In this update can I draw your attention to an issue that may well affect a lot of directors: the PAYE implications of allowing the company to make improvements to a home so that it may run its business from there.
Over the past few weeks we have had a rash of interesting technical cases with quite different outcomes. These have impacted on P11D reporting in a number of significant ways. We have updated our guidance taking these cases into consideration should they apply to other firms. We have also updated our P11D penalty guide and created a new P11D top tips guide.
Onto RTI: we have updated our 2014/15 guide to RTI penalties; we note that some RTI software does not work as well as it should, which calls into question HMRC's practice of "certification" of software. Whilst some aspects of RTI work well there appears to be an issue between what HMRC thinks is reported and what the software says.
Also much in the news this week has been HMRC's consultation on the Direct Recovery of Tax Debts. Will this be a power too far?
Finally, hard not to mention the on-going tax avoidance reporting in the press. Some members of the "boy" band Take That and the failed Icebreaker schemes are back in the news.
On a brighter note we welcome Paul Benney to our team. He has been appointed tax director and has been assisting our Virtual Tax Partner service.
Scroll on down for news and updates.
Nichola Ross Martin FCA Tax Director
Your online Virtual Tax Partner®: practical support for accountants, tax advisers and their clients
News and freeview
MPs call for new review of HMRC's powers
A new harsh penalty regime for share schemes, the power to raid our bank accounts, a penalty for just about every single transaction with HMRC? Is it time to review HMRC's performance on Powers, Deterrents and Safeguards? Let's have your feedback.
Swiss sign up to end banking secrecy
Switzerland, Singapore and India are amongst 47 nations that have agreed on measures which are designed to end banking secrecy.
Wrong PAYE code? Email HMRC
New email service
HMRC Direct Recovery of Debts consultation
A 'terrifying' prospect? HMRC wants to be given powers to dip into taxpayers' bank accounts. The move has alarmed MPs from the Treasury Select Committed and the tax bodies appear united in their calls for proportionate safeguards to added to those proposed.
HMRC: developing a modern Agent Strategy
HMRC has agreed on proposals for developing their "Agent Strategy" and is working with agents’ representative bodies to take this work forward. It seems that this means that on one hand Agents will be doing more of HMRC's work in the future and be recognised for the work that they already do.
VAT on storage
Voluntary disclosure helpline
Does a client wish to make a tax disclosure of past income or capital gains which is not covered by any online disclosure facilities? Use this number.
Subscribers: new guides and updates (paid content)
Wear and tear allowance and renewals basis
UPDATE: HMRC has clarified the wear and tear allowance in relation to residential rental property. Freestanding white goods as not trade tools however when fixed into fitted kitchens they may be treated as fixtures, otherwise they are plant and so there is no tax relief on cost or replacement.
P11Ds: top tips for employers
Essential reading: we have pulled together the combination of HMRC's employer tips with links to areas where we have seen particular difficulty
Building an office at home or converting part of a home into an office
UPDATE: how to create a tax-efficient home office (and amongst other things avoid unexpected PAYE and NICs).
Tax penalties: CIS (Construction Industries Scheme)
We have updated this guide to penalties, reasonable excuse and relief from double taxation
Tax penalties: P11Ds
Late filing penalties apply if returns are not submitted by 6 July 2014. Don't over look penalties for error and mistake.
Share awards: filing and tax penalties
UPDATED: there is a lot more compliance this year. File Form 40 (unapproved share issues/options) or form EMI40 etc by 6 July on paper, however employers must also go online and set up their scheme details there too. If that is not enough, HMRC is proposing a new and onerous penalty regime for you in the Finance Bill and you will be penalised if you don't file online. Simplification? Not a chance!
Capital allowances update
Annual Investment Allowance (AIA)
UPDATE: take a refresher on the AIA. It is set to increase from 1/6 April 2014 (assuming no changes to the Finance Bill) not all expenditure qualifies for relief and not all businesses my claim it either.
AIA & WDA: rules where there is a change of rate
Capital allowances: the note explains the hybrid rates used when there are change in the rate of writing down allowances (WDA) and the rules where there is a change in the rate of Annual Investment Allowance (AIA).
Close company loans toolkit
This guide takes a detailed look at the corporation tax treatment when a close company makes a loan to a participator (director-shareholder). It also provides links to our guides for individuals on the making of loans to companies.
Director's loan account toolkit
HMRC instructs staff to examine directors' private expenditure during the course of an enquiry into a close company's books and records. In most cases the company will be expected to produce a transaction history of any director's loan or current account.
Director's tax planning toolkit 2014/15
This year's toolkit, like all our maintained guides a rolling planner so we keep updating it when we find practical points that will interest you.
Legal or unlawful dividends
Start here for our guides on getting dividends right and the tax consequences when formalities are not adhered to.
Statutory residence test
The new rules with tips and planning points
Updated for different types of doctors, following the decision in Dr Samadian v HMRC we have examples of cases which are not on all fours with that decision and where it is more likely that home to work travel will be allowed.
Retirement: a purchase of own shares
Index to further guides
Employee Shareholder Status - tax & planning
Introducing the new measures introducing a new category of employee share owner are interesting for all sizes of companies. Our guide explains all.
ABC or alphabet shares: directors & employees
Essential reading for directors.
Employers' £2,000 NICs allowance
So is there any benefit to claiming the allowances as a one man company?
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