Friday, 11 May 2018

Say hello to our new in-house Agony Aunt…

Margery Orpington-Smythe at your service!

Ever mindful of wanting to give something back to the local community, we now have our very own resident Agony Aunt in post: say hello to Margery Orpington-Smythe.

Having just returned from an almost sell-out tour of two South Oxfordshire community halls, we’re pleased to announce that Margery’s at last bringing her coveted counsel online, ready to help our clients and readers address their everyday dilemmas and travails.

And with a reputation cobbled together around none of the qualities you’d expect from a half-decent Agony Aunt, she’s never short of some good old misplaced advice and opinions – all based on personal experience, of course (and what she imagines her experience might have been otherwise).

So, whatever you need to know and no matter what’s on your mind – whether it’s finance-related or otherwise, just ask Marge…

Here’s one to get us started:

Dear Marge,

After one of the hottest early May Bank Holidays ever, I’m now completely out of sorts. Not only am I concerned that the village has developed its own microclimate due to global warming, my dahlias have gone into overdrive, the cat refuses to vacate the bidet, and my G&Ts won’t stay chilled long enough for me to Instagram them. I’m at my wit’s end. Please help.

Yours, Perturbed and Desperate. (East Hendred)


Dear Perturbed and Desperate,

My, my. How awful for you. Luckily, I can completely empathise.

It reminds me of the summer of ’76 when our village too experienced unseasonably premature sunshine. If we’d heard of it, we also would have put it down to global warming. We hadn’t though, so we didn’t. Yet that was the very least of our problems.

Around that same period, I recall that our garden hedge maze grew so wild that a local tax inspector became lost in it for 3 whole weeks. Thankfully, there was an upside. It could have been a fortnight.

Our cats (Spreadsheet and Debit) were similarly out of sorts due to the heat. However, instead of being forced to seek a place of cool refuge in the way you describe, they were plagued with the biggest furballs I’d ever seen. At one point, I thought we had an infestation of extremely idle guinea pigs all over the house.

And, as for keeping one’s drinks cool, that remains a perennial problem. My advice would be to forget about the need for posy snapshots and just drink it while you can. If it’s still not staying cool for long enough, then just top it up. That always works for me.

Or just photoshop your G&T. Everybody does it and no one will know. Besides, when I was younger, it would take ages to take and develop a photograph, so it was much easier to instead write about whatever it was you wanted to capture by way of letter. Quaint, I know but oh, so satisfying! (By the way, if you think chilled tipples are a challenge, you should try keeping a Baked Alaska at the right temperature. There have been innumerable instances in our house when it’s resulted in marital disharmony and many a time nearly caused me to resort to simply being called Ms Smythe again.)

Anyway, I digress.

In summary, consider taking a social media holiday, build a walk-in refrigerator in which to enjoy your summer aperitifs, and keep your bathroom door shut. If that doesn’t work, remove the cat flap from it altogether.

The global warming issue is slightly trickier. One option is to move village. Or, if you don’t fancy that, just stay in the UK and wait until June.

Oh, and find yourself a nice accountant. They’re not all listless and boring.

Helpfully yours, Marge.

Until next month...

Friday, 20 April 2018

Had a chance yet to digest what the 2018 Spring Statement means for you?

Here’s a summary…

Last month, Philip Hammond announced his first Spring Statement.

After two full Budgets in 2017, it didn’t include any tax changes or new spending initiatives (these will come in the Autumn Budget).

Instead, it represented a move to a new cycle of annual tax and spending changes and, as such, focused on reviewing Office for Budget Responsibility (OBR) figures and announcing consultations.

Here’s a recap of its key contents for the 2018/19 tax year:

Consultations ranged from ways to squeeze more tax from international digital businesses to a proposal for extending entrepreneurs’ relief to some shareholders whose holdings drop below the qualifying 5% level. There’s also the possibility of the VAT threshold being lowered.

The start of April saw the usual changes to the income tax rates and allowances as well as national insurance contributions. This year there will also be a cut in the dividend allowance and some special new tax rates for Scottish taxpayers. Modest tax increases have been applied to company cars, but their cumulative impact could be significant for some people.

Many employees will see any extra net income from the tax changes diminished by higher minimum auto-enrolment pension contributions, although the lifetime allowance for pensions has been raised.

And, less welcome for some will be the changes to employee termination payments and the new rules for enterprise investment schemes.

Other areas included:

English business rates                                                                                               
The next revaluation of business property in England will be brought forward one year to 2021, with three-yearly revaluations thereafter.

Entrepreneur’s relief                                                                                                     
A consultation paper was published on how to give entrepreneurs’ relief in circumstances where it would otherwise be lost because of a new share issue.

It could be extended for shareholders who currently miss out because their company issues new shares to raise cash, dropping their shareholding below the crucial 5% point.

VAT threshold                                                                                                             
Because of concern that the VAT threshold of £85k is inhibiting business growth, the government issued a call for further evidence on restructuring the VAT registration threshold to offer more incentives for small businesses to grow. There’s already some evidence that businesses deliberately limit growth to avoid crossing the existing £85,000 threshold (which has been frozen for the next two years).

So, watch out for changes – maybe a system of gradually increasing tax rates as turnover rises, or possibly different rates for different types of business.

Tax and the digital economy                                                                                           
There were several papers examining taxation issues surrounding the digital economy, including VAT and income tax leakage through internet trading platforms.                                                                                       
The government says that some people who use online platforms to run their businesses are not paying their fair share of taxes. One approach could be to ask platforms to help with tax admin – rather like employers.

Self-funded work-related training                                                                             
A consultation paper was published examining how to extend the existing tax relief framework to self-funded work-related training by employees and the self-employed.

According to HMRC, over 1 million people paid for their own training back in 2016, so now the government would like views on how to extend the tax relief to provide a training boost and encourage this further.

Tax evasion and money laundering                                                                                                   
The government wants to crack down on people who use cash to evade tax and for money laundering by taking a keen interest in large cash transactions and finding out why they are used.

Enterprise investment schemes and venture capital trusts                           
New rules for enterprise investment schemes and venture capital trusts will mean more cash for innovative businesses – but higher risks for investors.

HMRC to extend powers                                                                                         
HMRC can demand a security deposit from businesses where tax is at risk for VAT, PAYE and NICs as well as various other taxes, and this will now be extended to corporation tax and the Construction Industry Scheme.

Get everything you need in your 2018/19 Tax Tables

We have free 2018/19 Tax Tables to give out if you’d like one.

They conveniently give you all the key numbers in one place and include all of the updated information announced in the Spring Statement.

If you’d like us to send you your new Tax Tables for the 2018/19 tax year, please get in touch.

Key changes for 2018/19 include:

  • Increases to the personal allowance, and basic and higher rate tax thresholds.
  • New income tax bands and rates for Scotland.
  • A cut in the dividend tax allowance from £5,000 to £2,000.
  • Revised company car tax scales, with an increase in the diesel levy.
  • The first increase in the lifetime pension allowance since 2010.
  • An increase in the maximum tax relievable investment in Enterprise Investment Schemes.

Questions or queries on how these relate to you?

If you have any questions or would like some more information on how the Spring Statement affects you, please get in touch.

Until next month (when we return to a lighter take on things)...

Wednesday, 7 March 2018

Steady now… HMRC releases new guidance on reasonable care...

Unfortunately, Finance Bill didn’t see the memo.

Maybe it was all the talk of Hysteria from Siberia or The Beast from the East but it made Finance Bill a little more distracted than usual.

Although never particularly detail-oriented, he nonetheless always acts with absolute conviction – regardless of whether he actually knows what he’s doing, or even if it’s right.

So, when he heard of new guidance from HMRC about taking reasonable care, he embraced it with his usual overly-enthusiastic gusto, and pretty much applied it to every area of his life. Better safe than sorry, eh?

As he was going to be working from home for a few days, the first thing he needed was an extra-comfy chair, lots of cushions and a supportive back rest. At long last he was able to use his Secret Santa present – a pressure-activated massager that gave messages of encouragement every time you shifted against it, such as “You are a tiger!” and “Whatever anyone else ever tells you, accountants are fabulous. No, really.

His laptop was fully charged, his therapeutic wrist support was in place; Wi-Fi signal at full strength, and firewalls, antivirus, and malicious threat software all ready to go. He had spare spare batteries for his calculator and his compendium of crayons was neatly lined up in colour order alongside his new school maths set. As his old mentor used to tell him, you can always rely on someone with a protractor and pair of compasses, but beware those who chew their pencils…

Efficient? He was going to be unstoppable. He even had a cup of freshly-poured herbal tea sat on his desk to help him stay hydrated (and not too hot, of course – ever since the last time when he burnt his lips and short-circuited the keyboard with a spray of Wong Lo Kat).

Nothing beats the feeling of being fully prepared. Even the background music was just right; conducive to creating a zen-like atmosphere and, importantly, not too loud. Despite having a vast and eclectic LP collection, Finance Bill had very fixed ideas on what qualified as work music and what he liked to call ‘Helloooow, sociable smooth’. Thrash metal was definitely not allowed (danger of sudden movements, moshing and breakages), and nor was anything by Anthrax (pathogenic reasons and highly contagious). The New Seekers were also off the playlist (due to danger of DVT from not moving at all).

Finally, he made sure the room was well-aired but warm (by having his convection heater outside the open window), and ensured that the lighting wasn’t too bright, but more ambient to aid concentration and remind him of his favourite jazz club near Whitehall, Dim.

Then, just as he was about to finally settle down to start some work, he decided to make one last trip to the kitchen to check he hadn’t left any taps dripping, slipped on the HMRC Reasonable Care booklet that was lying on the floor and is now in traction in The John Radcliffe Hospital. So much for better safe than sorry.

Still, it could have been worse; it could have been his Tom Petty Free Fallin’ single that he’d trodden on.

For the record (no pun intended), HMRC has published new guidance on how to take reasonable care when submitting tax returns and other documents to them, and what happens if you don’t (including details of penalties).

Coincidentally, it’s entitled ‘Reasonable care: tax returns and other documents’ and is the first time HMRC has made all care advice available to access from one location (on GOV.UK) instead of across various compliance manuals. Essentially, it gives advice on "doing everything you can to make sure the tax returns and other documents you send [to HMRC] are accurate.”

In case you were wondering how Finance Bill is doing, there was a silver lining. Kind of.

Now that all the snow has melted, he is starting to get a few more visitors; yet keeps telling them that everything’s up in the air and he’s completely plastered.

Sedative, anyone?

Until next month...

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...