K A Javid & Co

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Corporate capital losses From 1 April 2020, companies with brought forward capital losses will be restricted in their ability to offset those losses against chargeable gains. Only 50% of net chargeable gains may be sheltered through the offset of brought forward capital losses, subject to the allocation of a company’s (or group’s) £5m annual ‘deductions allowance’, introduced when the corporate income loss restriction regime was first implemented in 2017. The £5m deductions a...llowance can, therefore, be used by companies to access either income or capital losses. Where a company’s accounting period straddles 1 April 2020, the period will be split into two separate notional accounting periods for the purposes of the corporate capital loss restriction.
The government anticipates that this change will have minimal impact for all but the largest of companies owing to the £5bn deductions allowance.
Anti-forestalling provisions have applied since 29 October 2018, the date the proposed corporate capital loss restriction was first proposed.
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Statutory sick pay three-day limit lifted for covid-19 The government has confirmed that it will waive the three-day rule for statutory sick pay to kick in for workers self-isolating due to coronavirus
Under current rules, statutory sick pay only kicks in on the fourth day of illness and is paid at £94.25 per week.
... At PMQs today, Boris Johnson told MPs: ‘Today we are announcing that people self-isolating will get statutory sick pay from the first day off work. This will be included in emergency coronavirus legislation.’
‘Nobody should be penalised for doing the right thing.’
For businesses facing short-term cashflow issues, for example as a result of subdued demand, HMRC has also indicated that it will be prepared to discuss time to pay agreements.
The latest figures on coronavirus in the UK released by Public Health England indicate that cases have more than doubled in the last 24 hours to 85. As of 4 March, a total of 16,659 people have been tested in the UK, of which 16,574 were confirmed negative.
Kate Palmer, associate director of advisory at employment law consultancy, Peninsula said: ‘It is becoming more and more apparent that the UK economy is going to have many challenges to face because of the coronavirus and the bottom line of many businesses is going to take the brunt.
‘Changing the rules on qualifying criteria for paying statutory sick pay is one example of a direct hit on the finances as sick pay bills will increase significantly.
‘The government now needs to ensure that it does all it can to support businesses through what is going to be a very testing time to prevent the spread of the virus so that as few people as possible need to take time off sick.’
The Department for Work and Pensions will be issuing a statement shortly.
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Employment allowance NIC break targets small business From April, changes to the employment allowance will see the de minimis requirement removed in a bid to encourage smaller businesses to use the tax break to reduce their NICs' bill
The government has revised the rules on the £3,000 employment allowance, with effect 6 April 2020, removing the requirement for employers to provide information about other de minimis state aid they have received or been allocated.
... In future, employers will have to claim the employment allowance every year in order receive the relief as it will no longer be carried forward from one tax year to the next.
This reform, first announced at Budget 2018, is designed to target the employment allowance at the original intended beneficiaries: smaller businesses, excluding single director companies, giving them a tax break on Class 2 National Insurance contributions (NICs).
The tax break will cost the Exchequer £225m in the first year of operation, rising to £320m a year by 2023-24, and is likely to affect around 1.2m businesses, who are entitled to claim the tax break.
The tax relief will no longer be available to larger employers who incur employer secondary Class 1 NICs’ liabilities of £100,000 or more in the tax year immediately before the year of claim, as well as employers who are connected to other employers where their cumulative secondary Class 1 NICs liability is £100,000 or more.
To claim the employment allowance, employers must have space for the full employment allowance (currently £3,000) within their relevant de minimis state aid threshold.
When determining eligibility to receive employment allowance, for tax years starting on or after 6 April 2020, employers who are connected to other employers (such as companies within a group) will need to add together all of their collective secondary Class 1 NICs’ liabilities incurred in the tax year prior to the year of claim to assess eligibility.
If that amount is £100,000 or more, none of those employers will be eligible to claim the employment allowance for the current tax year.
As a result of this restriction, from 6 April 2020 employment allowance will be operated as de minimis state aid. It will be available to all employers who meet the secondary Class 1 NICs’ eligibility criteria, provided they have space in their relevant de minimis state aid limit(s) to accommodate the annual amount of the employment allowance, regardless of whether they would have that level of secondary Class 1 NIC liability).
The government has addressed the comments in the responses by amending the statutory notice to reflect a change to the data being requested.
The statutory instrument enacting the rules, Employment Allowance (Excluded Persons) Regulations 2020, was laid before parliament on 16 January 2020, amending the National Insurance Contributions Act 2014.
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In a tax tribunal ruling, News UK has successfully argued that the online presence of the Times and Sunday Times can be classified as a newspaper - and therefore be VAT-free - because of how often it is updated.
The media giant owned by Rupert Murdoch will potentially save huge amounts in tax and might even be able to secure a multi-million pound rebate from the UK government.
News UK has been involved in a long-running legal battle over whether it should pay the full rate of... VAT at 20%, in the same way as many news websites, which are updated on a rolling basis.
However, since the online editions of the Times and Sunday Times are updated all at once, four times each day, the media platform argues that it should instead be seen as a periodical. Newspapers are traditionally exempt from VAT.
On January 6th, the tribunal ruled that the news website could indeed be seen as equivalent to a newspaper, based on a segment of the law on taxable products written in 1972. The body said it is “an essential characteristic of a newspaper that it is produced in periodic editions", allowing it to confirm News UK's claim of being closer to a newspaper than a website.
This decision may still be appealed by HMRC, but overturns a previous ruling stating the VAT exemption can only apply to physical products.
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Limited Company client runs a swim school, teaching children. Is this an exempt supply of education?
Exemption from VAT applies to supplies of education by eligible bodies. These are schools, colleges, universities, some non-profit-making organisations, and providers of tuition in English as a foreign language. There is also an exemption for private tuition.
Private tuition means a sole trader or a partner in a partnership, including members of a limited liability partnersh...ip, providing education or training in a subject ordinarily taught in a number of schools or universities; this supply would qualify for exemption. However, tuition carried out by employees, or by tutors brought in to deliver classes, is excluded from the private tuition exemption and these supplies are standard rated.
A qualifying subject would be one that is commonly taught in schools or universities, and not one that is purely recreational. The subject would need to be part of school or university education, and the supply, one of tuition, in the sense of a transfer of knowledge or skill in that subject or activity. A number of subjects have been considered by the tribunals; in particular those involving physical activities.
Swimming lessons are commonly part of school education, so have the potential to be exempt.
Where supplies are made by a limited company these are not covered by the exemption. This is because the individual teacher in not acting independently of an employer (the company). HMRC manual VATEDU40500 confirms that the exemption does not apply to supplies made by a limited company.
So, although your client is teaching a subject that is ordinarily taught in a school or university the tuition is not covered by the exemption as it is supplied by a limited company. Your client’s supplies are taxable and when the company reaches the £85,000 threshold it will be required to register for VAT.
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Airbnb probed by UK tax authorities
Home rentals site Airbnb has warned a tax inquiry by HM Revenue & Customs could lead to legal proceedings.
A note in newly filed accounts for Airbnb UK said it had been contacted by HMRC over "tax laws or regulations impacting the company's business".
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THE HOT STORY
Javid considers scrapping IHT Chancellor Sajid Javid could be considering scrapping inheritance tax, telling a fringe event at the Conservative party conference that that levy is a “real issue” and saying that changes were “on my mind” when it comes to IHT. Asked if he would consider axing the tax, Mr Javid replied: “We have already made some sensible reforms in that tax … I shouldn’t say too much now but I understand the arguments against that tax.” He added: “...I do think when people have paid taxes already through work or through investments and capital gains and other taxes there is a real issue with then asking them on that income to pay taxes all over again.” This comes after the Brexit Party said it would abolish the tax, with party chairman Richard Tice last week describing IHT as "the most hated, the most unpopular tax in this country", adding: "We’ll just get rid of it”. Source: The Daily Telegraph (02/10/2019) Daily Mail (02/10/2019) The Independent (02/10/2019) The I (02/10/2019) The Sun (02/10/2019) Daily Express (02/10/2019)
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We would like to update you with some information we have received from HMRC relating to VAT registration for those businesses making preparations, should the UK leave the EU without a deal.
HMRC recognise that it is important to certain UK businesses and their supply chains, that EU businesses are VAT registered in the event of no-deal being reached, however, this needs to be balanced against the risks involved in permitting VAT registration to businesses when they do not cu...rrently meet the requirements.
HMRC have updated their processes to allow businesses to submit an advanced notification of VAT registration, with the effective date being 1 November 2019. This will help businesses prepare should the UK leave the EU without a deal and facilitates trade with as little disruption as possible.
As of 27 September, EU businesses are able to submit an advanced notification of UK VAT registration where it is necessary for them to do so. VAT notice 700/1 has been updated to include specific guidance relating to the information that a business must include to ensure their notification is approved.
A VAT number will be issued but it will not be active until the UK leaves the EU without a deal. In the event the UK reaches an agreement with the EU to leave with a deal in place, then these registrations will be cancelled as they will be no longer required.
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K A JAVID & CO can be found in the heart of Glasgow in the City Centre. Within easy reach of many towns in Glasgow
Whether you’re looking to set up a new business and looking for help with the Company Formation registration and processes or you are an established business, be it Sole Trader, Partnership or Corporate K A JAVID & CO can offer you a service to suit your needs. Covering everything from book keeping to producing and filing self-assessment forms, sorting out your payroll to submitting your quarterly VAT liabilities, the team will take care of it all, offering you peace of mind. Plus, they’ll also work with you to understand your goals and help you to achieve them .
Although K A JAVID & CO are in Glasgow they serve clients who are based throughout the UK.

Are there penalties for getting MTD for VAT wrong? A: MTD for VAT is backed up by a system of penalties. For the first year, however, HMRC intends to take a slightly more lenient approach on penalties for the issue of digital links between software products. Businesses are given until 31 March 2020 to have digital links in place between software products.
HMRC refers to this as a ‘soft landing’ penalty period. During this period, cut-and-paste will continue to be an acceptabl...e way to transfer information to HMRC. For businesses in the deferral group, the soft landing penalty timetable is adapted to give them 12 months to become fully compliant in putting digital links into place.
However, there is an important exception to this. Where VAT return information is transferred out of the accounting records into a separate program for submission to HMRC via the Application Programming Interface (API), transfer must be digital. This would apply, for example, where figures for the VAT return are collated in a spreadsheet and then transferred into bridging software for final submission. The transfer from spreadsheet to bridging software must use a digital link.
These penalties are specific to MTD, and are in addition to HMRC’s other penalty powers.
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Preparation of Personal Tax Returns Preparation of Partnership Tax Returns Preparation of LLP Tax Returns Preparation of Corporate Tax Returns Producing Reports covering a wide range of Tax related subjects... Advice on Personal Tax Advice on Partnership Tax Advice on Corporate Tax, including International Tax Advice Advice on Tax Mitigation Products Advice on Inheritance Tax Advice on Capital Gains Tax Advice on VAT Assistance with Tax Enquiries, Investigations and Tribunals Tax Planning Advice on mergers, reconstructions, purchases and sales Trusts EIS Applications and Advice R&D Tax Credit Applications and Advice
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The current deadline for submitting forms P11D and P11D(b) to HMRC is 6 July 2019. The form P11D will record the taxable value or ‘cash equivalent’ value of benefits in kind that have been provided to the employee during the 2018/2019 tax year plus any expenses that need to be reported.
Failure to meet the 6 July deadline, as with any HMRC deadline, signify the starting point for penalties to be applied, for failing to submit on time, which start at £100 for each month or par...t month, per 50 employees. Penalties can also be applied for late payment and for inaccurate returns.
The information being reported also needs to have been provided to each employee by 6 July – ideally well before that date – so as to provide an opportunity for correction where it may be needed.
Tax is then collected on these values directly from the employee either through self-assessment or, more commonly, through an amendment to the employee’s tax code.
As an additional mandatory obligation, I think we can all agree that this requirement adds to the burden of the employer significantly both in terms of time and cost – particularly where this task is fulfilled by an external provider.
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Landlord to be convicted of ‘racially aggravated harassment’ following Crown appeal
Prosecutors have successfully appealed against a sheriff’s decision to acquit a landlord accused of racially aggravated harassment after he called a tenant a “f*cking black bastard”.
The sheriff acquitted the respondent because the Crown failed to lead any evidence to show that the complainer was a member of a particular racial group, but the Sheriff Appeal Court observed that the offensive re...
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Don't just attend networking events; be an expert at them
Accountants should still use time-tested networking opportunities like Chamber of Commerce events to meet new business prospects, said Khalid Javid, founder of K A JAVID |& CO, a Glasgow-based consultancy that assisted Accountants in streamlining their practices in part by engaging in more effective marketing. But instead of attending networking events and chatting up potential new clients about services offered, he re...commends Accountants showcase their expertise by appearing as guest speakers and leading events. "entering the conversation with value." "When we share expertise," he said, "we have to think about it from the standpoint of the prospect. What are the things they face in their business? What are the things they want a solution for?" The answers to these business issues, we suggested, make great topics for speaking events and panels. Appearing as the expert who can solve these issues can have a greater impact on business development than merely networking. Khalid credits his Award, for Business of the Year, at, Scotland’s International Community & Business Award 2019, Straight Talk About Small Business Success in Glasgow, and the appearances he made in support of it, with directly leading to new business for his firm.
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TV’s Lorraine Kelly has HMRC for breakfast Lorraine Kelly ITV
Lorraine Kelly is off the hook after winning a blockbusting £1.2m IR35 tribunal appeal against HMRC. Rebecca Cave analyses the case and looks where the tax authority's demand fell short. Kelly and her husband set-up their personal company Albatel Ltd in 1992, eight years before the IR35 provisions were introduced in April 2000. Albatel provides Kelly’s services in a variety of roles as a broadcaster, actress, mode...
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The Basics of Company Limited Tax
Any new business owner of a limited company must understand the basics of Limited Company Tax along with any other tax obligations as it is crucial for the daily operations of a company. Business heads of companies have to come across different types of taxes while setting up operations, but that doesn’t mean they can’t be conquered. Companies can avail numerous tax benefits, by corporation tax return outsourcing, year end accounting outsourc...
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Let us considers the case of Salman Ali Chaudry (TC07050), who told HMRC that he was an employee of two off-licence stores in Glasgow and did not own them. In all my years of reading VAT cases, I can’t recall reading one where the supposed business owner denied that he owned the business subject to an HMRC enquiry.
Chaudry claimed he was not a sole trader running two off-licence stores in Glasgow but worked as an employee of a separate company, Urban Off Sales Ltd. There were...
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