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A Trillion Euro’s lost to tax evasion in the EU
A Trillion is a huge amount, its almost too large to imagine.
Here is the latest campaign video
http://ec.europa.eu/avservices/video/player.cfm?ref=I080915
As part of the intensified battle against tax fraud, the Commission launched on 6th February 2014 the process to start negotiations with Russia and Norway on administrative cooperation agreements in the area of Value Added Tax (VAT). The broad goal of these agreements would be to establish a framework of mutual assistance in combatting cross-border VAT fraud and in helping each country recover the VAT it is due. VAT fraud involving third-country operators is particularly a risk in the telecoms and e-services sectors. Given the growth of these sectors, more effective tools to fight such fraud are essential to protect public budgets. Cooperation agreements with the EU’s neighbours and trading partners would improve Member States’ chances of identifying and clamping down on VAT fraud, and would stem the financial losses this causes. The Commission is therefore asking Member States for a mandate to start such negotiations with Russia and Norway, while continuing exploratory talks with a number of other important international partners.
http://ec.europa.eu/taxation_customs/taxation/tax_fraud_evasion/missing-part_en.htm
steve@bicknells.net
Employment Allowance
Up to 1.25 million businesses and charities will benefit from it – and around 450,000 will not have to pay any Class 1 NICs at all in 2014-15.
On 6 March, HMRC sent employers an email, headed ‘Get up to £2K off your NICs bill’, highlighting the introduction of the Employment Allowance (up to £2,000 available for the tax year 2014-15 onwards) with a link to the guidance. Almost every employer who is a business or charity (including a Community Amateur Sports Club) paying employer Class 1 NICs on their employees’ or directors’ earnings will be eligible.
Employers need to claim the Employment Allowance using their 2014-15 payroll software, or HMRC’s Basic PAYE Tools.
Ruth Bulteel HMRC
5 top reasons why you need to use an MVL
Members Voluntary Liquidations have been increasing in popularity
According to the official statistics from The Insolvency Service, over the last few (financial) years the number of MVLs has been:
| 2008/2009 | 3,727 |
| 2009/2010 | 3,266 |
| 2010/2011 | 3,270 |
| 2011/2012 | 3,644 |
Since the ESC C16 change came into effect on 1st March 2012, the number increased to:
| 2012/2013 | 4,695 |
Here are my top 5 reasons why an MVL might be a good choice:
- The change in 2012 capped capital distributions on striking off at £25,000 but this cap does not apply to liquidations
- You want to retire and close your business and extract the net worth
- You created a Special Purpose Vehicle (SPV) for a specific project and the company is no longer needed
- Companies that are stuck off can be re-instated but that’s not the case with liquidated companies
- Entrepreneurs Tax Relief may be applicable meaning the capital distribution is taxed at 10%
steve@bicknells.net
Have You Heard Of The Parent-Subsidiary Directive? It Is About Tax, Who Pays It And Where.
The EU puts out its Directives and not much notice is taken until an issue drives it out for debate and scrutiny. This Directive was intended to prevent same-group enitities based in different states from being taxed twice or even thrice, yet it has been turned on its head and ignited furious debates and streams of hysterical wailing and gnashing of teeth by politicians who signed us up to the Directive, nodded all its gold-plated UK provisons through and now find it is not doing what they thought it would do.
Trade Union chieftains routinely accuse global companies of dodging taxes by trading across legal jurisdictions in exact accordance with the provisions and various national statutes based on the Parent-Subsidiary Directive. These same blockheads didn’t utter a single word of caution or advice when their political comrades devised, gold-plated, kept secret and craftily nodded through the mother of all Parliaments in the good old days when Antony Blair of that ilk ruled in conjunction with the Marxist Scotsman economist-of-note Gordon Brown, also of that ilk.
Just why the Unions should hold the present Government responsible for cross jurisdictional tax avoidance, when it is in accordance with statutes which they helped put in place, is not clear. Perhaps big Bob Crow or wee Len MaCluskie could explain their turncoat tactics in time for the Euro elections in May. If there are people in politics, the Church and high places who resent the big corporations and how they pay tax, they should have the guts and honesty to own up to their own stupidity and complicity in accepting the Directives that underpin it to this day!
Directives are issued in various formats. It is usually instructive to consult the versions issued in French and which are adopted for French domestic use. These are more likely to indicate the original true and fair intention and actual content of the Directives. It is well established that the British versions of Directives often end up almost totally different to those that are adopted by the French in their simplified format as proper working statutes and discussion documents designed to help and facilitate compliance and effect rather than to baffle, confuse and destablilise the issues they are intended to clarify and improve.
Lawyers do well out of the British Directives, Regulations and Interpretations that dog so many of our industries, commercial undertakings and ordinary people who get caught up in their toils and misrepresentations. It is time to take stock.
Service Company – Yes or No
It’s time to run your first RTI PAYE year end and you have your own limited company, how do you answer this question?
| Service Company | ‘Yes’ if you are a service company – ‘service company’ includes a limited company, a limited liability partnership or a partnership (but not a sole trader) – and have operated the Intermediaries legislation (Chapter 8, Part 2, Income Tax (Earnings and Pensions) Act 2003 (ITEPA), sometimes known as IR35). Otherwise indicate ‘No’. |
The question is now a bit more specific, which is great, because you will only answer ‘Yes’ if you have operated IR35.
steve@bicknells.net
HMRC are going to let you tell them your tax code…
It’s true, from April 2014, you can tell HMRC what you think your code should be by explaining why you think its wrong, here is a link to the HMRC structured E Mail
This form can only be used for queries relating to your PAYE Coding Notice. Any other queries will not be answered.
HMRC aim to respond within 15 days of receiving your E Mail.
Checking your tax code
You’ll find your tax code on:
- your pay slip
- your PAYE Coding Notice – you usually get this a couple of months before the start of the tax year and you may also get one if something has changed but not everyone needs to get one
- form P60 – you get this at the end of each tax year
- form P45 – you get this when you leave a job
Your tax code can be wrong for lots of reasons so being able to sent a structured E Mail to HMRC should help to get things corrected faster.
steve@bicknells.net
If your share value falls, so could your tax bill
Did you know that in the case of Mr Brown v HMRC Mr Brown was able to claim a tax deduction for the loss in his share value without having to sell his shares? Its true, its known as a NegligibleValue Claim and HMRC have Help Sheet on it (286).
A negligible value claim enables you to set a capital loss against your income (or against other capital gains if you have them) for earlier years and claim a tax refund.
Many negligible value claims are made by shareholder directors whose company has failed. Their claim is to offset the loss on the shares in their company against their directors’ wages for earlier tax years.
When a taxpayer owns shares which become of negligible value the taxpayer may make a claim under s24 TCGA 1992, resulting in a deemed disposal and reacquisition, which crystallises a capital loss.
steve@bicknells.net
The most tax efficient way for a contractor to close their business
Consultants who work as contractors often build up funds their limited companies, they do this as a safe guard because being a contractor, there can be gaps between contracts and they will need cash to carry themselves through to the next contract.
But what if they decide to retire or they get offered their dream job as an employee, they may have lots of assets and cash in their company, perhaps more that £25,000.
They might even find that their main client insists they become employees for example
Some of the BBC’s biggest freelance stars could be asked to join the payroll or leave the corporation, as a new test aims to clear up tax issues.
It is part of a clampdown on the use of personal service companies (PSCs) and a move to tax more freelancers at source.
How could they close the company and use Entrepreneurs Tax Relief to pay 10% tax?
- The Insolvency Practitioner will ask the Contractor’s Accountant to confirm that the clients tax affairs are inorder and that appropriate advice has been given
- Final Accounts will need to be prepared and creditors paid
- A Declaration of Insolvency will be signed – The declaration of insolvency demonstrates that the company will be able to settle or secure liabilities and the costs of liquidation within 12 months
- A meeting of Shareholders will appoint the Insolvency Practitioner
- Notices will be posted at Companies House and in the London Gazzette
- Then the MVL can be a carried out and funds distributed
- Arrangements can be put in place to allow the directors access to funds during the process
4 business models where customers fund your business
Finding ways to fund your business can be a challenge so hear are some business models where your customers provide the funding.
Subscribers
This can apply to many situations ranging from Networking and Memberships to Sky TV or Microsoft Office 365, get your clients hooked on paying a monthly or periodic payments and it should work wonders for your cash flow.
High Demand
Any product in short supply creates a situation where clients are prepared to pay now in order not to miss out, here is an example:
Microsoft unveils its new Xbox One console Friday, one week after the release of the rival PlayStation 4.
Microsoft says the supply of the new $499 consoles is its biggest ever. But with record pre-orders — more than double those of the Xbox 360 back in November 2005 — the consoles may be hard to find.
November 2013
Pay In Advance
Often used in the home improvement market for example conservatories, kitchens, bathrooms, getting customers to pay a deposit or in some cases all the money upfront (or on finance) puts you in the best possible position especially if you can set up accounts to pay your suppliers on 30 or 60 days.
Market Place
Getting paid to bring people together is a great business model think of ebay, dating sites, or any on line market place where the owner gets paid when a deal is done.
How do you fund your business?
steve@bicknells.net
Less restrictions on company names – would you like a new name?
Choosing a company name got a little easier as a result of changes in October 2013….
Measures to cut the list of ‘sensitive’ names that startup businesses must get approval for, prior to setting up, were announced by Business Minister Jo Swinson back in October.
Businesses that want to use words such as ‘Authority’, ‘Board’, ‘European’, ‘Group’, ‘International’ and ‘National’ will no longer have to get prior approval from Companies House, or a specified body. The same also applies to their Welsh and Gaelic equivalents. This red tape cutting exercise will result in a quicker process for companies wishing to use a ‘sensitive’ word or expression in their registered name.
The words and expressions to be retained are those which, when misused, are likely to cause confusion as to what the business actually does or has the legal authority to do. These words, amongst others, include ‘Accredited’, ‘Bank’, ‘Chamber of’, ‘Charity’, ‘Institute’, ‘Government’, and ‘University.’ The word ‘Sheffield’ is to be retained on the list after responses to the consultation showed support to keep it. The same applies to national words such as ‘English’, ‘Scottish, ‘Northern Irish’, ‘Welsh’ and ‘Cymru.’
Would you like to use a previously restricted name?
steve@bicknells.net
Business Accountant 