VAT QUESTION OF THE WEEK: Flat Rate Scheme – Changes to the Balance of Your Business

Q- My client joined the Flat Rate scheme on 1st January 2016. He is a sole trader carpenter and has a flat rate of 14.5%, but also runs a small DIY shop part time. The shop was previously only open four days per week but the business has expanded, and from March 2018 the shop is open six days per week whilst my client continues to do occasional carpentry jobs. Previously the carpentry income made up the bulk of his turnover. Due to the change in the business, which flat rate percentage should they apply to the gross turnover as they applied 14.5% last year?

A- Our client has a flat rate of 14.5% as a carpenter because the materials supplied form less than 10% of his carpentry income; however, there is also a rate of 9.5% if the materials supplied are 10% or more of the carpentry turnover. As a retailer, he would Read More

TAX QUESTION OF THE WEEK: Property Allowance

Q- My client has a rental property from which he only receives a small amount of income, he has heard about the new £1000 property allowance and wonders if he can make use of this?

A-  The property allowance of £1000 was introduced in the Finance Act (No. 2) 2017. The legislation can found in ITTOIA2005 s783B to S783BQ.

This new allowance is available from

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HR EXPERT: Bank Holiday

Q- A client has told me their employees are questioning if they have to work on the upcoming bank holiday, what should I tell them?

A- As Brits we all look forward to a bank holiday, whether we take the opportunity to enjoy an extended weekend away or to catch up on some DIY around the house. Therefore, bank holiday entitlement can be a particularly emotive issue in the workplace. Whilst many organisations offer these to staff as an automatic day off, others may Read More

Properties On Hand Deregistration

Q- As a jobbing builder, my client has reduced the number of projects he takes on as he approaches retirement, and as a result, his turnover has fallen below the VAT threshold and he wishes to deregister. However, he receives rental income from a small mixed property portfolio, some of which he opted to tax some years ago. What will happen if he deregisters?

A- You are thinking of the rules around deemed supplies of assets on hand at deregistration.  VAT Act 1994, schedule 4, paragraph 8 deems a supply of goods to take place when a person ceases to Read More

HR Expert: Hot Weather

Q- Several clients have asked me about the recent hot weather and if staff have a right to be sent home when it is too hot. Before summer starts, can you help clarify this?

A- Given the recent upturn in weather staff may be forgiven for looking wistfully out of the window longing to enjoy the British sunshine before the inevitable downpours return.There is a common theory amongst employees that they have the legal right to leave work if the workplace reaches a certain temperature, however, this is not the case. Instead, the Health and Safety Regulations state that workplace temperatures must remain ‘reasonable’.

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Late Filing Penalties for 2017 Self-Assessment

Q- I have one or two clients who have yet to give me the information needed to complete their 2016/17 self-assessment tax returns. I am concerned about the consequences of this and want to advise my clients of the implications.

A- Where a 2016/17 self-assessment tax return has not been filed by 31 January 2018, your client will already have been charged a £100 penalty.Online returns with a 31 January 2018 filing date will incur additional penalties from 1 May 2018. Penalties of £10 per day will be chargeable for up to 90 days.

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Catering Businesses – Be Prepared For a VAT Investigation

Q- I have a number of clients with restaurants, cafés and take-aways, and have heard that HMRC have a Task Force actively looking into similar businesses. What, if any, potential issues do I need to be aware of for my clients?

A- HMRC do have Task Forces across the UK targeting cash businesses, and in particular those involved with catering. The potential issues HMRC are looking for include under-declarations of sales; incorrect liability; standard-rated/zero-rated apportionments on eat-in and take-away foods, and the VAT treatment of tips and gratuities. As well as carrying out scheduled visits to discuss the business and review records, HMRC are also likely to carry out test purchases.

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HR Expert: Flexible Working

Q- A client has just received a request for flexible working from an employee that wants to attend an aerobics class on Wednesday afternoons, do they have to allow this?

A- The rise in flexible working practices has been a common theme in employment as organisations seek to maintain an attractive and non-discriminatory working environment. Read More

Selling To EU Customers

Q- My client sells goods on the internet to private customers. He makes sales within the UK and outside the EU, but the bulk of his turnover is now into other EU member states. He charges UK VAT on his sales to EU customers at present – is he correct to do this? He is considering finding a small warehouse in one of the member states from which to make his EU distribution. How would that affect his VAT accounting?

A- Sales of goods to customers in the UK will be subject UK domestic VAT. Sales outside the EU can be zero-rated exports as long as the supplier has the correct evidence of goods leaving the UK and going to the customer outside the EU within 3 months of making the sale.

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