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Newsletter – October 2019

2019 Personal Tax Returns
If you are preparing your own return, then remember 31st October 2019 is the penalty deadline for submitting by post.  Submit electronically by 31st January 2020 to avoid a penalty.

If you would like us to prepare your return then please return your completed tax quiz, with all relevant details, ASAP to get on the list.

HMRC Estimated Assessments
If you do not submit information to HMRC then they can estimate your income and the associated tax bills.

If you do not appeal, then these estimates will become your tax bills – due for payment.

HMRC are now rising outrageously large estimates to try to get tax payers to co-operate.

So if you cannot provide accurate figures, then do provide your own estimates, with as much evidence and justification as possible.  HMRC may then negotiate.  Otherwise it may go to tribunal where the only options will be the estimates on the table.

Examples from recent cases:-

  • the taxpayer had to pay the outrageous HMRC estimates as he did not provide an alternative to the tribunal.
  • the tax payer’s low but justified estimates prevailed against HMRC high guestimates.

Business Gifts
If planning business gifts this season, then know the tax rules

In general gifts are not tax allowable, nor VAT claimable – they are considered as entertaining.

However there are exceptions, so do use them:-

  • Promotional gifts up to the value of £50 per recipient per tax year are tax deductible and the VAT claimable. Such gifts must have a conspicuous advertisement and can not be food, drink or tobacco.
  • Free samples, given to the public for advertising those goods
  • One off gifts to staff, up to £50 per gift – restricted to £300 pa for Directors and members of their household.
  • Donations to charity e.g raffle prize (See notes below)

Donations & Charity Auctions
The season of goodwill is also the season for charity giving.

Donations to charity can be a business expense if reasonable i.e

  • local to the location or nature of the company’s activities
  • accompanied by relevant publicity
  • not excessive i.e. under £2,000
  • no personal benefit/connection
  • to a registered charity

Donations made by an income tax payer can be made under the Gift Aid Scheme – whereby the charity reclaims 20% tax and the individual claims higher rate tax relief via a tax return

Note: – a company does not pay Income Tax so cannot use Gift Aid

Donations can include items, shares, property or just cash e.g. raffle prizes, or clothes to a charity shop.  Donations are valued as follows:-

  1. For items donated with no reward, the value of the donation is the market value of the item/cash donated
  2. If you receive something in return for your donation e.g. at a charity auction, then there are two options
  • the item is valued (given a market value) before the auction and any sum paid in excess of this market value can be considered a donation and hence available to be subject to Gift Aid.
  • If the item has not been pre-valued, then what you pay, is considered to be the market value, so there is no excess available to be considered a donation or for gift-aid.

When Brexit happens the UK and the EU will be different territories for customs, VAT and anything that refers to origin.  But also, EU countries are not allowed to discriminate against fellow members, and we will no longer be a fellow member.  Specifically, there are issues over mutual recognition of trading entities, qualifications, certifications etc. etc.

Here are a few of the new things you may have to consider then travelling or shipping goods across borders.

  • Are you or your goods qualified to work in the EU? – Labelling, Certificates
  • Are you or your goods qualified to cross the border? – Visa’s, Licences etc
  • What do you need to present at the border? – export/import documents, passport
  • Who produces these documents? – You, your supplier/customer, courier
  • What do they need and when? UK or EU EORI number, VAT number, TSP number
  • What do you need to pay and when? – VAT, Import Duties, Excise duties
  • Insurance Cover – especially medial insurance
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