Some tax enquiry cases…
Tax Enquiry Investigation
Client A had been in a 4 year running battle with HMRC.The client was keen to finalise matters but at a reasonable compromise based on the facts and circumstances. HMRC were asking for approximately £200,000 and the previous accountant and insurers were not able to reduce this figure.
Shipleys were then appointed at this late stage and discovered flaws in HMRC’s argument. We supplied irrefutable evidence and successfully negotiated tax down to £30,000.
Comment: This is unfortunately a typical case where HMRC officers tend to hastily take a defensive position and refuse to move. Our legal backgrounds are invaluable in dealing with these type of enquiries.
Serious Tax Fraud
Client B had a 15 year back duty case, the tax assessed was approximately £300,000. Shipleys managed this stressful process from start to finish and achieved a good result both on time and reduced overall duty payable and secured a sensible time to pay plan.
Comment: HMRC are much more aggressive now with collecting tax with these kind of formal tax cases on the increase; it is thus essential that the client has proper representation by experienced advisers in order to achieve the desired outcome.
Latest news & blogs…
Self-employed clients may have difficulty proving their income when applying for a mortgage. To this end, HMRC have published details of mortgage providers and lenders who accept either a copy of the tax calculation (SA302) printed from the HMRC online account or a tax calculation printed from commercial software used to submit returns. The lenders also require a tax year overview which can be printed from the HMRC account.
The list of lenders who have agreed to accept tax calculations and tax year overviews that customers or their agents or accountants have printed is available on the Gov.uk website at www.gov.uk/government/publications/mortgages-providers-and-lenders-who-accwpt-a-sa302-tax-calculation-or-tax-year-overview.
Over the past few years the way in which landlords have been able to obtain relief for interest and other finance costs has been changing. The system of relief is moving from one of relief by deduction – which applies for 2016/17 and earlier tax years – to one under which relief is given as a basic rate tax reduction. From 2020/21, relief will be given in full as a basic rate tax reduction. Transitional rules apply for 2017/18 to 2019/20 inclusive as the changes are phased in, with some interest costs relieved by deduction and the balance as a basic rate tax reduction. For 2019/20, 25% of the interest costs can be deducted in computing profits, with relief for the remaining 75% being given as a tax reduction at the basic rate. Check with Shipleys Tax that you are obtaining relief for interest costs in the correct manner.
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MTD goes live
Making Tax Digital (MTD) for VAT went live from 1 April 2019. It applies to businesses with VATable turnover over the VAT registration threshold of £85,000 from the start of their first VAT accounting period on or after 1 April 2019, unless they fall within one of the categories of businesses with more complex affairs (such as those in a VAT group) in respect of which the start date is deferred until the start of the first VAT accounting period beginning on or after 1 October 2019.
Under MTD for VAT businesses must keep digital records and file their VAT returns digitally using MTD-compatible software.
Speak to Shipleys Tax to check what you need to do to comply with the requirements of MTD for VAT.
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