VAT penalty regime - over enthusiasm?

The fairly new VAT penalty regime based on behavioural tests appears to be causing much confusion amongst HMRC officers.  We have become aware over the past couple of months of a significant rise in the number of penalties being imposed by HMRC where it is at best questionable that the error a) was an error in the first place b) was ‘disclosed’ by HMRC (prompted) and c) was careless.   We are seeing this trend across all sectors and sizes of business, with penalties being imposed on those where there is a CRM large business relationship in place as well as on smaller businesses with no regular HMRC contact.   

Perhaps more worryingly is the move towards imposing penalties where a refund claim has been filed and there is later an adjustment to the figures following discussions between both parties, even though no repayment of tax has actually been made.   This begs the question as to whether businesses will think twice before filing complex refund claims where historically a collaborative approach would have taken place to agreeing the final value.  This would clearly be unjust. 

If you have been subjected to such a VAT penalty and you feel HMRC’s decision was not fair and reasonable, we would be happy to talk through the fact pattern with you.

For further information please contact Ward Williams’ Corporate Tax Director - Sarah Brock: sarah.brock@wardwilliams.co.uk

HMRC’s new Annual Tax on Enveloped Dwellings

New rules state that if UK residential property  valued above £2m is owned by non-natural persons (UK or non-UK) then an Annual Tax on Enveloped Dwellings (ATED) return must be filed by the submission deadline of 1 October 2013.

What is a ‘ mon-natural person’ ?  These are identified as including:

• companies;
• collective investment schemes;
• partnerships, one or more of whose members is a company.

There may be annual fixed tax charge that is due too.

Relief from ATED is available to a company acting as a trustee of a trust and potentially also for genuine residential property businesses operating on a commercial basis such as a property rental or as a trading/development business. Also, reliefs maybe available where properties are used for employee accommodation, farmhouses, public access property and charities.

Importantly, to claim these reliefs from ATED, HMRC will require an ATED return to be completed.

It is advisable for those affected by this new legislation to have considered all the details. This may be a complex assessment in certain circumstances.

Where the property value exceeds £2m, information regarding the property and its valuation will be required to be disclosed. We would also expect that HMRC will wish to tie its records into the UK Land Registry.

As with other UK tax returns, some form of declaration will likely be required.

If you consider that you would benefit from receiving specialist Tax advice in this area please contact Ward Williams, who will then be able to advise and deal with any relevant tax filing as circumstances require.

enquiries@wardwilliams.co.uk

http://www.wardwilliams.co.uk

New Ward Williams Creative drop-in sessions

Concerned you are paying too much tax? Maybe you qualify for tax relief or money back under R&D or Patent box relief? Trying to grow the business and not sure how to fund it? Preparing a business plan and need it looked over by a professional?

Whatever your business questions, Ward Williams Creative is here to help.
As a member of the ICAEW’s Business Advice Scheme we will be holding a weekly, free business surgery – an opportunity to drop-in and speak with a professional for free!

Where to find us: 81 Rivington Street, London, EC2A 3AY, every Tuesday in September and October 2013 (meeting room 7). No appointment required - just pop in or email a query in advance to creative@wardwilliams.co.uk

Revised FRSSE issued

The Financial Reporting Council (FRC) has published an updated version of the Financial Reporting Standard for Smaller Entities (FRSSE). This contains a small number of amendments resulting from the introduction of the revised UK reporting framework set out in FRS 100 and FRS 102.

The key amendments are:

• The clarification of certain requirements concerning annual impairment reviews, estimates of the useful life of goodwill and intangible assets, and definitions pertaining to related party transactions; and

• Disclosure exemptions regarding inter-group related party transactions, where a subsidiary party to the transaction is 100% owned by the group.

The amended FRSSE will replace the existing version (effective since 2008) and its adoption is mandatory from 1 January 2015, although earlier application is permitted.

For further information on this subject please contact andrew.webb@wardwilliams.co.uk

Why having an amazing business concept doesn't guarantee success

Great ideas need funding – but raising money can be more complicated than you think.

Ward Williams Creative examines a company that looked great on paper but faced significant obstacles to getting to market...

Read the full article here on smallbusiness.co.uk

Writing a business plan for a start-up

Q: I’m writing a business plan for my start up, what should I include?

Start by thinking about who is going to be looking at the plan and what they will want to know and keep this in mind when writing it. All business plans will look a bit different but the general structure should include:

·         Intro and contents

·         Executive summary (you write this last!)

·         The business concept in a nutshell

·         What type of business it is, e.g. sole trader, partnership, limited company

·         State the business objectives, e.g. to deliver bespoke photo frames at affordable prices

·         Summarise the market and your position in it. Include external market research and statistics or commentary supporting your argument to give a potential investor reassurance.

·         Operational information: outline how the business will work, include details of marketing activity, channels of distribution and key processes – such as on line sales systems.

·         Organisational information – outline the team and their skills

·         Financials – the essentials are a profit and loss (income and expenses), a balance sheet (list of all your assets and liabilities) and a cash flow showing when cash comes in and when it goes out, which will help identify any periods where extra support or funding is needed. If you need funding: state how much, what it is for, what the projected return is and when this will be achieved. Break-even points are often helpful to establish how much you need to deliver/sell to turn a profit.

·         List all assumptions used. Investors like sensitivity or scenario planning i.e. if sales are lower than expected by 15 per cent or costs of delivery increase. Include a risk analysis.

Most importantly - be realistic!

Think outside the box, it doesn't have to be a written report; it may be easier or more relevant to make a video or use PowerPoint.

Business plans can be dry reading, so think how yours can be different to capture interest. Talk to Ward Williams if you need help with this. http://www.wardwilliams.co.uk