On The Spot Blogs

#HMRC Business Records Checks - 8 Things You Need To Know

Business Records Checks are coming to the South East after Christmas. Happy New Year!

Business Records Checks need not cause SMEs many problems, but there are some pertinent points to know:

Initial contact is a letter from HMRC warning of a forthcoming phone call.Your accountant or tax agent will NOT receive a copy of this letter, so you must tell him/her.HMRC may prefer to talk to you, but they should agree to talk to your agent instead.If the phone call doesn't allay HMRC's concerns they are likely to make a visit to the business premises, which is often your home.HMRC need to know your records are REQUISITE to submit a correct and complete tax return. This might mean your small spread sheet and a plastic wallet of receipts in date order is perfectly appropriate.You don't need to know double entry book keeping or have a software package to keep adequate records.HMRC can't insist on you running a business bank account, however, businesses often find they get to a point that this makes their life clearer and simpler. Even after a visit, HMRC shouldn't charge a penalty if you make the changes you agreed to.

In summary, keep your accountant or agent informed, and if you present a clear picture of how you keep your records to make sure all income and appropriate costs are recorded, Business Records Checks shouldn't be something to cause you undue concern.

 

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#Tax Myth 8 - Exporting goods are VAT zero rated

You may know that exports are zero rated and think that there's nothing else to worry about. You're expecting to recover VAT on your costs so you're in a net recovery position each month. You might even be thinking of submitting monthly VAT returns to optimise your cashflow.

However, to be correct, you need to be able to agree with the following statement.

All my EU customers are VAT registered.

 

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A Guest At The Olympics? Here Are 6 Different Tax Treatments!

If you are lucky enough to be a guest at the Olympics, what sort are you and what tax is due?

1. Your client has invited you and your better half to enjoy the men's 100m final, plus you are wined and dined, all paid for by your client. Your company pays your train fare. You are hardly going to drive after all that free booze!

This is the E word - Entertaining! But it's mainly paid for by your client so it's his problem. What is that? Well, he can't claim any VAT deduction or any corporation tax relief for the cost. Happily you don't any suffer income tax. However, you won't be able to claim corporation tax relief for the train fare as the reason for the trip was Entertaining.

 

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Spend your capital gain and pay no tax - only 170 days to go!

This is a one off tax relief within the new SEIS introduced in March's Budget.

If you have recently exchanged, or expect to before the end of the tax year, eg on a buy-to-let property, and don't welcome the 28% capital gains tax bill, you could take the view that a government subsidy to encourage you to invest your gain in a new company will help you take a risk.

For example, if you sell an asset for £250,000 and make a gain of £50,000, the capital gains tax due @ 28% is £14,000.

 

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