Archive for August, 2013

Vodaphone settlement

Thursday, August 29th, 2013

In a previously unreported settlement with the UK Government, Vodaphone appears to have made a large payment to HMRC. The additional taxes related to the tax returns of an Irish subsidiary. Although the overall amount settled was not disclosed Vodaphone were required to reclaim approximately £57m from the Irish Government in tax that should have been paid in the UK.

For a four year period Vodaphone had used the Irish subsidiary to collect royalties from most countries and to remit more than one billion Euros of dividends to the low tax jurisdiction of Luxemburg. Vodaphone are reported as saying:

“In all respects and at every point, Vodaphone has conducted itself with the highest integrity and in full compliance with the law.

The settlement with HMRC related to a number of technical factors regarding inter-group transfer pricing arrangements.”

HMRC added:

“We do not comment on the affairs of individuals or companies, but we do ensure that multinationals pay the tax which is due under the law.”

Good news, exports on the increase

Wednesday, August 28th, 2013

The period April – June 2013 has seen positive economic growth for the second quarter. The economy expanded by 0.7%. Hopes of rebalancing the economy towards trade and investment were given a boost by an impressive 3.6% increase in exports in the same period.

However, the good news may too good for the Bank of England. It has pledged to hold the current low interest rates until unemployment drops below 7%. This is not expected to happen until 2016. The markets are now discounting a rise in interest rates as early as March 2015 on the basis that the economy is recovering faster than expected.

Business investment is also on the up, increasing by 0.9%; pay has increased by 2.6%, although this was distorted by delayed bonuses taken during April 2013; and household spending in the UK rose by 0.4%.

These statistics are by no means exceptional but they do point to a more encouraging outlook.

Economist warn that when the next election is past we will likely see Government returning to the reduction of Government expenditure; this will no doubt be a drag on any long term growth in UK trade and investment.

Partnerships and LLPs

Wednesday, August 21st, 2013

HMRC closed their consultation on the proposed changes to the taxation of partnerships and LLPs on 9th August.

Any subsequent changes will be introduced in the Finance Bill 2014, and be effective from 6 April 2014. Two possible changes are worth highlighting.

1. Disguised employment

HMRC aim to create a new concept for LLPs, a salaried member. They believe that the present presumption, that all members of an LLP are self-employed, has been abused. In effect, salaried employees have been elevated to member status and their previous employed status changed to self-employed status. In certain circumstances this can lead to significant National Insurance savings.

From April next year it is likely that this type of arrangement will be reversed.

2. Allocation of profits

The second area that HMRC want to tackle is the artificial allocation of profit and losses by partnerships with corporate members and schemes involving the transfer of profits between members with different tax status.

Many partnerships allocate profits to corporate partners in order to pay tax at the lower corporation tax rates. In this way the partnership retains more of its working capital.

Partnerships likely to be affected should start to reconsider their planning options, although it would be sensible to delay implementation of changes until the scope of the new legislation is confirmed.

Off-shore, online gambling to pay UK tax

Monday, August 19th, 2013

Online betting companies that have based their operations in offshore tax jurisdictions, to avoid Britain's gambling taxes, will be hit with a new levy to be introduced from December 2014. It is estimated that the new tax may raise £300m for the UK taxpayer.

The Government is to impose a 15% tax on operators in the £2bn remote gambling market. In a somewhat controversial approach, the UK will tax gambling revenues based on where the customer is located, rather than where the business is based.

Economic Secretary to the Treasury, Sajid Javid, said:

"It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the Government is taking decisive action to ensure this can no longer happen. These reforms will ensure that remote gambling operators who have UK customers make a fair contribution to the public finances."

The shift will affect some of the industry's largest players including: Ladbrokes, William Hill and Betfair, all of which have online operations based in Gibraltar, where taxes are levied at 1% and capped at £425,000.

If introduced, the 15% levy would mean that offshore operators are taxed at the same level as domestic internet betting companies.
 

Read our New Business Planning and Strategy Guide 2013/14

Friday, August 16th, 2013

The current economic landscape continues to hold a glimmer of hope for some while others, particularly those on the high street, look for evidence of a much more robust economic recovery. However, without proper planning a business limits its chances of success. Whatever stage your business is at, we can help you move forward. Whether it is just an idea or you are approaching the next phase of growth, financial and strategic planning is vital.

Our new guide provides an overview of actions to consider, from starting through to leaving your business, with a lot of tax planning information along the way.  To access the guide visit our website or click on this link http://mccleary.wpengine.com/index.php/planning-guides/ .

Financial Planning and Strategy Guide 2013/14

We have also published a Financial Planning & Strategy Guide, this comprehensive guide provides important information for your financial planning, both in the short and long term and can be accessed from the same link http://mccleary.wpengine.com/index.php/planning-guides/ .

Proper tax and financial planning can reduce or defer the tax you pay, freeing up more of your cash for investment, business or personal purposes. This is particularly pertinent as the ongoing sluggish economy and the, potentially, destabilising financial threats from countries in the eurozone continue to impact on our plans and finances.

Planning is the starting point for growing your wealth and building financial security so that you are as prepared and secure as possible when market and/or financial reverses occur.

This guide outlines some of our thoughts and basic strategies that you might like to discuss with us for the current tax year. There is no substitute for personal advice and we are committed to helping you plan and prosper.

 

We can help

In most sections of this guide, you will find a range of the areas where we can give advice. To schedule a planning meeting or to review a specific area of tax and financial planning, please contact us now.

Read our New Planning & Strategy Guides

Friday, August 16th, 2013

The current economic landscape continues to hold a glimmer of hope for some while others, particularly those on the high street, look for evidence of a much more robust economic recovery. However, without proper planning a business limits its chances of success. Whatever stage your business is at, we can help you move forward. Whether it is just an idea or you are approaching the next phase of growth, financial and strategic planning is vital.

Our new guide provides an overview of actions to consider, from starting through to leaving your business, with a lot of tax planning information along the way.  To access the guide visit our website or click on this link http://mccleary.wpengine.com/index.php/planning-guides/ .

Financial Planning and Strategy Guide 2013/14

We have also published a Financial Planning & Strategy Guide, this comprehensive guide provides important information for your financial planning, both in the short and long term and can be accessed from the same link http://mccleary.wpengine.com/index.php/planning-guides/ .

Proper tax and financial planning can reduce or defer the tax you pay, freeing up more of your cash for investment, business or personal purposes. This is particularly pertinent as the ongoing sluggish economy and the, potentially, destabilising financial threats from countries in the eurozone continue to impact on our plans and finances.

Planning is the starting point for growing your wealth and building financial security so that you are as prepared and secure as possible when market and/or financial reverses occur.

This guide outlines some of our thoughts and basic strategies that you might like to discuss with us for the current tax year. There is no substitute for personal advice and we are committed to helping you plan and prosper.

 

We can help

In most sections of this guide, you will find a range of the areas where we can give advice. To schedule a planning meeting or to review a specific area of tax and financial planning, please contact us now.

Read our New Planning & Strategy Guides

Friday, August 16th, 2013

The current economic landscape continues to hold a glimmer of hope for some while others, particularly those on the high street, look for evidence of a much more robust economic recovery. However, without proper planning a business limits its chances of success. Whatever stage your business is at, we can help you move forward. Whether it is just an idea or you are approaching the next phase of growth, financial and strategic planning is vital.

Our new guide provides an overview of actions to consider, from starting through to leaving your business, with a lot of tax planning information along the way.  To access the guide visit our website or click on this link http://mccleary.wpengine.com/index.php/planning-guides/ .

Financial Planning and Strategy Guide 2013/14

We have also published a Financial Planning & Strategy Guide, this comprehensive guide provides important information for your financial planning, both in the short and long term and can be accessed from the same link http://mccleary.wpengine.com/index.php/planning-guides/ .

Proper tax and financial planning can reduce or defer the tax you pay, freeing up more of your cash for investment, business or personal purposes. This is particularly pertinent as the ongoing sluggish economy and the, potentially, destabilising financial threats from countries in the eurozone continue to impact on our plans and finances.

Planning is the starting point for growing your wealth and building financial security so that you are as prepared and secure as possible when market and/or financial reverses occur.

This guide outlines some of our thoughts and basic strategies that you might like to discuss with us for the current tax year. There is no substitute for personal advice and we are committed to helping you plan and prosper.

 

We can help

In most sections of this guide, you will find a range of the areas where we can give advice. To schedule a planning meeting or to review a specific area of tax and financial planning, please contact us now.

New report from OTS

Thursday, August 15th, 2013

The Office for Tax Simplification has published a new list of tax issues for review. They include:

• Increasing the present £8,500 limit, below which employees (not directors) do not suffer benefit in kind charges. This limit was introduced in 1979 and was apparently based on the amount at which a married man started to pay higher rate tax. An inflation adjusted figure now would be close to £40,000. It’s unlikely HMRC would seek to increase the present limit to this level!

• Payrolling certain benefits so that tax is paid as the benefits are provided rather than at the end of the tax year.

• Changes to the cycle to work scheme.

There are also a number of suggestions to smooth the differences between the tax and National Insurance treatment of certain benefits.
OTS director John Whiting says:

“It is clear the current system for reporting expenses and benefits is simply not working well for employers or employees and also, in many cases, HMRC.

Time and again, through our workshops and in submissions, people have told us the rules around travel and subsistence, accommodation or HMRC admin, are causing them problems and costing them time.”

The Treasury will now have to consider whether the OTS proposals are worthy of serious consideration and new legislation.
 

TOP TIPS FOR BUYING YOUR NEXT LAPTOP

Monday, August 12th, 2013

 

Despite the plethora of tablets and mobile devices on the market, business professionals still depend on good old-fashioned laptops / notebooks as general workhorses. Here are a few things to consider when purchasing your next business laptop:

Size and Weight

Do you plan to take your laptop with you very often? If so, you need one that is convenient to carry. It may be better to choose something that is light in weight, with a screen size of 13 or 14 inches. Larger 17-inch screens can be cumbersome to transport, and a little too big for using on a train. If you require a larger screen in the office you can always plug the laptop into a separate monitor.

Operating System

The operating system is actually very important, but is often forgotten. It is good sense to try and match your laptop to your desktop computer, as your software will remain compatible and document transfer will be very straightforward.

Processor

It is unlikely that you will need the latest processor, as high-end processors are more suited to intense laptop activities such as gaming or video editing. If you are browsing the web, checking e-mail, using Skype and working on office documents, then a slower processor such as an Intel Core i5 is more than enough.

 Ports

It’s easy to be enticed by thin and affordable laptops, but they can have serious disadvantages, one of which is the lack of ports. Ports are necessary as they make your laptop even more functional or useful, allowing you to attach external devices such as printers, memory cards, monitors etc. Make sure you have at least 3-4 USB ports, WiFi capability and the ability to connect to a monitor to it in case you want to use it as a desktop machine.

 Battery

If you tend to travel a lot, you will need a good battery life. Aim for something in the region of 4-6 hours when searching for your laptop. It can also be useful to have the ability to purchase a second battery, as this allows you to effectively double your work time while travelling.

Ten new tax defaulters

Monday, August 12th, 2013

Ten new tax defaulters have been added to HMRC’s rogues’ gallery. This follows the publication of twenty tax offenders’ details last year. So far only one of the original twenty has been caught.

HMRC has statutory authority to “name and shame” taxpayers who they consider to be deliberate tax defaulters. Generally speaking these are persons who have received penalties for:

• deliberate errors in their tax returns or

• deliberately failing to comply with their tax obligations.

HMRC may publish information about a deliberate tax defaulter where:

• HMRC have carried out an investigation and the person has been charged one or more penalties for deliberate defaults, and

• those penalties involve tax of more than £25,000.

However, their information will not be published if the person earns the maximum reduction of the penalties by fully disclosing details of the defaults.
HMRC will publish sufficient information to identify the deliberate tax defaulter, the penalties imposed for their deliberate defaults and the amount of tax on which those penalties are based.

HMRC publish this information once these penalties are final. A penalty becomes final on

• the day after the end of the appeal period if the person does not make an appeal, or

• the date when an appeal is finally determined, or

• the date when a contract settlement is made.

The law requires that HMRC do not publish any information about the person for more than 12 months from the date HMRC first publish it.

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