Matters Of Tax

Matters Of Tax

by Melanie Richardson

Explaining the ins and outs of some current tax matters, Melanie Richardson also reminds us to get our tax returns in before the deadline.

TAX RETURNS

We are slowly building up to the tax season and trying to get ready for the rush. Last year, clients were still sending us information at 5.45pm on 31st January and this year we are trying to get a bit ahead! There will always be those last-minute clients, but we can do a better job if we get the information a bit sooner. Who knows, with a bit of notice, we might even be able to do some planning and save you some tax!

BENEFIT IN KIND

One of our clients has been giving their employees access to Perkbox. Perkbox provides staff with discounts and access to various deals which the employer pays for. It costs a relatively small amount per head and this client’s employees made good use if it.

Unfortunately, giving employees access to Perkbox is classed as a benefit in kind and therefore the employees are treated as if they had received extra salary by HMRC. They end up paying additional income tax, which was completely not what the client had intended.

In this case we were able to help and we wrote to HMRC explaining the situation and asking for a PAYE Settlement Agreement. This means that HMRC will allow the employer to pay the tax instead of the employees on an annual basis. Once agreed, this arrangement continues until it is cancelled by the employer. All they have to do now is to remember to pay the tax!

LEASE PREMIUMS

A rather small piece of legislation came in quite handy for another of our clients this week. The client had taken over a lease from another tenant of the property. The lease had been reassigned to our client.

Our client had paid a lease premium of £20,000 but this was not allowable for deduction against the company’s profits. Instead, a rather obscure piece of law means that we could take over the original tenant’s tax relief on a proportional basis and this can be offset against the company’s tax bill.

Unfortunately, at the moment the company is loss making, and so can’t make use of the relief, but as corporation tax losses can be carried forward indefinitely, they will get the benefit of this at some point in the future.

CHANGING ACCOUNTANTS

Most businesses will at some point want to change banks or professional advisors. As Chartered Accountants, we have to comply with the regulations set out by our Institute. This means that when a client decides to move elsewhere, we are obliged to provide the necessary information to the new advisors and all in a reasonable time frame. Failure to do this will result in censure from the Institute of Chartered Accountants in England and Wales (ICAEW) which has the ability to fine and discipline firms.

Dealing with a registered firm means that clients have these protections and more. However, unlike the term lawyer which is legally protected, anyone can call themselves an accountant and set up a business.

We came across this recently when we started to act for a new client, who had trouble getting their information from their old accountants. In this instance, the accountants weren’t registered with a professional body and the client had no real way of getting what they needed. Luckily, we managed to file the accounts in time, but it is always a good idea to make sure your accountants are registered with the relevant regulatory body.

  • Money Matters is written by Melanie Richardson – Managing Partner Swindells LLP Chartered Accountants & Chartered Tax Advisers
  • Tel: 01825 763366

As individual circumstances vary considerably from person to person, the views expressed in this article are meant only as a general guide, and any specific advice required should be sought from your own professional adviser or by contacting the writer at her place of work. No responsibility for loss resulting to any person acting as a result of any material in the above article can be accepted by the writer or Swindells LLP.