Good old bookkeeping

The next step in the government’s apparent headlong rush into online dependency appears to be the prospect of quarterly tax returns.

This quite bonkers idea is clearly to assist the government to get their hands on the tax revenues quarterly rather than the current half year installments, as is the case for most self employed. As usual it is dressed up under the banner of ‘tax simplification’, which clearly it is not.

So, if this ridiculous idea persists, the role of the bookkeeper will re-emerge. It will no longer be good enough to do the quarterly VAT returns and then give the year end records to the accountant. The figures will have to already be submitted to HMRC.

Quite why quarterly payments on account are not good enough I have no idea, but the new ‘system’ will require a degree of precision if chaos is not to follow shortly after. Imagine quarterly arable farming accounts – loss – loss – loss – profit. How are they to be catered for?

Anyway, the point of the article is firstly to point out the nonsense that is envisaged and secondly to alert the client to the fact that their bookkeeping will have to be sufficiently robust to cater for the demands of the new system.

Many clients have old accounting systems that work well as far as they are concerned. Unfortunately it would appear sensible for these to be critically reviewed and renewed if appropriate. Obviously, should any assistance be require in this regard do please get in touch.  Recently, the House of Lords have placed a partial brake on the implementation of this nonsense, it is to be hoped that they persist.

 

 

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The Budget – March 8th 2017

spring_budget_2017_web

Phillip Hammond delivered his first and apparently the last Spring budget yesterday. We attach the entire white paper for your perusal.

It has not gone down particularly well. It was not expected to go down well with Mr.Corbyn and Mr.O’Donnell; little does, but the increase in the National Insurance rate for the self employed has incensed many within Mr.Hammond’s own party. The conservatives do not have a large majority and with labour pledged to oppose, national insurance may well become a political chip.

Changes to the dividend tax exemption will not be popular either, but at least these were not manifesto pledges. It is most likely however that the word Hammond did not even mention will be the biggest determinant in both his and his party’s fortunes. Brexit.

Apart from various mitigants against the effects of the business rates revaluation property taxes have remained largely unchanged.

As usual, if you have any specific questions based on your own circumstances please do not hesitate to make contact.

 

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Single Farm Payment / BPS

Philip Hammond confirmed some months ago that the Single Farm Payment would be with us ‘until 2020’. I am still not entirely clear what this precisely means. Presumably the 2019 reporting and payment season will hold true, but in all liklihood there will be an election in Spring 2020, so what happens therafter is anyones guess.

However, it must be questionable if the current system and level of support will remain. Faced with a number of competing claims I would have thought it unlikely that farms subsidies would prevail, despite the obvious implication that unsubsidised UK farmers will be competing head on with subsidised European farmers.

Practical implications apply here too. It must be unwise to enter into new longer term FBT’s unless the uncertainty of 2020 is catered for in the small print. More pressingly, what will be the financial implication on the individual farm business if the support mechanism is withdrawn? Given the stark fact that UK farmers are certainly unable to influence world prices, it would be prudent to establish now just how long the existing business could survive without support. If the answer is ‘not long’ then at least there are 2-3 years to be able to do something about the expected outcome.

Consequently and unfortunately it is difficult for this writer to be economically optimistic. When all forms of business strive for economies of scale, the UK are now seemingly going in the opposite direction. Constitutionally we may well have regained control of our laws, all well and good. It is just to be hoped that the country is able to be economically prosperous enough to enjoy the new freedoms that may bring.

 

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The Oscars debacle

We are embarrassed to be associated by profession with Price Waterhouse Coopers and their incompetent handling of what should actually be quite an easy job – handing envelopes to celebrities to open and read out a name.

Were we given the simple task to perform, the winner of Best film would obviously be ‘The Railway Children’, best actor would be Bernard Cribbins and best actress Jenny Agutter.

How could they get it so wrong?

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Payroll department

In so far as it is possible we are attempting to establish a ‘stand alone’ payroll department so as to be able to properly specialise in this area which continues to be ever more bureaucratic and demanding. Chris Dowdy, who came with us from CVDFK has agreed to head up the new department, a role she previously held at Derngate Mews. Cath and Caroline will continue to support her and provide any holiday cover, so do please continue to employ your usual channels of communication.

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Tax department expansion

Due largely to an increasing workload the partners are pleased to announce that Patience Jamella has been recruited to assist and support Mark Watkins and Sam Leatherland in the tax department. Patience is Rhodesian by birth and has worked in this country for a number of years, including stints at local rivals Grant Thornton.

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Blakesley 2016

Blakesley show was held last weekend for the second time at it’s new venue on the Blakesley / Maidford crossroads. The weather was fine, without being too hot and so large numbers of the general public duly attended (at much cheaper rates than ‘Countryfile live!). A good time was had by all.

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Brexit

After the tumultuous events of the past 2 weeks a little political certainty is now appearing returning to the ranks of the Tories, with the Labour Party still to decide their future direction.

The fact remains that there is little the farming community can do but wait and see what happens. The fall in the pound will assist commodity prices at least in the short term and it could be that if a recession does take place in the wider economy as many predict, land prices may firm as a result as was the case back in 2007. That having been said the future of BFP (whilst in place for 2 years) will then presumably come under pressure.

In short, who knows? It seems a lifetime’s politics has taken place in 20 days and any prediction is a ‘mugs game’. It is also more than a little ironic that the leaders of the ‘leave campaign’ are now nowhere to be seen and the new Prime Minister has become leader through her ability to sit on a fence and say nothing. Strange times indeed.

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A FAMOUS VICTORY!

Last week we learned that Venue Retail Limited, represented by John Harris, had defeated HMRC in the First Tier Tribunal. The case concerned the withdrawal of the EIS relief claimed by investors in the company that was formed to operate the merchandising operation for the 2012 Olympic Games.

The case revolved around the definition of the ‘commencement of trade’ and Harris was able to argue that trade started when ‘operations began’, rather than ‘ when the shop doors opened’ as argued by HMRC. Harris based his argument on some old WW1 excess profits tax cases.

As a consequence it is anticipated that the relief that was withdrawn will not be restored. Some £400,000 of taxation is thought to be involved.

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Cherie Howard

The partners are pleased to report that Cherie Howard has recently joined the firm and is currently based in the Agricultural department. Cherie who is 23, is studying for her final AAT exams.

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