Thursday, March 31, 2011
Despite the name of the practice Elaine stresses that “Quality is in no way compromised. CheapAccounting operates to a set of very high service values”.
Inevitably, perhaps, most of Elaine’s clients have straight forward accountancy and taxation needs. Needs that her experienced network of CheapAccounting.co.uk accountants are well capable of addressing. However from time to time there may be a more complex tax issue which requires more specialist advice.
I am delighted to announce that Elaine has chosen my Tax Advice Network to provide tax support when required. We have agreed a working alliance which is clearly promoted on her website.
For obvious reasons I do not give permission for just anyone to include our logo on their website. Indeed Elaine is the first person to have that authority – beyond the tax adviser members of the Tax Advice Network of course.
Thursday, March 24, 2011
I have seen dozens of such identikit commentaries since the Chancellor sat down yesterday. Almost all contain pretty standard lists of the headline measures, cut and paste extracts from the budget press releases and sundry similar 'commentaries' containing the initial views of the author or a 'senior tax partner'. There are a few that contain bog standard 'advice' and a few firms have provided commentaries on specific measures - although most of these note that we don't have enough detail yet to know how the proposals will work in practice. Others reference what the writer would like to have seen or how limited the proposals are in specific situations.
Of course there will be many more such commentaries that I haven't seen. There's a limit as to how many I can pick up through the email lists I am on and through links contained in tweets on twitter. Still, two very different budget commentaries stand out and deserve an award*
Runner up - and with a special commendation for dividing up the announcements: Informanagement
- Budget Summary March 2011 - New tax changes announced today
- Budget Summary March 2011 - Future changes announced today
- Budget Summary March 2011 - Changes previously announced for 2011-12, now confirmed
And the winner is.........
....Elaine Clark of Cheap Accounting for her blog post: Not A Budget Newsletter!
It won't suit everyone but I love it!
* 'Award' in this context simply means to be acknowledged on this blog with an online link! ;-)
If you've come across any others that are clearly distinctive do please reference them in the comments section below and provide links if possible. Many thanks. I'm also keen to receive feedback challenging my view that the effort devoted to these overnight commentaries is a waste of time. By all means share your experiences of how and why you feel differently. Any evidence of the value would be great too.
Wednesday, March 23, 2011
"genuine and long lasting simplification can only be brought about through major structural changes to the UK tax system. Our key recommendations are that the Government starts to look at reforming the structure and we recommend that a timetable be set out by the end of the year. The two key areas that require attention are:
Studies on how best to achieve this could be carried out, for example, by setting up a working party and through consultation with advisers and professional bodies within a specified timeframe."
- The integration of income tax and national insurance contributions (“NICs”); and
- Introducing a radical new approach to taxation for the very smallest unincorporated businesses.
- Consistency in the definition of earnings;
- Consistency in the required calculations;
- Reliefs and exemptions on either income tax or NICs;
- Treatment of pensioners;
- Treatment of self-employment; and
- Treatment of savings and dividend income.
Thursday, March 10, 2011
Following a consultation on the draft new rules HMRC published a list of Frequently Asked Questions on February 21. These confirm that the new rules are intended to apply to arrangements
"involving a third party to reward employees and directors which seek to avoid, defer or reduce income tax and national insurance contributions",
"used as a tax-advantaged way to save for retirement, using an employer-financed retirement benefit scheme as an alternative to, or to top up, savings in a registered pension scheme."
In HMRC's view, while these convoluted arrangements seek to weave a way through the legal changes, they do not succeed. Even if they did HMRC would still challenge them as delivering remuneration which should have been subject to PAYE from first principles.
Subject to parliamentary approval, the new legislation will be effective from 6 April 2011 and some aspects of the proposed new law will apply from 9 December 2010. These changes are designed to prevent the avoidance of PAYE and national insurance contributions on employment income.
Individuals considering entering into such income tax avoidance arrangements should be aware that HMRC will pursue people who seek to avoid tax on monies they earn, through the courts where necessary.
- NO. The Revenue do NOT approve Disclosed tax schemes
- Tax planning to be wary of
- Were you wasting time advocating this tax scheme?
- Naive promoters of tax avoidance schemes
- Tax avoidance is a card game - the metaphors multiply
Wednesday, March 9, 2011
"On the basis of the low number of estates caught by IHT and the useful but relatively low revenues [after reliefs] that it raises, we consider that a more appropriate approach may be to review the whole of IHT rather than to consider individual IHT reliefs. Such a review may also encompass a review of capital gains tax and we envisage this as a longer term project."
"a proper review of inheritance tax, whether by HMRC, HM Treasury or the OTS....would clearly be a longer term project."
“only millionaires pay death duties”
Friday, March 4, 2011
- BBC business news notes that the 15p a day luncheon voucher relief may be removed.
- Money Marketing notes the calls for IHT and CGT reviews and the suggestion that merging income tax and national insurance would be a long term project that would deliver “major simplification”.
- The FT headline writer went for: Call to scrap blind person’s tax allowance
- Merging income tax and NIC – this is a long term project of structural reform that would deliver major simplification;
- Employee benefits and expenses – The longer term aim would be to align the treatment of employee benefits, with shorter term aims of simplifying many minor benefits with a de minimis limit of £100/£500, or amending the current £8,500 threshold;
- Inheritance tax and trusts – the reliefs for inheritance tax are integral to the policy and we consider that a more appropriate approach would be to review the tax as a whole;
- Capital gains tax, particularly as applicable to companies – the capital gains systems for individuals and companies have drifted apart, with gains by individuals taxed at a lower rate than income to reflect inflation, whereas companies are still required to calculate indexation. Our aim would be to realign the treatments and simplify the tax, but as there are changes in relation to corporate capital gains expected in Finance Bill 2011, this is clearly a longer term project; and
- Environmental taxes – Both landfill tax and aggregates levy should be reviewed, as both regimes contain basic charging provisions with numerous exemptions and it may be more appropriate to define what is caught rather than what is excluded.
"Our review has suggested that these areas are particularly complex areas, for example due to the number and complexity of the reliefs involved. Whilst each area is deserving of a full review, we recognise that these are complex and time consuming areas involving important matters of government policy that go beyond the current remit of the OTS"
Wednesday, March 2, 2011
ICAS' revised estimate of £562 for each HMRC visit is as follows:
- 1 hour preparatory meeting between the business (£50 per hour) and its accountant (£75 per hour) = £125
- 3½ hours spent by the business (£50 per hour) and its accountant (£75 per hour) in dealing with HMRC visit = £437
Tuesday, March 1, 2011
Customers who voluntarily come forward and put right their tax position can expect very similar terms to those on offer through PTSP. If you do not come forward and HMRC later find that you owe additional tax, you may face higher penalties or even criminal investigation.
Anybody with extra income or gains to disclose, whether in the plumbing industry or not, should seriously consider coming forward now. Those who do not and who are subsequently found out will be liable to penalties of between 35% and 100% of the tax evaded. And may well be subject to increased scrutiny for the next five years. The rules are changing. Tax cheats - whether local tradespeople, property owners, entrepreneurs or anyone else are all in the same boat. Make sure yours has a paddle - or even a motor!
The Plumbers Tax Safe Plan (PTSP) is designed for people working within the plumbing industry who have not told HM Revenue & Customs (HMRC) about all their income in the past and who now want to get back on track. It is intended to cover people who work (or worked) in the plumbing, heating or gas installation trades and this includes anyone who installs and repairs pipes and fixtures for water, drainage or gas systems in a building.
It's basically a 'fresh start'. If you decide to take advantage of PTSP, you can stop worrying about what might have happened had HMRC found out that you'd not been telling them about all of your income. It's a chance to start getting things right from now on, whilst knowing exactly how much it's going to cost to sort out things for the past.