The Result is in …..

We have opened the right envelope!

Congratulations and thank you for all who correctly entered our ‘Twelve Days of Christmas’ Quiz.  Eaves and Co are pleased to announce that the winner is Catherine Rogers of Ashford Rainham Ltd.  David Stebbings recently handed over her prize.

 

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For completeness here are the answers:-

 

The name Santa Claus evolved from Sinter Klass, a nickname for Saint Nicholas. What language is Sinter Klaas? Dutch

 

What fruit is traditionally used to make a ‘Christingle’?  Orange

 

Who ‘Rattle and Hum’ along to Angel of Harlem?  U2

 

Which carol is about a 19th Century Duke of Bohemia? Good King Wenceslas

 

“Christmas won’t be Christmas without any presents” is the first line from which literary classic by Louisa May Alcott? Little Women

 

Christmas Island, in the Indian Ocean, is a territory of which country? Australia

 

In the song ‘The Twelve Days Of Christmas’, how many swans were a-swimming? Seven

 

The North Pole, said to be Santa’s home, is located in which ocean? Arctic Ocean

 

The name of which of Santa’s reindeer means ‘Thunder’? Donner

 

Marzipan is made mainly from sugar and the flour or meal of which nut? Almond

 

Which traditional Christmas plant was once so revered by early Britons that it had to be cut with a golden sickle? Mistletoe

 

Who was Jacob Marley’s business partner?  Scrooge

 

The initial of each answer spells out DOUGLAS ADAMS.  The quote attributed to him on our website is ‘I’m spending a year dead for tax reasons’.

We are not, so look forward working with you again this year.  Remember the new tax year starts on 6 April.

Corporation Tax and VAT Loans

Whilst as tax advisors we tend to focus on [what we think are] interesting technical tax issues and considering how much should be payable having calculated that answer. Another possible difficulty with tax is the practical one of cash flows and actually paying it!

You may or may not be aware that it may be possible to obtain a loan to spread the cost of Corporation Tax or VAT bills to free up working capital. For example, with a Corporation Tax loan you could spread the cost over a 12 month period rather than paying all in one go.

We are not able to advise directly on such funding, but if you are interested in such opportunities for your clients, please contact Jonathan Smith at JGS Finance (http://www.jgsfinance.co.uk/) on 07778 523 499 and he will be happy to assist.  Please use reference EVL when you make contact with Jonathan.

Jonathan Smith (Head of JGS Finance) is a Chartered Accountant who I know and have trusted over many years of working with him.

Paul Eaves

The Season of Goodwill is (hopefully) not ended forever, but certainly the Tax Season is Upon Us – “Joseph also went up from Galilee…into Bethlehem to be taxed with Mary his espoused wife, being great with child” (Luke 2:4-7)

As the above quotation shows, paying taxes is nothing new.  As we approach the end of January and the deadline for filing and pay tax for the 2014/15 tax year we write to remind you that Eaves and Co are here to help.

Whether you are an individual struggling to understand your tax return form, or have not registered for HMRC’s Online Services in time, or an accountant needing extra assistance with a complex tax issue, we can help and hopefully ensure you are able to file before the 31 January deadline.   We have specialist extensive professional experience and expertise to deal with those knotty technical problems, plus relevant software and access to HMRC Online filing, so can file returns online at short notice.  All this with friendly service!

On another topic, and as a reminder for clients who are having difficulty raising finance, you may recall from previous messages that we have a contact who is involved in raising finance for all sorts of different purposes. Whatever weird and wonderful schemes your clients wish to consider – talk to Jonathan Smith on (Tel: 07778 523499) or (email jgsmith@jgsfinance.co.uk).  Quote reference ‘EVL’.  His website is www.jgsfinance.co.uk/asset-leasing-contract-hire-sale-leaseback.  This includes arranging loans to pay unpleasant tax bills.

As a reminder, Jonathan Smith qualified as a Chartered Accountant with Arthur Andersen but now works solely in raising finance. He is a man I have worked with over many years, and as a former partner of mine, a man who I trust and can recommend highly.

Client Funding

With the recent comments in the Yorkshire Post about the potential risk for a ‘2 tier economy’ with Northern prosperity lagging behind that of the South East, clients may still have difficulty raising finance. Jonathan Smith is now involved in raising finance for all sorts of different purposes. Jonathan qualified as a Chartered Accountant with Arthur Andersen but now works solely in raising finance. He is a man I have worked with over many years, and as a former partner of mine, a man who I trust and can recommend highly.

Whatever weird and wonderful schemes your clients wish to consider – talk to Jonathan on (Tel: 07778 523499) or (email jgsmith@jgsfinance.co.uk) quoting reference EVL. His website is www.jgsfinance.co.uk/asset-leasing-contract-hire-sale-leaseback.

Taxpayers Hunted and Lynched

The Blog this week could be described as dark tales from the Brothers Grimm entitled “What happens to those who ignore HM Revenue and Customs…”

Do not be too scared!  Whilst the Brothers Grimm tales tend to have awful endings – as do the stories of the poor souls in the cases described in the Blog – they are the ones who have ignored the warnings and neglected dealing with HMRC with due and proper respect.  For years many seem to get away with it.  However, the final conclusion seems inevitable to Observers.  Neglect means ignoring that invariably the Mills of God (and HMRC) may grind slowly, but they grind exceedingly fine.  It is prudent to take professional advice before the sack of corn representing your life is thrown down the hopper into the grinding wheel.

Looking at likely outcomes those who take advice from their properly qualified professional advisors generally come out far better.  Prior neglect will cost – often significantly – but making disclosure and then negotiating a fair deal makes personal and economic sense.  Just compare getting matters settled to being sent to jail or having your assets seized under the Proceeds of Crime Act, let alone the miserable anticipation of waiting for it to happen.

3 recently reported cases exemplify the lesson.  Stephen Douce only declared a low household income, where in fact he was earning far more.  The under-declarations resulted in a loss to HMRC of VAT, income tax, NIC and tax credits.  He was sent to jail.

Mr Lynch was discovered to have failed to declare a particular source of income.  The Courts held that the degree of suspicion was sufficient for there to be ‘discovery’ under S29 TMA 1970 and for procedures to be taken under the Proceeds of Crime Act, reflecting gains obtained illicitly over the preceding 20 year period.  Unexplained deposits and credit card payments from unexplained sources amounted to sufficient evidence of undeclared income.  The tax assessments stood.

The Hunt case shows financial irregularities can have other long term consequences.  Again, taking proper advice regarding prompt disclosure may well have helped Mr Hunt, a Financial Advisor, avoid having his new business tainted because he was deemed not to be a ‘fit and proper person’ under FSMA regulations.  He lost in court, even though he argued his original criminal conviction ought to be ‘spent’ because it took place in 1993 so was over 20 years ago.

The advice to clients is take proper advice and then act promptly.  Ignore HM Revenue and Customs at your peril!  The alternative consequences are likely to be costly and last most of a lifetime.

If you need further advice call us; 01704 548698 or 0113 2443502.

IR35 – New Tests for Personal Service Companies

IR35 TestsFollowing a review of the effectiveness of the IR35 rules, there is to be new guidance from HMRC including what is described as 12 business entity tests.

Points are allocated to each test and if a contractor scores less than 10 points there is a high chance of them being caught by IR35; if they score more than 20 points there is low risk.

 The headings for the tests are set out below:-

  • Business Premises Test
  • PII Test
  • Efficiency Test
  • Assistance Test
  • Advertising Test
  • Previous PAYE Test
  • Business Plan Test
  • Repair at Own Expense Test
  • Client Risk Test
  • Billing Test
  • Right of substitution test
  • Actual substitution Test

 For further advice regarding IR35 contact Eaves & Co on 0113 2443502

HMRC Release Tax Appeal Success Details

HMRC have recently published figures detailing the success rate of their internal review process compared with taking cases to tribunal.  Taxpayers can ask HMRC for an internal review if they are not satisfied with a decision of the Inspector, prior to taking it to the tax tribunal.

 There were some interesting figures revealed:

 On internal review – 44% of non-penalty cases were overturned, whilst 75% of VAT penalty cases and 35% of non-VAT penalty cases resulted in a cancelled or reduced penalty.

 This compares to a success rate at the tribunal for taxpayers of only 21% (according to HMRC).

 HMRC also state that only a ‘small minority’ of their decisions are challenged, meaning many incorrect decisions could remain in place.

These figures show that requesting an internal review can be a cost-effective step for taxpayers before the need to resort to the tribunal, and should be considered more often.

Penalty !

The tax return season for 2010/11 returns is due upon us.

This year though the rules for penalties have changed
significantly:-

Late Filing

  • Initial £100 late filing penalty still exists
  • From three months late, additional daily penalty
    of £10, up to a maximum of £900
  • From six months late, additional penalty of 5%
    of the tax due (de-minimis £300)
  • From twelve months late, additional 5% or £300
    penalty

Late Payment

5% surcharges will apply at:-

  • 30 days
  • 6 months
  • 12 months

If you’re an accountant, when will you start telling your
clients?

Eaves & Co, Tax Specialists, Leeds, West Yorkshire

HMRC Trialling Email Correspondence

HMRC have put in place a new scheme in order to test whether emails can be used more effectively for communicating with taxpayers.

 A pilot scheme has begun covering Corporation tax, VAT and employer-compliance issues.

 There is currently no intention to make email communications compulsory, but it may enable quicker responses in some circumstances.