Harrington Kelly Accountants | Blog

Fit Notes Replace Sick Notes

2010-03-17T09:28:00.001Z

From 6 April 2010, the format of medical statements - also known as medical certificates or sick notes - will change.

Medical statements are issued by doctors to employees when they are ill or injured. They are commonly used by employers as evidence for sick pay purposes. With the current statement, doctors describe an individual's condition and indicate whether or not they are fit to work.

From 6 April 2010, the new statement - known as a statement of fitness for work or 'fit note' - will mean doctors can advise that the patient either:

Is not fit for work
May be fit for work

The rationale behind the new regulations is to help more people stay in work by potentially modifying their duties and responsibilities rather than let them drift out of employment into long term sickness and reliance on state benefits. It is estimated that more than 2.6 million people in the UK are currently on incapacity benefit. Under the changes, to come into force next month, doctors could recommend reduced hours, altered duties or a phased return to work.

A doctor will give a 'may be fit for work' statement if they think that an employee's health condition may allow them to work – as long as you give them the appropriate support.

If a doctor uses this option, they will give advice about the effects of the patient's health condition and, if appropriate, some suggestions about the types of adjustment or adaptations you could consider making to help your employee back to work. There is some concern in the medical profession on how GPs will be able to form an accurate judgement on the workplace environment and what may be practical if an employee is to carry on working in some capacity.

While you won't have to act on the doctor's advice in a 'may be fit for work' statement, it may help you make simple and practical adjustments to help your employee return to work and reduce unnecessary sickness absence. If for any reason you can't make the changes necessary to support your employee's return to work, you should - for sick pay purposes - consider the statement as if the doctor had advised that your employee is 'not fit for work'.

Your obligations to pay statutory sick pay and make reasonable adjustments under the Disability Discrimination Act 1995 will not change.

For more information on the new Medical Statements:

Download guidance on the statement of fitness for work from the Department for Work and Pensions website
Download the new version of the medical statement from the Department for Work and Pensions website
Information on the reform of the medical statement on the Working for Health website

If we currently run your payroll and you need assistance to assess how the new regulations might affect you, or you need any other help with payroll-related matters then please contact us: info@harringtonkelly.co.uk

Moving to On-line VAT

2010-03-10T18:06:00.000Z

By 30 April 2010 you may have to file your VAT returns electronically, as paper VAT returns are being phased out.

All businesses that are already VAT registered and have an annual turnover of £100,000 or more must file electronically after this date. If VAT returns are filed electronically then any VAT due must also be paid electronically.

In addition if you register for VAT on or after 1 April 2010 you must file electronic returns and you will not have the option of paper returns regardless of your turnover.

So, what do you need to do?

Talk to your accountant if they will be submitting your VAT Return online on your behalf and discuss what you both need to do, to ensure you meet the deadline for your first online return 
Register and enrol for the VAT online service at www.hmrc.gov.uk
Consider whether you need to change any of your business processes for checking and authorising your VAT Return
Identify your preferred form of electronic payment (eg Direct Debit, internet banking, etc) and set up the necessary arrangements
If your business has to pay your VAT by cheque, make sure you order from HMRC the necessary Bank Giro paying-in slips.
Check if there are any implications for your accounting software by switching to electronic VAT returns.

Broadly speaking moving to online processing for VAT is a welcome change for most businesses as long as you are adequately prepared.

For more information see the HMRC website or speak to us at tax@harringtonkelly.co.uk

Non-Dom Not So Bad

2010-03-02T14:06:00.001Z

There is a lot of heat being generated about the involvement of wealthy non-doms in British political parties.

Essentially, non-domiciled individuals, or ‘non-doms,’ are resident in the UK but have strong affiliations with another country where they were either born or their parents were born. They must also have an intention to leave the UK at some time in the future and live in that other country. Personal circumstance are also important in establishing non-dom status.

For now let’s just leave the issue of whether someone who does not fully commit to Britain and its tax system should have a seat in the House of Lords deciding laws, including taxation legislation and let’s also park-up questions about whether such an individual ought to have a hand in funding and running a political party. Instead it’s worth looking at the broader tax principles involved in non-dom status.

The idea of paying tax in the place where income is earned has an underlying logic and fairness for the different national economies involved. If wealthy German bankers base themselves in London, they will pay UK taxes on their earnings in the UK while their investments at home would be taxed at German rates. Similarly British oil engineers working in Kuwait would pay local taxes on their Kuwaiti income but still pay UK taxes on any savings or rental income from their assets back home in the UK. That’s effectively what non-dom status allows to happen – it smooths the international mobility of labour and tries to distribute tax revenues equitably across the economies where income is earned. Without non-dom status there would be fewer foreign businessmen in the UK creating opportunity and demand and a smaller number of UK professionals working abroad.

The playing field has been made a little more uneven by countries selling the privilege of being a non-dom by demanding a small part of the taxes on foreign income that they are forfeiting. The UK price is £30,000 a year to remain non-dom after seven years in Britain. This allows our German bankers above to use the remittance basis for non-UK investment income and gains (ie broadly that they are taxable only when the money is brought into the UK) but they must each pay an annual levy of £30,000 for the privilege. The alternative would be to pay UK tax on their worldwide income and gains instead of the levy, which it is argued might stop them setting up in the UK in the first place. A non-dom resident in the UK, even if they have paid £30,000, is still liable to tax on any income or gains he or she is bringing into the UK.

So overall Britain collects some tax from the foreign workers based in the UK rather than collecting none and foreign executives come to the UK bringing their skills and spending power to benefit the UK economy. We expect our citizens to be treated much the same way when they work overseas. Is that so unreasonable?

Excel SUMIF Function

2010-02-08T10:12:00.003Z

SUMIF is a very handy Microsoft Excel function which many accounting professionals use. Its benefit is sometimes less well known by clients and many have found it useful when we have showed it to them and so we thought it was worth highlighting here.

SUMIF takes a range of numbers and sums them based on criteria. For example say you have a long list of expense items, each identified with a type: bank charges, cleaning, computer support and so on. SUMIF is able to generate automatic totals for each expense heading and will recalculate the totals if you reclassify your items.

There is a simple example here sumif.xls showing how to analyse some expenses from detail lines down to a summary format for an income statement or expense summary.

Please let us know if you need any help with Excel or designing spreadsheets to improve productivity: info@harringtonkelly.co.uk

31 January Tax Deadline

2010-01-24T08:50:00.010Z

Tax can be taxing if you’re still working on your return and payment for 2009/2010. The rules on filing and penalties are:

Returns must be filed online by midnight on Sunday 31 January 2010
The balance of any tax due for 2008/09 must be paid by 31 January 2010
In addition, a payment on account of tax for 2009/10 may be due by 31 January 2010
A maximum £100 penalty will be charged for late returns. However, if the tax due is less than this, the penalty is capped at the amount of tax outstanding
Any amount not paid will attract interest currently at an annual rate of 3% for each day until payment is received
In addition to the interest, a penalty surcharge of 5% of the tax owing will be imposed on any balance remaining unpaid 28 days after the due date. An additional 5% penalty surcharge will be added if the tax owing has not been paid within six months of the due date.

It is possible to avoid a penalty by:

Paying the tax due, or an estimate, before 31 January. Even if the tax return itself is late, there will be no fine if the tax is paid by the 31 January.
Submitting a tax return with estimated figures on it. You can resubmit at a later date with the right amounts and pay no fine.

HMRC might be prepared to show some leniency where there are genuine mitigating circumstances but don’t rely on it.

If you still need help with your 2009/10 tax or to find out more, please get in touch:

tax@harringtonkelly.co.uk | www.harringtonkelly.co.uk/cms/tax

Starting up in Business - Fact Sheet

2010-01-08T18:07:00.019Z

Clients starting out in business regularly ask what type of legal entity they should trade under: sole proprietor, partnership or limited company. Each of these has their own advantages and disadvantages and there isn’t a universal answer. Administrative costs, minimising tax liability, raising capital for the business and limiting personal liability should anything go wrong are just some of the key considerations. Our new fact sheet Starting Up: Forming a Business covers much of the essential background to weigh up the alternatives.

Making the wrong decision can be costly. As well as this free fact sheet, our initial meeting with a new client is also free and we can help you make an informed choice to get your business off to the best start: info@harringtonkelly.co.uk

VAT Task for Today

2010-01-01T16:45:00.004Z

The Chancellor has set everyone involved in VAT accounting a task for today with the standard rate of VAT changing back to 17.5% VAT following 13 months at 15%. Still it could have been worse - prior to the Pre-Budget report in December many high street stores had feared an increase in VAT to 20%, or the extension of VAT to food, as the Government seeks to plug the budget deficit.

Adapting to the new rate can be a headache for business owners:

There can be confusion where transactions span the VAT change date. The correct rate of VAT to apply is that applicable on the day the customer receives the goods or services referred to as the Tax Point. This means that invoices raised before 31 December 2009 should charge VAT at 15% while invoices raised on or after 1 January 2010 should show VAT at 17.5%. If an invoice is raised in January 2010 for supplies provided on or before 31 December 2009 then VAT can still be charged at 15%. For cash accounting, it means that 15% VAT will be due on supplies and purchases made before 1 January 2010, even if payment was received or made after 1st January 2010.
If you take a deposit for supplies before 31 December but the delivery is after 1 January then the deposit is subject to 15% VAT and the balance at 17.5%. If you raise the invoice for the full value of the supplies before 31 December then the VAT rate is 15%.
If you provide work on a continuous basis, once you pass 31 December 2009, you can either charge VAT at 17.5% on the entire bill, including the work done when the VAT rate was 15%, or so long as you can prove that this is reasonable, you can charge 15% on the work done before 31 December 2009 and 17.5% on the rest.
You could also raise an invoice before 31 December on the whole job and, even though the job is finished after 1 January 2010, VAT can be charged on the full amount at 15% provided your bill has been paid for by 31 December 2009.
If you raise a credit note after 31 December against a 2008/9 invoice with VAT originally at 15% then you should use the same VAT rate on the credit note as was on the original invoice so the transaction is VAT neutral.

Some businesses are considering absorbing the rate increase to remain competitive in the current market conditions. The rate change corresponds with the start of the post-Christmas sales – not a good time to be increasing prices. Of course, even if you decide to keep VAT inclusive prices unchanged, systems still need to be updated for the new VAT rate at 17.5% so the Treasury gets the extra 2.5% from your sales.

If you want to talk any of these changes through in relation to your specific circumstances then please contact us and we will be pleased to help you: tax@harringtonkelly.co.uk

Best wishes for 2010 from everyone at Harrington Kelly.

2010 Pro Bono Charity Work

2009-12-16T11:38:00.005Z

Each year around this time we will be offering one day’s work by a chartered certified accountant from our firm to a UK charity free of charge or pro bono (‘for the public good’) as it’s often called.

The legal profession has had a long-standing commitment to pro bono work but the accountancy world has been seen to be less keen to donate professional time to good causes. We hope to play a small part in changing that perception.

Our pro bono work can cover any aspect of accounting, reporting, tax, management or financial systems for a UK registered charity, subject to it being within our field of expertise. If the charity’s location is within 50 miles of London then the work can be carried out on site. If the location is further away then a day at our office spent working on a project for the charity will be provided as an alternative. The day can be scheduled at anytime in 2010 that is mutually convenient.

The selection of the charity for 2010 will be made on the basis of a brief submission (200 words maximum) of how you think your charity could benefit from our pro bono work.
To be considered please email your submission to us at info@harringtonkelly.co.uk Please put the heading Pro Bono in your message. The closing date for applications is 31 January 2010.

Best Wishes

Gerard Kelly
gerry@harringtonkelly.co.uk

Pre-Budget Report

2009-12-09T23:07:00.005Z

The Bank Payroll Tax may well grab the headlines from today’s Pre-Budget Report but the increase in National Insurance Contributions is probably the most significant announcement affecting almost all employees and employers.

From 6 April 2011 the rate of employers’ contributions will rise from 12.8% to 13.8%. The standard employee rate increases from 11% to 12% and the employee higher rate rises from 1% to 2%. There is a similar increase planned in NI for the self-employed. For employers, particular those in labour-intensive sectors, this is a significant increase which can only be paid for by increasing selling prices and/or reducing costs to maintain margins. It’s unlikely to encourage the creation of new jobs. The rise continues a trend in recent budgets to increase tax revenues through National Insurance rather than through income tax rates. It also highlights further the regressive nature of National Insurance where those on lower incomes pay proportionately more compared with income tax where the rate rises progressively with earnings.

The increase in NI in 2011 is likely to lead to more employers and employees looking at restructuring their pay and benefits to reduce the tax burden. Salary sacrifice schemes, where an employee gives up the right to cash pay in return for a non-cash benefit are also likely to become even more popular as a consequence of today’s announcement. Converting employee pension contributions into employer contributions means that neither the employee nor the employer has to pay NI on these contributions. However one of today’s other announcements was that tax relief on pensions contributions for those earning more than £130,000 would be reduced and this form of salary sacrifice may no longer be such an attractive option for higher earners.

Tax up in the Air

2009-12-04T06:49:00.009Z

Lyle Dicker Grace is a British Airways long-haul pilot. After a period of living in the UK, he claimed that for tax purposes he had relocated to his native South Africa in 1997 and was now ‘commuting’ to the UK for his work. In his view he only visited the UK because each of his long-haul flights for his employer started and ended here and consequently he should not be taxed as a UK resident.

HM Revenue & Customs saw matters differently and the pilot’s case has been considered by the courts, most recently by the Court of Appeal last month. In their evidence, HRMC pointed to the facts that Mr Grace retained a house in the UK that he used on regular trips, for work. He was also on the electoral role, he was a member of the UK Pilots’ Union BALPA and his salary from British Airways was paid into a UK bank account.

The issue here is residency for tax purposes. HMRC argued that collectively these factors meant he had not broken all residency ties with the UK and he was liable for UK tax. The case of Mr Grace highlights the need for a distinct break and a change in the pattern of life and work where a former UK resident claims to be non-resident. In the UK there is no clear statutory test for residency. Even if you spend less than 6 months in the UK, HMRC will take into account other factors such as property ownership or employment status to establish residency.

To be certain, a UK resident who wants to become non-resident ought to relocate their domestic and business life to another country, and spend as little time as possible in the UK in the first year of non-residence. Keeping records of your whereabouts is also persuasive in determining residency status.

Anyone leaving the UK permanently should seek professional tax advice as many factors can determine residency and make a big difference to tax status. For more information and specific advice please contact us at: tax@harringtonkelly.co.uk

Personal Insolvency Fact Sheet

2009-11-29T10:03:00.013Z

Our new Fact Sheet on Personal Insolvency has just been published:

http://www.harringtonkelly.co.uk/factsheets/personal_insolvency.pdf

It provides an impartial guide to the formal and informal solutions available if you are struggling with debt. The key message is that if you find yourself in this position then doing nothing is simply not an option. Reaching an agreed solution, which may avoid bankruptcy or an IVA, is far more likely if you are proactive in discussing the matter with a professional advisor and the banks, credit card companies and other lenders involved. If a formal insolvency procedure is the most appropriate advice for you then you should not delay in getting help. Contact us at info@harringtonkelly.co.uk for more information or specific guidance.

Self-Build VAT

2009-11-24T22:29:00.003Z

VAT can generally be reclaimed on new build residential properties and certain eligible conversions under the DIY house builders’ scheme. This often makes a rebuild on a plot of land more economical compared to the refurbishment of an old existing house, since these VAT advantages are not always available for refurbishment.

VAT can be reclaimed on building materials and permanent fixtures such as windows and central heating. Labour charges should not have VAT added by the builder. VAT can’t be claimed on removable items such as electrical appliances, carpets and curtains or on professional services such as architects, solicitors and surveyors.

A claim must be made within 3 months after a completion certificate has been issued by the Building Control Officer or an architect. VAT invoices are essential for a successful reclaim. HMRC have recently introduced two new claim forms; VAT 431NB for new houses and VAT 431C for conversions to ensure that the right information is provided for each type of development.

There are a number of tax planning points to consider at the design stage. For example fitted furniture is not eligible for VAT relief but storage, including wardrobes are eligible if designed into the fabric of the building.

Conversions are also zero-rated for VAT but, unlike new build, you do have to pay out VAT on labour costs, although you can reclaim this at the end of the project. Remember, the DIY scheme is only available to private individuals building houses for themselves or their relatives and not for development for resale, where different rules apply.

We can assist with all aspects of VAT accounting for self-build to make sure the right records are kept to make a successful claim for the full amount: tax@harringtonkelly.co.uk

Losses in early years of trading

2009-11-17T23:57:00.007Z

Many businesses start-up in a recession (check out this new book) and evidence is that it’s a good time to start. The costs of starting-up are lower in a downturn and redundancy payments can often provide the capital to get an idea going. However it’s not unusual for a start-up business to make a loss in the early years of trading. Fortunately there is significant tax relief for these losses available to sole traders. The underlying idea is to encourage entrepreneurship.

Relief may be claimed against an individual’s general income for the three years preceding the first year in which the loss is incurred. Relief is given against the earliest year first. There are naturally some caveats and anti-avoidance provisions, for example trade must be on a commercial basis with an expectation of profits. The benefit though can be considerable - for example someone previously employed paying tax at 40% can recover this tax paid on losses carried back. It may also be possible to set trading losses off against capital gains in the same year or the preceding year.

Please contact us if you need further advice on this area: tax@harringtonkelly.co.uk

Premier League Tax

2009-11-06T23:10:00.002Z

The 50% rate of income tax comes into force from 6 April 2010 and will be charged on earnings over £150,000 - not a problem for most people but one group of workers is set to suffer more than most. The average annual salary of a Premier League footballer is over £1m according to accountancy firm Deloitte. For a player on this level of income, the new 50% rate means an extra tax bill of around £100,000 pa. Also from that date, the personal allowance (£6,475 for 2009-10) will be reduced by £1 for every £2 of adjusted net income over £100,000. Therefore, individuals with adjusted net income in excess of approximately £113,000 will no longer benefit from any personal allowance.

With big money at stake, players and their accountants have been tackling the problem and looking at ways to structure player’s pay to reduce tax. One idea proposed involves paying part of a player's wages as an interest-free loan, which HMRC would treat as a benefit in kind using an interest rate which is currently 6.1% ie a £1m loan gives rise to a taxable benefit of £61,000 which is then subject to tax at 20% or 50%. This is likely to defer but not significantly reduce the tax on the underlying earnings when the ‘loan’ is presumably written-off by the club at some time in the future. Another option is for clubs to make payments into trust funds which can be released over time at the end of a player’s contract.

But HMRC is not likely to give players such an easy scoring opportunity. Efficient tax planning is every citizen’s right but with tax revenues falling and pressure on public spending, tax avoidance schemes will come under closer scrutiny than ever – especially high profile ones. Case law (the Ramsey doctrine) has established that ‘artificial’ tax planning can be overturned by the courts and the government always has the option of introducing retrospective legislation. Extra time could give the tax man a victory against the players.

Warren Buffet on Contracts

2009-11-04T17:55:00.014Z

Warren Buffett's Berkshire Hathaway Inc has announced it will pay $26 billion to buy out railroad Burlington Northern Santa Fe Corp in what the billionaire investor called a bet on the U.S. economy.

If agreed, it will be the largest acquisition in the company's history. Berkshire Hathaway already owned 22% of the rail operator before this deal was announced.

It’s a nice reminder to review some Buffettisms on mergers and acquisitions which might apply to this deal:

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1
It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.
Never invest in a business you cannot understand
Only buy something that you'd be perfectly happy to hold if the market shut down for ten years
It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Overlap Profits

2009-11-04T14:08:00.011Z

This is regular issue for sole traders and a key tax planning matter for start-ups and ceasing to trade as a sole trader.

When a sole trader starts up, the business profits are assessed for tax on 5 April following the commencement of trading and again one year after the commencement. So if the business starts on 1 September it is assessed for tax:

on the following 5 April for a period of 217 days (30 + 31+ 30+31+31+28+31+5)
and again on 31 August for 365 days.

The overlap profit in this example is the profit in the period from 1 September to 5th April which is effective taxed twice. This overlap profit is carried forward until either the business ceases to trade or the year end is brought into line with 5 April.

‘Profits’ here refers to taxable profits including adjustments for capital allowances and disallowable expenditure for tax purposes.

In this context a sole trader also ceases to trade as an individual if the business is incorporated and a limited company is formed to take on the trade. Therefore the timing of incorporation is also a key tax planning decision. Please contact us if you need further advice on this.

Cutting Inheritance Tax

2009-10-20T20:18:00.006+01:00

This is a regular issue with clients and while there is no universal advice which is appropriate (other than to make sure you have made a will which is always essential) there are some key steps clients can take:

Make a will (always essential)
Make cash gifts - gifting can be an extremely effective IHT planning tool but only if you begin early.
Tidy up life policies - writing life insurance policies you have into trust can eliminate IHT if the policy is paid out after your death
Discretionary will trusts - there are a number of trust types which can be used such a discretionary trusts and loan trusts
Invest wisely - some investments offer IHT benefits. For example most shares listed on the Alternative Investment Market become free from IHT once you have held them for two years
Get married - IHT is not payable when an estate passes between a husband and wife, or from one civil partner to another. Married couples or civil partners can transfer the unused element of their IHT-free allowance to their spouse when they die.

Pensioners' Tax Returns

2009-10-18T07:19:00.003+01:00

Many retired clients are surprised to be asked to fill out a tax return. Often they have gone through a lifetime of employment, paying PAYE and National Insurance every month, without ever being asked to complete a return. Now when they are no longer in full time employment and perhaps on a more modest fixed income, HMRC ask them to complete a tax return for the first time.

The reason may be that a retired persons tax affairs can be more complete than it first seems with multiple sources of income:

State pension
Personal pension
Occupational Pension
Pension lump sum
Investment income
Part-time employment.

When you reach State Pension age you no longer pay National Insurance contributions, but you don't automatically stop paying Income Tax. If your taxable income - including your State Pension - is more than your tax-free allowances you're still a taxpayer.The allocation of the individual's personal allowance (tax free allowance) may not be correct if there is a personal or occupational pension or part-time employment. For those aged between 65 and 74 the allowance is £9,490 for 2009/10, rising to £9,640 for someone aged 75 or over.

All of this can cause difficulties with the individual's tax code resulting in too much or too little tax being paid. Filling out a tax return will resolve this - if you don't submit a return you could end up paying too much tax.

For retired clients we can help you with:

Checking your tax code applying to employer pension you are receiving
Preparation of your personal tax returns
Advising generally on inheritance tax matters

Please contact us if you need further advice on this.

Powers of Attorney

2009-10-17T21:19:00.002+01:00

We are often asked by clients about granting a power of attorney should they become unable to make decisions for themselves in the future. The procedure has changed in recent years and it is now possible to grant a power of attorney relatively easily and securely through the Office of the Public Guardian (OPG).

A Lasting Power of Attorney (LPA) enables a person who has capacity and is over 18 (the donor) to choose another person or people (attorney(s)) to make decisions on their behalf.

There are 2 different types of LPAs:

A property and financial affairs LPA is for decisions about finances, such as selling the Donor’s house or managing their bank account; and
A health and welfare LPA is for decisions about both health and personal welfare, such as where to live, day-to-day care or having medical treatment.

An LPA must be registered with the OPG before it can be used. An unregistered LPA will not give the Attorney any legal powers to make a decision for the Donor. The Donor can register the LPA while they have capacity, or the Attorney can apply to register the LPA at any time.

An Attorney is appointed to make decisions as if they were the Donor themselves. An Attorney must act in the Donor’s best interests and have regard to the Code of Practice.

Although you can make an LPA without it, most people seek professional advice before granting an LPA. Accountants are often appointed a Professional Attorneys, with an obligation to prepare or review accounts to make sure the donors wishes have been followed. Please contact us if you need further advice on this.

HMRC Tax Amnesty Announced

2009-10-05T21:08:00.005+01:00

HMRC have announced a second amnesty period for individuals to disclose interest and gains from investments that have not previously been declared. Mainly this refers to offshore accounts, but onshore accounts are covered also. This New Disclosure Opportunity (or NDO) will run from 1 September 2009 to 12 March 2010.

During this NDO a special, flat rate 10% penalty will apply. Usually when HMRC finds undeclared income, it means fairly heavy penalties, anything from 30% to 100%, even criminal prosecution.

If you think you may be affected by this, please contact us for a free consultation and to discuss how we can assist you.

Summary of the NDO features:

The period for making the initial notification of intent to disclose runs from 1 September to 30 November 2009.
If you notify by paper the dates you can do so are 1 September to 30 November 2009.
If you notify online the dates you can do so are 1 October to 30 November 2009.
The standard penalty during the Disclosure period is 10%. However, if your bank sent a letter during the first Offshore Disclosure Opportunity this may rise to 20%.
The NDO closes on 12 March 2010. Individuals found subsequently to have undeclared tax liabilities will be subject to fines between 30% and 100%, and possible criminal prosecution.
No penalties are charged where the tax liability is less than £1,000.

Overseas property

We get a regular stream of queries from clients about the tax position on rental income and capital gains on overseas property. The rules are inevitably fairly complex. For example the tax due on rental income depends on whether you are resident, ordinarily resident or domiciled. If you sell or give away your property you may have to pay tax overseas. You may also have to pay capital gains tax (CGT) in the UK. Where CGT is due you can usually get credit for foreign tax you’ve paid on the same gain.

If you have an overseas property or income or gains overseas act now and contact us today for advice on your tax situation and we can help – don’t rely on an amnesty!

Update: HMRC have now produced their first YouTube video which is all about the Amnesty: http://www.youtube.com/watch?v=a7qb8Y8RvE0

Ten ways to survive a tax investigation

2009-09-28T21:21:00.000+01:00

Interesting feature in The Times today on ten ways to survive a tax investigation. This is a summary:

Keep calm and don't panic.
Get expert advice
Don't discuss your tax affairs with anyone except an expert
Don't lie to the taxman
Don't assume the Revenue is ignorant of anything
Be prepared
Make significant payments on account, where relevant
Don't try to destroy evidence
Do not develop a case of selective amnesia when dealing with tax officers
Once you have reached a settlement don't go there again

Here is the link to the full text.

Welcome to our Blog

2009-09-27T20:04:00.001+01:00

Welcome to our blog. Through our blog we aim to provide helpful and informative posts on finance, business, accounting and even life in general to meet the needs of our clients and readers. We hope that you’ll take a few moments to see what is available and we encourage you to get involved by commenting and subscribing.