odf r om 1J ul y2015t o5 Apr i l 2016; amont hl yi nc omeof£1, 500. T her ent a l i nc omea ppl i c a bl et ot he2015/ 16t a xy ea ri sf orni nef ul l mont hs( 9/ 12* £18, 000= £13, 500) a nd5da y soft hepr opor t i ona t ea mountduef orApr i l ( 5/ 30 *£1, 500=£250) . T her ef or et het a x pa y erha st a x a bl ei nc omeof £13, 750f ort he201516t a xy ea r . S i mi l a r l y , apr oper t yr el a t edi ns ur a nc epol i c yr equi r esal a ndl or dt o pa y£800f ort heper i odf r om 18J une2015t o17J une2016. T he per i odr el ev a ntt ot het a xy ea rr unsf r om 18J une2015t o5Apr i l 2016a ndt her ef or et her el ev a nte x pens ei s£640( 292/ 365*£800) . Wher ea c c ount sha v ebeenpr epa r edf ort hepr ev i ousy ea r , apr epa y mentwoul dbea ddedt ot hi sa mount . F ort he2015/ 16t a xy ea r , a pr epa y mentof£160i sc a r r i edf or wa r dt ot hef ol l owi ngy ea r . I npr a c t i c e , t hea c c r ua l sa ndpr epa y ment sba s i sma ybec ons i der ed a na dmi ni s t r a t i v ebur dena ndr et ur nss ubmi t t edwi t h gur espr epa r edt o31Ma r c hort hewhol eoft hee x pens eent er edwi t hout f ol l owi ngt hes t r i c ta c c r ua l sa c c ount i ngpr i nc i pl e . I ns ma l l erpr oper t ybus i nes s es , t het a xa ts t a k ewi l l of t enber ega r deda sdemi ni mi s , a l t houghf orl a r gerc onc er nsi tc oul dbec ons i der a bl e . Wi t ht hec or r ec ts of t wa r et ool s , t hebur denc a nber emov ed a nda na c c ount a nta nd/ ort het a x pa y erc a nens ur et heyf ol l owt he c or r ec ta c c ount i ngpr i nc i pl esa ppl i c a bl et ot het y peofbus i nes s . Ul t i ma t el yt het a x pa y eri sr es pons i bl ef ort hec or r ec t nes soft hei r r et ur n, a l t hought hepr epa r eroft her et ur ndoesha v eadut yofc a r e t oa dher et ot hec or r ec ta c c ount i ngpr i nc i pl es . T hes t a t ut or yc a s hba s i si nt r oduc edf r om Apr i l 2013f ors ma l l erbus i nes s eswi t hi nc omeofl es st ha n£82, 000, doesnota ppl yt ol etpr oper t ybus i nes s es . Howev er , HMRCdoa c c eptat a x pa y erus i nga met hods i mi l a rt ot hec a s hba s i spr ov i dedi tdoesnots i gnic a nt l y def erf r om wha tt hea c c r ua l sba s i sr es ul twoul dbea ndpr ov i ded gr os sr ec ei pt sdonote x c eed£15, 000. T hi si sac onc es s i ona ndoura dv i c ewoul dnea r l ya l wa y sbet oa c c ountf orapr oper t ybus i nes sus i ngt hea c c r ua l sba s i s . Howev er , i t ma ybeus ef ul f oranewpr oper t ybus i nes swi t hgr os sr ent a l i nc ome ofl es st ha n£15, 000duet ha tha se x per i enc edi s s ueswi t ht hec ol l ec t i onofr entf r om at ena nt , t ot a k ea dv a nt a geoft hec onc es s i ont o pr ev ent na nc i a l ha r ds hi p. Fi nanc eCos t s F i na nc ea nda s s oc i a t edc os t sa r ea l s oa l l owa bl ea sadeduc t i onf r om gr os spr ot sundert hea c c r ua l sba s i s . F oranewpr oper t ybus i nes s , t hei nt er es tel ementofbor r owi ngobt a i nedf ort heoper a t i onoft he pr oper t ybus i nes si sa l l owa bl ef r om t heda t et hepr oper t yi sr s tl et . 10
Ne ws l e t t e r I nt er es tonbor r owi ngt of unds ubs equenta c qui s i t i onsofr ent a l pr oper t yi sus ua l l yc ons i der edt obeac ont i nua t i onofa ne x i s t i ng bus i nes sa ndt her ef or et hes ec os t sa r ea l l owa bl e . At a x pa y erma ywi s ht or ena nc epr oper t ywi t hi nt hei rpor t f ol i o a ndwher et heequi t yr el ea s edi sus edwi t hi nt hepr oper t ybus i nes s , t hent hea ddi t i ona l i nt er es twi l l bea l l owa bl ea ga i ns tt hei r pr oper t yi nc ome . Wher er el ea s edequi t yi snotus edwi t hi nt hepr oper t ybus i nes s , a ddi t i ona lna nc ec os t sa r eonl ya l l owa bl et ot hee x t entt ha t t heyr el a t et oat a x pa y er sc a pi t a l c ont r i but i ont ot hebus i nes s . F ori ns t a nc e , at a x pa y erma yha v eownedapr oper t yf orma ny y ea r s , s uc ha swhenaf or merma i nr es i denc ebec omesar ent a l pr oper t y . Av a l ua t i ons houl dbeunder t a k ena sa tt heda t et he pr oper t yi sr s tl et , a st hi swi l l bet het a x pa y er ’ sc a pi t a l c ont r i but i ont ot hebus i nes s . F i na nc ei sr es t r i c t edt ot hei nt er es tel ementofbor r owi ng, a swel l a sa s s oc i a t edr ev enuee x pens es . As s oc i a t ede x pens esma yi nc l udet her enewa l ofa na nc ea gr eementf ora ne x i s t i ngpr oper t ybus i nes s , butnotf ort he r s ta r r a ngementf ee . F ut ur ec ha nges F r om Apr i l 2017,na nc ec os t si nc ur r edbyi ndi v i dua l swi t hpr oper t yi nv es t mentbus i nes s eswi l l gr a dua l l yber es t r i c t edt ot he ba s i cr a t eba nd. T her es t r i c t i onwi l l a l s oa ppl yt oa s s oc i a t ede x pens es , s uc ha s na nc ea r r a ngementf ees .
T hea mountofi nt er es ta l l owa bl ea sa ne x pens ewi l l t a perf r om 100%t oni l ov eraf oury ea rper i odwi t ht her ema i ni ngi nt er es t onl yr el i ev a bl ea tt heba s i cr a t eoft a x , a sf ol l ows
Aba s i cr a t et a xpa y erwi l l be na nc i a l l yuna ffec t edbyt he c ha nges , whi l ehi ghera nda ddi t i ona l r a t et a xpa y er swi l l s ee t heeffec t i v ec os tofna nc ei nc r ea s equi t es i gnic a nt l y . T he t a bl ebel ows howst hea ddi t i ona l t a xs uffer edf orahi gherr a t e t a x pa y erwi t hmodes tpr oper t yi nc ome . Per s ona l a l l owa nc es a ndr a t eba ndsa r ea s s umedba s edonr ec entt r ends .
I nt hi ss c ena r i ot hea ddi t i ona l c os ts houl da r gua bl ynotwa r r a nt t heneedf ordr a s t i ca c t i on, a l t houghi ti sea s yt os eehow na nc e effec t i v el yr educ i ngi nc omebyupt oaf ur t her25%s houl dbea t r i ggerf orc ons i der i ngwa y st oa v oi dl os i ngi nt er es tr el i ef . T her ea r epos s i bl emet hodsofmi t i ga t i ngt hei nc r ea s edbur den ofna nc e . I twoul dbepr udentf orat a x pa y ert oa s s es st hea c t ua l pot ent i a l c os tt ot hem a ndpos s i bl yl ook i nga tt hemos tc os tef f ec t i v ewa y sofma na gi nga nya ddi t i ona l e x pens e . Onepos s i bl ewa yt or educ et hea ddi t i ona l c os ti st odec r ea s et he a mountofl ev er a gi nga c r os st hepor t f ol i o. I ti sa r gua bl ybet t erf or apr oper t ybus i nes st oha v el owerl oa nt ov a l uer a t i osi nor dert o s ur v i v ei nt er es tr a t ea ndot herma r k et uc t ua t i ons , s ot her ema y beot herbenet sgi v ent her ec entment i onofi nt er es tr a t ei nc r ea s es . T her ec oul dbeCGTl i a bi l i t i esi fpr oper t i esa r edi s pos ed oft oa c hi ev et hi s . T henewr ul esdonota ppl yt oc ompa ni es , s ol a ndl or dswi t hl a r ge por t f ol i osma yc ons i dera c qui r i ngf ut ur epr oper t i eswi t hi nal i mi t edc ompa ny . T r a ns f er r i nge x i s t i ngpr oper t i est oal i mi t edc ompa nyma ya l s obea nopt i on, a l t hought her ec oul dbes i gnic a nt CGTa ndS DL Ti mpl i c a t i onsi ndoi ngs o. Cha ngi nge x i s t i ng na nc e a r r a ngement sma ypr ov ee x pens i v eorl endi ngpr ov i der sma y r ef us et ol endt oc or por a t es t r uc t ur esduet ot hei rper c ei v edi n c r ea s edr i s k( a l t houghac ha r geus ua l l ye x i s t sov ert hepr oper t y ) . s 162oft heT a x a t i onofCa pi t a l Ga i nsAc t1992( “ T CGA1992” ) pr ov i desar ol l ov err el i efont het r a ns f erofabus i nes s , c ommonl y k nowna si nc or por a t i onr el i ef . Ca s el a ws uppor t st ha tt her ea r e not or i ousdi ffic ul t i esi nes t a bl i s hi ngwhet herapr oper t yl et t i ng a c t i v i t yc ons t i t ut esabus i nes sf orCGTpur pos es . T hec our t sha v e s ugges t edt ha tapr oper t yl et t i nga c t i v i t yc oul dc ons t i t ut eabus i nes sf ort hepur pos esofs 162T CGA1992. Gr ea tc a r ei sneededa s t her ei snos t a t ut or ydeni t i onofabus i nes si nei t herCGTor i nc omet a xl egi s l a t i on. HMRCha v es uc c es s f ul l yc ont endedt ha t t her el i efdoesnota ppl yi ns omehi ghpr ol ec a s es , a ndi tma ybe benec i a l t of ol l owt henons t a t ut or ybus i nes sc l ea r a nc epr oc edur ea nds eekc on r ma t i onf r om HMRC. T hei s s uewi t ht hi spr oc es si sofc our s et ha tt her ei snor i ghtofa ppea l i nt heev entofa nega t i v er es pons ef r om HMRCwheni ti sf el tt ha ta c t i v i t ywoul d c ons t i t ut eabona debus i nes sa soppos edt oapa s s i v el et t i ng a c t i v i t y . I twi l l bei nt er es t i ngt os eehowmuc ht hes ec ha ngeseffec tr ent a l pr i c esa sl a ndl or dsma ys eekt os i mpl ypa s st hebur denoft hei r i nc r ea s ed na nc ec os t sont ot ena nt s . Onewoul di ma gi net ha t t hi swoul dputa ni nc r ea s edbur denont hos ewhoa r er ent i ngbec a us et heyc a nnota ffor dt obuy . Wehopemor ei sdonet oma k e a ffor da bl ehous i nga v a i l a bl et ot hos es t r uggl i ngt ogett hei rf oot ont he r s tr ungoft hepr oper t yl a dder .
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Ne ws l e t t e r FeePr ot ec t i onI ns ur anc eSer vi c e Wi t hHMRC’ si nc r ea s edf oc usonens ur i ngt a xc ompl i a nc e , f ee pr ot ec t i oni ns ur a nc es houl da l mos tbec ons i der eda“ mus tha v e ” i nor dert ol i mi tt he na nc i a l bur denofHMRCenqui r i esa nd c hec k si nt ot a xr et ur ns . Wi t ht hepubl i c na nc ess ot i ght l ys t r et c hed, HMRCha sbeens et t hea mbi t i oust a r getofi nc r ea s i ngt a xr ev enues . HMRCha v er es pondeds t r ongl yby : -I ni t i a t i nganumberofc a mpa i gnst a r get i ngt a x pa y er s , whom HMRCbel i ev eha v edec l a r edi nc or r ec tt a x ; -L a unc hi nganumberoft a s kf or c es , whi c ht a r getc er t a i nt r a des i ns pec ica r ea s ; -Rec r ui t i ng2, 500newCompl i a nc eOffic er s ; -T a r get i ng20, 000Bus i nes sRec or dChec k sea c hy ea r ; a nd -Under t a k i ngmor eenqui r i esa ndCompl i a nc eVi s i t st ha nev er bef or e . Anyt a x pa y erc a nbet a r get edbyHMRCt oc hec kt ha tt heya r e pa y i ngt her i ghta mountoft a x , a ns wer i nga l l ofHMRC’ sques t i onst a k est i mea ndpr of es s i ona l e x per t i s e .E nqui r i esof t endr a g onf ormont hsa nds omet i mest a k ey ea r st oc onc l ude .I tc a nc os t t hous a ndsofpoundst odef enda nenqui r y , wha t ev ert heend r es ul t .
Sowhatc anbedone? I ti smor ei mpor t a ntnowt ha ni tha sev erbeenf ort a x pa y er st o c ons i derpr ot ec t i nga ga i ns tt heunpl a nnedc os t st ha tt heywi l l i nc uri nt heev entofa nHMRCenqui r yorc ompl i a nc ev i s i t .T hi s c a nbea c hi ev eda tar el a t i v el yl owc os t . Ani ns ur anc ebac keds ol ut i on T opr ov i depea c eofmi ndt ot hos ec l i ent swhodoa s kust oa s s i s t onc ompl i a nc ema t t er s , wepr ov i deaT a xE nqui r yF eePr ot ec t i on S er v i c e .T heS er v i c ei sba c k edbya ni ns ur a nc epol i c yunderwhi c h wec a nc l a i mc os t si nc ur r eddef endi ngt hem i nt heev entofa n HMRCenqui r y .Cl i ent swhos ubs c r i bet ot hes er v i c ewi l l a l s obe a bl et oa c c es sat el ephonea dv i c el i nec ov er i ngt hec ompl e xa r ea s ofE mpl oy mentL a wa ndBus i nes sS a f et y , a tnoa ddi t i ona l c os t . We woul denc our a gea l l a c c ount a nt sa nda dv i s or st oofferas i mi l a r s er v i c ea ndt a x pa y er ss houl dc hec kt hea v a i l a bi l i t yofc ov erwi t h t hei ra gent s .
T axCompl i anc edat est or emember F or t hc omi ngda t esf ory ourdi a r y : 1Sept ember 19/ 22Sept ember 30Sept ember 30Sept ember 1Oc t ober 5Oc t ober 14Oc t ober 19/ 22Oc t ober 31Oc t ober
Dueda t ef orc or por a t i ont a x( “ CT” ) pa y ment sf ora c c ount i ngper i odsendi ng30Nov ember2014; Dueda t ef orAugus tpa ya sy ouea r n( “ P AYE ” ) pa y ment ; E ndofCT 61( c ompa nyi nc omet a xr et ur n) qua r t er l yper i od; L a s tda yt or ec l a i mE CVATc ha r gea bl ei n2014; Dueda t ef orCTpa y ment sf ora c c ount i ngper i odsendi ng31Dec ember2014; L a s tda yf ori ndi v i dua l sa ndt r us t eest or egi s t erf ors el f a s s es s mentf ort he14/ 15t a xy ea r ; CT 61i nc omet a xdueda t ef orqua r t ert o30S ept ember2015; Pa y mentf orS ept embera ndqua r t ert woP AYEs ubmi s s i ondea dl i neda t e; L a s tda yt os ubmi tpa pers el f a s s es s mentt a xr et ur nsf or14/ 15t a xy ea r .
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Ne ws l e t t e r EdgeNews
Ant onandJ er omet akeonBr i s t ol +Bat hMar at honf or Br andonT r us t
Edget eamsupwi t hCent ur i onVAT
T hi sOc t oberAnt ona ndJ er omewi l l bet a k i ngony eta not her t nes sc ha l l enge , t a k i ngpa r ti nt hebr a ndnewBr i s t ol t oBa t h ma r a t hon! T henewma r a t honi ss ett obeac ha l l engi ngone wi t hma nyhi l l si nv ol v ed!T heywi l l bedoi ngt hi st or a i s emoney f orourc ha r i t yoft hey ea r–Br a ndonT r us t . Pr ev i ousc ha l l enges Ant ona ndJ er omeha v et a k enonf orBr a ndonT r us ti nc l udet he L ondonMa r a t hon, t heGr ea tWa l l ofChi nat r eka nda bs ei l i ngt he Av onGor ge .
E dgeT a xL L Pha st ea medupwi t hVATe x per t sCent ur i onVATt o a dv i s ey ouonma na gi ngy ourVATa ndt a xr i s k . Wewi l l behol di ngt wos emi na r st hi sS ept emberc ov er i ng“ howt oma na ge y ourVATa ndt a xr i s k ; at opi cwhi c hi ses s ent i a l t oa l l bus i nes s owner sduet oHMRC’ sc r a c k downont a xa v oi da nc ea ndt he numberofenqui r i esont hei nc r ea s e . T hebr ea k f a s ts emi na r s wi l l t a k epl a c ei nBr i s t ol ont he23r dS ept embera ndCa r di ffon t he29t hS ept embera ndwi l l a l s ogi v ey out heoppor t uni t yt o net wor kov erbr ea k f a s t . T hes emi na r swi l l bel edbyourMa na gi ngPa r t nera ndr i s kma na gements pec i a l i s tAnt onL a ne , a nd a wa r dwi nni ngVATe x per t sL i zMa hera ndJ ul i eRa wl i ns onS mi t h. Mor ei nf or ma t i oni sa t t a c hedi nt hei nv i t a t i onov er l ea f . I fy oua r ei nt er es t edi na t t endi nga ndwoul dl i k et obooka pl a c e , pl ea s eema i l ourMa r k et i ngE x ec ut i v e , Ki r s t yDa ni el ; k da ni el @edget a x . c om.
Br a ndonT r us ta r eal oc a l c ha r i t ywhos uppor ti ndi v i dua l swi t h l ea r ni ngdi s a bi l i t i esa nda ut i s m. T heya i mt ogi v et hepeopl et hey s uppor ta smuc hf r eedom a ndi ndependenc ea spos s i bl e . T hey dot hi sbypr ov i di ngt hem wi t hl i v i ngs ol ut i onss uc ha sr es i dent i a l c a r ea nds uppor t edl i v i ng, a swel l a spr ov i di ngempl oy ment t r a i ni ngoppor t uni t i esa ndl ei s ur ea c t i v i t i es . E dgea r enowi nt hei r s ec ondy ea rofs uppor t i ngt heBr i s t ol ba s edc ha r i t ya ndc hos et o s uppor tt hem ha v i ngs eent hea ma z i ngwor kt heydof ort he peopl et heys uppor t . T os uppor tt hem ont hi sc ha l l engef orBr a ndonT r us t , pl ea s es pons ort hem her e: ht t ps : / / www. j us t gi v i ng. c om/ E dgeT a x L L P3/orbyt e x tET AX99 f ol l owedt hea mounty ouwi s ht ogi v ee . g. ET AX99£5, t o70070. F ormor ei nf or ma t i ononBr a ndonT r us tpl ea s ev i s i t : ht t p: / / www. br a ndont r us t . or g/ I fy out oowoul dl i k et ogety ourbus i nes si nv ol v edwi t hs uppor t i ngt hi sf a nt a s t i cc ha r i t ypl ea s ec ont a c tE r i nL a wt on; er i n. l a wt on@br a ndont r us t . or g. Rec r ui t ment
T axRi s k/R&DSemi narwi t hT axWi s e Ont he3Dec ember2015, E dgeT a xL L Pwi l l ber unni ngaj oi nt s emi na ra l ongs i deT a x Wi s eBus i nes sS er v i c esa tt heHol i da yI nn, F i l t oni nBr i s t ol . E dgeT a xL L Pwi l l bee x pl a i ni nghowt oma na ge bus i nes sr i s k sa ndHMRCenqui r i eswhi l eT a x Wi s ewi l l bepr es ent i ngonr es ea r c ha nddev el opment( “ R&D” ) t a xc r edi t s . T o pr er egi s t erorf orf ur t heri nf or ma t i onc ont a c tKi r s t y ; k da ni el @edget a x . c om.
L ook i ngf oranewc a r eeroppor t uni t y ?Wea r er ec r ui t i ngf ora numberofr ol esa tt hemomenti nc l udi nga na dmi ni s t r a t or , at a x ma na gera nda na c c ount a nt . F ormor ei nf or ma t i ona boutt he r ol espl ea s ev i s i tourc a r eer spa georc ont a c tusf orf ur t heri nf or ma t i on: ht t p: / / www. edget a x . c om/ c a r eer s
Ti gr entweekend Ont he14t o16Augus t , Ant onL a nepr es ent edat hr eeda y c our s eonAs s etPr ot ec t i ona ndt hePr i nc i pl esof T a xt oa r ound s i x t yel i t es t udent sof T i gr entL ea r ni ngUK( ht t p: / / t i gr ent . c om/ uk . ht ml ) . T hei rpr oper t y ba s edi nv es t i nga nd na nc i a l i ns t r ument si nv es t i ngt r a i ni ngpr ogr a mmesha v emetwi t h r es oundi ngs uc c es sUKwi de . Ov ert hepa s ty ea ra l one , T i gr ent L ea r ni ngUKha sc onduc t ednea r l y100t r a i ni ngs es s i onst ha t ov er3, 000c us t omer sa t t endedt hr oughoutE ngl a nd, S c ot l a nd, Wa l esa ndI r el a nd. T hec our s ewa sagr ea ts uc c es swi t hs ome f a nt a s t i cf eedba c ka ndaf ewnewc l i ent s ! I fy ouwoul dl i k et o ndoutmor ea bouta s s etpr ot ec t i on, pl ea s edonothes i t a t et o c ont a c tus . 13
Ne ws l e t t e r Upc omi ngs emi nar s : Ma na g i ngy ourVATa ndT a xRi s k
Br ea k f a s ts emi na rwi t hE dg eT a xL L Pa ndCent ur i onVAT
Cent ur i onVATS pec i a l i s t sa r eade di c a t e da nd a wa r dwi nni ngt e a mofhi g hl ye x pe r i e nc e dVAT s pe c i a l i s t s . Awa r de dt heBe s tUKVATT e a mi n 2013be angKPMG&De l oie ’ st ot het ops pot wewe r es hor t l i s t e da g a i ni n2015.
L i zMa her L i zs t a r t e dhe rc a r e e ri n VATi n1989wi t ht he f or me rHM Cus t omsa nd E x c i s et he nwor k e df or E r ns ta ndY oung , be c omi ngi t sfir s te v e rf e ma l e c or por a t eVATs e r v i c e s di r e c t ori nt heUK.
E dg eT a xL L Pa ndCe nt ur i onVA Twoul dl i k et of or ma l l yi nv i t ey out oa e ndourbr e a k f a s ts e mi na r s“ Ma na g i ngy ourVA Ta ndT a xRi s k ” . T hes e mi na r swi l l g i v ey out hec ha nc e t one t wor kov e rbr e a k f a s ta ndme e ts omene wpe opl ea swe l l a sg i v i ngy out heoppor t uni t yt ol e a r nhowt oma na g ey ourVA Ta ndt a xr i s kf r ome x pe r t s : Ant onL a ne , L i z Ma he ra ndJ ul i eRa wl i ns onS mi t h.
L i ze x c e l si nde l i v e r i ngVATbe s pok et r a i ni ngf or c l i e nt sbot hi nt heUKa ndi nt e r naona l l ya s we l l a st hr oug hCe nt ur i on’ sownVATT r a i ni ng pr og r a m. L i zi sar e g ul a rVATs pe a k e ra te v e nt s f orpr of e s s i ona l bodi e ss uc ha st heAAT , I CAE W, ACCAa ndCI MA.
T hes e mi na r swi l l c ov e r :
J ul i eRa wl i ns onS mi t h J ul i ewor k e donVAT Cont r ol wi t ht hef or me r HM Cus t oms&E x c i s e . S het he nwor k e df or E r ns t&Y oungt he n KPMGbe f or ej oi ni ng Ce nt ur i on.J ul i es pe c i a l i s e si npubl i c , c ha r i t y a ndnotf orpr ofits e c t or s .
-VA Tr i s k si ny ouror g a ni s aon, -Howy oumi g htha ndl eav i s i tf r omHMRC, -T hei nf or maona v a i l a bl et oHMRCa bouty ou, -Audi t sa ndt hepos s i bi l i t yoft he s ee s c a l angi nt oi nv e sg aons , -P e na l t yr e g i mea ndpr ot e cngf r ompe na le s , -Re duc i ngy ourr i s ka ndt a k i ngr e a s ona bl ec a r e . Whoa r et hes e mi na r sf or ? -Ac c ount a nt sa ndpr of e s s i ona l a dv i s or s -Bus i ne s sowne r s -Cl ubs , a s s oc i aonsa ndc ha r ie s
Da t es 23r dS ept ember-Br i s t ol T heKe ndl e s hi r eGol fCl ub He nfie l dRoa d Coa l pi tHe a t h Br i s t ol BS 362UY
29t hS ept ember-Ca r di ff As t us 6Cha r nwoodCour t P a r cNa nt g a r w Ca r di ff CF 157QZ
T i mi ng s 8: 30-Ne t wor k i nga ndbr e a k f a s t 9: 15-S t a r t 10: 45-F i ni s h
Cos t :£20 I fy oua nd/ ora nyc ol l e a g ue swoul dl i k et oa e ndpl e a s eRS VPt oKi r s t yDa ni e l ; k da ni e l @e dg e t a x . c omorMe r l eBe t he l l ; me r l e . be t he l l @c e nt ur i onv a t . c om l e ngusk nowwhi c hv e nuey ouwoul dl i k et oa e nda ndt hena me sofa nyc ol l e a g ue s y ouwi s ht obr i ng .
E dg eT a xL L Pi sas ma l l bou quet a xpr a cc es pe c i a l i z i ngi nT a xI nv e sg aons , Ri s kMa na g e me nt a ndCons ul t a nc y . E dg ei she a de dupbyMa na g i ng P a r t ne r , Ant onL a newhoi ss uppor t e dbyade di c a t e dt e a mofpr of e s s i ona l s .T hi sy e a rE dg ewa s s hor t l i s t e df or“ Be s tT a xI nv e sg aonsT e a m”i n t heT a x aonAwa r ds .
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ACha r t e r e dT a xAdv i s or , Ant ons pe c i a l i z e si nt a x i nv e sg aons , c ompl e x t a xpl a nni ng , pr ope r t y t a x aon, UKa ndoffs hor et r a di nga ndi nv e s t me nts t r uc t ur e sa nd a s s e tpr ot e con. Ant on s t a r t e dhi sc a r e e rI n E r ns ta ndY oung’ sT a x Ri s kMa na g e me ntT e a m.
Ant oni saCE DRa c c r e di t e dme di a t or , qua l i fie d t ode a l wi t hc ompl e xdi s put er e s ol u on. Ant on r e g ul a r l ys pe a k sa ndwr i t e sont het opi cofi nv e sg aonsa ndha sr e c e nt l yha dat a xdi g e s t “ Pr a cc a l ie sofT a xI nv e sg aons ”publ i s he d byT ol l e y ’ s .Ant onha sa l s oc ont r i but e dt o T ol l e y ’ sF i na nc eAc t2015ha ndbooka ndi si nt he e s t . pr oc e s sofwr inga not he rt a xdi g