EdgeNews l et t er I s s ue8 Dec ember2015
Ne ws l e t t e r
I nt hi si s s ue
Edi t or i al I ha v en’ ty ets eenT heF or c eAwa k ensa l t houghI t hi nki t ’ sa c r a c k i ngt i t l ef oranewdoc ument a r ys er i esonHMRC.I a m ofc our s epos i t i oni ngmy s el ff oranewc a r eeri ndev el opi ng i ns i ght f ul t el ev i s i onpr oduc t i ons .S owoul dDa v i dGa uk ebe L uk eort hebi gda ddy , MrDa r t hVa derhi ms el f ?T hemor a l i s t i cwi derpubl i cma yhol dhi ma st hey oungJ edi a l t hough t hos ef a c i ngt henewl yr el ea s eda c c el er a t edpa y mentnot i c esorha v i ngf a c eda ni nt er v i ewunderc a ut i on, ma yi ns t ea d bel i ev ehei st heoneont heda r ks i de .I nhi ss pa r et i mehe enj oy sf oot ba l l , c r i c k et , r ea di nga ndc ount r ywa l k s–I c a n’ t hel pbuti ma gi nehi m doi ngt hes et y pi c a l CVa c t i v i t i es dr es s eda sDa r t hVa der .
-T axr i s kupda t e -Y ouc anr unbuty ouc an’ t hi de: offs hor et axev ader s - HMRCt ar get s‘ affluent ’ t ax pa y er si nl a t es tc r ac k down Ant onL ane , Managi ngP ar t ne r
- Wha ts houl dadvi s er sdo whent hei rc l i ent sar eenqui r ed i nt obyHMRC?
T her e l e a s eof t hi sne ws l e t t e rc ome sa tat ur bul e ntt i mei nt hega l a x y .Notonl yha ss ome ones t r uc kba c k( HMRCi nt r oduc e dz i l l i onsof a v oi da nc eme a s ur e s ) , t hej e di r e t ur ne d( t he pr of e s s i ont houghtt he youtwi t t e d) , t he r eha sbe e nma nyapha nt om me na c e( t hegoa l pos t c ha nger e t r oa c t i v e l y ) , c l one sk e e pa t t a c k i ng( I ns pe c t or sha v ebe e npe r s i s t e nt ) l e a di ngt oa r e v e nge f ul S i t h( t het a x pa y e r swe r ep* s s e d) a ndc l onewa r s( t hepr of e s s i onde v i s e dc ount e r me a s ur e st oa t t a c kHMRC’ sme t hodol ogy ) .Af t e ra l l t ha tl ot , t hef or c eha st oa wa k e nr e a l l y doe s n’ ti t( s ome onei sgoi ngt oge tna i l e d) ?
- Real t i meBene ti nKi nd
I na na t t e mptt os umma r i s e , l a s tChr i s t ma swes a wt he r s tr oundof a c c e l e r a t e dpa y me nt not i c e sa l ongwi t ha na nnounc e me nton22De c e mbe rt ha tHMRCa r et a r ge t i ngbi l l i onsof unc ol l e c t e dde bt( di dn’ ta ffe c tt hec ons ume rt oomuc h) a ndt hi sy e a r , whi l s tnota nnounc e d ( y e t ) , HMRCha v ea ga i ni s s ue dmor eAPNs .We l l av e r yMe r r yChr i s t ma s–bondi ngbe t we e n HMRCa ndt het a x pa y e rha sne v e rbe e ns ogood!
- EdgeNews
S l i ght l ymor es i ni s t e r , t hi spa s tmont hweha v es e e nama s s i v ec ul t ur a l s hi f t .T hebount y hunt e r sa r eouti na c t i ont a k i ngav e r ya ggr e s s i v es t a nc ea ga i ns tt hos ewi t ht a xi r r e gul a r i t i e s . Weha v es e e na ni nt e r v i e wunde rc a ut i onf orat a xl i a bi l i t yov e re i ghty e a r sof t ot a l l i ngonl y a r ound£22, 000a swe l l a sbount yhunt e r sr e f us i ngt oope r a t eunde rdi s c l os ur ef a c i l i t i e s whe nc l e a r l yt he ya r ewi t hi nt hepa r a me t e r s .Wha ti sgoi ngon?Ma y beL i zHome rgr i l l i ng ov e rt heHS BCs a gai nF e br ua r y2015i ns pi r e ds ome t hi ng. S owhi c hS t a r Wa r sc ha r a c t e rc a n L i zHome rbe ?I ha dt odos omer e s e a r c ha nddi s c ov e r e dAur r aS i ngwhoi sde s c r i be da sut i l i z i ngav a r i e t yof t ool sdur i nghe rhunt s .S i nc e r ea pol ogi e st oL i zHome rgi v e nt ha tAur r a S i nga l s ol ook se x c e pt i ona l l yuna t t r a c t i v e , we a r s“ f unc t i ona l c l ot he s ” , ne v e rc ompl e t e dhe r J e di t r a i ni nga nds wungi nhe rl oy a l t i e se v e nt ua l l yt r a ns pi r i ngi nt her out i nes l a ught e rof J e di sf orf un.Obv i ous l y , L i zHome r , aqua l ie dl a wy e ra ndl ongt e r mc i v i l s e r v a nts ha r e sv e r y f e wof Aur r aS i ngspr ol e … Asa l wa y swewoul dl i k et ot ha nky ouf orr e a di nga ndwe l c omea nyf e e dba c kors ugge s t i ons f orf ut ur ene ws l e t t e ra r t i c l e s . Wewoul dl i k et owi s ha l l ourr e a de r sav e r yMe r r yChr i s t ma s a ndPr os pe r ousNe wY e a r . Mos tof usa tE dgewi l l beoutof t heoffic ef r om t he22ndDe c e mbe runt i l 4t hJ a nua r ybuti f y oune e da ny t hi ngur ge nt l yi nt heme a nt i mepl e a s el e a v eusa v oi c e ma i l ors e ndusa ne ma i l a ndAnt onorJ e r omewi l l a i mt oge tba c kt oy oua ss oona s pos s i bl e .
-T axeffic i enti nv es t ment s -T axc ompl i anc eda t est o r emember
- Chr i s t mass pec i al bl og
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 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 S omuc hi sc ha ngi ng; wene e dt oc ons i de rwha ti sc ur r e nt l y t a r ge t e da swe l l a swha tt hef ut ur ehol ds .Cur r e nti s s ue sa r ea s f ol l ows : - Sc hemat i cpl anni ng: Weha v ea l r e a dyme nt i one dAPNs , whi c h ha v ebe e ni s s ue donma s s .Howe v e r , ma nya r ec ha l l e ngi ngAPNs t hr oughr e pr e s e nt a t i onsa nde v e nt ua l l yj udi c i a l r e v i e w.Unf or t una t e l yf orHMRC, t he r ea ppe a r st obes omeme r i ti ns e e k i ngj udi c i a l r e v i e wa l t hought hi si sunl i k e l yt opr e v e ntal i a bi l i t ybe i ngdue a ts omepoi nts ubj e c tt ot heout c omeof l i t i ga t i on. - Cr i mi nal pr os ec ut i ons : Oure a r l i e rne ws l e t t e r ss e toutt he c ha ngei npol i c yt oe ns ur et hee v e r y da yt a x pa y e rk nowst ha tt he y a r ea tr i s kof pr os e c ut i oni f t he yf a i l t opa yt he i rt a x . Pr os e c ut i on t a r ge t sha v ea l s oi nc r e a s e da ndweha v es e toutt hene woffs hor e c r i mi na l offe nc epr e v i ous l y . -Offs hor es t r uc t ur es : t heoffs hor edi s c l os ur ef a c i l i t ye ndson31 De c e mbe r2015a ndt he r eha v ebe e nf e wr e por t e ddi s c l os ur e s . Wee nv i s a get ha tma nyhi ghe rne twor t hf a mi l i e swi t hs uc hs t r uc t ur e sdon’ ta ppr e c i a t et her i s k sa nda r enotf ul l ya wa r eof how HMRCma ya t t a c kt he i rs t r uc t ur e s .T hi swa st hec ont e ntof aT a x Di ge s t “ Ant i a v oi da nc el e gi s l a t i on, offs hor es t r uc t ur e sa ndt heoffs hor edi s c l os ur ef a c i l i t y ” wr i t t e nbyAnt ona ndpubl i s he dby T ol l e y si nNov e mbe r . On27Nov e mbe r , Da v i dGa uk el a unc he dac a mpa i gnwa r ni ng offs hor et a xe v a de r st ha tHMRCwi l l s t a r tt or e c e i v ede t a i l sonUK t a x pa y e r sf r om mor et ha n90c ount r i e s , unde rne wgl oba l a gr e e me nt sc ha mpi one dbyt heUK. -Hi ghnetwor t h: HMRCha sl a unc he danumbe rof t a s k f or c e st o i de nt i f yr i s k yhi ghne twor t hpe r s onst oi nv e s t i ga t et hr oughout t heUK, i nc l udi ngt heS out hWe s t . T hef ut ur ei sgoi ngt obev e r ydi ffe r e nti f HMRC’ smode r ni s a t i on pr ogr a mmec ome st of r ui t i on. On12Nov e mbe r2015HMRC a nnounc e di t st e ny e a rmode r ni s a t i onpr ogr a mme : -Regi onal c ent r es : T he r ewi l l be13ne wr e gi ona l c e nt r e sov e r t hene x tv ey e a r s . T hec ur r e nt58, 000f ul l t i mee qui v a l e nt e mpl oy e e sa r el oc a t e da c r os s170offic e s .T he s eoffic e swi l l be c l os e da ndr e pl a c e dbyt her e gi ona l c e nt r e sr e s ul t i ngi ni mpr ov e d c ommuni c a t i on, r e s our c es ha r i ng, a c c e s st os pe c i a l i s t sa ndbui l di ng“ amor ehi ghl y s k i l l e dwor k f or c et ome e tt hec ha l l e nge sof br i ngi ngi nmor er e v e nuef r om t hos ee v a di ngt a xa ndi mpr ov i ng i t sc us t ome rs e r v i c et ot hehone s tma j or i t y ” .
On14Dec ember , Da v i dGa uk ea ddr es s edHMRCa tt hei rs t a k ehol derc onf er enc ea ndc onc ent r a t edont hedi gi t a l a dv a nc ement s , c omment a r ya ndquot es : -“ I c e r t ai nl yhav eonee y et owar dst heupc omi ngChr i s t masf e s t i v i t i e s , asI ’ ms ur emanyof y oudo. Andast hef at he r of t hr e eboy s , I ’ m c ur r e nt l yi nt hepr oc e s sof managi nge x pe c t at i onsar oundpr e s e nt s . ” Hopef ul l ynohov erboa r ds !
-“ Al l t ax pay e r swi l l r e c e i v et hedat aands e r v i c e sr e l e v ant t ot he m and, f ort hos ewhohav edi ffic ul t ygoi ngonl i neorwhone e de x t r a s uppor t , he l pwi l l beav ai l abl et hr oughot he rc hanne l s . ” -“ T ax pay e r ss houl dn ’ t hav et ogi v eHMRCi nf or mat i ont hat i t al r e adyhas , or s houl dbeabl et oge t f r ome l s e whe r e–f ori ns t anc e , f r ome mpl oy e r s , bank s , bui l di ngs oc i e t i e sandot he rgov e r nme nt de par t me nt s . ” -“ By2 0 2 0 , mos t bus i ne s s e s , s e l f e mpl oy e dpe opl eandl andl or ds wi l l ber e qui r e dt ok e e pt r ac kof t he i rt axaffai r sdi gi t al l yand updat eHMRCat l e as t quar t e r l yv i at he i r di gi t al t axac c ount . ” -“ ByApr i l 2 0 1 6 , e v e r yi ndi v i dual ands mal l bus i ne s swi l l hav e ac c e s st oadi gi t al t axac c ount whi c hwi l l bes i mpl e , pe r s onal i s e d ands e c ur e , offe r i ngane v e r wi de r r angeof s e r v i c e s . I ndi v i dual t ax pay e r swi l l beabl et oi nt e r ac t wi t hHMRCdi gi t al l yandat anyt i me t hat s ui t st he m. ” -“ I nt hene x tv ey e ar s , al l t ax pay e r swi l l beabl et ous et he i rdi gi t al ac c ount st os e eas i ngl e , upt odat eande as y t of ol l owov e r v i e wof t he i rt axaffai r s , j us t l i k et he ydoi nt he i ronl i nebank i ng. ” T hes er ef or mswi l l a s s i s tt or educ ea ndi dent i f yr i s k smuc hmor e ea s i l ya nd, i ft hepa c eofi nt r oduc t i oni sma i nt a i ned, t heUK’ st a x s y s t em wi l l bec omeas i gnic a nt l ydi ffer entpl a c ef ort a x pa y er s ; t hos ewhodon’ tbuts houl dpa y , a ndofc our s ea dv i s er sa l i k e . Bi gbr ot herwa swa t c hi nga ndnowt hey’ r ec uddl i ngy ou!
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Ne ws l e t t e r Y ouc anr unbutyouc an’ t hi de: offs hor et axevader s •T i mei sr unni ngoutt odi s c l os eunde rt heOffs hor eDi s c l os ur e F a c i l i t i e s( “ ODF ” ) •L a s tc ha nc edi s c l os ur ef a c i l i t yt obeope ne di n2016 •HMRCt os t e pupt he i rc r a c k downont a xe v a de r swi t hne w c r i mi na l offe nc e sa ndt oughe rpe na l t i e s •Aut oma t i ce x c ha ngeofna nc i a l i nf or ma t i ons ha r e dbe t we e n 90j ur i s di c t i ons •I f y ouha v ea nyc onc e r nsa boutt a xpl a nni ngy ouha v eunde r t a k e ny ous houl ds e e koura dv i c e . T i mei sr unni ngoutt odi s c l os et a xi r r e gul a r i t i e sunde rt heODFa s t heL i e c ht e ns t e i na ndCr ownDe pe nde nc yDi s c l os ur eF a c i l i t y ( J e r s e y , Gue r ns e y , I s l eof Ma n) a r eduet oc l os ea tt hee ndof t hi s mont h( De c e mbe r2015) . Wi t ht hede a dl i nea ppr oa c hi ng, Da v i d Ga uk e ,na nc i a l s e c r e t a r yt ot heT r e a s ur y , ha st a k e nt heoppor t uni t yt owa r na l l t hos es t i l l a v oi di ngt a x : “ Hi di ngmone yi nanot he r c ount r yat t hee x pe ns eof hone s t UKt ax pay e r si snot ac c e pt abl eand wehav emadei t c l e ar wewi l l put as t opt oi t . Unde r our ne wr e gi me t hes mal l mi nor i t ywhoe v adet axoffs hor e , f ac i l i t at eor t ur nabl i nd e y et ooffs hor et axe v as i onwi l l f ac et oughe r s anc t i ons . ” I nhi ss t a t e me nthei sr e f e r r i ngt ot hene wt oughe rs a nc t i onst obe i nt r oduc e di n2016i nc l udi ng: •Ane wc r i mi na l offe nc ef orc or por a t i onst ha tf a i l t ot a k e a de qua t es t e pst opr e v e ntt hef a c i l i t a t i onof t a xe v a s i onbyt he i r a ge nt s ; •T oughe r na nc i a l pe na l t i e sf oroffs hor ee v a de r s , i nc l udi ngt he pos s i bi l i t yof ape na l t yba s e dont hev a l ueof t hea s s e tonwhi c h t a xwa se v a de da swe l l a swi de rpubl i cna mi ngof offs hor e e v a de r s ; •Ane wpe na l t yr e gi mef ort hos ewhoe na bl et a xe v a s i on, ba s e d ont het a xt he yha v ehe l pe dt a x pa y e r st oe v a dea ndna mi ngof e na bl e r s ; •Ane ws i mpl e rc r i mi na l offe nc et oma k epr os e c ut i onof offs hor e e v a de r se a s i e r . Al ongwi t ht he s ene ws a nc t i onsa l s oc ome st hea ut oma t i c e x c ha ngeof da t awhi c ha l l ows na nc i a l i nf or ma t i ont oa ut oma t i c a l l ybes ha r e dbe t we e n90j ur i s di c t i onsa c r os st hewor l d, l e a v i ng nowhe r ef ort hos ea v oi di ngt a xt ohi de . T hepr oc e s st oi mpr ov ei nt e r na t i ona l t a xt r a ns pa r e nc ybe ga n a boutt woy e a r sa gobutt her e a l i nf or ma t i onwi l l s t a r t owi ng ne x ty e a r . T hi swi l l a l l owt heUKa nda l l c ount r i e ss i gne dupt o e a s i l ya c c e s sa c c ounti nf or ma t i onf r om ot he rc ount r i e si nc l udi ng na me s , a ddr e s s e s , a c c ountnumbe r s , i nt e r e s ta ndba l a nc e s .
T heda t awi l l beus eda l ongs i deHMRC’ sa l r ea dypower f ul Connec ts y s t em a l l owi ngHMRCt oi dent i f ynewt a r get st os c r ut i ni s e .
Connec ti sHMRC’ sda t aa na l y t i c a l s y s t em whi c ha l l owsa c c es st o mi l l i onsofr ec or dsa tt hec l i c kofbut t on. Da t at heyc a na c c es s i nc l udesba nks t a t ement s , l a ndr egi s t r yi nf or ma t i on, pa s ta nd pr es entempl oy mentdet a i l sa ndmor e . S eeoura r t i c l e“ Wha ti s Connec ta ndwha tdoesi tk nowa bouty ou? ” f ormor ei nf or ma t i on. HMRCa r er ea l l ys t eppi ngupt hei r ghta ga i ns tt a xev a s i oni n 2016ma k i ngi ta l mos ti mpos s i bl et oev a det a xa ndgeta wa y wi t hi t … But r s t … des pi t eha v i nga l l oft hi spoweri nt hepa l m oft hei r ha nds , HMRCwi l l bek i ndl ygi v i ngt hos ea v oi di ngt a xonel a s t c ha nc et ov ol unt a r i l yc omef or wa r da nddi s c l os ur et a xi r r egul a r i t i esus i ngt hei rnewdi s c l os ur ef a c i l i t y . Us i ngt hi s na l di s c l os ur ef a c i l i t ywi l l pr ov i det heoppor t uni t yt os et t l eons l i ght l y mor ef a v our a bl et er mst ha ni fHMRCwer et oa ppr oa c hy oua nd enqui r ei nt oy oura ffa i r s . Howev er , a l t hought henewdi s c l os ur e f a c i l i t ywi l l a l l ows omel eewa yf ort a x pa y er s , t het er mswi l l not bea sf a v our a bl ea st hos eoft hec ur r entoffs hor edi s c l os ur ef a c i l i t i es . Wewoul denc our a get hos ewi t ht a xi r r egul a r i t i est os eek a dv i c ea ss oona spos s i bl e . I fy ouha v ea nyc onc er nsa boutt a xpl a nni ngy ouha v eunder t a k en, pl ea s ec ont a c tusf ora ni ndependentr ev i ewoft hepl a nni ng. Wes pec i a l i s ei nt a xi nv es t i ga t i onsa ndr i s kma na gement , wi t h Ma na gi ngPa r t ner , Ant onL a neha v i ngt went yy ea r sofe x per i enc ei nt hi s el d. T os pea kt oAnt onoroneofourt ea m, pl ea s e c a l l t heoffic eon01454777831orema i l c on dent i a l @edget a x . c om.
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Ne ws l e t t e r HMRCt ar get s‘ affluent ’ t axpayer s i nl at es tt axavoi danc ec r ac kdown •HMRCha smor et ha ndoubl e dt hes t a ffhe a dc ounti nt he i r Afflue ntUni t •T hec os tof i ns pe c t or swa ge sha v er i s e nby68%ov e rt woy e a r s •HMRCi sc l os i ngl oc a l t a xoffic e sa ndope ni ngr e gi ona l t a x c e nt r e s •Any onewhoha sa nyt a xc onc e r nss houl dc ont a c tusf ora dv i c e . T hel a t e s tgr oupof t a x pa y e r st oc omeunde rs c r ut i nya r et he ‘ a fflue nt ’ wi t hHMRCmor et ha ndoubl i ngt hehe a dc ounti nt he i r Afflue ntUni tov e rat woy e a rpe r i od. T henumbe rof s t a ffi nt hi s uni tj umpe d54%t o327i n2014/ 15f r om 213i n2012/ 13. I nt he s a mepe r i odt hec os tof i ns pe c t or s ’ wa ge sa l s or os e68%f r om £7. 8m t o£13. 1m. T hi sr a pi di nc r e a s es howsHMRC’ sdr i v et o c omba tt a xa v oi da nc ei nt hi sgr oupof t a x pa y e r s . Wi t ha ni ndi c a t i v e me a na v e r a ges a l a r ywi t hi nt hede pa r t me nti nc r e a s i ngt o£40, 000 f r om £36, 700, i ti sunl i k e l yt ha tbi ghi t t i ngi nv e s t i ga t i v emi ndsha v e be e nr e s our c e d.Be f or et he“ s ma r t ” a v oi de r sore v a de r sof t a x a s s umet he yc a nout s ma r tHMRC, onemus tbe a ri nmi ndt ha t t he r ei sl i k e l yt obes i gnic a ntda t aa na l y s te x pe r t i s ewi t hi nt he de pa r t me nt . Combi ne dwi t ht heConne c ts y s t e m, i ti sl i k e l yt ha t t hi sde pa r t me ntwi l l bef or mi da bl egi v e nt hegov e r nme nt si nt e nt i ont ot a c k l et het a xga p. HMRC’ sAfflue ntUni twa sor i gi na l l ys e t upi n2011t ot a r ge ti ndi v i dua l swhof a l l i nt ot hehi ghe rt a xr a t e ba nde a r ni ng£150, 000ormor eay e a r . T heuni ti se s pe c i a l l yi nt e r e s t e di nt hos ewhoa r epr ope r t yowne r sort hos ewhoha v eoffs hor ea c c ount s . I n2013/ 14t heAfflue ntUni tc ol l e c t e da ne x t r a £137. 2mi l l i onc ompa r e dt o£85. 7mi l l i ont hepr e v i ousy e a r ; a ga i n de mons t r a t i ngt he i rf oc usa nddr i v ei nt hi sa r e a . T hegr owt ha ndde v e l opme ntof t heAfflue ntUni tt i e si nwi t ht he c l os ur eof t heOffs hor eDi s c l os ur eF a c i l i t y( “ ODF ” ) , whi c hc ome st o a ne ndi nDe c e mbe r2015. I nl i newi t ht hec l os ur eof t heODF , HMRCha v ef ourc ons ul t a t i onsi npl a c e : •Ane wc r i mi na l offe nc ef orc or por a t i onst ha tf a i l t ot a k e a de qua t es t e pst opr e v e ntt hef a c i l i t a t i onof t a xe v a s i onby t he i ra ge nt s ; •T oughe r na nc i a l pe na l t i e sf oroffs hor ee v a de r s , i nc l udi ngt he pos s i bi l i t yof ape na l t yba s e dont hev a l ueof t hea s s e ton whi c ht a xwa se v a de da swe l l a swi de rpubl i cna mi ngof offs hor ee v a de r s ; •Ane wpe na l t yr e gi mef ort hos ewhoe na bl et a xe v a s i on, ba s e d ont het a xt he yha v ehe l pe dt a x pa y e r st oe v a dea ndna mi ngof e na bl e r s ; a nd •Ane ws i mpl e rc r i mi na l offe nc et oma k epr os e c ut i onof offs hor e e v a de r se a s i e r . F ormor ei nf or ma t i onont hec ons ul t a t i onsa ndt heODFpl e a s es e e oura r t i c l e“ hi deands eek: offs hor et axevas i on” . I ti sl i k e l yt heAfflue ntUni tha sgr ownr a pi dl yt oe na bl et he mt o de a l wi t he x pe c t e dde ma ndi nt hec omi ngmont hsf ol l owi ngt he s e r e c e ntde v e l opme nt s . T hene wsof t hegr owt hof t heAfflue ntUni tc ome sa spa r tof t he ma s sr e s t r uc t ur i ngof t he i ror ga ni s a t i onwhe r et he yha v e
c hos ent or emov e137l oc a l t a xoffic es , c utt hous a ndsofj obsa nd open13newr egi ona l t a xc ent r esa spa r toft hei rmoder ni s a t i on pl a n. Des pi t et heba dnewsf ors omeHMRCs t a ff, t hemoder ni s a t i ons houl ds a v eHMRC£100m ay ea rby2025. HMRCbel i ev es t ha tt hi swi l l enc our a geamor ec ol l a bor a t i v ewa yofwor k i ngf or HMRCempl oy eesa ndwi l l enc our a gec a r eerdev el opmentwhi c h ma yha v epr ev i ous l ybeenhi nder edbyha r dt or ea c hs a t el l i t e offic ffi es . T he r s tr egi ona l c ent r ei ss ett oopeni n201617wi t ha l l c ent r espl a nnedt obeopenedby2027. T hi st si nwi t hpl a nsf or HMRCt odi gi t a l i s et hei rs er v i c esbya l s oi nt r oduc i ng“ di gi t a l t a x a c c ount s ” wher et a x pa y er swi l l s ubmi tt hei rt a xr et ur nsonl i ne t hr ought hei rowndi gi t a l t a xa c c ount . T hes ea r es ett obei nt r oduc edov ert he201516t a xy ea ra ndwi l l a l l owc us t omer st opa y t hei rt a xa ny t i medur i ngt hey ea r , ev ent ua l l yr epl a c i nga nnua l t a x r et ur ns . T her egi ona l t a xc ent r eswi l l bel oc a t edi n: •Br i s t ol –S out hWes t •Ca r di ff–Wa l es •Bi r mi ngha m –Wes tMi dl a nds •Not t i ngha m –E a s tMi dl a nds •S t r a t f or da ndCr oy don–L ondon, S out hE a s ta ndE a s tof E ngl a nd •L eeds–Y or k s hi r ea ndHumber •Ma nc hes t era ndL i v er pool –Nor t hWes tofE ngl a nd •Newc a s t l e–Nor t hE a s tofE ngl a nd •Gl a s gowa ndE di nbur gh–S c ot l a nd •Bel f a s t–Nor t her nI r el a nd Whats houl dyoudonow? HMR M Ca r ei nv es t i nghea v i l yi ns t r ea ml i ni ngt hei roper a t i onsa nd bei nga bl et oi dent i f yt hos ewhoa v oi dt a x esqui c k l ya ndeffic i ent l y . Wi t hmoder nt ec hnol ogybei ngf ul l yembr a c eda ndc r os s j ur i s di c t i ona l c ooper a t i onbec omi ngmor epr ev a l ent , i ti sha r der t ha nev ert oei t herbl a t a nt l yori na dv er t ent l ydodget hebul l eti fa t a xi s s uee x i s t s . E v er y ones houl dbec on dentt heya r es a i l i ngt he r i ghts i deoft hel a w, ora tl ea s tHMRC’ si nt er pr et a t i onofi t . I fy ouha v ea nyc onc er nsov ery ourt a xa ffa i r s , y ous houl dc ont a c t usf oraf r eec on dent i a l di s c us s i on; 0 1 4 5 47 7 7 8 3 1 .
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Ne ws l e t t e r Whats houl dadvi s er sdo whent hei rc l i ent sar e enqui r edi nt obyHMRC? Ana c c ount a nt , s ol i c i t oror na nc i a l a dv i s e rma ybet he r s tpoi nt of c ont a c twhe nac l i e ntr e c e i v e sa ne nqui r yf r om HMRC.T ha t e nqui r yma ys e e mr out i nea nda na dv i s e rma ybec on de ntt ha t t he r ea r enoi r r e gul a r i t i e s .Howe v e r , amome nts houl dbet a k e n t oc ons i de rhowHMRCi de nt i f yt a x pa y e r st oe nqui r ei nt oa swe l l a swha ta na dv i s e rc a ndot obe s tma na get ha te nqui r y .We r ee c tonme a s ur e sa dv i s e r sc a nt a k et oe ns ur et he ypr ov i det he be s ts e r v i c ea ndpr ot e c t i onf ort he i rc l i e nt s .Wea s s umet ha t c or r e s ponde nc eha sbe e nr e c e i v e dwhi c hma yi nc l ude : 1.Ar e que s tt or e v i e w: a.P AYEr e c or ds ; b.Che c kt hea c c ur a c yof aV ATr e t ur n; 2.Ane nqui r yope ni nt oas e l f a s s e s s me ntwhe t he rc or por a t eor pe r s ona l ; or 3.Age ne r a l a ppr oa c ht ounde r s t a ndape r s on’ st a xa ffa i r smor e f ul l yorunde r s t a ndabus i ne s s .
HMRCi s , unf or t una t el y , ac ommer c i a l or ga ni s a t i onwi t ht he r es pons i bi l i t yofens ur i ngt a xc ompl i a nc e .I tha sa wa r dwi nni ng s of t wa r ewi t hwhi c hHMRC’ sRi s ka ndI nt el l i genc eUni tus est o i dent i f ypot ent i a l i r r egul a r i t i eswhi c ha r et henpa s s edt ooffic er s t os el ec tt hei rmet hodofa ppr oa c ht oi dent i f yi ft her ea r ei nf a c t i r r egul a r i t i es .
T he r s ta ndmos tpr ot e c t i v es t e pa na dv i s e rc a nt a k ei st o a s s umet her e que s ti sNOTr out i ne .
S or r y , enqui r i esa r enol ongers i mpl yr a ndom.T ha ti snott os a y t her ea r et a xi r r egul a r i t i esa l t houghi ti smor el i k el yt her ea r e . T hi sr ea l i t yr equi r esanewa ppr oa c hwhenha ndl i ngHMRC enqui r i esors oc a l l ed“ r out i ne ” v i s i t s .
T hes e c onds t e ps houl dbet os pe ndal i t t l et i mei de nt i f y i ngr i s k s .
I dent i f yi ngr i s ks
T het hi r dwoul dbet opl a nhowt oma na geHMRC’ sr e que s t . Rout i neornot T hei nf or ma t i ona v a i l a bl et oHMRCi sphe nome na l .I ti nc l ude s i nf or ma t i onf r om l ot sof gov e r nme ntde pa r t me nt si nc l udi ng( but notl i mi t e dt o) : -Compa ni e sHous er e c or dsbe i nga c c ount s , mov e me nta nd i s s ueof s ha r e s , c e r t a i nr e s ol ut i onsa ndt hea bi l i t yt oc onne c t oneormor ee nt i t i e sbe nec i a l l yowne dbyt hes a mepe r s ons ; -L a ndr e gi s t r y , e l e c t or a l r ol e , c ounc i l t a x , bus i ne s sr a t e sa nd pl a nni ngpe r mi s s i on; -L i c e ns e s ; -V AT , c or por a t et a xr e t ur ns , e mpl oy e rr e t ur nsa ndpe r s ona l t a x r e t ur ns ; -I mpor ta nde x por t s ; -I nf or ma t i onf r om t hi r dpa r t i e sbe i ng na nc i a l i ns t i t ut i ons , pr ope r t yma na ge me nta ge nt s , di gi t a l wa l l e t sa ndi nt e r ne t pa y me ntf a c i l i t a t or s , a ndi ns ur a nc ec ompa ni e st ona meaf e w ( t he r ea r es i x t e e nbr oa dc a t e gor i e st ha tHMRCc a nr e que s t i nf or ma t i onf r om wi t houtat a x pa y e rk nowi ng) ; -Bor de ra ge nc yr e c or ds ; -I nf or ma t i onpa s s e df r om ov e r s e a sj ur i s di c t i onse i t he runde r e x i s t i ngdoubl et a x a t i ona gr e e me nt sort hes oona c t i v ei nt r a gov e r nme nta gr e e me nt s ; -Cour tr ul i ngswhe t he rc omme r c i a l orpe r s ona l ( f ore x a mpl e t hos ea r i s i ngi nt hee v e ntof di v or c ee t c . ) a ndj us ti nc a s et ha t wa snoti nv a s i v ee nough-s oc i a l me di ar e c or dsa r epot e nt i a l l y a c c e s s i bl et oo.
I ti si mper a t i v et ha ta na dv i s erei t herbyt hems el v esorwi t h s pec i a l i s ta s s i s t a nc ec ons i derwha tt her i s k sa r e .T odos of ul l y , r equi r esal i t t l es noopi nga nda ppl y i nga nobj ec t i v ev i ew. Ana dv i s ers houl dc ons i derr ev i ewi ngt hef ol l owi ng, s a yt hr eet o s i xy ea r s : 1.T a xr et ur nss ubmi t t ed; 2.Ac c ount sofa l l ent i t i esa s s oc i a t edwi t ht hei ndi v i dua l ; 3.Mov ementofa s s et si nc l udi ngs ha r esa ndpr oper t y ; 4.Whet hert a xpl a nni ngha sbeenunder t a k en; 5.Whet herat a xs c hemeha sbeenut i l i s ed( ov ert hepa s tf t een y ea r s ) ; a nd 6.Pr es sc ov er a gea nd/ ori nf or ma t i onons oc i a l medi as i t es ( a l t hought hi si ni t s el fwi l l notr es ul ti na nenqui r y ) . Gener a l a r ea sofr i s ki nc l ude: Per s onal -Ca s hr ec ei pt s -T r a ns f erofa s s et s -T a xf a v our edi nv es t ment s -Pens i onpl a nni ng -Pr o te x t r a c t i on -E l i gi bi l i t yof ent r epr eneur ’ sr el i ef -Pr oper t yi nc omea ndga i ns -Remuner a t i onpl a nni ng -T r a di nga ndnotdec l a r i ng( i nc l udi ngi nt er nett r a der s )
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Ne ws l e t t e r Bus i nes s -T r a ns a c t i onswi t hc onnec t edper s ons -Underdec l a r edi nc omef orVAT / Cor por a t i ont a x -Ov ers t a t ede x pens esf orVAT / c or por a t i ont a x -I nc or r ec toper a t i onofP AYEonpa y ment st odi r ec t or sort hos e r ega r deda ss el fempl oy ed -I nc or r ec toper a t i onofP AYEonbenet si nk i nda nd/ ors a l a r y s a c r ic ea r r a ngement s -I nc or r ec tt r ea t mentofe x pens es : c a pi t a l a ndr ev enue/ a l l owa bl e ordi s a l l owa bl e -S ha r et r a ns a c t i ons -I nc ent i v epl a nni ng -Nonori nc or r ec tpa y mentofS 455 -Reor ga ni s a t i on -Ca pi t a l a l l owa nc ec l a i ms -Pr o te x t r a c t i on -T r a ns f erpr i c i ng
Managi ngHMRC’ sr eques t HMRCdon’ ts i mpl ydi r e c t l yr e que s tas pe c ica r e at obec ons i de r e d, i ns t e a dt he yc ol l a t ee v i de nc ewhi c hma yge ne r a l l yi ndi c a t e t hedi r e c t i onof t he i rque r i e sa l t houghof t e ngoe smi s s e d.A HMRCr e que s ti f c ons i de r e dc a r e f ul l yc a n: -L e ty ouk nowwha tt he ya r er e a l l yi nt e r e s t e di n; a nd -Pe r mi tac l i e ntt oma k eapr oa c t i v edi s c l os ur ea ndmi t i ga t e pe na l t i e s . Ar e que s tma ybef ori nf or ma t i onorf orame e t i ng/ v i s i t . Whe r et her e que s ti sf ori nf or ma t i on, i ti se s s e nt i a l t oe s t a bl i s h: -T het i megi v e nt or e s pond; -Whe t he rHMRCi se nt i t l e dt ot hei nf or ma t i on; -Coul dt hei nf or ma t i onr e l a t et oe s t a bl i s hi ngat a xi r r e gul a r i t y a ndi f s owha ta r e a ? I tma ys e e m obv i ous , a l t houghf a rt ooof t e nc ons i de r a t i oni snot gi v e nt ohowl ongar e s pons ema yt a k ea nda dv i s e r sa ndc l i e nt s ndt he ms e l v e sr us hi ngt ome e tade a dl i ne .HMRCwi l l ge ne r a l l y r e que s tar e s pons ewi t hi n30da y sa l t hought hi spe r i odi st he mi ni mum r e qui r e me nt .
T her ema ybegoodgr oundswhyt het i mes c a l ec a nnotbemet i nc l udi ngt hea v a i l a bi l i t yofper s ons , t hea mountofi nf or ma t i on r eques t eda ndt het i mei twi l l t a k et or ev i ewa ndc ompi l et he i nf or ma t i on.HMRCwi l l gener a l l ye x t endt heper i oda l t hough t heywi l l notbec ont enti fadea dl i nei snotmet . T her ei sa nel i net obei ngc ooper a t i v ea ndpr ov i di nga l l i nf or ma t i onorpr ov i di ngt ha twhi c hHMRCa r eent i t l edt oort ha t whi c hi snec es s a r yt oa ns wert heques t i on.F ore x a mpl e: - HMRCma yr eques tper s ona l ba nks t a t ement sofas ha r ehol der / di r ec t orwhi l s tl ook i nga tac ompa ny’ st a xa ffa i r s .I st hi s a ppr opr i a t e?Wher et heper s ona l ba nka c c ounti sus edt omeet e x pens esoft hebus i nes sa nd/ ort hebus i nes sa c c ountus edt o meetper s ona l e x pens est henHMRCma yha v egr oundst o r eques t . -T heba nks t a t ement sofabus i nes sma yber eques t edt o ev i denc eapa r t i c ul a re x pens e–woul di tnotbes i mpl ert opr ov i dear ec ei pta ndones t a t ementa soppos edt oa l l ? -S t a t ement s( orot heri nf or ma t i on) ma ybea s k edf ort he c ur r enta c c ount i ngy ea rorpr i oronest ha ta r enotwi t hi nt he enqui r ywi ndow. E s t a bl i s hi ngwha tt hel i neofques t i oni ngr el a t est o, r equi r es e x pl or i ngwha ti nf or ma t i onc oul dbeus edf orot hert ha nwha ti t a ppea r st ober eques t edf or .F ore x a mpl e , per s ona l ba nks t a t ement sma ys howot hers our c esofi nc omeorr egul a ra mount s pa i dbyac ompa nyt ha ta ppea rt obes a l a r ya ndnotadi v i dend. Anot here x a mpl ema ybev er i f y i ngt heVATr et ur na ndc ons i der i ngent er t a i nmente x pendi t ur ea ndc ompa r i ngi ta ga i ns tt he a mountdi s a l l owedi nt hec or por a t i ont a xc omput a t i on. T he a dv i s ermi ghtwi s ht or ec onc i l er et ur n gur esa hea dofc ommuni c a t i ngwi t hHMRC! HMRCma ys t i pul a t et heywi s ht ol ooka tev i denc i ngt hes a l es gur ea l t hougha l s oa s kf ors t oc kc ounti nf or ma t i ona ty ea r s t a r t / enda ndda ma ges .S a l es gur esc oul dber ec onc i l edwi t h VATr et ur nsa l t hought hedi s c r epa nc i esbet weenVATr ec l a i med a ndpa i dma yi dent i f ypot ent i a l c a s hs a l es . I fav i s i ti spr opos ed, wewoul ds t r ongl yr eques ty ouc ons i derour a r t i c l eCons i der a t i onsf orMeet i ngspa r t1a nd2a v a i l a bl eher e . Wewi l l beha ppyt opr ov i deanoobl i ga t i ondi s c us s i ona bouta n enqui r yorpr opos edmeet i ngwi t hHMRCt ohel py oui dent i f y r i s k sa ndma na ger es pons es , pl ea s ec a l l uson01454777831or ema i l a l a ne@edget a x . c om
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Ne ws l e t t e r Real t i meBene ti nKi nd S i nc et hea dv e ntof ‘ HMRCt a s kf or c e s ’ i n2011weha v es e e na ma r k e di nc r e a s ei nt henumbe rof i nv e s t i ga t i onswi t ha ne s t i ma t e d£404m i nt a xr e c oupe d.Cl e a r l yHMRCa r et i ght e ni ngup i na l l a r e a sof t a xa dmi ni s t r a t i ona ndc ompl i a nc e . E mpl oy e ebe net sr e por t i ngha shi s t or i c a l l ybe e na na r e a whi c hE mpl oy e r sha v ef oundc onf us i nga ndHMRCha v e s e e me dpa r t i c ul a r l ys t r i nge nt . Apa c k a geof r e f or msont hewa yf r om 5Apr i l 2016a i me da t ma k i ngr e por t i ngs i mpl e rf ort hee mpl oy e r ; t hemos tnot a bl e c ha nge sbe i ng: -Abol i t i onof t he£8, 500‘ hi ghe re a r ne r ’ t hr e s hol d( wi t ht wo e x e mpt i ons ) ; -Abi l i t yf ore mpl oy e r st ov ol unt a r i l ypa y r ol l s pe c ie dbe net s i nk i nd; -Re pl a c e me ntof f or msP11da ndP9dwi t honl i ner e a l t i me Pa y r ol l i ngBe net si nKi nd( “ PBI K” ) s of t wa r e ; a nd -I nt r oduc t i onof a ne x e mpt i onf ors pe c ie dr e i mbur s e d e x pe ns e s . I na ddi t i on, t he r ee x i s t sdr a f tl e gi s l a t i onpr opos i ngac ha nget o t hec ur r e nts y s t e m of a gr e e i ngt he‘ t r i v i a l i t y ’ of be net si n a dv a nc ewi t hHMRC, butt hi si sy e tt obea gr e e d, s omor eon t ha ti nf ut ur ene ws l e t t e r s . F r om 5Apr i l 2016t he r ewi l l benot a x f r e ebe net sf ort hos e e a r ni ngbe l owt he£8, 500‘ hi ghe re a r ne r ’ t hr e s hol d, unl e s sy ou a r eami ni s t e rf orr e l i gi onof ac a r e rpr ov i de dwi t hf ooda nd l odgi ngi nt hehomeof t hepe r s ony oua r ec a r i ngf or .I nt he c ur r e nty e a ri f y oua r ea ne mpl oy e eordi r e c t ore a r ni ngl e s s t ha n£8, 500pe ra nnum y oua r ee nt i t l e dt oc e r t a i nbe net s t a x f r e e , pr ov i de dt het ot a l be netdoe s n’ tpus hy ourt ot a l e a r ni ngov e rt het hr e s hol d.
T henewr egul a t i onsa l l owempl oy er st opa yc er t a i nbenet s a nde x pens est oempl oy eesv i at hei rpa y r ol l i ngs y s t emsa nd a ut oma t i c a l l yr egi s t ert hi swi t hHMRCea c hmont hus i ngt he newPBI Ks of t wa r e .T hee x c ept i ons , whi c hwi l l c ont i nuet or equi r es ubmi s s i onv i aP11D, a r e: -Vouc her sa ndc r edi tc a r ds ; -Benec i a l l oa ns ; a nd -L i v i nga c c ommoda t i on. Asi ts t a ndst hi si sav ol unt a r ypr oc es s , butt her egi s t r a t i on dea dl i nef or2016/ 17i s5Apr i l 2016a ndi ny ea rr egi s t r a t i oni s notpos s i bl e( t houghy ouc a nder egi s t erdur i ngt hey ea r ) .As t hef es t i v es ea s ona ppr oa c hess owec a ne x pec tt hegi f tofP AYE Codi ngnot i c esa ndt oa v oi dapl et hor aofc odi ngnot i c e a mendment sbei ngi s s uedne x ty ea r , HMRCa r eenc our a gi ng empl oy er st or egi s t ert hei rempl oy eesbef or e21Dec ember 2015. Obv i ous l yt her ea r ec ons t r a i nt swi t ht hei nt endednewpr oc es s , na mel yt ha tt hePBI Ks of t wa r er equi r ement sha v enoty etbeen s pec ieda ndy ou’ l l needt oens ur ey ourpa y r ol l i ngs of t wa r ei s c ompa t i bl e . Ai meda tr emov i ngt her equi r ementt oc ont a c tHMRCa ndga i n di s pens a t i onf ors omebenet sHRMCwi l l bei nt r oduc i ngal i s t ofc r i t er i awhi c ha l l owst heempl oy ert odec i dewha tbenet s a r er epor t a bl e .S oundss i mpl eenough, butt her ei sl i t t l ement i onoft hef a c tt ha tt hi spl a c est her es pons i bi l i t yoft hedec i s i on ont heempl oy er , i nc r ea s i ngt her i s kt ot hem a ndt heyma ybe pena l i s edf ori nc or r ec tr epor t i ng.Wher et her ei saper c ei v ed gr eya r eaf or wa r dt hi nk i ngempl oy er sa r eobt a i ni ngdi s pens a t i ont ous ea sev i denc ei fi tbec omesr equi r ed. I ti sr ec ommendedt ha templ oy er st hi nkc a r ef ul l ya boutt hei r pr oc es s esgoi ngf or wa r da nddot hi ss oonerr a t hert ha nl a t era s mi dy ea rr egi s t r a t i oni snotpos s i bl e .
Cur r e nt l y , e mpl oy e ebe net sne e dt ober e por t e dt oHMRCby 31J ul yf ol l owi ngt hee ndof t het a xy e a r .I f y oua r ea ne mpl oy e eordi r e c t orov e rt he‘ hi ghe re a r ne r ’ t hr e s hol dy ouwi l l us e f or m P11Dor , i f y ouf a l l unde rt hi st hr e s hol d, f or m P9D( t he r e mov a l of t hi st hr e s hol dnul l ie sf or m P9Da nda ss uc hi twi l l di s a ppe a r ) .
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Ne ws l e t t e r T axeffic i enti nves t ment s Wi t ht het a xr e t ur nl i ngde a dl i nef a s ta ppr oa c hi ng, we t houghti twoul dbeus e f ul t opr ov i deas umma r yof pot e nt i a l wa y sf orat a x pa y e rt oi nv e s ti nat a xe ffic i e ntma nne r . T he r ea r e anumbe rof wa y sf orat a x pa y e rwi t hl i a bi l i t i e sa tt hehi ghe ror a ddi t i ona l r a t e sorf undst oi nv e s tt odos oi nawa yt ha tbe ne t st he m. I ndi v i dua l S a v i ngsAc c ount s( “ I S A’ s ” ) a ndpe ns i onsa r eof t e nt he s t a r t i ngpoi ntf ora ni nv e s t ort oi nv e s te ffic i e nt l ya ndpr e pa r e f orr e t i r e me nt . Howe v e r , t he r ea r el i mi t sont hel e v e l of i nv e s t me nt , pot e nt i a l r e t ur nsa nd e x i bi l i t y . T hef ol l owi ngi nv e s t me nts t r uc t ur e sa r ehi ghe rr i s ka ndt a x pa y e r ss houl ds e e kpr of e s s i ona l t a xa dv i c ea nd na nc i a l a dv i c e s ui t a bl et ot he i rc i r c ums t a nc e sbe f or ec hoos i ngt oi nv e s ti na ny of t hes t r uc t ur e sout l i ne d.
I f VCTs ha r esa r es ol da tapr ot , t hec a pi t a l ga i ni se x emptf r om c a pi t a l ga i nst a x( CGT) . L os s esi nc ur r edonas a l eof VCTs ha r es a r enev era l l owa bl ef orCGTpur pos es . I tdoesnotma t t er whet hert hes ha r eswer ea c qui r edbys ubs c r i pt i onora c qui r ed f r om a not heri nv es t or . T heowner s hi pper i odi si r r el ev a ntf ort heCGTe x empt i on; t her ei snoqua l i f y i nghol di ngper i odc ondi t i on. Aswi t ht hedi v i dende x empt i ondi s c us s eda bov e , i tdoesnotma t t erwhet her t hes ha r eswer ea c qui r edbys ubs c r i pt i onorf r om at hi r dpa r t y . T heCGTe x empt i ononl ya ppl i est ot he r s t£200, 000ofs ha r es a c qui r edi nt het a xy ea r . Anys ha r esa c qui r edi ne x c es soft hi s t hr es hol dwi l l bec ha r gea bl ea s s et sf orCGTpur pos esa nd t her ef or eaga i noral os swi l l a r i s eons a l e . T her ea r enor epor t i ngr equi r ement sont heT a xRet ur nwher et heent i r es a l ei s e x empt . VCTi nv es t ment sdonotqua l i f yf orBus i nes sPr oper t yRel i ef ( “ BPR” ) f ori nher i t a nc et a x( “ I HT” ) pur pos es .
Vent ur eCapi t al T r us t s
Ent er pr i s eI nves t mentSc hemeT axRel i ef
AVe nt ur eCa pi t a l T r us t( VCT) i saHMRCa ppr ov e dc ompa ny whi c hi nv e s t si ns ha r e sa nds e c ur i t i e si s s ue dbyqua l i f y i ng unquot e dt r a di ngc ompa ni e swi t hape r ma ne nte s t a bl i s hme nt i nt heUK. VCT sa r ea t t r a c t i v et oi nv e s t or swhowa ntt os pr e a d t he i rr i s kbyi ndi r e c t l yi nv e s t i ngi nanumbe rof unquot e dc ompa ni e sr a t he rt ha ni nv e s t i ngdi r e c t l yi nonec ompa ny , a si nt he E nt e r pr i s eI nv e s t me ntS c he me( E I S ) . Ani ndi v i dua l i nv e s t i ngi na VCTc a nbe netf r om t hef ol l owi ngt a xr e l i e f s :
T heE nt er pr i s eI nv es t mentS c heme( E I S ) enc our a gesi ndi v i dua l s t oi nv es tmoneyi ns ha r esi s s uedbyqua l i f y i ngunquot edc ompa ni eswi t haper ma nentes t a bl i s hmenti nt heUK.
-i nc omet a xr e l i e f of upt o30%ont hea mounti nv e s t e dupt o £200, 000; -di v i de ndsf r om t heVCTa r et a x f r e e ; a nd -a nyga i nont hes a l eof t heVCTs ha r e si se x e mptf r om c a pi t a l ga i nst a x T he r ei snot hi ngt opr e v e nta ni nv e s t ors ubs c r i bi ngf ormor e t ha n£200, 000wor t hof VCTs ha r e si nat a xy e a r . Howe v e r , i nc omet a xr e l i e f i sgi v e nont he r s t£200, 000onl y . VCTr e l i e f i s a l wa y sgi v e ni nt het a xy e a ri nwhi c ht hes ubs c r i pt i oni sma de . T he r ei snoa bi l i t yt oc a r r yba c kt hei nv e s t me ntt oobt a i nr e l i e f i na ne a r l i e rt a xy e a r . T heVCTt a xr e l i e f i sde duc t e df r om t het a xl i a bi l i t yi npr i or i t yt o a nyot he rt a xr e duc e r s . T het a xr e duc t i onc a nbr i nga ni ndi v i dua l ’ st a xl i a bi l i t yf ort hey e a rt oni l , buti tc a nnotge ne r a t eat a x r e pa y me nt . T hei nc omet a xr e l i e f i sc l a we dba c ki f t hes ha r e s a r es ol dwi t hi nv ey e a r sof i s s ueorc e a s et oqua l i f y . Pe na l t i e s a ndi nt e r e s twi l l a ppl ywhe ni nc omet a xr e l i e f i swi t hdr a wn. Di v i de ndsf r omVCTor di na r ys ha r e sa r ee x e mptf r om i nc ome t a x , a l t hought hi se x e mpt i ononl ye x t e ndst ot he r s t£200, 000 i nv e s t e di naVCTi nat a xy e a r .
As ubs c r i pt i onf orel i gi bl es ha r esofaqua l i f y i ngE I Sc ompa nyi s at a xeffic i enti nv es t mentf ort hei ndi v i dua l . T heyc a nbenet f r om t hef ol l owi ngt a xr el i ef s : -I nc omet a xr el i efofupt o30%ont hea mounti nv es t edf or s ubs c r i pt i onsma deonora f t er6Apr i l 2011( pr ev i ous l y20%) ; -Abi l i t yt oc a r r yba c ka l l orpa r toft hei nv es t mentt ot he pr ev i oust a xy ea rpr ov i dedt hel i mi ti snote x c eeded; -Noc a pi t a l ga i nst a xonqua l i f y i ngga i ns ; -Unl i k eVCT’ s , c a pi t a l l os s esonE I Ss ha r esa r ea l l owa bl el os s es f orc a pi t a l ga i nst a xpur pos es ; -AnE I Ss ha r es ubs c r i pt i onc a nbeus edt odef erc a pi t a l ga i ns t a xont hes a l eofa nya s s et ; -F r om 6Apr i l 2015, def er r edga i nsqua l i f y i ngf orent r epr e neur ’ sr el i efs t i l l qua l i f yf ort her el i ef( pr ev i ous l ya ni nv es t or woul dha v es uffer edCGTa t18%or28%i ns t ea dof10%i f t heyi nv es t edi nE I Ss ha r esa nddef er r edaqua l i f y i ngga i n) ; a nd -Bus i nes sPr oper t yRel i ef( “ BPR” ) f ori nher i t a nc et a x( “ I HT” ) pur pos ess houl da ppl ya f t ert woy ea r sofowner s hi p. T her ei snownomi ni mum i nv es t ment . Pr i ort o5Apr i l 2012, t her ewa sa£500mi ni mum s ubs c r i pt i on. T heper mi t t edma x i mum i nv es t mentwa si nc r ea s edt o£1, 000, 000f r om £500, 000 bef or et he2012/ 13t a xy ea r . T heE I St a xr el i efi sdeduc t edf r om t het a xl i a bi l i t ya f t erVent ur e Ca pi t a l T r us ti nc omet a xr el i efbuti npr i or i t yt oa nyot hert a x r educ er s . T het a xr educ t i onc a nbr i nga ni ndi v i dua l ’ st a xl i a bi l i t y f ort hey ea rt oni l , buti tc a nnotgener a t eat a xr epa y ment .
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Ne ws l e t t e r I nc omet a xr e l i e f i sc l a we dba c ki f t hes ha r e sa r es ol dwi t hi n t hr e ey e a r sof i s s ue . T her e l i e f c a nbec a r r i e dba c kt ot hepr e v i oust a xy e a ri f t hei ndi v i dua l ma k e sac l a i m. Di v i de ndsf r om E I S c ompa ni e sa r et a x a bl e , unl i k edi v i de ndsf r omVe nt ur eCa pi t a l T r us t s . T hega i nont heE I Ss ha r e si se x e mptf r om CGTpr ov i di ngt he i nv e s t orr e c e i v e di nc omet a xr e l i e f ont heor i gi na l s ubs c r i pt i on a ndt hei nc omet a xr e l i e f ha snotbe e nwi t hdr a wn( s ha r e smus t behe l df or3y e a r s ) . I f al os si si nc ur r e di ti sa l l owa bl ef orCGT pur pos e s . T he r ea r enor e por t i ngr e qui r e me nt sont het a x r e t ur nwhe r et hee nt i r ega i ni se x e mpt .
HMRCwi l l noti s s ueac ompl i a nc ec er t ic a t eunt i l t hema j or i t y ( 70%) oft hef undsa r es penti nt hequa l i f y i ngt r a de . I nc omet a x r el i efc a nnotbec l a i medunt i l t hec ompl i a nc ec er t ic a t ei s i s s ued. F r om 6Apr i l 2015, t her equi r ementf oraS E I Sc ompa ny t onoti s s ueVCTorE I Ss ha r esunt i l i tha ss pent70%ofS E I S f undsr a i s edi sa bol i s hed. I ti spos s i bl ef ora ni nv es t ort opr ov i s i ona l l yc l a i mr ei nv es t ment r el i eff orCGTpur pos es . Rel i efc a nbewi t hdr a wni nv a r i ousc i r c ums t a nc ess uc ha sa nea r l ydi s pos a l oft hes ha r es . I ft hes ha r es hel df ort hr eeormor ey ea r st hennoCGTwi l l bec ha r gea bl eon a nyga i nma dewhent hes ha r esa r es ol d.
Rei nv e s t me ntr e l i e f , a l s ok nowna sde f e r r a l r e l i e f , i sa v a i l a bl ei f a ni ndi v i dua l orat r us t e es e l l sa na s s e ta ndr e i nv e s t st hes a l e pr oc e e dsi ns ubs c r i bi ngf orqua l i f y i ngE I Ss ha r e s . T hec a pi t a l ga i nc a nbede f e r r e dunt i l t hes a l eof t heE I Ss ha r e s .
T her el i efwor k si nmuc ht hes a mewa ya sE I Sr el i efa ndac ompa nyc a nnoti s s ueS E I Ss ha r esi fE I S / VCTs ha r esa r ea l r ea dyi n i s s ue . Howev er , ac ompa nyc a nma k eE I S / VCTi nv es t ment s a v a i l a bl ea f t eri tha sma deS E I Ss ha r esa v a i l a bl e .
SeedEnt er pr i s eI nves t mentSc heme( “ SEI S” )
Soc i al I nves t mentT axRel i ef( “ SI TR” )
Announc e di nbudge t2011a ndc omme nc i ngf r om Apr i l 2012, t heS E I Swa se x pe c t e dt or unf or v ey e a r s . T hes oc a l l e ds uns e t c l a us ewa sr e mov e di nt he2014F i na nc eBi l l a ndS E I Swa sma de pe r ma ne nt .
S I T Ri sa v a i l a bl et oi ndi v i dua l swhoi nv es ti nc ommer c i a l bus i nes st ha thel pc ommuni t i esa ndpeopl e . T her el i efoper a t esi n v er ymuc ht hes a mewa ya st heE I S .
Ani ndi v i dua l i nv e s t i ngi nS E I Ss ha r e sc a nbe netf r om t hef ol l owi ngt a xr e l i e f s : -I nc omet a xr e l i e f of upt o50%ont hea mounti nv e s t e d; -Abi l i t yt oc a r r yba c ka l l orpa r tof t hei nv e s t me ntt ot hepr e v i oust a xy e a rpr ov i de dt hel i mi ti snote x c e e de d; -Noc a pi t a l ga i nst a xonqua l i f y i ngga i ns ; -Ca pi t a l l os s e sonS E I Ss ha r e sa r ea l l owa bl el os s e sf orc a pi t a l ga i nst a xpur pos e s ; -AS E I Ss ha r es ubs c r i pt i onc a nbeus e dt ode f e rc a pi t a l ga i ns t a xonha l f of t hepr oc e e dsf r om t hes a l eof a nya s s e tupt o t hepr e s c r i be dl i mi t ; a nd -Bus i ne s sPr ope r t yRe l i e f ( “ BPR” ) f ori nhe r i t a nc et a x( “ I HT” ) pur pos e ss houl da ppl ya f t e rt woy e a r sof owne r s hi p. I nv e s t or sr e c e i v eupt o50%i nc omet a xr e l i e f f ori nv e s t me nt sof upt o£100, 000of s ha r e si nqua l i f y i ngs t a r t upc ompa ni e s . A c ompa nyc a nr a i s eama x i mum of £150, 000f orS E I Ss ha r e s . S i nc et he2013/ 14t a xy e a r , a ni ndi v i dua l wi t hc ur r e nty e a rc a pi t a l ga i nsma yr e i nv e s tt hepr oc e e dsi nt oS E I Ss ha r e sa ndbe e x e mptf r om c a pi t a l ga i nst a xonha l f ( 50%) of t hega i n. Whe n S E I Swa si nt r oduc e d, c ur r e nty e a rga i nsc oul dbede f e r r e di n f ul l . T hei nv e s t orc a nnotbea ne mpl oy e eof t hec ompa ny( unl e s s t he ya r eadi r e c t orwhos ee nt i t l e me ntt or e mune r a t i ondoe s notc omme nc eunt i l a f t e rt hes ha r ea c qui s i t i on) a ndc a nnot ha v ei ne x c e s sof 30%of t hes ha r ec a pi t a l . T hei s s ui ngc ompa nymus tbear e l a t i v e l yne w( l e s st ha n2y e a r s ol d) i nde pe nde ntunquot e dt r a di ngc ompa nywi t hape r ma ne nte s t a bl i s hme nti nt heUK. T hec ompa nys houl dnotha v e mor et ha nt hee qui v a l e ntof 25f ul l t i mee mpl oy e e s( i nc l udi ng di r e c t or s ) or£200, 000of a s s e t sbe f or et hes ha r e sa r ei s s ue d.
I nc omet a xr el i efi sgi v ena sat a xr educ erof30%oft hei nv es t mentma deupt oama x i mum of£1, 000, 000i nt hec ur r entor pr ev i ousy ea r( i f2014/ 15orl a t er ) . T hei nv es t mentmus tbehel d f orami ni mum oft hr eey ea r s . I nc omet a xwi l l bedueona ny i nt er es tordi v i dendi nc ome , t hes a mea sf ora nyot heri nv es t ment . E x i s t i ngCGTl i a bi l i t i esc a na l s obedef er r edonqua l i f y i ngi nv es t ment s . T hel i a bi l i t ywi l l c r y s t a l i s euponr edempt i onordi s pos a l oft hei nv es t ment . NoCGTl i a bi l i t ywi l l a r i s eona nyga i n i nt hei nv es t menti t s el f . T hei nv es t eeor ga ni s a t i ons houl dha v eadeneda ndr egul a t ed s oc i a l pur pos e . Cha r i t i es , c ommuni t yi nt er es tc ompa ni esor c ommuni t ybenets oc i et i esc a r r y i ngoutaqua l i f y i ngt r a de , wi t hf ewert ha n500empl oy eesa ndgr os sa s s et sofnomor e t ha n£15mi l l i ona r ee x a mpl esofor ga ni s a t i onst ha tma ybe el i gi bl e . E Ur ul ess t i pul a t eama x i mum l i mi tf orent er pr i s et or ec ei v e €344, 827( a ppr ox i ma t el y£250, 000) ov ert hr eey ea r s . T heUK gov er nmentha sa ppl i edf orE Uc l ea r a nc et oi nc r ea s et hel i mi t s perent er pr i s et o£5, 000, 000pery ea ra nd£15, 000, 000i nt ot a l . T heUKgov er nmenta l s owa nt st oe x t endt hea v a i l a bi l i t yof r el i eft oS oc i a l I mpa c tBondsa swel l a sc ommuni t yener gya nd s ma l l s c a l ec ommuni t ya gr i c ul t ur a l s c hemes . AS oc i a l Vent ur eCa pi t a l T r us ti sa l s oe x pec t edt obei nt r oduc ed i nabudgeti nt henott oodi s t a ntf ut ur e . Communi t yI nves t mentT axRel i ef( “ CI TR” ) T heCI T Rs c hemepr ov i desat a xi nc ent i v et oi ndi v i dua l sorc or por a t esi nv es t i ngi na c c r edi t edCommuni t yDev el opment F i na nc eI ns t i t ut i ons( CDF I s ) . 9
Ne ws l e t t e r T her e l i e f i swor t h25%of t hef undsi nv e s t e dov e rv ey e a r s( 5% pe ra nnum) . T hei nv e s t me ntc a nbebywa yof as ubs c r i pt i onf ors ha r e sors e c ur i t i e s , al oa nt ot heCDF I orade pos i tt oaCDF I t ha tqua l ie sa s aba nk . At a xr e l i e f c e r t ic a t es houl dbei s s ue dbyt heCDF I be f or er e l i e f c a nbec l a i me d. I ti spos s i bl et oc l a i mr e l i e f dur i ng t het a xy e a rbywr i t i ngt oHMRC. Pr i ort o5Apr i l 2014, a nyunus e dr e l i e f woul dbel os t . F r om 6 Apr i l 2014, unus e dr e l i e f c a nbec a r r i e df or wa r dt obeus e d wi t hi nt he v ey e a ri nv e s t me ntpe r i od. T he r ei snoc e r t a i nt yof ac a pi t a l r e t ur na tt hee ndof t he5y e a r i nv e s t me ntpe r i oda ndt her i s kc oul dbec ons i de r e dhi ghe rdue t ot hena t ur eof t heunde r l y i ngi nv e s t me nt s . Bus i nes sPr emi s esRenovat i onAl l owanc e T heBus i ne s sPr e mi s e sRe nov a t i onAl l owa nc e( BPRA) i sa v a i l a bl e t oa nyi ndi v i dua l orc ompa ny , whoi nc ur sc a pi t a l e x pe ndi t ur eon br i ngi ngqua l i f y i ngbus i ne s spr e mi s e sba c ki nt obus i ne s sus e . BPRA’ swe r ehe a v i l yma r k e t e da r oundt het ur nof t hede c a de , a l t houghha v el a r ge l yf a l l e noutof f a v ourduet oHMRCc ha l l e nge s ons omes t r uc t ur e sa ndt hel a c kof a t t r a c t i v ei nv e s t me nt s . T heBPRAgi v e s100%i ni t i a l a l l owa nc e sf orc a pi t a l e x pe ndi t ur e ont her e nov a t i onorc onv e r s i onof bus i ne s spr ope r t i e st ha tha v e be e nv a c a ntf oray e a rorl onge ri nde s i gna t e ddi s a dv a nt a ge d a r e a sof t heUK.
I mpor t antdat esf ort hedi ar y
T her ul esa ppl yf orqua l i f y i nge x pendi t ur ei nc ur r edona nda f t er 11Apr i l 2007. T her el i efwa sor i gi na l l yi nt endedt oe x pi r ei n 2012, buti nt he2011Budget , wa se x t endedf oraf ur t her v e y ea r st o5Apr i l 2017f ori ndi v i dua l s , a nd31Ma r c h2017f orc or por a t ei nv es t or s . T oqua l i f yf ort heBPRA, t hebui l di ng: -mus tbei nades i gna t eddi s a dv a nt a geda r ea ; -mus tha v ebeenempt yf ora tl ea s tay ea rbef or et her enov a t i onwor k sbega n; -mus tha v epr ev i ous l ybeenus edi nat r a deorbeenus eda sa n offic e; -mus tnotha v ebeenus eda sadwel l i ng, a nd -mus tr ema i na sbus i nes spr emi s esa f t erc ompl et i onoft he r enov a t i on. Rel i efi sgi v enbydeduc t i ng100%oft her enov a t i onc os t s a ga i ns tt r a di ngpr ot s . Nor el i efi sobt a i nedf orc os t sofa c qui r i ng t hel a ndonwhi c ht hebui l di ngi ss i t ua t ed. Aswi t hor di na r yc a pi t a l a l l owa nc es , apa r t i a l c l a i mf or r s ty ea r a l l owa nc esc a nbema de . T her ea f t er , Wr i t i ngDownAl l owa nc es ( “ WDAs ” ) a r egi v ena t20%onas t r a i ght l i neba s i s . T hea l l owa nc esa r ec l a wedba c ki ft hebui l di ngc ea s est obeus ed f oraqua l i f y i ngpur pos ewi t hi n7y ea r sa f t eri twa sr enov a t ed a nd r s tma dea v a i l a bl ef orus e . Ani ndi v i dua l i nv es t i ngi nas c hemewi l l us ua l l ybec omea memberofapa r t ner s hi pors y ndi c a t ea ndwi l l r ec ei v et henec es s a r yt a xc er t ic a t esf ort hei rt a xr et ur nf r om t hea dmi ni s t r a t or s .
30Dec ember2015 -F i na l da yf orel ec t r oni cs ubmi s s i onofs el fa s s es s mentt a xr et ur nsf or i ndi v i dua l swi t ht a xl i a bi l i t i esofl es st ha n£3, 000whowi s hHMRCt o c ol l ec tt a xduet hr ought hei r2016/ 17P AYEc odi ngnot i c e 31Dec ember2015 -Dueda t ef orCompa nyT a xRet ur nF or m CT 600f ora c c ount i ng per i odendi ng31Dec ember2014 -E ndofCT 61qua r t er l yper i od -F i na l da yf ornonE Ut r a der st or ec l a i m UKVATs uffer edi nt hey ea rt o 30J une2015 1J anuar y2016 -Cor por a t i onT a xpa y mentdueda t ef ort heper i odendi ng31Ma r c h 2015 14J anuar y2016 -I nc omet a xpa y mentdueda t ef ort heCT 61qua r t ert o31Dec ember15 19/ 22J anuar y2016 -P AYEpa y mentdueda t ef orqua r t erendi ngormont hofDec ember 2015 31J anuar y2016 -F i na l da yf orel ec t r oni cs ubmi s s i onofs el fa s s es s mentt a xr et ur nsf or i ndi v i dua l sa ndpa r t ner s hi ps -I nc omet a xa ndCl a s s4Na t i ona l I ns ur a nc eCont r i but i onba l a nc i ng pa y mentdueda t ef or2014/ 15t a xy ea ra nd r s tpa y mentona c c ount f or2015/ 16 -Dueda t ef orCa pi t a l Ga i nsT a xl i a bi l i t i esa r i s i ngi n2014/ 15
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Ne ws l e t t e r EdgeNews Wel l donet oAnt onf orwr i t i nghi ss ec ondt axdi ges tf or T ol l ey’ st hi syear ! I nNov e mbe rAnt onc ompl e t e da not he r20, 000wor dt a xdi ge s t f or T ol l e y ’ s . T hi st i meont hes ubj e c tof “ Ant i a v oi da nc eL e gi s l a t i on, Offs hor eS t r uc t ur e sa ndt heOffs hor eDi s c l os ur eF a c i l i t y ( “ ODF ” ) ” , whi c hc ome st oa ne ndonDe c e mbe r31s t . T het a x di ge s twa spubl i s he di nNov e mbe ra ndy ouc a ns ubs c r i bet o T ol l e y ’ st a xdi ge s t sont he i rwe bs i t ewww. t ol l ey . c o. uk. A ma s s i v ewe l l donet oAnt onf orwr i t i ngt hi s , t hes e c ondonet hi s y e a r ! Thankyouf orat t endi ngours emi narwi t hpeni ns ul a bus i nes ss er vi c es OnT hur s da y3r dDe c e mbe r , E dgeT a xhe l daj oi nts e mi na ri n c onj unc t i onwi t hPe ni ns ul aBus i ne s sS e r v i c e swhe r ewec ov e r e dPe ns i onRe f or ms , Aut oE nr ol me nt , E mpl oy me ntL a w Upda t e spl usas pe c i a l pr e s e nt a t i onont a xr i s kf ore mpl oy e r s f r om ourMa na gi ngPa r t ne r , Ant onL a ne . Wewoul dl i k et ot ha nk oura t t e nde e sa ndwehopey ouf oundi ti nt e r e s t i nga ndus e f ul . Weha v ema nys e mi na r sa nde v e nt sl i ne dupf or2016, wewi l l k e e py oupos t e d!
Rec r ui t ment–newpos i t i onsavai l abl e! Ar ey oul ook i ngf oranewc ha l l engewor k i ngwi t ht a xor a c c ount s ?Wemi ghtha v et her i ghtj obf ory ou…Weha v enew oppor t uni t i esa v a i l a bl et oj oi nourt ea ma sa na c c ount a ntora t a xma na ger . Pl ea s es eeourc ar eer spagef ormor ei nf or ma t i on ort oa ppl y . I fy oua r el ook i ngf orapos i t i onwhi c hi snota dv er t i s ed, pl ea s ef eel f r eet os endusy ourCVa swea r eha ppyt os ee t hes eork eept hes eon l eunt i l as ui t a bl epos i t i onbec omes a v a i l a bl e . Wewoul dl i k et ot ha nka l l ourr ea der sf ory ours uppor tt hi s y ea ra ndwi s hy ouav er yMer r yChr i s t ma sa ndHa ppyNew Y ea r . Wewoul dl i k et or emi ndy out ha twewi l l beoutoft heoffic e f r om 22ndDec embert o4t hJ a nua r yf ort heChr i s t ma shol i da y sbutpl ea s el ea v eusames s a gei fy ouha v ea nur gent quer ya ndwewi l a i mt ogetba c kt oy oua ss oona spos s i bl e . T ha nky ou, t heE dgeT a xt ea m.
I t ’ sChr i s t mas ! ! ! Edges pec i al Chr i s t masbl og: I fyouc oul das kSant af orANYt hr eet hi ngsi nt he wor l dt hi sChr i s t maswhatwoul dt heybe? Cat e: •Bea nba g •Cl i mbi ngs hoest ha tdon’ tma ngl emyf eeta ndma k emewa ntt oc r y •Ana l l e x pens espa i dCa r i bbea nCr ui s e ( a l l a r eequa l l yunl i k el y ) Ki r s t y: •Onedi r ec t i onundermyChr i s t ma st r ee •Ana l l pa i df ort r i pa r oundt hewor l d! •Wor l dpea c ea nda nendt opov er t y J er ome: •F es t i v ef unwi t ht hef a mi l y •AL a mbor ghi ni •Wor l dPea c e Ant on: •T os pendmor et i mewi t hmyc hi l dr en •T oha v eanewa dv ent ur e •T ot r a i nha r der Hol l y: •AHol i da y ( s omewher ehot ) •AHor s e •Conc er tT i c k et s
Whati syourNewY ear ’ sr es ol ut i on? J er ome: Di a r i z ea ndPr i or i t i z e . Hol l y: Getba c ki nt ohor s er i di ng. Cat e: Dos omet hi ngt ha ts c a r esme . Ki r s t y: c ompl et et her es ol ut i onsI di dn’ tc ompl et e t hi sy ea r ! Andt i c ks omet hi ngoffmybuc k etl i s t !
Whati syourNewY ear ’ sr es ol ut i onf orEdge? Ant onandJ er ome: T obet hemos ta ppr oa c ha bl ea ndf unpr of es s i ona l s er v i c es bus i nes si nt heS out hWes ta ndt obui l donc l i ents a t i s f a c t i on t hr oughi nc r ea s edpr oduc t i v i t yf r om i nv es t menti npeopl e , t r a i ni nga ndt ec hnol ogy .
MerryChri s t mas 11