Archive for December, 2015

Donald’s Blog

Thursday, December 17th, 2015

Please click here  to read Donald’s latest blog on the Scottish spending review.

Tax helpline for those affected by recent flooding

Thursday, December 17th, 2015

Readers affected by the recent floods, particularly in the north-west of England, should take note that HMRC has created a support line. If your business was affected you should call HMRC as they will be sympathetic to requests to extend tax payments while the clean-up operation continues.

The helpline will enable anyone affected to get practical help and advice on a wide range of tax problems they may be facing. This includes the following issues:

  • agree instalment arrangements where taxpayers are unable to pay as a result of the floods
  • agree a practical approach when individuals and businesses have lost vital records to the floods
  • suspend debt collection proceedings for those affected by the floods
  • cancel penalties when the taxpayer has missed statutory deadlines

The helpline is in addition to other HMRC telephone contact numbers.

The helpline is 0800 904 7900. Opening hours are Monday to Friday, 8.00 am to 8.00 pm; Saturday and Sunday, 8.00 am to 4.00 pm, excluding bank holidays.

Advice has also been posted by the British Insurance Brokers’ Association on insurance claims processes. They say claimants should:

  • Contact their insurer or insurance broker and inform them before conducting any emergency repairs
  • Leave dangerous work such as fixing the roof to professionals
  • Turn the power off, if safe, in a flooded home
  • Ensure homes are safe and secure before leaving to prevent further loss
  • Keep damaged items for evidence of a claim, including samples and photos of carpets, and receipts for any emergency work

Year End Tax Review

Tuesday, December 15th, 2015

Please click here  to read our 2015-16 Year end tax review.

Draft finance bill clauses published

Tuesday, December 15th, 2015

HMRC has issued the following information regarding the publication of draft clauses of the Finance Bill 2016:

New draft tax legislation has been published (9 December 2016) to implement policies published at Summer Budget and Autumn Statement 2015.

It has also published new tax consultations and responses to policy consultations which took place over the past year.

Finance Bill 2016 continues the government’s commitment to stop tax evasion, tackle tax avoidance and ensure companies pay their fair share of tax through:

  • clamping down on tax avoidance and ensuring multinationals pay their fair share of tax by stopping the use of hybrid mismatch arrangements
  • introducing a new tougher anti-offshore tax evasion regime, which will include new criminal and civil sanctions
  • introducing new measures to improve large business tax compliance, including a new requirement that large businesses publish their tax strategies and special measures powers to tackle a minority of large businesses that persistently engage in aggressive tax planning

One of the main priorities of this government is to ensure the British tax system is simpler and more effective for taxpayers.

This Finance Bill will build on the excellent progress made under the previous Parliament by establishing the Office of Tax Simplification (OTS) on a statutory basis and outlining its core functions.

To support hardworking savers, Finance Bill 2016 will implement a personal savings allowance that will mean as of 6 April, 95% of taxpayers will pay no tax on the first £1,000 of savings income if they are a basic rate taxpayer, and the first £500 if they are a higher rate taxpayer.

Finally, our vital creative sector will be further benefit from an increase in the rate of tax relief orchestras can claim to 25% of qualifying expenditure.

David Gauke, Financial Secretary to the Treasury, said:

The government is committed to creating a tax system that is easy to understand, simple to engage with and hard to evade. It is essential that it successfully supports investment in business, as well as those who work hard and save.

That’s why I am pleased to be announcing draft legislation that will help us deliver on this commitment to taxpayers.

The consultation on the draft legislation will run until Wednesday 3 February, with the final details being confirmed in Budget 2016 and finally introduced in Finance Bill 2016.

Readers might be interested to learn that the draft clauses and explanatory notes publication for the Finance Bill 2016 runs to over 600 pages…

Training for employees and franchisees

Friday, December 11th, 2015

Employers who pay for their employees and sub-contractors to attend training courses may be interested in the following directive from HMRC, issued July 2015.

The cost of food and accommodation provided for employees attending training courses for the purpose of the trade is not disallowable under the legislation. However, if food and accommodation are provided as part of training given to any other person free of charge then the cost is entertainment and is disallowable.

Traders may provide training for people who are not their own employees. Examples would be self-employed sales staff or commission agents. Although the training itself (such as the cost of speakers or hire of a room) is an allowable expense, any food or overnight accommodation provided for the attendees is disallowable entertainment.

This principle was confirmed in the VAT case of Customs and Excise v Shaklee International, where the point at issue was the food and hotel costs of residential courses organised by a sales organisation for its distributors. Similarly, the cost of any food or overnight accommodation provided at recruitment or selection events for prospective self-employed sales staff or commission agents is disallowable entertainment. This is because, prior to their selection, they are unlikely to be directly involved with the trade, are not under any obligation to provide, and are in fact not providing, proper and sufficient quid pro quo.

Traders may also provide training for their franchisees. In many such cases the (usually lump sum) payment made for the franchise secures a commitment by the franchiser to provide training. In this event, the training is not provided free of charge and any food and accommodation provided is part of the cost of the training and is not disallowable under the legislation. However, any hospitality over and above that which is included in the terms of the franchise is disallowable under the legislation.

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