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HMRC seizes assets from 2,000 small firms.

It was October 2017 when I commented that “HMRC have their sights on small business” as HMRC were on record saying that SME’s dodge the most tax, releasing figures showing that small to medium sized businesses are responsible for 51% of the £5.2bn “tax gap” between what is owed and what is paid.

HMRC put tax-avoiding small businesses in to four categories, the “unthinking evader”, the “invested evader”, the “lifestyle evader” and the “systematic evader”.

Are you thinking about VAT at your works Christmas party?

I am almost sure that the first thing that everyone thinks about when the office Christmas party is mentioned is what should be done about the input VAT incurred, but for those that don’t think like this (maybe it’s just me), I thought it would be useful to give a quick reminder on the correct treatment.

When only employees of the business attend the Christmas party then this is seen as staff entertainment and is deemed to be wholly for the purposes of the business, and input VAT incurred on the event is fully recoverable.

Inheritance tax – a tax of choice?

Originally featured on Unbiased, November 28. 

If you asked your friends, ‘Who do you want to leave your money to when you die?’ some of them might say, ‘The taxman’ – but only if they have grown-up children who work for HMRC. Otherwise, it’s safe to say that most of us would prefer our families to inherit as much of our wealth as possible.

Get them while they're hot!

In the Budget of 2012 George Osborne initially proposed imposing VAT on all hot food. This had the effect of uniting the North and South—(Well the South West anyway). Yes 20% vat on pies, steak bakes and the venerable Cornish pasty beloved by the masses and not just in Cornwall!

The media loved this and portrayed it as an attack on the staple diet of the working classes of Great Britain. After a relatively short media campaign, the government relented and brought in some new, more complicated rules on hot food. This was sufficient to appease the bakers, and the consumers.

Budget Highlights for UK Manufacturing

Whilst the recent budget didn’t throw up any significant headline announcements for our Manufacturing Sector, there were various items outlined which should have a positive impact on the sector, including:

Research & Development

The rate of the R&D expenditure credit for non SMEs will be increased from 11% to 12% with effect from 1 January 2018.

Enterprise Investment Scheme

Performance in the legal sector market 2016/17

Our unique business support for law firms and our endorsement by the Law Society mean that we act for over 100 law firms every year.  As a result, we gather a huge amount of financial and operational information on those firms which we compile in our benchmarking database.  Although each and every one of our law firm clients receive a personalised benchmarking report for discussion as we review their annual accounts, we have also summarised the results of all of the firms in our annual benchmarking report for 2016/17.

Forensic Team Doubles in Size

Armstrong Watson Accountants, Business and Financial Advisers have announced that, just one year on from its establishment, their Forensic Team has doubled in size to meet increasing demand.

Based in the firm’s Leeds office, the Forensic Team’s expansion comes in response to growth in shareholder disputes, business and intellectual property valuation work, and commercial litigation.

The existing team of five, led by Partner and Head of Forensic Accounting, Matthew Geale, assisted by Liesel Annible and Chis Hine, has been joined by Lindsay Tarrant as a Senior Manager. 

Budget Review for Retail Sector

There are number of areas in the Autumn Budget that will impact on the retail sector.

The reduction in the VAT registration threshold which had been suggested prior to the budget was avoided, at least for now, with the threshold frozen at £85,000 for the next two years whilst the government consults on the matter. 

Making Tax Digital is edging closer and from April 2019, businesses trading above the VAT registration threshold will need to report their VAT information through this system.

Impact of the Budget for Family Businesses

It will come with little surprise that the second budget of 2017 failed to offer significant headline announcements, despite the rumour mill going in to overdrive during the past few days.

The Chancellor delivered a budget speech based predominantly on the economic climate, with specific focuses on growth and debt, especially given the backdrop of the impending ‘Brexit’ effect.  Growth and decreasing unemployment bring optimism for a post ‘Brexit’ Britain and offer some reassurance to family business owners - although there will be challenging obstacles ahead.

The Budget Tightrope

Graham poles, Armstrong Watson's Tax Partner gives his views on the upcoming Autumn Budget given by the Chancellor Philip Hammond.