Category: Tax

If you are a director of a small company you may have made private payments using the company’s bank account or other resources. Unless these private amounts are reimbursed to the company you would become a creditor, owe money to, your company – you would have an overdrawn director’s loan account. There are three principal … Continued

As most retailers sell a high volume of lower priced commodities, some subject to zero rate and some standard rate VAT, HMRC have created a number of special schemes that simplify the calculation of VAT due. What schemes are available? Standard retail schemes are suitable for most retail businesses. However, there are special arrangements and … Continued

If you use the Cash Accounting scheme to calculate any VAT due to HMRC you are automatically protected from the VAT effects of bad debts – you will only be paying over output tax received from customers less input on bills paid to suppliers. If you are not using Cash Accounting or other special schemes … Continued

In our July update we advised businesses to take care when timing their capital expenditure during 2012. You may remember that the Annual Investment Allowance is being reduced from £100,000 per annum to only £25,000 per annum. The effective date of the change is 6 April 2012 for unincorporated businesses and from 1 April 2012 … Continued

VAT inspectors are sent out to verify that returns filed correctly reflect the underlying accounting records of the tax payer. They will conduct as many tests as they feel are necessary to satisfy themselves on this point. For instance:  Can you provide an audit trail that shows how your sales and purchases have been recorded … Continued

Some EU member states, including the UK have a zero rate which was agreed as part of their EU Accession Treaty.  For example, in the UK most ‘basic’ food stuffs are zero rated.  However, the UK is no longer able to add to the zero rate categories, and the minimum VAT rate that can be … Continued

HMRC are presently pursuing a number of campaigns designed to target taxpayers who have been less than forthcoming in declaring their taxable income and gains. This update summarises these campaigns. Liechtenstein Disclosure Facility (LDF): A new penalty regime was introduced by Schedule 10 of the 2010 Finance Act allowing for a higher penalty for taxpayers … Continued

Your business may be better off adopting this method of calculating your quarterly VAT bill unless: Your turnover is above £150,000 and the other qualifying rules do not apply. Your expenditure on standard-rated business expenses is more than HMRC consider typical for your business sector; You regularly receive VAT repayments under standard VAT accounting, or … Continued

Owners of Furnished Holiday Lets (FHL) property may like to consider the following planning points:  1. Loss relief The ability to set off losses from FHL trading was severely restricted on 5 April 2011. From that date the set off of FHL losses against other income of FHL property business owners was stopped. In future … Continued