Harnett Accontants

Tag: HMRC

  • – Tax Evasion Cases Fall By 25%

    Accountancy

    – Tax Evasion Cases Fall By 25%

    brings you this article from Accountancy Age, revealing that serious tax evasion cases have fallen by nearly 25% over the last year.

    💡
    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    “Serious tax evasion cases identified by HM Revenue & Customs has dropped nearly a quarter over the last 12 months.

    In 2011/12, there were 3,456 suspected cases, the lowest number for five years and down 23% on the 4,506 identified in 2010/11, according to figures obtained by law firm, Pinsent Masons.

    What Hmrc Says

    HMRC defines a case as ‘serious’ where £50,000 or more has been evaded, or when prosecution is possible.”

    It’s thought that HMRC’s tough anti avoidance measures are responsible for the decline. HMRC’s has nearly doubled its property raids over the last 12 months, and public awareness of tax avoidance has grown considerably.

    If you need advice about taxes, or help to make sure that you are paying exactly the right amount of tax, and running your business in the most tax efficient way possible, contact our accountants in Wimbledon and we will arrange a free, one hour, no obligation consultation. You can contact us through our website or on 020 8977 3883. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with property tax advice?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • – Stamp Duty Loophole Closed By Hmrc

    Accountancy

    – Stamp Duty Loophole Closed By Hmrc

    brings you this article from Accountancy Age, reporting that the taxman has won a major victory by shutting down a stamp duty tax loophole.

    💡
    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    “The Taxman has claimed a significant victory in a tribunal in its continued fight against tax avoidance schemes.

    Durham-based property company Vardy Property took advantage of a regulation initially devised to prevent double taxation. It wanted to avoid paying £290,000 of stamp duty on the £7.25m purchase of a business park in Stockton-on-Tees in 2006.

    The sub-sale relief was intended to exempt legitimate intermediaries, for example house-builders, from paying stamp duty twice – first after buying the land, and then after selling the completed house.”

    This is seen as a significant victory by the taxman as it sends a clear message that using legitimate tax schemes to avoid tax will be spotted and clamped down on by HMRC.

    If you need advice about taxes, or help to make sure that you are paying exactly the right amount of tax, and running your business in the most tax efficient way possible, contact our accountants in Kingston and we will arrange a free, one hour, no obligation consultation. You can contact us through our website or on 020 8977 3883. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with property tax advice?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • – Business Finance Video Tip

    Accountancy

    – Business Finance Video Tip

    brings you another helpful video tax tip. Today’s video is on the subject of business finance and the most tax efficient way to raise finance for a business transaction through borrowing.

    💡
    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    If you need advice about tax efficient business finance, contact our accountants in Kingston and we will arrange a free, one hour, no obligation consultation. You can contact us through our website or on 020 8977 3883. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with accounting and tax?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • Harnett Accountants Putney – Real Time Information… Information

    Accountancy

    Harnett Accountants Putney – Real Time Information… Information

    Harnett Accountants Putney brings you another helpful video tip. Today’s tip is on the subject of real time information and what you need to know to be prepared for its mandatory introduction in October next year.

    💡
    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    If you need advice about Real time information, and how to prepare your software and your business practices for the introduction of RTI, , contact our accountants in Putney and we will arrange a free, one hour, no obligation consultation. You can contact us through our website or on 020 8977 3883. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with accounting and tax?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • – Advice On Ir35

    Accountancy

    – Advice On Ir35

    brings you this advice about IR35 law, and an accompanying report from the Accountancy Age website, revealing that IR35 investigations have been stepped up again by the taxman, bringing in over £1million so far.

    💡
    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    “INVESTIGATIONS into freelancers underpaying tax have doubled, with the taxman scooping more than £1m from its efforts.

    The number of probes into whether freelancers should be caught under IR35 rules – where they are effectively employed, rather than working for themselves – has doubled to more than 50.”

    Last month, our accountants in Wimbledon brought you this information about IR35, which could help protect you from being unfairly targetted by the taxman if you run your own company…

    If you provide services through your own personal service company you may be aware of a certain tax law known as IR35. The IR35 rule imposes an extra charge on your company if you’re treated as an employee of your customer or customers, or if you worked for the customer directly. It can be difficult to pin down exactly when IR35 should apply, as it depends on the relationship between the contractor and the customer, which will be different in every case.

    HMRC have tried to make generalisations about which companies come under IR35 and which don’t. They’ve drawn up a set of business entity tests with a scoring system, to help you decide whether your business would be at high, medium, or low risk of being investigated for falling under IR35.

    What Hmrc Says

    These tests are not derived from the tax law. They simply represent HMRC’s view of the risk of a business falling under this legislation.

    The scoring attached to the tests is controversial, as it penalises businesses that have no bad debts, never pay to advertise and operate from the owner’s home. These IR35 business entity tests do not change the law one bit, and will probably be ignored by the Tax Tribunal.

    If you choose to use the IR35 business entity tests, you don’t have to declare your score to HMRC, the tests are merely for your own guidance. However, if you’re worried that the business entity tests produce a high risk score for your business, we should discuss why this is the case. Are there any changes which can be made to the way your business operates which would make it less likely to be caught by IR35?

    We can advise you on the correct tests for IR35, which would be recognised by the Tax Tribunal, so do ask if you would like some reassurance.

    What Hmrc Says

    It may also help to read up on the background of the legislation. You can find some information about it on the HMRC website:

    – How to tell if the legislation applies to you or your company

    What Hmrc Says

    • – What to do if you disagree with HMRC’s decision to try and tax you under the legislation
    • – Specific information for owners of limited companies or partnerships
    • You should take the information with a pinch of salt however, as the HMRC website will try to convince you that you should fall under IR35. Take the following examples…

    What Hmrc Says

    According to the HMRC website, you do fall under the legislation if you can answer yes to this question

    Would you be an employee if you worked for your client directly and not through your company or partnership?

    This clearly doesn’t make very much sense, as the same could be said for any small service company, and therefore all such companies would have to pay IR35! Furthermore, if you can answer YES to most of these questions, you also fall under IR35…

    Do you work set hours, or a given number of hours a week or a month? Do you have to do the work yourself rather than hire someone else to do the work for you? Can someone tell you at any time what to do, when to work or how to do the work? Are you paid by the hour, week or month? Can you get overtime pay? Do you work at the premises of the person you work for, or at a place or places he or she decides? Do you generally work for one client at a time, rather than having a number of contracts?

    Many small service companies can surely answer yes to the above questions, and still be very much their own independent company. The taxman doesn’t seem to understand that small service companies often consist of one person, they often have to do exactly what their clients/customers demand of them, but they are still very much their own separate entity with their own independent needs. This is not to mention the fact that many such contracts are very temporary in nature and will not provide anywhere near the same level of security as a permanent contract of employment.

    However, as we have stated earlier in this blog, much of the information on the HMRC website is simply their opinion, and not all of it is reflected in tax law. Many claims would not stand up in an independent tribunal, and you should always make sure that you know your rights as a taxpayer before you hand over any money. Please contact our accountants in Wimbledon by email or on 020 8977 3883, and we will provide a free one hour, no obligation consultation to discuss the details of your case, and advise you as to whether your company does fall under the legislation or not. If your company does not fall under IR35, and the taxman is demanding money from you, then we can help to guide you through the appeals process.

    What This Means For You

    Follow on Twitter,  Facebook and . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with IR35 and contractor advice?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • – October Newsletter And Tax Q&a

    Accountancy

    – October Newsletter And Tax Q&a

    are pleased to present our latest newsletter and accompanying tax Q&A. Our newsletter offers monthly advice on the latest issues to affect business owners in the UK, as well as offering handy tax tips. In addition, our monthly tax Q&A is a great opportunity to have your questions answered by our expert team of accountants in Kingston. Remember to send your questions in by e-mail to have them answered in next month’s tax Q&A.

    💡
    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Taxman On The Hunt Again

    The Taxman has run a number of campaigns designed to encourage certain classes of taxpayer to declare their untaxed income. In the past we have seen campaigns aimed at medics, plumbers, tutors, electricians and e-traders.

    A new campaign started on 26 September 2012, this time targeting direct sellers. These are people who sell products on a commission basis in customers’ homes. These sellers often earn very little from their efforts, but they still need to declare those small amounts of income to the Tax Office. The campaign will primarily focus on helping the door-to-door sellers understand their obligations to register for tax and to file tax returns.

    Following swiftly on will be a campaign targeting builders and tradesmen who provide home maintenance, repair or home improvement services.

    These tradesmen may not be registered with HMRC under the construction industry scheme (CIS) if they only work for householders. If you are such a builder or trades-person, now would be a good time to talk to us about any tax related worries you have.

    The Taxman has also formed some new taskforce teams to door-step particular businesses in defined areas. The latest list of potential ‘tax cheats’ now includes: grocers & retail traders, restaurants, motor-traders, hairdressers & beauticians, and London-based lawyers! If your business is in this list, please contact us for a free consultation and we will discuss if this may affect your business.

    We warned you previously about the new real time information (RTI) process. Now the Taxman is writing to all employers who are not already part of an RTI pilot, to tell them how to prepare for RTI.

    Key Considerations

    To recap: RTI is a new way of submitting payroll data to the Tax Office. Instead of sending PAYE information to HMRC once after the end of the tax year, employers must submit their payroll data online on every occasion their employees are paid.

    If you run a computerised payroll, your payroll software should be updated to cope with RTI. However, do check with your software provider, as some payroll packages are not going to be revised for RTI. In which case you need to find new payroll software, or use the free software provided by HMRC (for up to 9 employees), or ask us help you process your payroll each month.

    All small and medium sized employers will be expected to start using RTI to submit payroll data from April 2013, unless they have agreed a different start date with the Tax Office. Once you receive an ‘invitation’ from the Taxman to use RTI, you must join the RTI system from the date directed.

    You will need to collect some new data items under RTI which are not currently required for PAYE, such as:

    – Hours worked per week for each employee based on one of four bands; – Details of those earning less than the lower earnings limit (£107 per week); – Which employees are paid irregularly, perhaps only once per year; and – Passport numbers for employees who do not have NI numbers.

    In addition you will need to have the correct NI number (where this exists), date of birth, gender, full name and address for each employee.

    What This Means For You

    Our accountants in Kingston can help you with the transition to RTI, but please start thinking about what help you might need sooner rather than later.

    If the previous business was VAT registered it can pass its VAT number on to the new company under the transfer of going concern rules (TOGC). However, this is not always advisable as the VAT number will carry with it all the ‘history’ of the old business, including defaults for late payment and error records. If the owners of the new company are not exactly the same people as those who owned the old business, the new owners may not want to take on the VAT ‘sins’ of the old business.

    In this case the new company will have to apply for a new VAT number. This is the same procedure as a new VAT registration, and penalties will apply if it is not done on time.

    If you want the new company to adopt the VAT number of the unincorporated business you must inform the Tax Office of the change in structure of the business within 30 days. If this deadline is not met the Taxman will impose a ‘failure to notify’ penalty which could be up to 100% of the VAT due, even where all the VAT due has been paid on time.

    Please ask one of our VAT experts for advice on dealing with VAT on incorporation.

    Goodwill On Incorporation

    Trading as a company is generally more tax efficient for profitable businesses; the tax rates are lower and many tax reliefs are only available to companies. Certain professions which were previously prevented from operating as a company, such as solicitors, can now incorporate.

    If your business is loss making it may be better to remain as a sole-trader or partnership until those losses are fully relieved.

    When incorporating a business, great care should be taken over the value of assets which are transferred to the new company, including the business goodwill. It is generally fairly easy to value fixed assets such as buildings or equipment, but goodwill of the business will depend on a number of factors and may not exist at all for some businesses. Examples of factors to consider include:

    – Reputation of the business; – Ability to generate future sales or fees; – Customer & staff loyalty; and – Location of the business.

    A common approach is to estimate the capitalised value of the future profits of the unincorporated business and adjust for non-recurring items of income or expenditure. Adjustments will also be required for differences between the structure of the old partnership and the new company. The directors will be paid a salary, whereas the former partners took a profit share. Interest on borrowings will be paid by the company instead of by the partners.

    Once a goodwill figure is established it can be included as part of the price to be paid under a sale agreement that transfers the business to the company. It is a good idea to include a price adjuster clause in this sale document, so if the Taxman challenges the value of the goodwill any outstanding amount of sale proceeds due to the former owners can be adjusted.

    Important Points

    Where the former owners become directors of the new company, it is common practice to leave part of the sale proceeds owing to those individuals as loan accounts within the company. These loan balances can then be drawn down gradually from the company with no tax to pay. However, the former owners may have to pay capital gains tax on the transfer of the business to the company.

    If you are thinking of incorporating your business, please contact us, and we will go through each area of your business and discuss what incorporating will mean for you. Each business is very different and so incorporating can have different advantages and disadvantages in each individual case. However, in most cases incorporating leads to a more efficient business and lower tax bills for business owners, so although it is a complex move to make, the long term benefits make this option appealing for more business owners.

    Q. I am employed by a charity that provides me with a Skoda Yeti car as my work involves transporting disabled people. I pay for all the petrol, but the charity reimburses me for work-related journeys at 15p per mile. This rate has not changed since June 2011, although the price of petrol has increased. Can I claim back any more of my petrol costs for work journeys from the Tax Office?

    A. Unfortunately not. The advisory fuel rate for cars with petrol engines of up to 1400cc is 15p per mile and it hasn’t changed since 1 June 2011. The rates for LPG cars and diesels have moved slightly over that period but not much. You could ask your employer to pay more per mile, but you will then be taxed on the excess above 15p per mile, unless you can show your car is particularly fuel-hungry, which is unlikely for a Skoda.

    Q. I’m a painter and decorator, working mainly for individual householders. I only give out an invoice for work done if my customer asks for one. Is this acceptable to the Taxman? I’m not VAT registered.

    A. As you are not VAT registered there is no legal requirement to issue invoices for every sale, but it is good business practice. If you accurately record the money you receive from customers, and those amounts can be tied up to the cash and cheques you bank, the Taxman should not have a problem with your business records. However, if the Taxman suspects that you have been under-recording your sales, because you receive many payments in cash which are not immediately banked, you may have a problem. We can help you set up a system which will accurately record your sales, and keep the Taxman happy.

    Further Details

    Q. My office junior is paid exactly the national minimum wage (NMW). Do I have to put his wages up from 1 October 2012?

    A. It depends how old your employee is. >From 1 October 2012 the NMW rate for those aged 21 and over rises from £6.08 to £6.19 per hour, and the apprentice rate is increased to £2.65 per hour. However the rates for 16 to 20 year olds have not been increased.

    October Key Tax Dates

    • 1st – Due date for payment of Corporation Tax for the year ended 31 December 2011
    • 5th – If a Tax Return has not been received, individuals and trustees must notify HMRC of new sources of income and chargeability in 2011/12
    • 14th – Return and payment of CT61 tax due for quarter to 30 September 2012
    • 19th – Tax and Class 1B NI due on PAYE settlements for 2011/12
    • 19th/22nd – PAYE/NIC and CIS deductions due for month to 5/10/2012 or quarter 2 of 2012/13 for small employers
    • 31st – Deadline for 2011/12 self assessment paper returns to be filed for HMRC to do the tax calculation. If a paper return is being filed also the deadline for tax underpaid to be collected by adjustment to your 2013/14 PAYE code (for underpayments of up to £3000 only)

    Things To Know

    If you have any questions, submit them by e-mail to have them answered in next month’s tax Q&A. And for any advice on the issues raised in this month’s newsletter, or to find out how we can you to improve your business and make sure that it’s running in the most tax efficient way possible, please call our accountants in Kingston on 020 8977 3883 or contact us through our website. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with VAT returns and compliance?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.

  • Talk Travel Expenses

    Tax Insights

    Talk Travel Expenses

    Damien has recorded another series of great tax tips videos. Today’s video tax tip from is on the subject of travel expenses. Travel expenses are often a source of confusion, both for employees and employers. If you are an employee, you should know what you are entitled to so that you can reduce your tax bills, and as an employer you should make sure that you are running your business in the most tax efficient way possible.

    💡
    Reviewed for 2026/27: All tax figures and HMRC rules in this article reflect current guidance for the 2026/27 tax year.

    Key Considerations

    We would also like to direct you to this information published on the HMRC website, detailing what you can (and can’t!) claim travel expenses for.

    “If your job requires you to travel on business you may be able to get tax relief on your travel expenses. You can go back several years to get the relief – the time you’ve got depends on whether you’ve previously sent in a Self Assessment tax return.

    If you’ve got to make journeys for business purposes you can deduct your travelling expenses from your taxable income – so you’ll pay less tax.

    What Are Business Journeys

    • You can only get tax relief on the cost of business journeys. These are when, as part of your job:
    • you have to travel from one workplace to another – this includes travelling between your main ‘permanent workplace’ and a temporary workplace
    • you’ve got to travel to or from a certain workplace because your job requires you to
    • But business journeys don’t include:
    • ordinary commuting – when you travel between your home (or anywhere that is not a workplace) and a place which counts as a permanent workplace
    • private journeys – which have nothing to do with your job

    What This Means For You

    If you’re not sure if a place you travel to counts as a permanent workplace telephone your Tax Office for advice.”

    As you can see above, ordinary commuting between your home and your place of work does not count as an allowable tax expense, so there is no way that you can reduce your tax bills based on your daily journey to and from work, no matter how expensive it is. This is an especially big problem for people who have to drive a long distance on the motorway or travel a long way by train every day.

    Travel Expenses That Qualify For Relief

    • “You can get tax relief on the necessary costs of business travel like:
    • public transport fares
    • business phone calls, fax or photocopying costs
    • But you can’t get tax relief for things that aren’t directly related to the business journey – like your newspaper or private phone calls.”
    • “You might have to use your own car, van, motorbike or cycle to make business journeys. Your employer can give you mileage allowance payments to cover your costs – up to a certain maximum amount per mile – and you don’t have to pay tax on them. If your employer doesn’t pay you the maximum, you are entitled to tax relief on the difference between:
    • what your employer actually pays you for your business journeys

    Important Points

    the maximum tax free amount that your employer could have paid you for those journeys

    You’ll need to keep good records of the business mileage you do and of the mileage allowance payments your employer gives you. You cannot get relief for your actual expenses if they are greater than the allowed maximum per mile.”

    What Hmrc Says

    All of this information is available to view on the HMRC website.

    If you need advice about travel expenses, or if you run a business and need help with calculating how much you need to give your staff for business journeys, and which arrangements you need to make with HM Revenue and Customs, please call our accountants in Wimbledon on 020 8977 3883 or contact us through our website. Also you can . Additionally, you can keep reading our daily blogs.

    📌 Important: Tax rules change regularly. Always verify current figures at gov.uk/hmrc or speak to a qualified accountant.
    📞
    Need help with VAT returns and compliance?
    Harnett and Co are ICAEW chartered accountants in Kingston upon Thames, Surrey. We give clear, practical advice to businesses and individuals across West London and Surrey. Book a free consultation today.