UK Tax Specialist’s Blog

How to Value Your Business

Posted by on Oct 19, 2017 in Personal Finance | Comments Off on How to Value Your Business

“How much is my business worth?” is the one question that I’ve been asked several times recently, mostly by clients approaching the big ‘R’, the date they’ve set for their retirement. The correct answer, as you might have guessed, is the same answer as when an Estate Agent is asked to value a house, or a car dealer the value of your vehicle; it’s worth as much as somebody is prepared to pay for it. There is no single formula that can be used to accurately value every private business due to two...

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Latest news from MJ&Co Accountants

Posted by on Oct 12, 2017 in Self Assessment | Comments Off on Latest news from MJ&Co Accountants

As you may have noticed, winter is drawing ever closer and its approach heralds the beginning of this year’s ‘Tax Return Season’. All accountants, and I suspect many taxpayers, view this annual event in pretty much the same way as Jon Snow and the Night’s Watch viewed the approaching winter in Game of Thrones. In their case it was the army of the living dead, the ‘white walkers’ which in many taxpayers’ minds equates to the serried ranks of the tax inspectors. Tax Return Deadlines For those of you who prefer the tactile nature of the...

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HMRC Lose to Charity at PEC VAT Tribunal

Posted by on Oct 6, 2017 in Business Tax, VAT | Comments Off on HMRC Lose to Charity at PEC VAT Tribunal

This week’s Blog is a case of HMRC pec-king at a small charity and ending up with a bloody nose. Reason for the Tax Tribunal The small privately funded charity ‘Will Woodlands’ was involved in forestry and acquired parcels of land to establish woodlands. Its charitable aims are stated being “conserving, restoring and establishing plants and all forms of wildlife in the United Kingdom and securing and enhancing public enjoyment of the natural environment in the United Kingdom.” The Tribunal held that the charity’s primary objective is to...

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Employees to face unexpected back-dated tax on loans

Posted by on Sep 22, 2017 in Business Tax, Personal Tax Planning | Comments Off on Employees to face unexpected back-dated tax on loans

In the Budget 2016 the Chancellor included proposals to impose a retrospective tax charge on certain loans to contractors and employees, which remain outstanding on 5th April 2019. Not surprisingly, this proposed tax charge was seen by many as both unfair and retrospective. Many things have changed in the world since then and both political and judicial decisions have been made that many observers feel would justify a review of the original plans. However, when the draft loan legislation was re-published on 13 July 2017, it looked virtually...

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Five Ways To Avoid Or Mitigate Tax Penalty

Posted by on Sep 14, 2017 in Business Tax, Self Assessment, Tax Investigations | Comments Off on Five Ways To Avoid Or Mitigate Tax Penalty

Today I thought I would share with you a number of ways in which a taxpayer can appeal against a penalty notice for carelessness, where the error has been accidental rather than a deliberate error. In this Blog I have assumed the taxpayer will have co-operated as fully as possible with HMRC in establishing the correct tax position and has made all necessary disclosure following the detection of the error. This reduces the scope of the penalty to an amount between 15% and 30% of the potential lost revenue (PLR). Tax Penalty Mitigating Factor...

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Tax Simplification

Posted by on Sep 7, 2017 in Opinion | Comments Off on Tax Simplification

‘Attempting tax simplification is like painting Brighton Pier while someone else is extending it to France’ is a well-known quote by the late Geoffrey Howe in relation to tax reform. But John Whiting of the Office of Tax Simplification (OTS) adopted it recently in a speech describing the work his office was doing and what they were attempting to achieve. Why bother Simplifying Tax? Whiting’s arguments for attempting to simplify the tax system included: It would make tax easier to understand by the taxpayer Tax would be easier to deal with by...

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Common errors made by businesses: VAT Disbursements

Posted by on Aug 24, 2017 in Business Tax, VAT | Comments Off on Common errors made by businesses: VAT Disbursements

VAT on Disbursements A common error made by many businesses, is to believe that their own expenses for example rail fares, legal fees, mileage and hotel costs to name but a few, will qualify as disbursements when re-invoiced to their customers. This is however not correct, as under HMRC tax law, a disbursement is an expense that belongs to the supplier’s customer rather than the supplier. For example, when a solicitor deals with a house purchase on behalf of a client, he or she will often pay for expenses that belong to the client, e.g. local...

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HMRC Hacked: What Might’ve caused The Sunday Times To Think That?

Posted by on Aug 17, 2017 in Opinion, Personal Tax Planning | Comments Off on HMRC Hacked: What Might’ve caused The Sunday Times To Think That?

HMRC have responded to a recent report in the Sunday Times that criminals have hacked into taxpayers’ online tax returns and have flatly denied that it’s happening. What Might cause The Times Think HMRC have been hacked? The Sunday Times highlighted an incident involving Jackie Annesley, the Sunday Times Style Magazine’s editor, who alleged criminals had falsified her tax return in order to steal £1,826. Annesley received notification concerning suspicious activity occurring on her self-assessment account. After the hacking...

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The VATman can go back 20 years!

Posted by on Aug 10, 2017 in VAT | Comments Off on The VATman can go back 20 years!

Background Compulsory VAT Threshold The case of Ahmed Rasouli (t/a Euro Foods) v HMRC was ostensibly about whether the taxpayer registered for VAT on the correct date. The starting point of any VAT registration challenge is to determine the date when a business is obliged to register, i.e. when the compulsory registration threshold has been exceeded. Facts: Taking Over a Going Concern Euro Foods traded as a convenience store selling food, household products, alcohol and tobacco. Rasouli took over the business of Euro Foods on 1 April 2012,...

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Working Tax Credits Explained

Posted by on Aug 3, 2017 in Family Tax Credits | Comments Off on Working Tax Credits Explained

Don’t be fooled by the name: Working tax credits are little to do with tax. Unlike tax “reliefs”, people need not be paying any tax to receive tax “credits”. Tax credits are essentially a means of re-distributing income by paying money to working people on low incomes or families raising children and are operated by a specialist section of HMRC (The Tax Credit Office). If you’re eligible, you can get it irrespective of your employment status and you will get a basic element plus extra elements, depending on your...

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