Reminder about Returns in General 

  

HMRC are stepping up their campaign to capture and fine tax dodgers or those that make deliberate (or, even, innocent) mistakes on their tax returns. There are a few things you can do to mitigate the stresses of this: remember that everyone is under suspicion; anyone can be investigated, so be prepared.

 

How might you prepare yourself?

First of all, never ignore any correspondence from HMRC: contact DNS immediately you receive anything from them. Secondly, if you're a contractor, we recommend you use the DNS online accounting portal. This brilliant programme won't allow you to forget important due dates or to get behind with your paperwork, and also helps us to make better use of our tax planning expertise and advise you on your finances, using real-time information. Secondly, make sure that you have Tax Investigation Cover so that in the event that you are investigated, you need not worry about the costs of dealing with Investigations, as your insurance will cover everything. Thirdly and most importantly, if you are in any doubt about your business or personal finances: VAT, tax, payroll, expenses or any other aspect, go to the DNS website/ Knowledgebase where information is readily available. Your account manager is also, of course, also always at hand to guide you.

  

Among DNS's clients are tens of IT contractors and this next story will interest you. IT contractor Elaine Richardson, trading as ECR Consulting, emerged victorious last week from an IR35 case that could have cost her £50,000 as HMRC decided to prosecute her as a disguised employee through an engagement with Vertex Data Science. As a member of the Professional Contractors Group (PCG), ECR was covered by their tax investigation insurance to fight this case.

 The tribunal applied the usual three status tests: mutuality of obligation, substitution and control to determine the nature of ECR's working relationship with Vertex and concluded: "ECR operates from a dedicated home office and have a company domain and website. ECR advertises its services and is a member of the PCG. It has retained reserves and invested in development and has over the years taken on fixed price work for a variety of clients. ... It is clear to us that ECR is a genuine business and therefore not a target of the IR35 legislation."

 In our view, there are three important lessons to take from this case: First, had ECR not had tax investigation insurance they may well have been sunk; second, had they not had a company domain and website, a history of advertising and been investing in the business, it may not have been so easy to prove that ECR was a genuine business, and third, many feel that HMRC is losing its momentum with these sorts of cases,  a press release on the case argued: "The classic tests of employment and IR35 status - control, substitution and mutuality of obligation - are increasingly irrelevant in today's knowledge economy, and can no longer reflect modern flexible working patterns," while the business owner herself said: "the Revenue has done a very good job of convincing, or trying to convince everybody, that mutuality simply means someone does some work and gets paid for it. In every case that comes before the court, somebody has done some work and been paid for it - and if that were true no case would ever be decided on mutuality of obligation."

"It's almost as if HMRC is weary of the legislation themselves," once source said, but we don't buy this wishful thinking: clearly the Treasury is desperate to grab money wherever it can, and regardless whether HMRC is losing momentum or not, if they can get you they will. Our advice is: continue to have your contracts checked for IR35 status, continue to take out insurance and make sure that you protect your business by running it visibly as a business, that is with an office, website, letterhead, proper accounting and a careful register of clients for whom you work. Read how to avoid the IR35 pitfalls on the DNS website in the Knowledgebase/Tax Tips and Articles.

  

  

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Cycle to work Scheme 

Who qualifies?

To qualify, R&D must be part of a project or planned objective that aims to increase the overall stock of knowledge or capability in a particular field, and should resolve scientific or system uncertainty for your business. It need not be new research; using knowledge that exists elsewhere is acceptable, but your business must research it, understand it and then "reinvent" it for your own use. This may sound all very technical but this is not the case. To summarise it can be any process or activity which results in advancement and efficiency. Why not check if you eligible or not by filling in the questionnaire.

 

Who's it for?

The scheme is designed to encourage and reward companies who invest in scientific or technological innovation. So, if your business has designed or developed new processes, products or software in the past two or three years which have been technologically innovative, then you may be eligible. Your account manager will be happy to talk over your eligibility for this great opportunity and organise all the necessary paperwork on your behalf. To read more go to the DNS website/Knowledgebase or you can read full article by clicking here.

  

  

 

 

We offer a secure storage facility to our clients for storage of their books and important accounting and statutory files. We can manage boxing-up your files (at an extra charge) and even securely dispose of obsolete files. (Remember by law you must hold onto your accounts and all related paperwork for at least four years). With this service you can be assured that you are holding on all statutory and important records at very little extra cost and no hassle to keep them with you. They can be safe with us. You can read more about this service on Secure Storage.  

  

 

  

  

As usual I ended up writing quite a lot for one newsletter but taxman keeps us quite busy and I feel as a responsible accountants we must keep our clients fully informed. Please don't forget to update us with any changes in your circumstances. And please make sure that you carry on sending us your referrals: Refer a friend, colleague or relation, and if they sign up, DNS will reward you with a cheque of one month fees. Some of our clients have literally received the half of their fees back from referrals and you can be next one. 

Best wishes to you all and we hope you have a great and successful summer.

Please feel free to get in touch with me or any of my team members on any section of this newsletter and we will be happy to help.

 

Yours sincerely

Sumit Agarwal

And DNS team