Overseas income or assets?

From 2016, HM Revenue & Customs (HMRC) is getting an unprecedented amount of information about people’s overseas accounts, structures, trusts, and investments from more than 100 jurisdictions worldwide, thanks to agreements to increase global tax transparency. This gives HMRC unprecedented levels of information to check that, as in most cases, the right tax has been paid.

If you have already declared all of your past and present income or gains to HMRC, including from overseas, you do not need to worry. But if you are in any doubt, HMRC recommends that you read the factsheet below to help you decide now what to do next.

 

SPORTING TESTIMONIALS

A friend of mine is a football player who has played for a club for many years.  The club wishes to show appreciation for their efforts for the club as a player as well as their efforts in promoting the club. It has been suggested that a Testimonial match or a series of benefit events are held with the aim of raising funds for the sportsperson and a testimonial committee will be set up to oversee this.  What are the tax consequences?

The first point to mention is that the activities undertaken by the committee if organised on commercial lines amount to trading.  Examples of this might include entrance fees to a cricket match or dinner event and any receipts from the sale of any merchandise for the event.

Having stated this, a genuinely voluntary collection for the sportsperson as a measure of person esteem would not constitute a trade receipt.

The committee would be accountable to tax on trade receipts. The net proceeds would then be available for payment to this football player.  The net payment would not be a deductible expense for the committee.  Where the committee is an unincorporated association it will be within the charge to Corporation Tax.

If the sportsperson has a contractual right, whether written or verbal, to a testimonial then the money raised would be earnings in their hands.  It would need to be established that the testimonial was organised to demonstrate affection and regard for personal qualities of the player for the proceeds not to be earnings. Each case would be examined on its own merits with this regard.

From 6 April 2017 where no right or expectation to a testimonial exists a ‘one’off’ once in a lifetime income tax exemption is allowed for the first £100,000 received provided conditions are met.

BLACKBERRY MAKES A COMEBACK WITH THE KEYONE

BlackBerry has recently launched its new KeyOne smartphone. It combines a physical keyboard with an Android operating system, BlackBerry secure email and a 4.5inch touchscreen.

Many smartphone users find typing on physical keys more accurate than tapping out emails using a touchscreen and this is the audience that BlackBerry is targeting with the new KeyOne.

The keyboard can be set up to enable shortcuts. For example, set it to press “L” to open LinkedIn, or “P” for your photos.  Keys can also be assigned as shortcuts for specific contacts, to switch Bluetooth on and off and so on. Each of the 26 keys can be used for two different shortcuts – a long and a short press. You can also swipe vertically or horizontally on the keyboard as you would on a touchscreen, letting you flick through menus or scroll down pages, while the phone’s fingerprint scanner is built into the space bar.

The design of the KeyOne is smart and professional. It looks high end and the touchscreen is bright and clear with a resolution of 1620 x 1080 pixels. The KeyOne uses the latest version of Android (Android 7.1.1 Nougat) and is geared towards business users who value productivity above all else. Users have access to all of the apps on the Google Play Store as well as a number of enterprise-focused BlackBerry programmes

Aside from the keyboard, the BlackBerry Hub software is the highlight of the KeyOne. It combines notifications, messages, calls, LinkedIn, Facebook, Whatsapp, Twitter and calendar notifications into one streamlined location.
The BlackBerry KeyOne is available on contract from various providers or SIM free from £499. It includes 32GB of storage, expandable with optional microSD cards if you need more storage space.

 

Mortgages and SA302 Requests

HMRC are aware that a number of agents are still phoning HMRC for a paper copy of their client’s tax calculation and/or their Tax Year Overview.

We as agents are telling HMRC we need this because our client’s lender will not accept the self-serve copy printed from their HMRC online account or the commercial software used to file the Self Assessment (SA) return, or our commercial software does not print.

HMRC have been working with the:

• Council of Mortgage Lenders and their members to understand their requirements and make the necessary changes so that they will accept self-served copies of the tax calculation from the HMRC online account or the commercial software used to file the SA return. All the lenders who will accept self-serve copies have also agreed to be added to a list of lenders which has now been published on GOV.UK

• commercial software companies to ensure their software offers a print facility

This means that all agents who have filed a SA return online will be able to print a copy of the tax calculation and/or the Tax Year Overview when it suits them rather than calling HMRC and waiting up to 2 weeks to receive a copy.

Now that HMRC have made all the changes required to allow agents to self-serve online HMRC will no longer be issuing paper copies of the tax calculations directly to agents from the 4 September 2017.

CREATING A LEARNING CULTURE IN YOUR FIRM

Creating a learning culture in your business involves a lot more than finding the right mix of training courses and seminars.

It’s about creating a mindset among your team. Leading businesses such as Apple, Google, SAP, American Express have embraced learning cultures and tend to outperform their competitors in their respective market sectors. So how do you create a learning culture in your firm?

Establish a link between learning and performance appraisals.

Your employees need to understand that ongoing learning and development is highly valued and that a capacity to engage in learning is an essential part of their role. Each team member should be set a learning and development objective at the beginning of the year and their performance against that objective should be measured as part of their mid year and end of year appraisals.

Integrate learning into day-to-day operations.

Team members should be encouraged to apply new learning to their jobs. Once links between learning, performance and outcomes are established, managers can support the learning by following up regularly on what employees are doing differently, what improvements they have made to processes, etc.

Make learning a strategic initiative rather than an administrative task.

Learning and development can be used to increase employee engagement and productivity. The best businesses create a robust, ongoing performance management process that fosters collaboration between employees and managers and makes learning from feedback part of everyday life. Give team members the tools to identify skills gaps themselves and empower them to find new learning opportunities.

Identify subject-matter experts.

Another way to deliver learning opportunities is to harness the skills and knowledge of subject matter experts within your business and implement knowledge-sharing programs. With this approach, you can link learning activities with core objectives and measure the impact it has on your business, the productivity of your team, etc.

Encourage accountability.

Employees may see their relationship with employers as reciprocal (even more so with younger generations such as Millennials). They expect access to learning opportunities as a partner in the relationship, but a partnership is a two-way street. As such, businesses can hold employees accountable for their own learning and development objectives. Managers need to be clear about who owns what and give their teams responsibility for their own development – and the tools they need to advance.

WHAT DO FUTURE LEADERS LOOK LIKE?

True leadership skills must be learned and practiced before they become second nature. So what do future leaders look like and how can you help them to develop their skills?
Some members of your team will be high performers but that doesn’t necessarily mean that they will be natural leaders. An individual’s past performance is a measure of their ability and expertise, but you need to look beyond performance to understand an employee’s appetite to grow, to develop others, to articulate a vision and communicate a strategy.

Potential future leaders will display a high degree of interest in the firm’s objectives, and engage in its future plans and strategy. Consider whether they proactively contribute good ideas and take ownership for delivering those ideas.

The best business leaders seek out challenges, enjoy learning and tend to explore new approaches to their work in order to find better ways of doing things.

Potential leaders have to be able to build a team and influence colleagues at various levels across a business. People tend to gravitate to leaders who will coach them to success. So look for coaching and mentoring competencies, and listen for coaching stories by other employees, to evaluate the future leadership potential of your key team members.

Where possible, it is better to grow your own talent in-house. The cost of retaining and developing your existing team is lower than hiring from the outside. Creating an in-house leadership development program is a good way to evaluate your high-potential team members.

NETWORKING TIPS FOR INTROVERTS

Business networking seems easy and tends to come naturally to extroverts. But what if you are an introvert? What do you do if attending a networking event is your worst nightmare? The good news is you can still master the art of networking.

Arrive early

Arrive early when there are fewer people and it is often easier to engage in meaningful conversation without being interrupted. Making one good connection can be the springboard to building your confidence.

Bring your wingman/woman

Having a colleague or friend with you can make it easier to strike up a conversation with others and perhaps they would be happy to introduce you to other people at the networking event.

Take a break

Networking events can sometimes be overwhelming for anyone. Make sure you take regular breaks. Perhaps you can step outside to check your email or take a call. You could even check the sports scores on your smartphone and use the latest football results as an ice breaker during your next networking chat.

Have a plan

It may help to write out a few ice breakers before attending your next networking event. A quick read of the business section of the newspaper or taking note of a few topical news stories could help you to strike up a conversation with someone new.

Networking is really about relationship building. Consider the people you meet as potential new friends and just explore getting to know them. Set yourself a target of making at least 1 or 2 new contacts at each networking event you attend and don’t feel the need to work your way around the entire room.

Prepare a few questions

It can be useful to prepare a few open questions which can help you get to know new people. General questions such as “Tell me about your business”, or “What trends are you seeing in the market?” can help you to get the other person talking. Remember – business people tend to enjoy talking about their own firms.

Principal Private Residence (PPR) & A Trust

A client has transferred a residential property into a discretionary trust. The value of the property is over the IHT nil rate band. Are there are CGT implications? If the trustees sell the property in the future can they claim principle private residence relief?

A transfer into a discretionary trust is a chargeable lifetime transfer so this would be immediately chargeable to IHT on the amount over the IHT nil rate band (£325,000) and would be taxed at 20%. If the settlor were to die within 7 years of the transfer into the discretionary trust an additional 20% could be payable as the IHT rate on death is 40%.

As far as capital gains tax is concerned a claim under TCGA 1992 s260 could be made to hold over the gain on the way into the trust because this is a chargeable lifetime transfer within the meaning of the Inheritance Tax Act 1984 and is not a potentially exempt transfer.

The trustees could be eligible to claim principle private residence relief under section 225 of TCGA 1992 if they meet the normal qualifying conditions.  The qualifying conditions under TCGA 1992 s225 i.e. a beneficiary is permitted to live in the property under the terms of the trust deed.  Principle private residence relief cannot be claimed when an s260 claim as been made as per s226A TCGA 1992.’    Ie. the trustees cannot claim relief on a disposal (the later disposal) if the acquisition cost of the property has been reduced by a gift hold-over relief claim under s260 made by any person on an earlier disposal.  Special transitional rules may allow some private residence relief to be claimed by the trustees if gift hold-relief under s260 is given in respect of a transfer to the trustees which was made before 10 December 2003.

MAKING TAX DIGITAL FOR BUSINESS DELAYED

The Government has responded to pressure from accountants and other interested parties and announced the delay of Making Tax Digital for Business to 2020 at the earliest.

Quarterly VAT reporting using the new system will be mandatory from 2019.

In a further U-turn, three million small businesses and buy to let landlords below the VAT threshold will now not be required to keep digital accounting records but will be able to move to the new system for keeping tax records at a pace that is right for them.  For such businesses, Making Tax Digital will be voluntary.

Mel Stride, the new Financial Secretary to the Treasury and Paymaster General, announced that the roll out for Making Tax Digital has been amended to ensure businesses have plenty of time to adapt to the changes.  Under the revised timetable:

  • only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records, and initially only for VAT purposes from 2019
  • businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020

As VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now.

All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes. This deferral will give much more time for businesses, supported by their advisers, to identify for themselves, at their own pace, the benefits of digital record keeping. It will also ensure that many more software products can be developed and tested before the system is mandatory.