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Newsletter June 2015

This month's newsletter lists the tax changes announced in the Finance Bill 2015 that were deferred until after the election, a reminder to take a look at the pensions automatic enrolment process, how to recover pre-incorporation VAT and a recent case where directors were jailed for defrauding an appointed liquidator.

Our next newsletter will be published Thursday, 2 July 2015.

What is your business staging date?

Pensions' automatic enrolment is not going to go away. Businesses have begun to receive notification of their staging date: the date on which pension arrangement under the scheme should be in place.

According to the Pensions Regulator's commentary on automatic enrolment:

"The law on workplace pensions has changed. Every employer with at least one member of staff now has new duties, including putting those who meet certain criteria into a workplace pension scheme and contributing towards it. This is called auyomatic enrolment. It's called this because it's automatic for your staff - they don't have to do anything to be enrolled into your pension scheme. But it's not automatic for you. You need to take steps to make sure they're enrolled."

The stages or tasks you will need to complete by your staging date include:

  1. Assessment of your workforce to see who is eligible.
  2. Provide a point of contact.
  3. Create an action plan.

This will include choosing a pension scheme or checking that your present scheme will qualify.

If you are still unsure what you should be doing, we would be happy to point you in the right direction. As we mentioned at the beginning of this article, this requirement is not going to go away.

Reclaiming VAT input tax prior to registration

Once you have registered your business for VAT the first thing you should consider is the possibility of reclaiming input tax on purchases of goods and services prior to registration.

This article summarises the issues you will need to consider for the two categories: goods and services.

There's a time limit for backdating claims for VAT paid before registration. From your date of registration the time limit is:

  1. 4 years for goods you still have, or that were used to make other goods you still have
  2. 6 months for services.

You can only reclaim VAT on purchases for the business now registered for VAT. They must relate to your 'business purpose'. This means they must relate to VAT taxable goods or services that you supply.

You should reclaim them on your first VAT return (add them to your Box 4 figure) and keep records including:

  1. invoices and receipts
  2. a description and purchase dates
  3. information about how they relate to your business now

If your pre-registration purchases and other costs are significant, this facility can produce a reasonable cash flow benefit.

Please call if you would like our help to assess the possible claim you could make.

The missing clauses

In order to process the Finance Bill 2015 through the parliamentary procedures before the recent election, certain clauses were deferred. It is likely that the deferred clauses will be reintroduced in the summer Budget, 8 July 2015.

As announced, George Osborne will present his first Budget of the new parliament 8 July. The clauses that were deferred are:

  1. Tax exemption for travel expenses of members of local authorities.
  2. Consortium relief - the "link company" rules.
  3. Fuel duty incentives for aqua methanol.
  4. Exemption for trivial benefits in kind.
  5. Amendments to rules for the Enterprise Investment Scheme and Venture Capital Trusts.

Speculations about other matters that may be included in a post election budget are rife and may include:

  1. The announcement of an increase in Inheritance Tax exemptions for married couples passing on the family home, to a possible £1m, and
  2. Loss of higher rate tax relief for pension contributions.

Attempts to defraud a liquidator punished by courts

A court order appointing a Provisional Liquidator was made by the High Court in March 2014 against Parkwell Investments Ltd, based in Wilmslow, Cheshire. The order removed the company's officers and appointed a Provisional Liquidator in their place to protect the company's remaining assets.

The company's officers then deliberately and knowingly acted in contempt of court by transferring £450,000 out of the reach of the Provisional Liquidator.

The funds are now very unlikely to be recovered, a point which presiding Judge Mr Justice Norris took into consideration when sentencing. He said the company officers' actions "were an affront to the rule of law and order".

Amran Munir, Ali Sami Farooq, and Saif Chaudhry were each sentenced to six months' imprisonment, of which three months is to be served in prison before being granted unconditional release. Unusually, the prison sentence was given in civil, rather than criminal, proceedings.

The individuals initially defended their actions but at the eleventh hour admitted to breaches of the court's order.

Tax Diary June/July 2015

1 June 2015
Due date for Corporation Tax due for the year ended 31 August 2014.

19 June 2015
PAYE and NIC deductions due for month ended 5 June 2015. (If you pay your tax electronically the due date is 22 June 2015.)

19 June 2015
Filing deadline for the CIS300 monthly return for the month ended 5 June 2015.

19 June 2015
CIS tax deducted for the month ended 5 June 2015 is payable by today.

1 July 2015
Due date for Corporation Tax due for the year ended 30 September 2014.

6 July 2015
Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2015
Pay Class 1A NICs (by the 22 July 2015 if paid electronically).

19 July 2015
PAYE and NIC deductions due for month ended 5 July 2015. (If you pay your tax electronically the due date is 22 July 2015.)

19 July 2015
Filing deadline for the CIS300 monthly return for the month ended 5 July 2015.

19 July 2015
CIS tax deducted for the month ended 5 July 2015 is payable by today.

Rates & Allowances

Rates and allowances for income tax, corporation tax, capital gains tax, inheritance tax and the pension scheme earnings cap are set out below.

Alexander Probin
Suite 5
125/129 Witton Street
Northwich
Cheshire
CW9 5DY
t - 01606 359008
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