Jon Stow Consulting – Tax Solutions

Following the Coalition’s decision not to abolish the Furnished Holiday Lettings (FHL) tax category with all its advantages over the letting of investment property, we now know what the Government does intend for the future.

Donegal cottage

The regime for FHL is not going to be quite as generous as it was in the past, but we should be thankful that it is not going to be axed altogether. The previous qualifications for a letting to be an FHL were:

• the property should be available for holiday … Continue Reading
  

The 2009 Pre-Budget Report in December signalled a significant number of tax increases in the UK designed to make up the significant Budget deficit following the banking crisis. For many or our clients there will be a significant impact on their finances.-Income tax rates to rise and personal allowances to reduce for wealthier clients. -Future changes to rates applicable for dividends, trusts and NICs. -New 50% income tax band. There are further complicated rules for pension relief restriction and the end of well-established tax breaks for furnished holiday lettings (currently enjoying business tax advantages). There … Continue Reading

We professionals in the tax business are fond of offering tax health checks to prospective clients, but now we should be offering health checks to medical professionals, who are the target of HMRC’s latest campaign to collect tax from perceived miscreants. I am sure the Revenue is not suggesting that all in the health business are into dodgy dealing and falsifying their tax returns, but presumably there must be a supposition that “extras” such as giving references to patients, signing passport applications and getting payments from pharmaceutical companies slip through into doctors’ pockets unnoticed by their accountants or tax advisers. … Continue Reading

I had a telephone call this week from a chap who said “I am phoning because I want to start a company”. My immediate reaction after thanking him for the call was to ask why he needed a company, if he meant a limited company. This is because from the tax point of view it is not necessarily a good idea to have a company, and there needs to be a commercial reason if profits are going to be limited initially or there might be trading losses which would be useful to an individual who is a current taxpayer-employee, or … Continue Reading

It was reported this last week that 1.5 million UK pensioners are paying too much tax which is because too much is being deducted from their occupational and private pensions and from any employment earnings they have. Once upon a time of course, most pensioners with taxable income of any sort had to complete tax returns. Since the introduction of Self Assessment in 1996-97 and increased automation and exchange of information as well as significant job cuts in what has become HM Revenue & Customs, far fewer people have to complete tax returns. In itself this is sensible, because why … Continue Reading

There is a new phishing scam going round in the form of an email that purports to come from HM Revenue & Customs. This is just to warn you not to click on the link in any such email you receive. HM Revenue & Customs will never email a taxpayer concerning a tax refund or any other matter. Part of the text of the current “phishing” scam email is as follows:”Taxpayer ID: (a “reference”)Tax Type: INCOME TAXIssue: Unreported/Underreported Income (Fraud Application)Please review your tax statement on HM Revenue and Customs (HMRC) website … Continue Reading

A couple of incidents recently highlighted have highlighted how easily “progress” can isolate people and prevent them from getting help, and those people are often the neediest.As a tax professional I am used to the bureaucracy of HM Revenue & Customs, though even for me it can be extremely frustrating. I received a form from HMRC concerning a pensions coding (Form P161 for the initiated). It was addressed to my firm, but did not have the taxpayer-client’s name on it, only the National Insurance number. I could not trace the number in my tax software and telephoned HMRC … Continue Reading

It has been a strange week. On Monday I went to see a client to collect his tax papers, only to find that they were in a locked cabinet to which only his wife had the key, and she was out. It was a short meeting as a result, and I did wonder why my client had not telephoned to save me the journey.Two less eventful days ensued, and I went to my monthly local meeting of tax practitioners on Thursday. “Tell me, everyone” I said, “what do you guys do in the way of marketing?” Six … Continue Reading

Like most other people in my business, nearly all things in my office are done online. The tax returns have to be submitted by FBI (file by internet); we can read the Revenue manuals online, download their booklets, read the professional magazines and have website communities of fellow professionals. In other words, we have access to every possible resource of information without resorting to the printed word. Then, if we need something printed, then we print it ourselves,Many readers of this piece will recognise this; some will be fellow tax professionals and others will have found their business … Continue Reading

HM Revenue & Customs has claimed that it has struck a blow for lower-paid workers in the form of restaurant and nightclub staff. As many of you will know, there is a common system in restaurants where tips are collected whether through cash or as additions to credit card billing and allocated to a member of staff, the troncmaster, who is responsible for delivering shares of these gratuities to his or her colleagues. Normally the person who has the distribution responsibility deducts PAYE as appropriate which is dealt with separately from the normal wages. Yes, some cash tips go straight … Continue Reading