APS

Errors in a return implications?

Duty to file correct and complete returns

Penalties can be charged

Late return or payment of tax

Penalties

Why should you make disclosures?

Viewed in a better light to HMRC - remove possibility of criminal charges and can reduce penalties.

what should you always recommend when correcting?

it is done ASAP to reduce penalties/interest

How should you disclose?

disclosures outside stat amendment window are made using HMRC DDS accessed via gov website

What cannot be disclosed via DDS?

Employer liabilities (eg PAYE)

VAT

what is a contract settlement?

legally binding agreement that brings case to an end, avoids need for HMRC to raise assessments and court

What does telling HMRC about inaccuracy do?

max penalty reduction 30%

what does helping HMRC quantify inaccuracy do?

max penalty reduction 40%

what does givign access to HMRC do?

max penalty reduction 30%

what can HMRC do where penalty is based on careless behaviour?

suspend all or part of a penalty for up to 2 years

Are interest/penalties deductible from trading profits?

extra tax on profits not deductbile

PAYE/NIC will be

penalties no

int on underpaid CT is

What should we highlight where it says it is a new client?

Engagement procedures, LOE, ML requirements, professional insurance

Incorporation - implications of transferring property

Chargeable gain based on proceeds less cost

SDLT charged on the MV of property at combination of 2% and 5% - ned to be paid within 30 days of transfer

Implications of company paying some consideration in loan stock

Interest is taxable at usual IT rates

Company needs to WH BR 20% tax at source and remit tax deducted to HMRC on quarterly basis

What is typical withdrawal strategy for directors?

Small salary to utilise NI earnings threshold (£12,570) and then draw anything further by dividend

Benefit of retaining ownership of property as opposed to transferring

No SDLT

If you dispose of it around the same time as sale of shares you can still get BADR based on associated disposal rules

VAT implications of incorporating?

No VAT liability as transfer of a going concern

Deregister ST business within 30 days

Newco should register again within 30 days or company can take over VAT number

How should you set up report?

To:

From:

Date:

Re:

Introduction - this report is provided for [purpose]. Report is intended for use by you only. This report will contain [contents],

Exec summary

Letting of hall for conferences and supply of lunch - VAT?

The supply of room is exempt supply

Supply of lunch is catering and therefore Standard Rate of VAT

Constructing new houses - VAT?

The sale of newly constructed houes is zero rated supply if freehold or lease > 21 years is sold.

Input VAT will be recoverable

Long term lets as living accommodation v holiday accomodation - VAT

Long term lets as living = exempt

Holiday accom = liable to VAT at standard rate

what is a new commercial building? is it VATable?

Yes it is VATable - any commercial building less than 3 years old

Pros and cons of OTT

Pros - you can reclaim input VAT

Cons - have to charge VAT on sale price, less attractive to non VAT registered buyers.

Transfer of 50% shareholding - what to remember when calculating gain?

There should be no premium for control - discount by 10% ish

FMV of interest must be obtained, can apply for post transaction valuation check using CG34 procedure

What could ruin BADR on sale of shares?

Non-trading activities of the company.

What is SD payable on?

0.5% on purchase of shares

What is SDLT payable on?

VAT inclusive price of building and land

When might you want to buy shares over T&A?

if there are losses that you want

Implications if you sell shares as non-resident?

No CGT

Will become chargeable if you come back within 5 years

What can ruin TOGC treatment?

A significant gap in trading pattern before or after purchase

How could you fund a newco?

Liquidate current company and make capital distribution

What could you register Newco for?

EIS scheme - this would defer the capital distribution gain from liquidating the previous company