The Construction Industry Scheme remains a difficult beast with which to comply.
Here at Eaves & Co in Leeds we are dealing with a case where tax was not deducted by a contractor on a certain category of payment to its subcontractors.
The case has been ongoing for a good of time and we have been introduced to mitigate the CIS tax exposure to the contractor. Our well considered case that the contractor took “reasonable care” in implementing the CIS has been put to HMRC. We await to hear whilst still claiming evidence that the subcontractors have actually paid all relevant taxes, which is the second line of defence.
Reasonable excuse is a well tested path in CIS terminology with a number of recent cases taken to Tribunal in attempt to avoid the consequences of non-CIS compliance. We expect our case of reasonable care to be thoroughly tested by HMRC.
Liechtenstein Disclosure Facility (LDF): A Progress report on a worldwide facility
According to recent information provided by the Tax Faculty of the Institute of Chartered Accountants in England & Wales (ICAEW) the new disclosure opportunity has yielded about £82 million from approximately 5,500 disclosures. This works out at an average of £14,500.
Given the number of UK residents HM Revenue & Customs believe to have offshore assets, the numbers taking up the generous terms offered by the Liechtenstein Disclosure Facility seem small.
An explanation for this may lie in the fact that the LDF remains misunderstood.
Many people do not realise that from December 1, 2009, anyone with any investments or assets in any other offshore location is also able to participate in the LDF if they move some or all of those investments into Liechtenstein.
HMRC has said that it will not offer such favourable disclosure terms as the LDF again so there really is no better time than now to disclose any offshore assets.
The view here at Eaves & Co Leeds is that this is a worldwide facility worthy of consideration.
If you require any tax advice regarding a Liechtenstein Disclosure call our Leeds office on 0113 244 3502.
The recent changes in rules on Capital Gains Tax and Entrepreneurs’ Relief mean that it is more important than ever. With the main rate of CGT now 28% and the rate on assets qualifying for ER remaining at 10%, the benefit of attaining ER is increased to 18% from the previous 8%. Coupled with the lifetime limit increase to £10m, the overall lifetime value of ER is a maximum of £1,800,000; a significant increase on its initial value of £80,000.
It is therefore more important than ever to fully consider the availability of ER on transactions and ensure that all the conditions are met.
HM Revenue & Customs have produced a toolkit for identifying associated companies and proving whether small company rates or marginal small company relief (MSCR) is due.
Much commentary has suggested that the toolkit should be used every time the small company rate/MSCR is claimed with the checklist incorporated into the procedures of all accountancy firms so that the issues brought up are discussed annually with the directors of companies.
HMRC have stated that penalties could be applied where such rates are applied incorrectly and it is therefore important to ensure that the correct procedures are followed. Having the completed checklist on file would be an advantage, but it must also be clear that someone has appropriately considered the circumstances.
There are proposals to change the rules on associated companies which are currently in consultation. The proposed new rules look at commercial interdependence rather than the current basis looking strictly at control.
The toolkit can be found at www.hmrc.gov.uk/agents/toolkits/mscr.pdf