Pension Calculator

Hargreaves Lansdown have just posted a pensions calculator to their web site. A useful tool... Click on the title of this post and book mark the page.

Are you missing out on R & D relief advice?

Click on the title of this piece to download an interesting article published in Taxation, written by Nigel Holmes of Armstrong Watson. The article is available from our Resource Centre, please use password (resourcesaccess) to login. Nigel and his firm have considerable experience in preparing and negotiating claims with HMRC. He is happy to discuss the issues raised in the article - nigel.holmes@armsrtongwatson.co.uk

LLPs and group relief

Niall Murphy of Shoosmiths has posted an interesting update on LLPs and group relief. He quotes:

"A recent announcement by HM Revenue & Customs (HMRC) on how it treats limited liability partnerships (LLPs) for group relief purposes could have significant implications for groups with LLPs in their structures."

To read the full article click on the title of this posting.

Generate qualified leads ...

We now have a growing number of firms who subscribe to our Tool Kit. The Tool Kit has been designed to produce qualified leads for your practice - from both new prospects and existing clients. We have recently taken on a dedicated Customer Service Manager, Fiona Caddick, who is tasked with supporting subscribers with implementation of the various Tool Kit features.

Next year we will be adding a number of new features to the Tool Kit including an editable news feed for your practice web site and a page of calculators. We will also be improving the presentation of the three core report generators, Business Fitness Assessment, Tax Planning Report Generator and the Personal Financial Health Check.

All registered subscribers at 31 December 2010 will receive these updates with no increase in their subscription.

To incourage participation in this service I am willing to offer any firm that completes an Online Order Form before 31 December 2010 with free use of the service until 1 March 2010. During this free trial period Fiona will work with you to ensure that you add the core features to your web site and integrate the opportunities to increase business with existing clients.

Minimum monthly subscription available, no subscription fees to pay before 1 March 2011. Click on the title of this posting to place your order.

If you would like an online demonstration of the Tool Kit call me anytime 01926 334773 or email bob@landmarkpd.co.uk.

And don't forget - you will be seeing a number of clients between now and 31 January 2011 to review their 2010 SA return - the Tool Kit Tax Planning Report generator is a perfect tool to engage with clients to tease out tax planning opportunities for 2010-11...

Accountants and legal privilege

Legal Professional Privilege and Accountants (This article is reproduced with the permission of the writer, David Winch FCA, MLRO Support Ltd)

Last month the Court of Appeal ruled on an issue of interest to accountants and lawyers and their clients.

In a nutshell, if a client seeks legal advice about his tax affairs from his lawyer that advice, and the communications to and from the lawyer for the purpose of obtaining that advice, are covered by common law legal professional privilege. That means that HM Revenue & Customs cannot require disclosure to them of the privileged documents by the issue of a notice under section 20 Taxes Management Act 1970 (now replaced by provisions within Schedule 36 Finance Act 2008) or similar legislation.

  

But what is the position if the client seeks that advice on tax law from his accountant rather than from a lawyer?

The Appeal Court ruled that common law legal professional privilege does not extend to advice, even legal advice, from accountants to their clients.  That means that HMRC are entitled to require disclosure of the documents.

The result is a disappointment for accountants, but not a surprise.

But it does not affect the statutory exemption from reporting suspicions of money laundering based upon information received in defined circumstances. That exemption, which is laid out in section 330 Proceeds of Crime Act 2002 (as subsequently amended), remains available both to suitably qualified accountants and to lawyers.

Anybody heard of HMRC's AAM service?

I was reading Taxline today (what else do you do on a Sunday?) and came across an article regarding the Agent Account Manager service. See I knew all along...

Apparently it has been set up to help practitioners with client-specific problems. To be more specific the AAM is your next port of call when "normal channels" have proved less than fruitful.

Why am I not getting excited about this?

If you want to take a look, and you should probably register, click on the title of this posting.

Good luck!

Student accommodation and capital allowances

On 22 October HMRC revised its guidance on what it considers is meant by the term “dwelling house” in relation to the Capital Allowances legislation. This will potentially have far reaching effects on developers of student accommodation.
Click on title of this posting to see full article on Shoosmith's web site...

Flippin 'eck

It would seem that HMRC are brushing up their skill sets and in particular owners of more than one property who have submitted a s225 (PPR) election will need real evidence that they did actually move in to the second property if they want to rely on PPR relief for both properties.

A recent Telegraph editorial sets out the issues quite nicely... Click on title of this posting to see the article online.

More than one residence - unmarried couples

A married couple or civil partnership are only allowed a single PPR [s222(6)] and any election under s222(5) must be made jointly. However, this does not apply to unmarried couples.

Opportunity

If an unmarried couple own two residences then maximum relief can be obtained by each owning one property outright rather than owning the two properties jointly. However, it is advisable that each person make a s222(5) election in favour of the property they own. This is because both properties might be considered residences for both of them, even though they each do not own one property. It might be argued that each party only has a gratuitous licence to occupy the property they don’t own [see CG64470] but it is unsafe to rely on this particularly if both parties contribute to the upkeep of both properties. ESC D21 provides an extended time limit to make an election where a person is not aware of the need to make one and he only has a negligible interest in one property but, again, it is unsafe to rely on this.

(This posting is an extract from Graham Buckell's publication "CGT - PPR Relief" that will form part of the Landmark Tax Options service - to see a full list of the Tax Options planning articles and make a no obligation advance order, click on the title of this posting)

Trade Mark Searches

A recent High Court case has determined that it is necessary to document a search of existing Trade Marks if you want to defend a Trade Mark challenge. For new products or services this would seem to be a prudent course of action.

You can advise clients who are contemplating the launch of a new brand that as well as searching Companies House register and Google, they should also search the Intellectual Property Office records to see if there is a registered Trade Mark. There are numerous firm set up as Trade Mark and Patent Agents that will do this for clients. Or, you could direct them to http://www.ipo.gov.uk/.

To see the free search option offered by IPO click on the title of this posting.

Company Administration Manual

Companies House have an excellent (free) guide on company admin processes, annual returns, company meetings etc.

Click on the title of this posting to download a copy from Business Links.

Phoenix companies watch out...

I found the following copy on HMRC's web site today re businesses that will not qualify for the new NIC Holiday. A great example of non-plain English... I believe they are saying that Phoenix companies will not qualify?

Click on title to read complete article.

Businesses that aren't considered to be new

The test of a new business is based on the activities of the business. For the purpose of the holiday, the test requires you to look at the activities of the new business and to consider whether all, or most of them, have previously been carried on by them in another business during the six months leading up to the start of this business. Also you need to decide if the new business consists of activities, or mostly of activities resulting from the transfer of most of the activities of another business. In considering those activities, you will need to consider whether there are similarities that may exist between the products or services, the customers, suppliers and the employees of any previous or ongoing business and the new business.
Your business will not be considered to be new and therefore won't qualify for the NICs holiday if any of the following apply:

• at any time in the six months leading up to the start of this business, you carried on another business and the new business consists (or mostly consists) of activities that were undertaken in the other business
• you begin to carry on a business as a result of a transfer of another business and the activities of the new business (or most of them) were previously carried on in the other business
• you begin to carry on a business and before the business starts you enter into an arrangement to take on an existing business or part of an existing business at some point during the period of the NICs holiday

The meaning of “most of them” in this context means the greater part or the majority of the activities.

Key Tax Dates Confirmed

HM Treasury has posted the following forward announcements:

29 November 2010 - Chancellor will make his Autumn Statement to parliament (a PBR in sheep's clothing!)

9 December 2010 - Government will publish draft clauses for Finance Bill 2011.

At the same time the Government will publish a formal response or update on current consultations:

• Simplification of corporate capital gains for companies
• Pensions annuitisation
• Furnished Holiday Lets
• And a number ofareas relating to HMRC's powers.

23 March 2011 - Chancellor George Osborne has confirmed the Budget will take place on Wednesday 23 March 2011

List of All UK Tax Reliefs

I added a free download to the Landmark Resource Centre yesterday, the spreasheet issued by HM Treasury that lists all 1,042 UK Tax Reliefs.

Just click on title of this post...

Apparently George is reviewing the list, no doubt with an eye on repealing certain reliefs to increase his tax take!

Give away income live on capital

Came up with the following idea when researching IHT planning for a client. Basically the tax payer has ring-fenced a significant block of capital that he intends to leave to a charity. The capital is invested and produces an income that is taxable. (He pays tax at 50% on his marginal income.)

We are discussing the possibility of donating the annual income to the charity under gift aid and using capital to replace the income. In this case there are no CGT complications in reducing the capital sum each year.

Overall charity gets more and HMRC gets less!

Revenue and Customs Brief 44/10 - VAT now recoverable entertaining overseas customers

HMRC's Business brief 44/10, published this month, sets out the scope for recovery of VAT input tax on entertaining overseas customers. Click on title of this article to access the report.

Tax relief on pension contributions - are we better off?

This month I have included an article for clients about the proposed changes to the rules regarding tax relief on pension contributions in the Uktaxworld newsletter. Readers may be interested in the following comments on the article sent to me by Nigel Moon of Reeves of Canterbury.

" ... whilst the £255k annual allowance is reducing, there are the anti-forestalling provisions currently in place that mean that (despite the £255k) higher rate tax relief for many people could be restricted currently to contributions as little as £20k ....

Under the proposed rules, higher rate tax relief will I believe be available on the £50k (though nothing on the excess, indeed there will the horrible excess charges) so in terms of tax relief some/many may be better off under the new rules.

With regard to the "spike" you mention, the draft legislation indicates that if someone belongs to a pension scheme in the three preceding years but has not paid up to the £50k limit then he can use the shortfall in the later year i.e. he could pay up to £200k if nil paid (though a scheme member) in the earlier years - or say £140k if he'd been paying £20k pa.

This latter seems to be producing a bit of a windfall to some - I think this might be the point referred to in a recent FT article - in that if someone had been paying £20k from 2008/09 to 2010/11 for example (in latter years to keep higher rate tax relief) then he can make up the shortfall and get relief in 2011/12 by paying £50k + 3 x £30k.

Of course, all draft thus far ...

Tax on UK flights up by max 55% today

Click on title to read industry commentary...

Child benefit claw back may be unenforceable...

Take a look at the article posted to the Wall Street Journal blog, of all places, that opens up an interesting debate on the published, Coalition intent to claw back child benefit from higher rate families. Click on the title to read the full article...

Swiss bank accounts!

It would seem that the powers that be are on the brink of a remarkable climb down in their proposed fishing expedition to find out which UK nationals have Swiss bank accounts, determine the interest missing from their UK return and hammer them for tax, penalties and interest.

In a nutshell:

1. The UK will grant a complete tax amnesty to holders of Swiss acounts - no tax to pay on interest credited.
2. In future the Swiss authorities will have the power to determine and levy a withholding tax on interest credited to UK nationals. I assume the Revenue will stay in Switzerland?

In other words it would appear that the UK has just done the following:

1. Granted Switzerland the right to set the effective higher rate of tax on investment income in the UK;
2. Granted Swiss banks an everlasting competitive advantage over UK banks – because it will pay all higher rate tax payers to bank in Switzerland henceforth;
3. Denied the UK tax authority the right to make enquiries of their own choosing about the tax affairs of a British person – the Swiss now being granted the right to decide how many enquiries may be made and whether they are appropriate or not.

Which sort of rankles when you consider, for example, the reduction in tax relief in the UK for pension contributions next year, et al...

CIOT discussion, notification of tax schemes

Came across the following comments as part of a CIOT article on IHT avoidance crackdown:

"Following consultation, the March 2010 budget announced a package of five measures to strengthen and improve the Disclosure of Tax Avoidance Schemes (DOTAS) regime. Briefly these measures are:

• A new 'trigger point ' for the disclosure of actively marketed schemes – the point at which a promoter first communicates information (including information about the expected tax advantage) about a substantially designed scheme to a third party with a view to obtaining clients for that scheme;
• An information power which gives HMRC the power to require a scheme 'introducer' (an intermediary whose function is to introduce clients to the promoter) to identify the promoter;
• Increased penalties for failure to comply with a disclosure obligation;
• A new requirement for promoters to provide HMRC with periodic information about clients who implement a notifiable scheme; and
• Revised and extended 'hallmarks' (descriptions of schemes requiring disclosure).

Scary stuff...

Junior ISA'a announced

A new tax-free savings account for under 18's is to replace the scrapped child trust fund (CTF) scheme.

The Treasury said the Junior ISA would be available from autumn 2011. As with the adult ISA the Government will not contribute and there will be an annual cap on the amount that can be paid in - details to be announced.

R & D Relief - expert support

This week I sat down to write the UKtaxworld newsletter for November and decided to include an article on R & D Relief. In doing so I realised that I had an ambivalent attitude to the topic. Firstly it's an incredible opportunity to provide much needed funds to clients involved in R & D (especially the surrender of the Relief for the 14% tax credit if losses are created and cannot be otherwise utilised). Secondly it is a rather complex application process! Firms who have clients that may benefit from the relief, and do not have time, resources or skills to deal with the application in house, could consider a joint venture approach. Click on the title of this posting and contact Mark Evans or his partner at R & D Tax and Grants Ltd. And if you remember mention that you have made contact via this blog.

iXBRL accounts and signatures

HMRC have confirmed that accounts submitted by iXBRL are only required to have a typed signature. The typed signature should mirror a signed copy that needs to be keep on file to demonstate compliance with Companies Acts; there is no HMRC requirement to submit accounts with "wet signatures".

Losses carryback deadline approaching

The temporary extension of trading loss carry back, to three years, ends 23 November 2010. s23 and schd 6 FA 2009. The relief applies to losses incurred in accounting periods ending between 24 November 2008 and 23 November 2010.

Under used resource - your staff!

I have recently added a handout to the Landmark Resource Centre that will have your staff lining up to help develop your practice. Click on the title of this posting, login to our Resource Centre and download the document with my compliments.

64-8 Warning...

If you advise client's on Tax Credits issues you may want to look out your 64-8. Old copies of the form do not have a check box to authorise contact for tax credit purposes. If your form does not authorise you will need to submit a second, supplementary form. As if you did not have enough to do!! Click on title of this posting to download new form 64-8.