Tax Question of the Week: SDLT and Welsh Land Tax

Q- My client is buying five residential properties from the same seller. Three of the properties are in England but two of them are located in Wales. I am familiar with the “linked transaction” principle and understand that this is common to both taxes with similar rules, but how would this apply in this case, given the different rates and bandings in each jurisdiction?

A- Although Land Transaction Tax (LTT) in Wales replaced Stamp Duty Land Tax from 1 April 2018, both jurisdictions contain similar rules – which require a single calculation of tax based on the combined consideration of all the “linked transactions” where: Read More

VAT Question of the Week: Moss Changes

Q- My client is a dietician and weight loss specialist and she has produced an online course that she sells worldwide, comprising pre-recorded videos and downloadable PDFs. She is presently trading below the UK threshold but has had to register for VAT in order to complete MOSS returns in respect of her sales to the EU. What will happen after Brexit?

A- The Mini-One-Stop-Shop regime (MOSS) is an online service that allows EU businesses selling digital services to consumers (B-C) in other EU member states to report and pay VAT via a single return and payment in their home Member State. Businesses not established in the EU can also use the system by registering in an EU member state (non-Union MOSS). Alternatively, a business can register in each EU Member State where sales are made. You can find further information about registering for VAT in EU member states on the EU Commission website https://ec.europa.eu/taxation_customs/business/vat/eu-country-specific-information-vat_en Read More

An Important Update From HMRC on Self-Assessment

All Self Assessment customers need to file their 2017-18 return, make a balancing payment for 2017-18 and their first payment on account for 2018-19 by 31 January 2019. (if appropriate)

We are aware however that if a customer is affected by an exclusion they won’t be able to file online or get an accurate self-assessment income tax liability calculation for 2017-18. Read More

Tax Question of the Week: Electric Car Charging

Q- My client is an expanding local mobile care business and they are increasingly aware of the pollution that cars emit into the environment. With this in mind, they have been asked by their team whether they can look at changing the company cars to hybrid or electric cars and whether there are any incentives to do so.

Here we look at some of the recent changes and existing exemptions that may help them to make their minds up.

A- If an employer provides a vehicle battery charging point for use by employees, no additional benefit arises if the employee uses the charging point to charge a company car. The provision of electricity for an electric company car is not regarded as ‘fuel’, even if the employee uses the charged vehicle for private mileage. Consequently, no additional fuel benefit arises. Read More

VAT Question of the Week: Professional Fees and Design & Build Contracts

Q- My client is an architect, and always charges standard rate VAT as long as the property he is working on is in the UK. This has never been queried until recently when he invoiced a building contractor in respect of a new housing development. The contractor is saying that because this is a design and build contract, the professional services should be zero-rated. He is referring us to a paragraph in Notice 708 which he says backs up his request. Is he correct?

A- The reference to this in Notice 708 is section 3.4.

“3.4 Services excluded from zero-rating

 3.4.1 Architects, surveyors, consultants and supervisors

The supply of architectural, surveying, consultancy and supervisory services is always standard-rated.

These services are, however, procured in a number of ways: Read More

Tax Question of the Week: Changes in Entrepreneurs Relief

Q- How do changes in the Entrepreneurs relief conditions following the budget affect me and when do they come into force?

A- The first key change was the definition of a personal company for Entrepreneurs’ Relief. Previously, a personal company was defined as one in which the shareholder:

  • is an office holder, director or employee of the company or group company; and
  • holds at least 5% of the ordinary share capital and of the voting rights of the company.

The shareholder will now also need to hold a 5% interest in the distributable profits and the net assets of the company for the relief to be available on the gain. Read More

VAT Question of the Week: POA Regime

Q- My limited company client operates a commercial property rental business. They are VAT registered and have opted to tax each of their properties. Following a review of their portfolio, they made the decision to dispose of some of their properties and acquire new ones, and have sold a number of high-value properties over the last 12 months. They have recently received notice from HMRC that they have reached the Payments On Account threshold, and are required to make regular monthly payments in addition to the payments when the VAT returns are submitted. What is the POA regime, and when can we leave it? 

A- The Payments On Account regime applies to businesses required to make large payments of VAT to HMRC. Entry to the regime is based on the net payments shown as due to HMRC on the VAT returns, i.e. the box 5 figures calculated as output tax less input Tax.

The disposal of a number of opted to tax properties has meant that the net liability for your client has exceeded the POA threshold. All VAT-registered businesses with a VAT liability of £2.3 million or more in a period of 12 months or less, are required to make interim payments at the end of the second and third months of each VAT quarter in advance of their quarterly VAT returns. The amount of the interim payments is calculated at 1/24th of the annual VAT liability in the period in which the threshold was exceeded.  Read More

HR Expert: Planning the Works Christmas Party

Q- My client is planning their work’s Christmas party and has asked me what things they need to consider to ensure this runs smoothly?

A- As we head into December most staff across the country will be looking forward to their respective Christmas parties and the chance to celebrate with their colleagues outside of the typical working environment. However, the thought of planning a Christmas party can be a stressful proposition for your client, bringing with it a number of risks that need to be addressed in order for it to run smoothly.

Read More

Tax Question of the Week: Estates in Administration

Q- I need to register an Estate of a deceased person with HMRC but cannot find any relevant online forms. How do I register?

A- The law has not changed but unfortunately, HMRC has continually changed its administration procedures regarding estates.

The law (Section 7 Taxes Management Act 1970) requires the personal representatives to notify liability within 6 months of the end of the tax year of liability. Failure to do so may result in a “late notification penalty” (under Schedule 41 Finance Act 2008). For example, if an individual dies during the 2018/19 tax year and the estate receives untaxed income or has a chargeable gain in the tax year then notification is required by 5th October 2019.

Read More

VAT Question of the Week: Sale of Business Assets

Q- My client is changing his business policy with respect to vehicles so that in future vehicles will be leased on contract-hire instead of owned by the company. Several employees are interested in buying the old vehicles. Will he need to charge VAT on the sale of those vehicles to the employees?

A- There are four possible VAT positions on the sale of assets by a VAT registered business:

Read More

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