Capital Gains Tax is essentially when you are taxed for the profits (gains) you make when you sell, give away or ‘dispose’ of something you own that has increased in value.
This can include: selling shares, transferring a property to someone else, exchanging an asset for something else or receiving compensation… The list goes on!
However, the actual amount of Capital Gains Tax you will have to pay will vary depending on your tax free allowance and any other additional reliefs you have taken.
In most cases, CGT is dealt with via the self-assessment system when you submit your tax return. However, you now need to report the gains on disposal of any residential properties in the UK to HMRC within 30 days using a separate form.
There are beneficial rates and reliefs to be taken advantage of and our tax specialists are best placed to help you do this.
If you are struggling to assess your potential Capital Gains Tax liabilities, our team of tax consultants can help. Harnessing our years of experience in this field, we can not only help you to minimise these costs – for good –but we can provide tax preparation support which will ensure you don’t worry about your taxes in the future!
Why Barnes Roffe?
We are much more than your average accountancy firm. Through our continued endeavour to help all our clients to receive quality, expert tax advice; our tax preparation team can now provide you with comprehensive cover to ensure against any unnecessary taxation costs.
So contact Barnes Roffe today and take your first step to making tax less taxing. Our tax advisors are ready to take your call.
If an employee has a company car, there is often a tax charge on the benefit given to the employee.
The tax payable on company car benefit-in-kind can be an important consideration for businesses providing company cars, whether to a team of sales staff, for example, or simply to the key employees.
But with the tax on car benefits increasing all the time, staff may not feel they are getting a benefit at all and it is even possible for an unexpected (and unwelcome!) tax charge to arise if an employee only makes occasional use of a car available to all employees.
So careful planning is needed and at Barnes Roffe we can help and advise you on the best way to provide this type of benefit to your employees and ensure that all your compliance and tax requirements are met.
Our team of tax advisors are able to help our clients with this type of strategic decision. So no matter your decision in regards to company cars, with our support you can forget about the complications of working out these taxes and instead focus on maximising the success of your business.
Contact our tax team today and we can help you meet your company car benefit obligations in the most tax efficient way.
Estate tax is a tax based on the value of the property of a deceased person which is charged on the personal representative of the deceased.
It is one of the many taxes you will have to account for if you are the trustee or personal representative of someone who has died. In such circumstances you will need to complete a Trust and Estate Tax Return form for HMRC so that they can take into account any income or chargeable gains it had made over the tax year.
Why Barnes Roffe?
We understand that tax and all its different variations can be a lot to take in, and we want to help. Using our tax preparation services, we can help you to check all your tax liabilities and ensure you are thoroughly prepared for every eventuality. So contact our team of tax accountants today and let us help you to make tax less taxing.
If you have received a tax investigation letter from HMRC what should you do?
In the first instance, you should always read the letter carefully and if you are unsure what it means, or if it is a complicated request for information it is a good idea to get expert, specialist advice straight away. Any investigation into your tax affairs is very likely to be disruptive to your business and costly, especially if you don’t get the right help. We would caution against replying without seeking advice, however tempting it may be.
At Barnes Roffe our expert team will be able to support you in all of HMRC’s investigatory areas.
For a free, confidential chat about any HMRC enquiry, or tax investigation contact our Barnes Roffe’s specialist tax team without delay.
What triggers an Investigation?
Compliance checks are usually triggered when figures submitted on a return appear to be wrong for some reason. For example, when a business with a large turnover declares a very small amount of tax, or on the other end of the scale, if a small company suddenly makes a large claim for VAT. However, there are many other reasons why a business can become under investigation:
- HMRC receives a tip-off;
- Your income falls dramatically, costs increase significantly or there are inconsistencies between different returns;
- Your costs are unusually high compared to the industry norm;
- Your business is in a high-risk industry, for example one that commonly takes cash payments;
- You often file your returns late;
- Your standard of living appears to be inconsistent with your declared level of income; or
- You are unlucky enough to be in a sector that HMRC has decided to target.
Which business taxes do HMRC investigate?
HMRC investigations are not limited to income tax and can also include
- Corporation Tax
- VAT
- Capital Gains Tax
- Inheritance tax
- National Insurance
- Stamp Duty Land Tax
- PAYE and Construction Industry Scheme deductions
Main types of HMRC investigation
This may occur when HMRC believes there is a significant risk of error in a tax return and a review of all records will be undertaken. This can include personal financial records of Directors/Business owners as well as business records, and in such circumstances, it is important to receive professional guidance as to what HMRC can legitimately request.
In this instance HMRC wants more information about a particular part (or parts) of a return or the accounts on which it is based. Although this is often due to a genuine mistake rather than a deliberate attempt to evade tax, it is still important that you don’t take this type of enquiry lightly and treat it just as seriously as a full enquiry.
HMRC maintain that they select cases for enquiry purely at random. Whilst this may be factually correct, HMRC has at its disposal comprehensive information sources and sophisticated statistical analysis techniques to scrutinise financial information included in submitted returns. So, although HMRC may occasionally pick a selection of businesses to investigate completely at random, you should never assume this applies to you. Any enquiry should be taken seriously.
How far back can HMRC go?
This is a complex question. The usual answer for self-assessment returns is one year from the date of filing, although HMRC can use their powers of “discovery” to raise assessments for earlier periods or request information if they have grounds for suspecting an underpayment of tax. Their entitlement to do this should always be examined carefully so that you should always seek professional advice if you are asked for information or receive an assessment in relation to a year that is supposedly “closed”. Where returns are inaccurate through carelessness, generally HMRC has 6 years to raise assessments.
If HMRC writes to you stating that they are doing so under “Code of Practice 9” they can go back up to 20 years. These cases are very serious because they involve HMRC alleging deliberate taxpayer behaviour involving fraud. If you receive a code of practice 9 notice you should get specialist help immediately. Barnes Roffe has extensive experience in this complex area.
What happens once HMRC have decided to investigate?
Once HMRC have decided to conduct a tax investigation, you will be required to provide any information they have requested, unless you can demonstrate that the information is not “reasonably required” for the purposes of the enquiry. In many cases the anomaly will have been caused by a minor discrepancy and the case can be closed relatively quickly. Occasionally however, HMRC may request further information and wish to undertake a more detailed investigation.
What happens next will depend on what HMRC finds. They may prosecute in cases of deliberate or fraudulent tax evasion, particularly in cases where large amounts of tax are at stake. Indeed, it is possible to go to prison for tax offences although HMRC will usually seek civil penalties. In fact, the code of practice 9 procedure mentioned above is specifically aimed at giving taxpayers protection from prosecution subject to their making a full disclosure of past irregularities and agreeing to make good the tax.
Some of the most common outcomes and solutions include:
You will be required to pay any tax owed within 30 days, with interest added. You may also be charged a penalty unless HMRC determine that the error was made despite taking reasonable care. If an underpayment arose because of a careless error, penalties can often be suspended (and not paid at all) if HMRC can agree specific suspension conditions and these are adhered to by the taxpayer for a prescribed period of time. HMRC likes to insist that there are no appropriate suspension conditions in particular circumstances, but often they can be persuaded otherwise.
You will receive a tax rebate with interest.
If HMRC conclude there was deliberate behaviour on the part of the taxpayer, they will charge a penalty based on the underpaid tax and may escalate the case to criminal status. If this happens, the amount of any penalty will depend on such factors as why you underpaid, the seriousness of the matter and the amount of the liability involved, how quickly you told HMRC about any mistakes, whether this was prompted by HMRC or volunteered by you and your level of co-operation throughout the enquiry. Similar factors apply where a penalty is levied for careless behaviour in circumstances where HMRC cannot agree suspension conditions (see above).
How long will a tax investigation take?
Some tax investigations finish with one letter, other investigations can go on for months or even years, with HMRC asking for more and more information.
How do I know that the investigation is over?
This will be officially marked by either a closure notice being issued, or by agreeing a contract settlement.
- Closure notices can include a penalty notice or an assessment and are usually received in the form of a letter detailing exactly what the final position is.
- A contract settlement is a legally binding agreement between HMRC and the taxpayer. The taxpayer agrees to pay the money and HMRC agrees not to use its powers to recover the money.
The good news is that once a return has been investigated, it cannot usually be investigated again.
Once a closure notice has been issued, if you do not agree with HMRC’s findings you can usually appeal HMRC’s decision to the Tribunal. However, this is a costly process and not one to be undertaken lightly.
Need Advice?
At Barnes Roffe we offer a comprehensive range of tax investigations services for those facing an HMRC enquiry. If you have any questions or would benefit from impartial, confidential advice, please get in touch with our experienced tax investigation team today.
Income tax is exactly as it sounds, a ‘tax on your income’. However, not all income is taxable and even then you are only taxed when you earn above certain levels.
What is a taxable income?
Income tax applies to: earnings from employment, earnings from self-employment, receipts from most pension schemes (including state, company and personal), interest generated on most savings accounts, income from shares, rental income and income paid to you from a trust.
Essentially you can and will be taxed on almost everything you earn that is above your personal allowance.
How can we help?
At Barnes Roffe our team of tax accountants can help you to reduce the amount of income tax that is payable to the Government and keep your earnings where they belong – with you!
We are much more than your average accountancy firm. Through our commitment to providing you with the latest tax advice, support and industry knowledge, our tax consultants can ensure that you pay ONLY what you are liable for.
Contact our team today and let us help you to make understanding tax even simpler.
Losing a family member is never easy, and the last thing you will want to think about is whether or not you are liable for paying inheritance tax. However, it is essential that you check so that you are aware of your rights and can prepare your family for the future ahead.
What is inheritance tax?
Inheritance tax is a tax levied on the transfer of an individual’s estate on his/her death to non-exempt beneficiaries (subject to a nil rate band).
Inheritance Tax is usually paid on a property when somebody dies, although it is also sometimes payable on trusts and gifts which are made within 7 years of the individual’s death.
Most estates don’t have to pay inheritance tax, as they fall within the “nil rate band”. As long as your estate’s worth is not above £325,000 (gifts and trusts included) then you won’t have to pay 40% inheritance tax on any sums exceeding this threshold.
However, if you think your estate may be liable to inheritance tax on your death it is important to plan in advance so your tax liability will not be greater than it should be. There are many opportunities for tax efficient planning, if you put them in place in good time.
We can help you to alleviate the stress of worrying about the future and provide you with the tax advice you need.
Barnes Roffe is licensed by the ICAEW to carry out non-contentious probate work covering the obtaining of a grant of probate and dealing with the Inheritance Tax returns that may be necessary.
We can act where there is a will, as well as when the deceased has died intestate.
This means that we are now not only able to assist clients with IHT planning and will drafting, but can also provide a fully inclusive service to include obtaining probate and estate administration.
Where appropriate a Barnes Roffe partner might act as executor, but our probate services can equally be provided to non-professional executors.
VAT
VAT (Value Added Tax) is a tax that is charged on most business transactions in the UK.
There are different rates of VAT applicable to different types of transactions., the most common being:
- Standard – 20%
- Reduced – 5%
- Zero – 0%
- Exempt
VAT is charged on most goods/services, but if you wish to reclaim the VAT you spend, you need to become a VAT registered business.
Who must register?
If the goods/services you supply count as ‘taxable supplies’, you’ll need to become VAT registered, especially if your turnover for the last year has gone over the VAT threshold, or if you think your business will soon surpass this threshold.
If you are having problems determining whether or not to become a VAT registered business, Barnes Roffe can help. We offer VAT return preparation services, as well as VAT advice and guidance.
It’s not that simple…
VAT is perhaps the most complicated tax. From partial exemption calculations to reverse charge rules, cross-border trading to land and property transactions, the possible pitfalls and complexities are many. It is vital to get professional VAT advice as the cost can be great if you make the wrong decision. Advance planning is invaluable.
Our tax team and specialist VAT consultants can advise you on all areas of VAT.
We also offer a VAT Healthcheck service, giving you peace of mind over your VAT compliance.
At Barnes Roffe we are much more than your average tax accountants. Through our commitment to offer you the best quality tax advice, our tax consultants can help you to calculate all of your taxes as well as provide you with in-depth business strategies.
Contact our tax team today and we can help you understand how VAT affects your business.
