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The Chartered Institute of Taxation (CIOT) has taken exception to (part of) the latest VAT Notice 733 ("Flat Rate Scheme for Small Businesses"): they have thrown their weight behind the issue of whether or not "Flat Rate VAT" should be applied to bank interest received What is the VAT Flat Rate Scheme? The VAT Flat Rate Scheme is supposed to simplify the operation of VAT for small businesses: it doesn't reduce the amount of VAT that a business charges to its customers, but instead of having ... Continue Reading

HM Revenue & Customs (HMRC) has admitted that it 'may' be unable to issue all of the PAYE payment booklets for 2011/12 in time for the first payment, due 19 May 2011. (22 May for electronic payers - but note that this is a Sunday so funds must have cleared on or by 20 May in order not to be treated as 'late' for the purposes of possible penalties and interest). HMRC would like employers to pay electronically (and this is their preference anyway) but if employers need or prefer to pay by post, ... Continue Reading

Steve Allen of VAT Advisers provides a practical VAT tip for company directors   Introduction - Receipt Not in the Name of the Company? There are occasions where the director of a business will need to pay for business expenditure out of his or her own pocket. For example, you could be away on a trip and see a shiny new must-have piece of equipment at a knock-down price. You don’t have your company card with you, but do have enough cash in your personal account, so you buy ... Continue Reading

Steve Allen of VAT Advisers Ltd highlights a selection of recent VAT cases. Tribunal Says that Cashbacks are NOT a Separate Supply This is an interesting case concerning the VAT treatment of ‘cashback’ payments. The Appellant, a home improvement company, decided to boost its sales by introducing a ‘cashback’ scheme, which was available to customers who took out a loan to pay for part of their home improvement. The Appellant entered into an agreement with a ... Continue Reading

Peter Arrowsmith FCA highlights a selection of NIC matters, and provides tips on filing Employer End of Year Returns for 2010/11 (P35 and P14), and on securing a contributory record for state benefits purposes. Tip of the Year (Bonus Tip!) Employer End of Year Returns for 2010/11 (P35, along with all P14s) need to be filed - electronically in virtually all cases - on or before 19 May 2011. The previous seven-day concession in ESC B46 no longer applies, even to those few cases that are ... Continue Reading

LITRG reminds of tax and tax credits issues to consider and action you might need to be taking this month. Back to business With Easter, the Royal wedding and May Day having fallen in quick succession, we may all be in a festive and holiday mood. But now that the celebrations have died down, we have to turn our attention back to more sobering matters – tax and tax credits. We are of course now in a new tax year, but we cannot quite yet put 2010/11 behind us. Tax 1. ... Continue Reading

Mark McLaughlin CTA (Fellow) ATT TEP looks at a recent case on the distinction between trading and investment and tax implications. Introduction The distinction between property trading and property investing is an important one. For example, individuals trading in properties may be eligible to claim Entrepreneurs' Relief on a disposal of the business. In addition, if the trade incurs losses, the individual may be able to offset those losses against general income. On the other hand, ... Continue Reading

Steve Allen of VAT Advisers Ltd comments on recent figures showing that more than half of VAT Penalties imposed by HM Revenue & customs are overturned on appeal Introduction In January 2011, the Financial Times published an article which reported that more than half of the VAT penalties issued by HMRC had been overturned on appeal. This was according to a recent study which indicated that HMRC’s penalty review procedure introduced in 2009 was making it easier to query their decisions. What ... Continue Reading

The Provincial Tax Practitioner recalls a recent problem with PAYE demand letters from HMRC. Introduction - Threatening Letter from HM Revenue & Customs A client rang us to say he had just received a nasty letter from HMRC requesting payment of 2010/11 overdue PAYE. He naturally wanted to know why he was paying us his hard-earned money for failing to ensure that he complied with his PAYE obligations. After all he was quite capable of doing that himself for free. How much were HMRC ... Continue Reading

LITRG look at how recent tax, NI and tax credits changes may affect low to middle-income earners taking childcare vouchers from their employers in exchange for a reduction in salary. Background For the last few years LITRG have been warning that if you were on a low or middling income and able to recoup most of your childcare costs through tax credits, it would usually be to your disadvantage to start receiving childcare vouchers from your employer in exchange for a reduction in salary. ... Continue Reading