Thursday, 22 February 2018

Phew! Is February over yet?

Here’s a round-up of the year so far…

So, how’s 2018 been for you up till now? Nice and relaxed? Or crazily manic?

It’s definitely been the latter for us, and not least because the end of January always culminates in our busiest time of the year – tax returns and all that.

Then, no sooner have you managed some well-deserved rest at the start of February than Valentine’s Day arrives with sackfuls of cards from mystery admirers who just can’t resist the fast-lane lure and idylls of accountancy. It results in a lot of post to open and, we admit, is the main reason why this month’s article is slightly later than usual…

Nonetheless, it also means that two months into 2018, now’s the perfect time to take a look at what’s happened so far this year. Financially-related, of course.

How many of the following can you relate to?

Hurrah – tax returns are done and dusted!                                                           
The 31st January saw clients and accountants breathe a collective sign of relief for another year. For some, what better feeling is there than being able to relax once it’s all over? And particularly after the buzz of having left everything to the last minute. Again.

But some tax return software said “No”.                                                               
Which no doubt merely added to the sense of rush for the adrenaline junkies. One software programme was found to have miscalculated tax owing on foreign income, which, once rectified, resulted in a nice surprise. But not for the person who was being taxed. Conversely, a different software programme developed glitches in the week leading up to the deadline, leaving taxpayers and their agents no option but to file erroneous figures and pay the tax due – in some cases, an overpay, whilst an underpay for others.

And late filing fines may be illegal.                                                                           
Assuming that you did file your return on time, you won’t have been penalised with a £100 fine. Yet one leading judge has warned HMRC that automatically fining people for filing their tax returns late may not be legal – simply because they were issued automatically by a computer. The judgement means that penalties are only valid if issued by humans and is expected to lead to a surge in successful appeals. Looks more like a case of ‘Computer says “Doh!”’

Credit card charges are now a thing of the past.                                                       
If you’re an advocate of ‘cash is king’, then this won’t apply to you. But for those who wield more plastic than Barbie and Ken, they’ll be delighted that credit card fees were scrapped as of mid-January. Of course, businesses wouldn’t dream of increasing their pricing to compensate. Or, in the case of a Glasgow taxi firm, replacing the fee with a service charge instead…

Not all accountants are foul-mouthed, sweary **$***>$.                                           
One from Sheffield did hit the headlines though, after confronting a couple of clients outside a pub with a profanity-laden rant following a fee dispute. (Incidentally, saying “Please” at the end of an expletive-heavy outburst rarely tends to soften things.) More refreshingly, a different article even accused us (accountants in general, that is) as being too nice. Aw, isn’t that lovely…

But they ought to take a Hippocratic Oath.                                                                     
Apparently, this is to help combat tax avoidance so, thankfully, isn’t something that we need to worry about. More relevant for us and other mainly sedentary professions would be a Hippopotamus Oath, in which we ban all fast food at our desks and vow to get out more.

And it’s BAFTA and Oscar time…                                                                                     
Okay, this has nothing to do with finance but who doesn’t enjoy a good film? Forget ‘Three Billboards Outside Ebbing, Missouri’, ‘The Post’ and ‘Darkest Hour’, why hasn’t ‘The Accountant 2’ with Ben Affleck come out yet…

So, there you have it – the main goings-on to date in the fiscal world. We know, enthralling.

And, by the way, if you thought that opening more than 400 Valentine’s cards takes a long time, you should see how long it takes to write them.

Ages. Absolutely ages.

Until next month...

Thursday, 11 January 2018

For help on Self Assessment for the self-employed…

It’s probably best not to be guided by Preston Garstang and Compton Bassett… 

Yep. It’s that time of year again. The time of year when lots of us become a little anxious and distracted.

And, nope, we don’t mean the F.A. Cup 3rd Round or feeble attempts at Dry January but the end-of-month deadline for submitting tax returns.

So, while many people frantically scrabble together as much information as they can to get their affairs in order, it’s a busy time too for HMRC as their Helpdesk Team prepare for the last-minute rush of enquiries.

Which is why it’s all hands to the pump, and the reason Messrs Preston Garstang and Compton Bassett from the Department of Trivial Affairs (http://www.chapmanworth.co.uk/news/ October 2017 blog) have been drafted in to help.

What they don’t know about the finer points of Self Assessment for the self-employed can be written in several weighty tomes, so, rather than being assigned to the helpdesk, their remit was to instead submit all manner of potential queries as part of a test run.

Here’s a sample of what they came up with…

On travel expenses:

Q. I have friends coming to help me on a business trip who aren't employed by me in any form. 
     How can I claim for their expenses for the trip?

Q. If I take my cat on Eurostar for business, can I claim £0.45 per mile instead of the fare?

Q. I got a unicycle for Christmas and plan to use it to get to work. I’m unable to ride it yet though.
     Two questions – can I be reimbursed for lessons and how much can I claim per mile?

Q. Sorry, that should have read car.


On clothing and personal expenses:

Q. I’m a professional lion-tamer. Can I expense private healthcare if I get injured?

Q. I’m a Scuba Diver Trainer and was thinking of getting a reversible wetsuit/tuxedo like Sean
     Connery wore in Thunderball. Do I just claim 50% of the cost?

Q. My work has resulted in back pain from sitting at a desk (my desk is too low and my chair is
     too high, and it also only has 3 legs). My osteopath says I can claim the cost of treatments. Is
     this correct?

Q. Good day. I am a method actor in musical theatre and need to maintain a specific physique that
     ranges from extremely buff to er, not-so-buff (nonetheless, I remain irresistibly cavalier). How
     much can I expense on gym membership and fast-food?

Q. As part of my brand image, I take my Andalusian chihuahua (Rodrigues) to business meetings.
     He usually sits in my handbag. However, he gets very nervous if there are a lot of people
     present and has already ruined 2 rugs, a welcome mat and a Louis Vuitton Speedy 30. Can I
     claim for these as well as a dog hypnotherapist?


On capital expenses:

Q. I’m planning a Star Wars attraction and want to build a Death Star. Some of it will be for work
      and some for holidays. How much can I expense? (Ps. Not sure yet if it will be my base for
      work. It’ll also be in my back garden and not up in space.)

Q. How do I claim for work done on my swimming pool? The roof was leaking so I had to have it
     fixed and my car park also had to be resurfaced.

Q. How about a Bond-villain lair inside a volcano? I say Bond-villain lair but it’s actually just
     going to be used for respectable purposes.

Q. Regarding the swimming pool, it’s a separate building next to the patio.

Q. I work from home and my front door is in a terrible state (I think it’s next door’s dog) and needs
     replacing. What amount can I claim back?

Q. If I work from home, can I knock all the walls down to make it one big room instead of having
     to claim just a proportion?

Q. I can turn the swimming pool into a registered business if that’s easier?


On work-related research expenses:

Q. I regularly conduct wine tasting abroad. Can I fly Business Class and claim it as an expense?
     The fact I have family and friends there is completely coincidental.

Q. Performing my work includes researching a lot of culture (films, video games, magazines, 
     books, travel) for creative inspiration and idea generation. Oh, and gin and tonic. Can these
     purchases be included as expenses?


On entertaining expenses:

Q. Can I count membership to a Members’ Club that I use for an office/meeting place for my
     business?

Q. Can I claim for a business development meeting with a VIP customer? Usually it’s in my office
     but it might be over dinner in an expensive restaurant (they do an early-bird menu).

Q. Is there a daily food allowance of £8.00 per day? And does this go up with London weighting?

Q. What if it’s a Meal Deal?

Q. Or just a bag of crisps (low fat)?


Just in case none of this has been particularly helpful, here are some must-knows:

The term ‘wholly and exclusively’ is key to much of what can be legitimately claimed for
   business expenses.

Entertaining expenses are a big no-no.

Any tax due should be paid by 31st January, including payment of any liability (for 2016-17),
  and any payment on account (due for 2017-18).

And, lastly, a £100 penalty also applies for late submissions, even if there was no tax to pay or
  any tax due was paid on time.

More information can be found at https://www.gov.uk/expenses-if-youre-self-employed and via HMRC’s online webinars: https://www.gov.uk/guidance/help-and-support-if-youre-self-employed.

So, there you have it.

Incidentally, we’ve just heard that some of the Helpdesk Team have been named in the New Year Honours List; not for services to the public but for ‘outstanding patience and fortitude in the face of extreme ill-informed inquisitiveness’ – from seconded colleagues.

Although the rumour that HMRC now internally stands for ‘Help Me Remain Civil’ is yet to be verified.

Until next month...

Saturday, 9 December 2017

It’s the Mastermind Christmas Special!

With Finance Bill answering questions on Christmas cracker jokes and, er, finance… 

Hello and welcome to our festive edition of Mastermind. I’m Magnus Numpteys…

Could we invite our first contestant into the chair, please.

MN: Your name, please?                                                                                         
Contestant: Finance Bill.

MN: Occupation?                                                                                                         
FB: Finance and Accountancy Aficionado. Although some people say that I occasionally get the wrong end of the stick.

MN: And your specialist subject?                                                                               
FB: Christmas cracker jokes and, er, finance. 

MN: Okay, Finance Bill, your time on Christmas cracker jokes and finance starts now… 
…How may accountants does it take to change a light bulb?

FB: 0.80 + VAT?                                                                                                                 
MN: Correct.

MN: What kind of motorbike does Santa ride?                                                       
FB: A Holly Davidson?                                                                                                                 
MN: Correct.

MN: What does Miley Cyrus have for Christmas dinner?                                       
FB: Twerky?                                                                                                                                          MN: Correct.

MN: What is the definition of ‘accountant’?                                                             
FB: Someone who solves a problem you didn’t know you had, in a way you don’t understand?            MN: Correct.

MN: What do you call a group of vainglorious chess players in a hotel lobby?                            
FB: Chess nuts boasting in an open foyer?                                                                                    
MN: Correct.

MN: Why did the accountant get excited when he completed a jigsaw puzzle in 42 weeks?           
FB: Because on the box it said 8-12 years?                                                             
MN: Correct.

MN: How will Christmas dinner be different after Brexit?                                   
FB: No Brussels?                                                                                                                            
MN: Correct.

MN: What do you call an accountant without a spreadsheet?                           
FB: Lost?                                                                                                                         
MN: Correct.

MN: What is the definition of a good tax accountant?                                         
FB: Someone who has a loophole named after them?                                               
MN: Correct.

MN: What is Santa’s favourite pizza?                                                                       
FB: One that’s deep-pan, crisp, and even?                                                                   
MN: Correct.

MN: How does an accountant go wild when staying at a hotel?                                                 
FB: By refusing to fill in the Guest Comment Card?                                           
MN: Correct.

MN: What happened to the man who stole an Advent calendar?                     
FB: He got 25 days?                                                                                                         
MN: Correct.

MN: How do accountants make a bold fashion statement?                               
FB: By wearing light grey socks instead of their dark grey ones?                                 
MN: Correct.

MN: What goes "Oh, oh, oh"?                                                                                 
FB: Santa walking backwards?                                                                                                      
MN: Correct.

MN: [BUZZER SOUNDS] And finally, have you heard the joke about the interesting accountant? 
FB: Er, no?                                                                                                                                     
MN: Me neither. Correct.

Finance Bill, at the end of that round, you scored 15 points, with no passes. 

Our next contestant, please…

How did you do?

We’re not suggesting you apply to go on Mastermind, but it’s never a bad thing to occasionally gen up on information that may affect your financial situation.

Although, perhaps not just yet, unless you still have your tax return to do. It is nearly Christmas, after all.

So, from everyone here at CW Towers, may we wish you all a very merry Christmas, and a healthy and happy 2018!

And please don’t overdo the twerky at your office party.

Until next month year...

Tuesday, 7 November 2017

Your starter for 10: Is it a car or a van?

Er, not sure. Can it be something in-between…?

Oh, the fun we have at CW Towers!

When we’re not beavering away with all sorts of accountancy-related work, we sometimes treat ourselves to a well-deserved game of inter-departmental (and extremely competitive) I Spy.

The most recent episode was no less fiercely fought, descended into a somewhat passionate debate, and almost resulted in someone having their solar-powered calculator hidden in a bottom drawer.

And all because the person whose turn it was had a window to look out of.

Usually, in a game of I Spy, being the only person with a view to the outside world can give someone an unfair advantage. Although, in this case, what they saw complicated matters more than anyone could ever have imagined.

I spy with my little eye, something beginning with, er, ‘C’. I think. 
No, hang on. ‘V’. No. Forget that, it’s definitely ‘C’. Probably.

Guesses ranged from carrot and cauliflower (it was market day), to calculator (even though we’ve already had that 17 times before), to see-saw (please, don’t ask) and Chippenham.

Then, what’s normally a fairly breezy affair became much less so when the person triumphantly declared, “No, it’s a car! I still… think.

At which point, 14 people were huddled around a small window overlooking the street.

That’s not a car!” someone challenged. “Well, not according to HMRC!

Yes, it is!” cried the other person defensively.

And that’s when the wheels came off…

(For the record, there have been 3 recent appeals by HMRC to examine whether vehicles supplied to employees were vans or cars. This is because the categorisation of a vehicle supplied to an employee significantly affects the income tax liability for the employee as well as the national insurance contributions for the employer.)

So, apart from allowing innocuous office games to become too riotous, the moral of the story is that, sometimes, a window and a bit of HMRC knowledge can be dangerous.

Which is why, for health and safety reasons, we’re not going to play I Spy for a while.

No, the next game we have lined up is the fun and fast-paced ‘If I were a muppet, what sort of muppet would I be.

That should be interesting.

Until next month...

Thursday, 12 October 2017

What’s the best pressie you’ve ever received from work?

Well, it depends how trivial it is…

Brace yourself: we’re about to mention the c-word.

No need to be alarmed though – Hallowe’en hasn’t arrived yet and no one’s mentioned Guy Fawkes or Bonfire Night, so it’s perfectly acceptable timing to jump on the bandwagon and bring up Christmas 3 months early…

Because Christmas is a time for giving and goodwill to all, now is the ideal time for (ahem, great) employers to start thinking about what presents to get their highly-appreciated and hard-working employees.

Which is why it’s good to know about what gifts are tax-exempt and which ones you need to report on your P11D or PAYE Settlement Agreement.

That’s right; we’re talking about trivial benefits here.

So, what’s allowable and what isn’t?

Well, thanks to the work of Sir Tufty Rough-Bonce and his aides Preston Garstang and Compton Bassett in the Department of Trivial Affairs, all of the finer, pointless details have already been thrashed out.

Lengthy discussions have been had and painstaking decisions made. A Definitive History of HMRC didn’t quite make it (not trivial enough) and life-size knitted sheep were rejected immediately (too woolly).

However, within the conclusive guidelines, a nice bottle of wine or festive turkey is deemed acceptable. As is a £49.00 personalised Winter Wonderland snow globe.

In short, for the gift to be exempt, here’s what you need to know:

It can’t be cash or a cash voucher (but can be a gift voucher).
It shouldn’t exceed £50 in value.
It can’t be provided as part of a salary sacrifice or other contractual arrangement.
It shouldn’t be given in recognition of roles or services that the employee performs as part of
        their job.

Hopefully then (and unless you’re an insomniac), the wait for just what you've always wanted is only 77 sleeps away. But, if you think there’s more chance of Bing Crosby carol-singing White Christmas at your place of work than your employer having a seasonal treat lined up for you, remember, you could always lead by example…

Apparently, we hear that an ornamental turkey in a bottle is all the rage this year and selling fast. Of course, where you invite the recipient to put the decorative stuffing is entirely up to you.

Until next month...

Friday, 8 September 2017

Who Wants To Be a Millionaire?

We can help. But first, it’s time for the Chapman Worth quiz…

Bake Off’s back and so is Strictly, but whatever happened to another old favourite?

Here’s our industry-topical homage to one of the most popular quizzes of all time. (Unfortunately, there’s no money up for grabs although winners will have the opportunity to unsubscribe from to our mailing list.)

Ready?

Q1: What expenses can landlords now claim?
A. Whatever they like.
B. Whatever they can get away with.
C. Those that are wholly and exclusively for the purposes of renting out the property.
D. None. It’s not worth being a landlord.

Q2: What is Form 17?
A. A millennial hip-hop group from Grove.
B. The document that follows Form 16.
C. A shampoo for poodles.
D. A HMRC declaration for cohabiting couples to acknowledge unequal property ownership and be taxed proportionally.

Q3: What’s the definition of ‘people with significant control’?
A. Someone with authority or skill – e.g. a teacher, traffic warden, or juggler.
B. Someone who can drink 11 cups of tea without the need to powder their nose.
C. An individual who exerts significant control over a UK company or LLP through shares or voting rights.
D. Your other half.

Q4: What is disincorporation relief?
A. An annual, televised fundraising event.
B. Relief that allows the transfer of a business from a private limited company to a sole trader or partnership; and due to end on 31 March 2018.
C. The feeling you get when you leave behind corporate life.
D. An over-the-counter medication.

Q5: What does OTS stand for?
A. Office of Tax Simplification.
B. Office of Tax Simpletons.
C. Oh. Tax. S**t.
D. Overly Tense Subtraction.

If you’re dying to know the correct answers or want to read more on the topics covered here, you’ll find everything you need in this month’s email newsletter.

And if you’ve still no idea what quiz show we’ve been talking about, it might be time to ask the audience.

Either that, or shout in exasperation: “I’ll have a ‘P’ please, Bob!” Anything to let you escape the room.

Until next month...

Friday, 4 August 2017

Final score (AET): Tax Avoidance Scheme 0 – 1 HMRC

How a complex Employee Benefit Trust resulted in a catastrophic own goal…

With the new football season warming up, we’ve decided to get you in the mood with a match report of a recent (albeit long-running) encounter between HMRC and a well-known football club.

So, it’s over to our roving reporter in the north, Mike Hardigan-Fitzbaddely…

“Well, this one’s been a cracker, full of twists and turns.

Although the season’s just now starting for some, this marathon of a contest has only just finished for others. And yes, while one side can claim to literally be over the moon, the other is, without doubt, feeling as sick as a parrot. With psittacosis.

I’m talking about the former incarnation of Rangers Football Club (who subsequently went into liquidation) and the case brought against them by HMRC for tax avoidance.

From the off, Rangers were keen to keep things tight around the fringes and keep something extra in their locker – about £47m – rallying at every opportunity to keep HMRC at bay. Their strategy worked well and for much of the tussle, they remained untouchable. Their opponents had seen this formation and tactics before though, and continued to probe relentlessly until the cracks in Rangers’ rearguard action started to show.

On a different day, and if Rangers’ gameplan had been on target, it might have worked. But, as the battle of wills wore on, all their attempts to think outside the box caused them to fall into their own offside trap. 

And, despite a valiant, backs-to-the-wall defensive display, they ultimately found themselves not in acres of space, but a quagmire of red-card trouble. Caught in their own net, they paid the ultimate penalty.

What might have first appeared as a game of two halves and ‘a bit of handbags’ has now been decisively concluded. To lose the dressing room is one thing; to lose the entire football club is something that will cause them nightmares for years to come.

This is Mike Hardigan-Fitzbaddely, North of Watford. In the rain.” 

For those of us not versed in empty footballing parlance, following an appeal, The Supreme Court finally ruled in favour of HMRC who claimed that Rangers’ complex Employee Benefit Trusts and sub-trusts structure amounted to avoidance of liability to pay Income Tax and Class 1 National Insurance contributions. This involved the payments of over £47m to players, managers, and directors of the football club between 2001 and 2010.

We’ve all heard of schoolboy defending, although, in this case, it seems nowhere near as damaging as schoolboy accounting. Sometimes, claiming to give 110% clearly doesn’t work.

And remember, it’s only a cliché if it doesn’t have that certain je ne sais quoi.

Until next month...