In view of the positive feedback to my Blog on questions I’ve received, I thought I would share a few of more of them with you
I cover Five topics in this blog, please click a topic header below to go directly to that question and answer:
Question: A few years ago I bought a two-bed holiday apartment in Tenerife and let it out to friends and business acquaintances for a few weeks a year for a cheap rent of £150 a week. The total for the year is around £1,500 and I only really do it to cover the community fees, electricity and water charges, do I have to tell the taxman?
Answer: Strictly speaking yes, but as you do have legitimate expenses, it would be relatively easy to show that you haven’t made a profit. Personally, I wouldn’t get involved with HMRC but make sure that you keep your receipts, just in case.
Question: My small staff use their computers pretty much 8 hours a day and one employee has complained of eye strain, if I pay for her eyes to be tested, is it tax deductible?
Answer: Yes, in fact under Health and Safety at Work regulations you may have to! As long as your employee uses a VDU as part of their normal duties then no chargeable benefit will arise on the cost of the eye examination, assuming all employees are offered the same checks. As an employer you may also provide your employees with an annual medical check-up or health assessment, without the employee incurring a benefit in kind charge.
Question: I am a sole trader and employ a couple of part time staff in a catering business. I have registered them all on the RTI system with HMRC, they pay no tax/NI as their pay is small. I also have a 19yr old Karen, who is on a gap year, I forgot to put her on RTI and when I phoned HMRC they said I would have to re-do all of my RTI reports for the year, including all my employees’ details. I’ve had problems with RTI over the year and I didn’t want to push my luck by deleting everything and starting again.
My question is, as Karen’s total pay is well under her personal allowance (£3,380), can an I still claim for her wages as an expense even though I haven’t recorded them in RTI or will I get a slap on the wrist if HMRC checks
Answer: In a utopian world you should go through the laborious process of re-entering your RTI for the year. However as we do not live in the perfect world, my own opinion would be for her to give you an invoice for the total of £3,380 and this will tally with your expenses. It is unlikely that any enquiry would pick up the monies paid, but you would have evidence of the payments being made in a worst case scenario
A Cute Business
Question: I received an email from Acute Domains pointing out that they have been asked to register 7 domain extensions for a domain similar to my own. They go on to say that after checking, they found that these 7 names were similar to mine and under their fair usage policy, are obliged to offer me first refusal. When I checked they were all exactly like mine save for the extensions. Is this some sort of con?
Answer: Whilst what Acute are doing is not fraudulent, it appears to be a marketing ploy and is something that has happened to a number of my clients. My advice is to politely refuse and the problem is likely to go away.
Question: I was unable to file a VAT return for quarter to December 2013 and after speaking with the VAT office they said that this was due to being unable to verify our address (We had moved offices and had set up redirection with the PO). We were asked to complete a change of address form and this was sent to HMRC who confirmed receipt with new VAT certificate.
I’m now trying to file a 6 month return to March 2014 and pay my VAT, but can’t as HMRC/VAT forgot to remove the block on the VAT account and they’ve even removed my business bank details, so I can’t pay by DDM or submit the return, what can I do?
Answer: Blocking the submission of returns and turning away money is bizarre and is just another item on the list of HMRC’s incompetent admin mistakes. I would phone up the Vat office again and tell them you wish to make a complaint, you will then be put through to a manager who can and will (they just hate complaints) sort the problem out for you.