Nowhere to hide Big data or Big Brother in disguise? - Shipleys LLP
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Autumn 2017
Financial and business intelligence
Nowhere
to hide
Big data or
Big Brother
in disguise?
Also in this issue: LLP or Ltd – which is right for
SEIS and EIS schemes your business?
HMRC’s new ‘snooper computer’ Letters of wishes
Client profile: Great Point Media
Contents:
Viewpoint: Simon Robinson 1
There’s a hole in my Budget
Making Tax Digital 2
Get ready for more tax returns a year
Investing in start-ups 2
Tax reliefs for investors in early stage businesses
The most expensive computer ever? 3
How HMRC’s Connect computer gathers information
about your income and lifestyle from a range of sources
UK jobs at
Limited liability partnership or risk from AI
limited company? 4
Choosing the right structure for your business No
Mind your own business 5
What will the new General Data Protection Regulations Finance Act
mean for your business? this year tax
income n
Tax briefs 6 relief o
Tax-free childcare, all change for non-doms, offshore trusts, SEIS
HMRC’s Worldwide Disclosure facility and more
HMRC’s Trust Register 7
New obligations for trustees to provide information
new data
in the fight against money laundering protection
regulations
VAT corner 7 come into
force
Making Tax Digital and bad debt relief
Client profile 8 4 tax returns a
Great Point Media year instead
of 1 due to
Shipleys news 9 Making Tax Digital
Charity fundraising events, secondments to
Australia, alumni news and more
AGN member focus 9
Caderas Martin, France
Money matters 10
Where there’s a will there’s a way
UK tax revenues 05.10.18
annual deadline
Shipleys LLP is a firm of chartered accountants and business last year to register
advisers. Shipshape is our regular newsletter for clients and complex estates
contacts.
If you have any suggestions for topics you would like to
see covered in Shipshape, or have any comments about its
content, please contact Stuart Dey or Clare Schorah at our
London office.
T +44 (0)20 7312 6528
E deys@shipleys.com or schorahc@shipleys.com
cost of
Shipleys is a Member of AGN International, a global association of separate and independent
accounting and advisory businesses.
HMRC’s super
computer
Registered to carry on audit work in the UK and Ireland, and regulated for a range of investment
business activities by the Institute of Chartered Accountants in England and Wales.
More detailed information on tax changes is available on our website at www.shipleys.com
Page 2 articlesShipshape
Shipshape are intendedAutumn
to create 2017
awareness of issues and specific advice should be
obtained before taking action, or refraining from taking action in relation to the topics covered.
Designed and co-edited by Thirdperson.co.uk
Viewpoint: Simon Robinson
020 7312 0000 • robinsons@shipleys.com
There’s a hole
in my Budget
The whole business of setting It’s a small world after all always been part of how we some stores can now use the wi-fi
taxes and government spending What does the recent trade operate, the new offices have been connectivity on your smartphone
will hopefully get a whole lot dispute involving Bombardier designed to enhance our data to see if you’re a repeat visitor,
simpler now that there will be herald for hopes of free trade security, so that we can easily find out which departments you
just one Budget statement a deals post-Brexit, I wonder? A comply with the new General visit and get access to your digital
year instead of two. Chancellor 220% import tariff was proposed Data Protection Regulations retail history.
Philip Hammond’s first Autumn by the US after claims that the (GDPR) that will apply from Perhaps it’s time for us all to
Budget, set for November 22, aircraft and trainmaker, which May 2018. There’s more on these become more aware of the
should contain some news of real employs thousands of people in regulations on page 5. What action personal information we’re giving
interest. Belfast, had received unfair state will be required in your business? away about ourselves.
The Government has recently subsidies to help beat rival Boeing
Somebody’s watching me Paranoid Android
shown signs of ‘rowing back’ from to a major contract.
HMRC’s new super computer Are our jobs all going to be
its toughest austerity measures as It was only July when Donald
‘Connect’ is a part of the big data replaced by artificial intelligence?
the outcry against cuts to public Trump promised a post-Brexit
phenomenon, which makes use There’s concern from some
services grows stronger. That, and free trade deal with Britain “very,
of the rapidly growing mountains in the accountancy and legal
the possibility of a hefty Brexit very quickly”, but at the same
of digital information being professions that it will be possible
divorce bill, means The chancellor time he tells domestic audiences
collected about us and the world for many tasks to be performed
has a big funding hole to fill. It that any deals should favour the
we live in. We discuss Connect by AI technology in the future.
seems likely he’ll have to raise US and US jobs. We need
in more detail on page 3 but, According to a report from PwC,
more tax to do that. politicians to stop jockeying for
essentially, it gathers information up to 30% of UK jobs are at risk of
Rumours abound that he might position and instead get on with
about your income and lifestyle being taken over by robots and
restrict the tax relief on pension the job in hand for everyone’s
from multiple sources. Any AI by the early 2030s. How might
contributions and investments in benefit.
discrepancy between this data this affect your businesses or your
the Enterprise Investment and
Moving on up and what’s included on your tax customers?
Seed Enterprise Investment
As this Shipshape goes to press, return could trigger an enquiry Automation might cut some
Schemes (EIS and SEIS). Critics say
we are on the cusp of relocating from HMRC. costs and enable us to pass on
these schemes designed to
our expanding Godalming office Another example of the use of savings to clients, but I’d argue
encourage investments in smaller
to larger premises next door big data is mini cab firm Uber’s that you can’t beat the personal
companies only benefit the
but one, and we look forward to so-called surge pricing. This is knowhow of a trained human
wealthy. It is suggested that relief
welcoming you there. We will of where Uber raises its fares when specialist for bespoke advice. It
in all three could be restricted to
course be notifying Companies the digital data it collects in real seems to me that trying to deny
20%. There’s more on EIS and SEIS
House about the change for those time shows high demand for the potential of computers isn’t
on page 2.
clients who use our address as vehicles. Prices can be triple the the way to go. I’d suggest we try to
their registered office. While standard amount to entice more understand AI better and use it to
privacy and discretion have drivers to work and to manage the complement our services rather
demand from passengers. Uber’s than do away with the human
future in London will be a story to touch.
follow after its run-in with Enjoy the read.
Transport for London.
You won’t be surprised to hear
that retailers use weather
information to make decisions
about stocking shelves with BBQ
on bonus paid tax returns food, but you might not know that
by profit share filed online
in an LLP
Shipshape Autumn 2017 Page 1
Tax comment and analysis
The Seed Enterprise Investment
Scheme (SEIS) offers generous
tax benefits to investors in early
stage businesses.
The introduction of are filed. Although VAT is
currently the most digitised of
Making Tax Digital taxes, only 12% of VAT returns How does the SEIS scheme work? Although you don’t pay CGT on
(MTD) has been are filed by accounting
software.
If you subscribe for shares in a
qualifying early stage business
any gain on the shares, you can
claim CGT relief if you sell them
postponed until at It’s important to start under the SEIS scheme and keep at a loss. This is calculated on
least 2019 for VAT preparing for the journey to
MTD, even though there is still
them for three years you can get
income tax relief of 50% of the
the cost of the shares less the
income tax relief. So, for a £1,000
and 2020 for other some confusion about some of investment and won’t pay capital subscription for shares eventually
taxes. the detail. For most businesses
this will mean making sure
gains tax (CGT) when you sell the
shares.
sold for £200 there is a CGT loss of
£1,000 less £500 income tax relief
that your accounting software If you make a capital gain on and £200 sale proceeds. The loss
What’s the big deal?
will be able to cope with the something else and ‘reinvest’ the is therefore £300 to be set against
MTD will mean four quarterly
direct filing requirements – so proceeds in SEIS shares, up to half other gains, saving tax of up to
tax returns every year
it might be time to change your of the reinvestment can be £84 on, say, the sale of a holiday
instead of the one that’s
software and get the benefits deducted from the gain. The effect home.
currently required and a final
of a cloud accounting package is that a £1,000 investment could However, for subscriptions for
‘declaration’ at the end of the
that has this capability. get £500 income tax relief and shares in an unlisted trading
year. But the changes involve
also £140 CGT relief (28% of 50% of company, it’s often possible to
much more than just increased For information about how
£1,000). This means the net claim the loss against income
frequency of tax returns: you can get your business
after-tax cost of the investment instead. At the higher income tax
business accounts must be ready for MTD, please speak
could be just £360. rate the £300 loss could be worth
kept digitally and the software to your usual contact or
tax returns
filed online The Enterprise Investment £135 of tax saved. But if the
must file the returns directly read the article on page 4 in
Scheme (EIS) is a similar scheme investment was a complete loss,
to HMRC (even if a spreadsheet the Summer 2017 edition of
for larger companies. Once held this would be £225. So, with
is used, although this is under Shipshape.
for two years, shares in most SEIS maximum
review).
and EIS companies are exempt relief from
So, MTD will be a major
from inheritance tax as they income tax on
change to the way tax returns
qualify for Business Property investment,
Relief. maximum CGT
For higher rate taxpayers these relief for
Latest Making Tax Digital anticipated timetable tax returns schemes can offer a very generous reinvestment
set of tax reliefs. Unsurprisingly, of a gain and tax
filed online
income n
2019 there are a number of rules maximum re li e f o
All VAT-registered businesses must use MTD for VAT around the investor, the type and income tax SEIS
timing of the investment and how relief for the
2020 it’s disposed of. loss on disposal
Non-VAT-registered unincorporated businesses and landlords must of the shares, the net after-tax
Don’t put all your eggs in one
use MTD for income tax cost of the £1,000 investment
basket
would be just £135 (with reliefs
Investing in start-ups under SEIS
2021 and EIS can be risky as some
totalling 86.5%).
Companies must use MTD for corporation tax and all other
businesses will inevitably fail
businesses must use MTD for income tax For further information, please
and you may not get your money
speak to your usual contact.
back. So if an investment does go
Businesses with a turnover of less than £10,000 are currently
wrong, what further reliefs are
excluded.
available?
Page 2 Shipshape Autumn 2017
The most expensive
computer ever?
HMRC’s new super computer ‘Connect’ – The big picture • Social media websites – e.g. Facebook,
dubbed the ‘snooper computer’ by the media Connect gathers information from a range of Twitter and Instagram
– gathers information about your income government and corporate sources to create
• Gas safe registration
and lifestyle from a wide range of sources. a profile of your total income and lifestyle. If
Any discrepancy between this and what’s this differs from what’s included on your tax There’s no doubt that enforcement efforts are
included on your tax return could trigger an return, an enquiry or compliance check may proving a worthwhile investment, as the tax
enquiry or compliance check. be triggered. So it’s more important than ever clampdown last year brought a record £28.9bn
to file accurate tax returns. Understandably, to government coffers!
The difference between the tax revenues that
details of exactly how it works are not HMRC also had
HMRC expects to come in and what it actually
available but the information sources it draws quite a good year in
collects is known as the ‘tax gap’. Tax evasion
from are believed to include: court – of the tax
and avoidance by businesses and individuals
avoidance cases in
contribute to the tax gap, along with error, • Bank accounts – in the UK and more than 60
2016/17 the scoresheet
failure to take reasonable care, non-payment, other countries
reads: HMRC won 22,
legal interpretation, the hidden economy and
• Employers payroll records – salary, benefits, drawn 1, lost 3. Most of
criminal attacks on the tax system. cost of
share options etc the cases won by HMRC’s super
HMRC’s number one objective is to
HMRC in 2016/17 computer
maximise tax revenues and bear down on • Local government (e.g. properties rented for
related to events that
avoidance and evasion. As more and more social tenants)
took place up to ten
people submit information digitally – 9.6
• DVLA – vehicles purchased and owned years earlier, but it does highlight the need to
million ‘customers’ filed their 2016/17 self-
be realistic in deciding whether to go all the
assessment returns online before the 31 • The Land Registry – properties purchased
way to court.
January deadline – HMRC is able to focus a and sold
greater proportion of its staff and resources on
• Websites such as AirBnB and peer-to-peer
closing the tax gap. In the summer 2015
lending sites and your browsing history
Budget, the Government announced £800m Shipleys’ fee
for HMRC to spend on checking up. Over • Visa and Mastercard transactions
recent years it has invested almost £100m in
protection service
• eBay
the Connect system.
No-one welcomes close scrutiny from the
tax office, which can be costly and time-
consuming. By signing up to Shipleys’ fee
protection service, we will deal with any
30% Income Tax HMRC compliance checks on your behalf
in return for a fixed annual fee, rather
22% VAT than by charging for the time spent on an
enquiry. To encourage more of our clients
21% NICs
to join we have cut the cost this year and
HMRC 9% Corporation tax extended the scope of what’s included.
revenue 5% Hydrocarbon oils For some clients the reduction is
significant – for a private individual the
2016/17 2% Alcohol annual cost is now only about equivalent
£574.9 billion 5% Others (IHT, IPT, APD, etc)
to half an hour of a tax manager’s time.
We’ve done this to spread the compliance
3% Stamp taxes check risk across a larger number of
participants.
1.5% CGT
Please speak to your usual Shipleys
1.5% Tobacco contact if you would like more details.
Shipshape Autumn 2017 Page 3
Tax comment and analysis
LLP or Ltd – which is best for you?
Choosing the
right structure
for your business
LLP Ltd
Potential liability of owners LLP Ltd
There are a number Each member’s liability
their
Shareholders’ liability
is restricted to any
Incentives and rewards
ted to
of factors to consider
is restric
formal capital and outstanding calls Promotion to Bonuses subject to
when thinking about certai n unallo cated on share capital on membership for high income tax and NIC
profits on winding up, winding up. flyers. Bonus paid via at up to 47% also
how to structure your excep t that they have a profit share is taxed at
up to 47%. Members
attract employers’
joint and several liability
business to limit
NIC at 13.8%. Share
for stamp duty land tax. retain control via option schemes can be
your liability. Here’s
members’ agreement.
Risk protection
complex and costly to
administer.
our quick guide Members have Shareholders have
Retirement issues
protection under tort
comparing limited protection under tort
and contract law. A and contract law. A Members can decide Retirement bonuses to
liability partnerships director might still
member might still to ascribe no value to retiring directors may
be liable for his own be liable for his own the LLP’s goodwill, so be costly in tax terms.
(LLP) with limited negligence, e.g. health negligence. a retiring member takes There
only his capital, loan
must be a formal
companies (Ltd). and safety regulations. share valuation agreed
and current account
Registration
with HMRC if a director
balances. Avoids costly sells his
shares on
Governed by The valuation exercises
Governed by a retiring (or at any time).
Memorandum and whenever members
members’ agreement,
Both LLPs and limited companies Articles of Association, leave.
which is a private
are legal entities in their own right, which must be filed
capable of entering into contracts
document and Sale of the business
will not be filed at at Companies House.
and holding the title to assets. Companies House. All directors must Buyers prefer to Shareholders prefer to
Companies House filing is Partners in the LLP be registered at buy business assets sell a company to avoid
required within nine months of are called members. Companies House. because of reduced double-tiered tax (see
due diligence and
period end for LLPs and private At least two must be below regarding tax
designated members less reliance on
companies, and six months for a plc. sellers’ warranties
on sale). Greater due
Accounts will require an audit who have additional diligence, warranties
legal and other duties. and indemnities. and indemnities risk
unless it is a small or dormant Normally relatively low
All members must for sellers. Normally
company or LLP. In general no transaction costs.
be registered at relatively high
exemption from audit is available Companies House. transaction costs.
for an FSA regulated entity.
Minimum capital Tax on profits
Abbreviated accounts can be
prepared and filed at Companies None. Members can Can be as little as The LLP is transparent. Corporation tax at 19%.
House provided the LLP or limited fund the business one penny issued and Members are taxed on Salaries etc are a cost
company meets the relevant with debentures or paid up for a private profits earned (rather in calculating taxable
requirements. unsecured loans company. Plcs must than drawn), save profits.
ranking equally with have at least £50,000 that anti-avoidance
other unsecured share capital with at legislation can result
creditors. least 25% paid up. in certain members
on fixed shares being
Employment rights treated as deemed
employees.
Members’ only rights Directors are generally
are those given in a employees, protected
members’ agreement. by employment law.
Page 4 Shipshape Autumn 2017
Mind your own business
LLP Ltd
Tax on owners’ incomes The General Data Protection you should legally be collecting and
Self-employed top Employees’ top rate Regulation (GDPR) comes into full holding the data in the first place.
rate is normally 47% is 47% including NIC. effect on 25 May 2018 and will affect Customers have new rights to know
including NIC. Except But company suffers every type of business. what you hold and to request that it’s
if the member is a 13.8% employer’s NIC deleted.
on all remuneration. Whether this is the first time
deemed employee, tax
liabilities are personal; Dividends escape all you’ve heard of GDPR or it’s already How long should you hold data for?
if a member defaults NICs but are taxed at on your radar, it’s important to There is often a legal obligation
there is no come back up to 38.1%. Must pay understand how it will affect your to hold data, but after this period
on the LLP or the other over PAYE and NIC. business, and what steps you must you need to think about whether
members. take to ensure you’re ready in time. you have a valid business case for
The new rules will cover every retaining it. This may mean securely
Tax on sale
business, from sole traders to large destroying physical records or
Members can sell Gains from selling share
multinationals, including not-for- deleting electronic files.
business assets and capital are taxed at
profit organisations.
are taxed personally on 10% or 20%, subject to Where are you storing the data?
GDPR is essentially a beefed-up
gain at 10% or 20%, possible entrepreneurs’ To protect physical data you must
relief. Sale of business version of the Data Protection Act,
subject to possible ensure that your building is secure,
assets by the company but it also encompasses some new
entrepreneurs’ relief. and that data is not maliciously
The LLP will not be results in tax of 19% areas. To comply with the rules you
copied. So you may need a clear desk
liable for any tax. of the gain for the will need to consider what personal
policy or secure storage areas to
company, but with data you hold and why, how long you
the acquisition cost ensure contractors or visitors can’t
keep it for and whether it’s stored
adjusted for inflation. see or photograph information. If
securely.
There is further tax on you keep data in an off-site location,
extraction of the net What data do you hold? check whether the third party is also
gain from the company. Firstly, carry out a ‘data audit’ to protecting it under the GDPR. In case
understand all the information you you lose a laptop or mobile phone
Inheritance tax hold that is covered by GDPR and you should make sure it’s encrypted
Business property relief Business property relief where it is. This will include your or can be wiped remotely.
at 50% or 100% may at 50% or 100% may
internal records and your client or Normal emails are not secure so
apply to an interest in apply to shares in a
customer records, both electronic and you may need to consider encryption.
an LLP’s assets. limited company.
physical. The rules cover anything The onus is on the sender of the data,
FCA considerations ‘personally identifiable’, meaning but you may also want to give your
Regulatory capital rules Paid up capital will be anything which can be linked to clients the ability to send you things
probably mean an FCA dictated by FCA capital an identified or identifiable person. securely.
member LLP must have requirements and only Identifiable means things that can be
Stand out against the competition
some formal capital, discretionary bonuses used to identify someone like an IP
are excluded from The silver lining is that while GDPR
use of subordinated address or phone number. Often, data
annual expenditure may be burdensome, it may allow
loans from members, will be on a form that contains some
but Tier 2:Tier 1 ratio calculation. you to showcase to your customers
personally identifiable information
restriction and all how securely you look after their
and it’s not practical to split it out.
earnings of members information – and this could be an
are excluded from Why are you holding the data? opportunity to stand out.
annual expenditure You then need to establish whether
calculation.
Shipshape Autumn 2017 Page 5
Tax briefs
Offshore trusts
The proposed changes affecting
Get your
distributions from offshore
trusts have been revived, but in a
overseas tax
modified form. The new Finance
Act will reflect these changes,
affairs up
which affect those deriving
benefits from non-resident trusts,
to date
and are to be effective from 6
April 2018.
Act now to take advantage of
The original proposal referred HMRC’s Worldwide Disclosure
to ‘onward gifts’ by non-resident
Facility (WDF)
Tax-Free Childcare
beneficiaries who received
benefits from offshore trusts, if
made within three years of the
Under the new Tax-Free Childcare scheme parents can get
original distribution or at any
up to £500 every three months (£2,000 a year) for each of Recent initiatives to improve global tax
time, if pre-destined. Now, it is
their children to help with the costs of childcare. You will compliance such as the Common Reporting
only to refer to such onward gifts
need to set up an online childcare account and for every Standard and the US Foreign Account
if there is an initial intention to
£8 you pay in, the Government will pay £2. If you have a Tax Compliance Act (FATCA) mean the
make the onward gift when the
disabled child you can get up to £1,000 every three months. world is getting smaller with regards to
donee would be UK resident – but
To qualify, both parents must be working and each tax information being shared with tax
there is to be no time limit.
earning at least £120 a week (on average) and neither authorities worldwide.
earning more than £100,000 a year.
The Common Reporting Standard (CRS),
Parents can’t use Tax-Free Childcare at the same time as
developed by the Organisation for Economic
they receive childcare vouchers, Universal Credit or tax
Cooperation and Development (OECD), is a
credits. But they can use Tax-Free Childcare alongside the
global initiative on automatic exchange of
15 and 30 hours free childcare schemes for three and
information to combat tax evasion. Once it’s
four-year-olds in England, or any free childcare hours
Inheritance tax fully implemented, just over 100 countries
provided in Scotland, Wales or Northern Ireland.
for non-doms will automatically share information on the
The system for registering with HMRC to open a
income and assets held by overseas residents.
childcare account descended into chaos ahead of the As well as the changes affecting
For example, if a French resident happens to
deadline for registering at the end of August, with the non-doms involved with
have a UK bank account, the bank is obliged
helpline overwhelmed by requests for support as HMRC’s offshore trusts, the following
to report that information to HMRC, which
system wasn’t working very well. HMRC has said it will also affects non-resident non-
will in turn report it to the French fiscal
look to compensate certain applicants who were affected. doms:
authorities.
For further details on the scheme and how to apply,
• Interests in close offshore
visit: https://www.gov.uk/help-with-childcare-costs/ Voluntary disclosure window
companies and partnerships
tax-free-childcare Some information sharing under CRS
will be subject to inheritance
is already underway, but a window of
tax (IHT) to the extent their
opportunity is currently open to encourage UK
Finance (No.2) Bill 2017 value can be attributed to
residents to become fully compliant with their
A further Finance Bill, which was UK residential property
UK tax affairs. From 1 September 2018, there
published in September, repeats (disregarding a less than 5%
will be more swingeing penalties for people
proposals contained in the March interest in such companies or
who declare (even voluntarily) any previously
Finance Bill, which was much partnerships).
unreported income or gains on which tax in
truncated because of the General
• Loans made to individuals, the UK would have been due. After this date
Election. As outlined below, the
trustees and partnerships to the minimum penalty will be 100% of the
new Bill now reflects the changes All change for
finance the acquisition of such tax due with no discount, even for voluntary
to the taxation of non-doms non-doms
interests or UK residential declarations.
effective from 6 April 2017. Changes to the
property directly or indirectly, If you have anything to report, a voluntary
Other matters affecting the taxation of non-doms
and money or money’s worth disclosure should be registered with HMRC’s
current tax year are included, will be effective from
made available as security, Worldwide Disclosure Facility (WDF) as soon
such as non-corporate property 6 April 2017 and will
collateral or guarantee for such as possible and certainly before 1 September
income charged on the cash basis, be essentially those
loans will be subject to IHT. 2018. If you make a voluntary disclosure now
the £1,000 trading and property set out previously in
and pay the tax owing including interest, the
allowances, tax-exempt pensions Shipshape. For more • Furthermore, when such
maximum penalty may be significantly
advice and part surrenders of life detail see: http:// interests in companies or
mitigated, and in many cases will be well
policies. The Bill also refers to www.shipleys.com/ partnerships are disposed of,
below 100%.
changes affecting companies’ resources/issue/non- or such loans are repaid, the
losses and deductible interest. resident-trusts proceeds will continue to be
For further information, please speak to your
subject to IHT for two years.
usual Shipleys contact.
Page 6 Shipshape Autumn 2017
VAT corner
Tax briefs
VAT and
HMRC’s new Trust Register Making Tax
Trustees may need to provide information to HMRC’s Digital
Trust Register under regulations designed to prevent
money laundering and terrorist financing. As outlined on page 2, HMRC’s Making Tax Digital
(MTD) proposals have been partly deferred but it has
been confirmed that it will go ahead for VAT with effect
from April 2019.
What we know so far
Action required Although the finer details have yet to be announced, we
Trustees of all ‘taxable relevant trusts’ will have to provide:
can confirm some of the key components:
• a ‘statement of accounts’ for the trust, describing the trust assets
1. Only VAT-registered businesses with turnover in
(including the address of any property), and
excess of the VAT registration threshold (currently
• information about the identity of settlor(s), trustees and beneficiaries. £85,000) will need to comply with MTD. Businesses
that are VAT-registered but have turnover below the
HMRC says that in some circumstances trustees will need to register by 5
registration threshold will be able to volunteer for
December, but in the majority of instances the deadline is likely to be 31 January
MTD.
2018. There are also obligations to keep this information up to date.
2. Use of digital record-keeping will be compulsory,
Affected trusts where lessees’ service charges and which means that manual record-keeping or the use
A ‘taxable relevant trust’ is one in contributions to a sinking fund are held of spreadsheet records will no longer be acceptable
which in any year trustees are liable in trust. unless they are used to feed into a digital record-
to pay income tax, capital gains tax, keeping system.
Further information required
inheritance tax, stamp duty land tax, the
The regulations require advice of the 3. Digital record-keeping packages must be capable of
Scottish land and buildings transaction
value of trust assets as at the date of the uploading VAT return information to HMRC’s
tax or stamp duty reserve tax in relation
current statement of account. HMRC, website. The current system that allows manual
to the trust’s income or assets.
however, asks for the value of trust keying of the VAT return figures will be phased out.
It isn’t clear when the status of a
property when settled. Where the trust
trust is determined, except that it is on 4. Regardless of Brexit the information to be provided
assets include shares, etc. of companies,
or after 26 June 2017, when the will be the standard 9 box VAT return as currently
HMRC is also asking for the companies’
regulations first applied. HMRC seems configured.
UTRs, which the regulations do not
to believe that ‘liable to pay’ means
mention. 5. Businesses will, in addition to the standard 9 box
when the relevant liability accrues, for
figures, be able to ‘volunteer’ to provide more
example the tax year in which taxable Estates Register?
detailed information. We don’t know what this
income arises, but it might be when the HMRC initially said it was introducing
detailed information will consist of but early
income tax is payable. a separate Estates Register, saying that
indications are that it could be as detailed as line by
details of ‘complex estates’ should be
Information on beneficiaries line analysis. However, HMRC has said that a
given by 5 October of the tax year after
HMRC seems to require details of all business that volunteers the extra information will
the estate is ‘set up’. The details sought
named discretionary beneficiaries be less likely to be inspected.
are the name of the deceased, those
and any others who actually receive
of the personal representatives, ‘the Before the General Election it was announced that
benefits. The regulations say that
tax years the estate needs to declare charities would be exempt from MTD, but there has
information on individual discretionary
liability to income tax or capital gains been no confirmation since the revised timetable was
beneficiaries is not required if the
tax for’ and ‘period end date if the revealed.
class is still open, as for example in the
administration period has ended’. Now
case of a discretionary trust where the
it proposes including estates in the
beneficiaries are defined as the issue
‘Trust Register’, to be known as the Trust VAT bad debt relief
of the settlor, and any spouse of any
Registration Service – the TRS. The VAT bad debt relief rules rarely feature in a VAT
of the issue, born before the end of the
Tribunal but a recent case provides a timely reminder of
trust period. Otherwise, the trustees Trustees’ record-keeping obligations
one key element.
would have to advise a change to the The regulations require trustees of
Those who are familiar with the rules will know that
register for every birth, death, marriage all ‘relevant trusts’ to maintain the
the debt must have been outstanding for at least six
and divorce of a member of the class of information that has to be filed with
months before a VAT refund claim can be made and any
beneficiaries. HMRC by taxable relevant trusts. A
claim for a refund will be subject to the normal
However, the regulations do permit ‘relevant trust’ is a UK express trust, or
four-year cap.
HMRC to require trustees to provide non-UK trust that receives income from
People often forget that the debt must also be
information about what is in a letter of a UK source or has assets in the UK,
written off in the accounts. The case referred to above
wishes. A similar problem would apply including a bare trust.
confirmed a ‘specific’ bad debt provision is required
to most flat management companies,
rather than a ‘general’ provision.
Shipshape Autumn 2017 Page 7
Client profile: Great Point Media
Funding
big-budget
drama
Media investment and
distribution company
Great Point Media has been
behind some of the biggest
dramas to hit our screens
over the past few years,
including The Last Post, an Founded in 2013 by award- From start-up to scale-up more expensive, with every
winning producers Robert Despite having a strong episode of a TV drama
eight-part 1960s-set drama Halmi and Jim Reeve, Great track record in the industry, now expected to look like
currently airing on BBC1 on Point Media specialises in the Fergus explains that raising a Hollywood feature,” says
development, investment and the first funds took time and Fergus. “We’re constantly
Sunday nights. Shipshape exploitation of entertainment persistence. “But once we had looking to find new ways
chats to commercial director media rights. established our first few funds and partners to put value
“The majority of the and proved the concept and on the screen and stand out
Fergus Haycock to find out founding team spun out of business model, we’ve been in the marketplace. But our
more. Ingenious Media, having fortunate enough to increase main focus is to continue to
spotted an opportunity in the our fund raising year-on- provide a great service to both
buoyant market for high year.” our investor clients and our
quality drama production, Based in Covent Garden creative partners.”
particularly with new market the company had to scale up
Support from Shipleys
players such as Netflix, its team quickly to deal with
“Shipleys has supported us
Amazon and Hulu,” explains the demand, and now has 22
from the outset, particularly
commercial director Fergus employees, plus small teams
in advising on structure
Haycock, who looks after a in New York and Spain.
and accounting for film
portfolio of development and “We’ve worked with some
and TV projects that attract
production companies. “This great producers on exciting
production tax credits in
was coupled with an hit content, including the last
the UK,” says Fergus. “These
opportunity for investors to two seasons of Line of Duty,
credits are a vital way of
participate in the nascent and breakout features like
putting more value on
Seed Enterprise Investment Lady Macbeth, part of a
screen and bringing the best
Scheme and invest in early- programme in which we
possible talent to UK shores.
stage development of support new filmmakers. The
Steve Joberns is widely
intellectual property.” film was produced on a small
considered the ‘go-to’ adviser
“We cover the entire budget and was picked up for
for production tax credits in
spectrum of production a wide release in all markets.
the UK and we’re lucky to be
“Steve Joberns is widely activity from development of We’ve also invested in a new
able to tap into his wealth of
considered the ‘go-to’ adviser new ideas, through to full band called Nathaniel Rateliff
experience.”
for production tax credits in production, and are becoming & The Night Sweats. The first
“We’ve grown quite quickly
the UK and we’re lucky to be more involved in the album was a hit and we’re
and during this time Tim
able to tap into his wealth of international distribution of releasing the second album
Hardy and his team have been
experience.” completed productions. We later this year.”
really helpful looking after
look to work with exciting
Fergus Haycock, commercial Future focus the various reporting
production talent, and for
director of Great Point Media “The production business requirements and providing
projects with international
is becoming increasingly advice on a range of queries.”
appeal.”
competitive and the bar is
being set ever higher and www.greatpointmedia.com
Page 8 Shipshape Autumn 2017Shipleys news AGN member focus Alumni news
joining us next year should get in
touch with Dean Hardy or Stuart
Caderas
Martin, France
Godalming office
The Godalming office has Dey at Shipleys.
experienced real growth in the
Alumni
last few years and the 40-strong Macmillan coffee morning
team are on the move. We are Our offices in Godalming Creating state-of
in the process of signing a new
lease for a much larger office
and London both took part in
Macmillan’s ‘World’s Biggest
-the-art cars
within the Goldalming Business Coffee Morning’ this autumn,
Park. We’ll update our website raising £239.
Caderas Martin was established
and social media once we have
in 1978 in Paris.
more information.
It prides itself on
its strong partner
Oakleaf cycle ride
led approach and believes that
Congratulations to Alice Phil Clamp joined Shipleys in
a combination of this and its
Ancrum, Lizzi Gear, Steve September 2005 as an audit
ability to look at problems
Hume and former Shipleys’ trainee, completed his training
from all angles to find the right
principal Steve Ryman who and left in May 2010 as an audit
solution for clients has helped it
all successfully completed the supervisor. He then spent five
develop steadily through internal
Prudential RideLondon – Surrey years at Capita Plc as a finance
growth.
100 mile bike ride in July. manager and financial controller.
The firm now has almost 100
They raised more than Phil moved out of London and
members of staff providing
£3,100 for Oakleaf – a charity after doing three-hour commutes
chartered accountancy,
dedicated to helping those for a year, decided to find a job
News from Australia consultancy and audit services to
suffering with mental health closer to home.
Auditors Hebe Travis and Joanne a broad range of clients, in France
issues get back into employment “I now work for Jaguar Land
MacCourt are enjoying a three- and overseas. Caderas Martin has
and/or the community. The Rover as finance manager in its
month secondment to Hall a strong history of working
charity has strong links to our Special Vehicle Operations
Chadwick in Sydney. Shipleys internationally and values the
office in Godalming. department. We take the core
and Hall Chadwick have been relationship it has with AGN.
products and turn them into
running a staff exchange scheme
specialised vehicles focusing on
for many years.
performance, luxury and
It’s an exciting opportunity
capability. I review business
for people to experience working
cases for new products and
in a different culture and
manage the finances of the
environment, and to have the
development programmes as
chance to do some travelling at
well as the manufacturing site
the end of the secondment.
that builds these vehicles.”
You can read Joanne and Celebrating
“Shipleys helped me gain the
Hebe’s blog here: http:// exam success
technical accounting skills I need
graduate.shipleys.com/ Congratulations to Ed Rosen,
for my role, as well as the ability
Hebe Travis and Luke Barron who
to discuss and present financial
have passed their exams and are
information to non-finance
now qualified ACAs.
Staff and alumni golf day professionals. My secondment to
Many thanks to everyone who the corporate finance
joined us at Hoebridge for our department helped with my
golf day in August. The balmy current work in investment
weather seemed to suit quite appraisal and reporting.”
a few players but current staff “I met my wife at Shipleys
member Richard Stredwick was (Ria Bentley) and we live in
declared overall winner with Oxfordshire with our one-year-
42 stableford points. Normally old daughter, Ava, and dog,
we’d be calling for a cut in his Gatsby. We got married in June
handicap, but he played off his this year and my best man was
official club handicap of seven, Rob Wood – who I also met at
and incredibly went round in Shipleys!”
just one shot over par. Well If you want to reconnect with
done Richard! Special thanks former Shipleys colleagues, join
to Charlotte Westwood at our the LinkedIn group ‘Shipleys
Godalming office who organised alumni’.
the day. Alumni interested in
Shipshape Autumn 2017 Page 9Money matters
Where there’s a
will there’s a way
The instructions in a will
don’t always have to be carried
out to the letter.
The term ‘last will and testament’ How it works Granting discretion
is familiar to most of us, but Alternatively, executors or
Lasting powers
the way an estate is distributed A bachelor leaves an estate trustees can be given discretion of attorney in
doesn’t always have to be exactly as to the manner and timing of
as the will sets out.
of £2m. He had made lifetime
chargeable transfers in the the distribution of all or part of
the news
For example, someone can seven years before his death of an estate, either on the death
In the Summer 2017 edition
make a claim for support under £325,000. He leaves £80,000 in of the person making the will
of Shipshape we said it was
the inheritance laws of England & his will to charity and the rest to or perhaps that of a surviving
a good idea to have lasting
Wales (or their equivalent his favourite nephew. spouse. Here too, there may be
powers of attorney (LPAs) in
elsewhere), because they believe scope for tax-effective action
place to ease the burden on
they should have been favoured within two years of the death
Inheritance tax at 40% is loved ones, should you ever
in a will. Executors have to (with trustees exercising their
payable on £1.92m, which is lose the mental capacity to
consider the validity of any such discretion). Whenever trustees are
£768,000. This leaves £1.152m make decisions for yourself.
claim, sometimes assisted by the given discretion, a letter of wishes
for the nephew. This is still our view, despite
court. is a good idea.
widely reported comments
A more common situation is
Letter of wishes by a former judge, who said
where a beneficiary named in a If the nephew executes a DOV
Letters of wishes received some he’d seen cases of attorneys
will decides to disclaim a legacy to give an additional £120,000
media attention recently in defrauding the grantor.
or agree to a deed of variation to charity, meaning that
relation to the estate of the late The judge recommended
(DOV). For example, someone charitable bequests are up to
Bruce Forsyth – an example of that, as an alternative, an
named as a beneficiary in the will 10% of the estate, the tax rate
legitimate tax planning being interested party might apply
of one of their parents might on the other 90% falls to 36%.
sensationalised by the press. to the Court of Protection to
prefer to skip a generation and
A letter of wishes is not become the relevant person’s
divert the legacy to his or her own
The amount available to the binding, but gives trustees an ‘deputy’. There are two types
children. This can have useful tax
nephew after tax would be 64% indication of how they should act of deputy – a property and
effects, as it avoids the risk of
of £1.8m, or £1.152m – exactly in the circumstances prevailing at financial affairs deputy and a
inheritance tax on their own
as before. But the charity would the time. It is most relevant in the personal welfare deputy. Both
death.
get an extra £120,000 at no case of a will trust. are, in our view, expensive
Charitably-minded
cost to the nephew. The letter of wishes may be and cumbersome.
grandchildren might use a DOV to
changed as often as the settlor
give added tax benefit by cutting
So bear in mind that the likes, without the formality
the marginal tax rate on an estate Please speak to your usual
beneficiaries of your will can take required for a will or codicil. This
from 40% to 36%. contact if you would like help
action after your death, and if means it can be updated to reflect
in making or updating your
this is within two years, the tax changing financial or family
will.
implications can be the same as if circumstances, even if the will
the DOV was part of your original was made many years earlier
will. This expression of wishes need
not be in a formal letter as such; it
could be in a video, audio clip or
even be spoken (with notes taken
at the time).
For further information, please London Godalming www.shipleys.com
contact one of our offices: 10 Orange Street 3 Godalming Business Centre
Haymarket
London
Woolsack Way
Godalming
@Shipleys_LLP
Page 12 Shipshape Autumn 2017 WC2H 7DQ Surrey GU7 1XW Shipleys LLP
T +44 (0)20 7312 0000 T +44 (0)1483 423607
E advice@shipleys.com E godalming@shipleys.com Download our app here:
shipleys.com/resources/issue/shipleys-appYou can also read
