To February’s Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.
If you need further assistance just let us know or you can send us a question for our Question and Answer Section.
We are committed to ensuring all our clients don’t pay a penny more in tax than is necessary.
Please contact us for advice in your own specific circumstances. We’re here to help!
Tax Schemes & Swiss Bank Accounts
Have you received a letter from the Taxman recently, inviting you to pay tax avoided by using a tax scheme or Swiss bank account?
The specific tax avoidance schemes involve one or more of the following:
- the manipulation of accounting rules;
- British film tax relief;
- artificial trading losses.
read more – click here >>
Letting Relief Explained
If you have let a property which was once your main home, or was treated as your main home as you lived in job related accommodation, letting relief can help reduce the tax you pay on the eventual sale. This tax relief cannot apply to a buy-to-let property that has never been occupied by the owner. – click here to read more >>
SEIS – The Opportunity
The Seed Enterprise Investment Scheme (SEIS) will have a limited life – only five years to 5 April 2017. It allows investors to receive 50% income tax relief on the amount invested and up to 28% capital gains tax relief for a limited period. Also if you make a loss on the SEIS shares you can get further income tax relief for that loss. – click here to read more >>
Green Car Scam
Please don’t be taken in by a scheme which claims to reduce the taxable benefit of your company cars. The taxman has specifically warned taxpayers about this scheme on the spotlights page of his website. – click here to read more >>
February Question and Answer Section
Q. My company designs websites. If my customer is a business in the Republic of Ireland can I apply zero rate VAT to the sales invoice? Do I need their VAT number before I can do this? Is the situation different if my customer is a private individual?
A. Website design is a service, so the VAT treatment depends on whether your customer is a business or not. You should retain some evidence to prove whether your customer is in business, but you don’t need to hold its VAT number if your customer is not VAT registered.
Where your Irish customer is a business, and will use the service you provide for business purposes, the service you are providing is outside the scope of VAT. Your customer must apply the local Irish VAT to what it buys under the reverse charge rules. ‘Outside the scope of VAT’ means you do not apply VAT to your sale. If your business is VAT registered you will need to ask for its VAT number to report the sale on your EC sales list form. Only sales to VAT registered businesses are reported on that form.
If your Irish customer does not operate as a business, you must apply VAT at UK rates to your invoice, just as if your customer was located in the UK.
Q. I plan to sign over my home to my son to avoid inheritance tax. Is there anything else I should be aware of before I do this?
A. If you continue to live in the property after you have given it to your son, the gift will not be effective for inheritance tax (IHT), so no IHT will be saved. For IHT purposes the property will be treated as belonging to you until you stop using it, so it will form part of your estate on your death and be subject to IHT. There may be a reduction in the IHT due if your son also lives in the property and pays his share of the running costs.
If you son does not live in the property there may also be capital gains tax charges when he comes to sell the property. We need to discuss this plan in detail with both of you before the gift goes ahead.
Q. I run a landscape design business employing a dozen staff. The business is registered as a subcontractor under the construction industry scheme (CIS), and receives payments from the main contractors after deduction of tax. I’m worried that under RTI we won’t be able to off-set the CIS deductions against the PAYE deducted from out payroll, so we will be out of pocket. Is this true?
A. Under RTI the CIS tax retained by contractors can be deducted from the PAYE you deduct from your payroll. However, you will have to show how much CIS tax has been deducted on your Employer Payment Summary (EPS) each month. The EPS must be submitted by the 19th of the month following the end of the tax month for which the PAYE was deducted.
February Key Tax Dates
2 – Last day for car change notifications in the quarter to 5 January – Use P46 Car
19/22 – PAYE/NIC and CIS deductions due for month to 5/2/2013
28 – Talk to us about year end and pre-budget planning
First 5% penalty surcharge on any 2011/12 outstanding tax due on 31 January 2013 still unpaid