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News this month for travellers taking large sums of cash abroad,
or into the UK, a note for pensioners taking State Pension benefits
for the first time, possible tax opportunity for owners of commercial
buildings and a re-run of the increased benefit charges for
van users (including penalties for non-compliance of the new
Anti-smoking rules).
Our next newsletter will be published on 7 August 2007.
Taking cash abroad - new cash declaration rules commence 15
June 2007
A new European Union (EU) law on travellers declaring "cash"
came into force on 15 June 2007 in the UK and throughout the
EU. It has been introduced to help combat money laundering,
including tax evasion.
It only applies to persons who:
- are entering the UK from a non EU country, or
- are travelling from the UK to a non EU country
and are carrying "cash" of 10,000 Euros, about £6,500,
or more (or the equivalent in other currencies).
"Cash" includes not only currency notes and coins
but also cheques of any kind (including travellers' cheques)
and banker's drafts.
For this purpose the Isle of Man and the Channel Islands are
non EU countries and so the declaration is required from persons
travelling there from the UK or entering the UK from there (whether
by air or sea) with sufficient "cash".
Travellers are required to declare the "cash" to
HM Revenue & Customs (HMRC) at the place of their departure
from, or arrival in, the UK.
Forms on which to make the declaration are available at ports
and airports and are also downloadable from the HMRC internet
site. The forms require information about the amount of money,
its owner, its origin, its intended use and the intended recipient
as well as details of the traveller's name, address, nationality,
passport number and occupation and the journey being made.
The intention is that travellers should simply drop their completed
form into a box before boarding their boat or plane, retaining
a carbon copy which they should produce if challenged.
Travellers could face a penalty of up to £5,000 if they
fail to comply with the obligation to declare, or provide incorrect
or incomplete information.
Under existing law "cash" of more than £1,000
may be seized anywhere in the UK (including at ports and airports)
if a customs or police officer has reasonable grounds to suspect
that it is either the proceeds of, or is intended for use in,
unlawful conduct. This "cash" may then be forfeit
to the Crown if no acceptable explanation for it can be provided.
It is expected that HMRC will use information from "cash"
declarations in their efforts to counter tax evasion and other
crime.
There will still be no declaration required for people travelling
between the UK and other EU countries.
The countries of the EU are Austria, Belgium, Bulgaria, Cyprus,
the Czech Republic, Denmark, Estonia, Finland, France, Germany,
Gibraltar, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania,
Slovakia, Slovenia, Spain, (including the Canary Islands), Sweden,
and the United Kingdom (not including the Isle of Man and the
Channel Islands).
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article. 
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State Pensions - tax return declarations
Most pensioners will be aware that their State Pension is taxed
as earned income.
If you delay taking your pension you may become entitled to
take the deferred benefit as an increase in your weekly/monthly
pension, or as a lump sum.
Both of these options are taxable and need to be entered on
your tax return from the fiscal year that you first receive
the pension and if taken, the lump sum.
If you are a tax client we obviously are aware of your age
and therefore eligibility for State Pension benefits. However
we will not know if you have decided to defer taking your pension
and if so, that you may be receiving a lump sum at some time
in the future.
It would be helpful if you could keep us informed so that we
can properly advise on any resulting tax liabilities that may
arise - and when they may fall due for settlement.
Click here for a call back from our office regarding this
article.
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Commercial Buildings - Time is running out for certain
tax claims
TFrom April next year fixtures and fittings included in the
sale or purchase of a commercial building will be treated differently
for capital allowance purposes. At present you can claim a tax
writing down allowance of 25% per annum. (This rate is applied
to the tax written down value at the beginning of each year.)
From April 2008 these types of fixtures and fittings are to
be re-classified as long-life assets and the annual tax allowance
will be reduced to 10%.
This does point up an interesting tax planning opportunity
for purchasers of commercial property who did not sign a particular
tax election when the property was bought.
The tax election referred to here is a Section 198 claim. This
election effectively binds both the seller and purchaser of
a commercial property to an agreed valuation for fixtures and
fittings included in the sale. This agreement is irrevocable
- cannot be subsequently changed.
If you did sign such an election what we are about to suggest
will not apply!
If you did not sign a S198 election you are free to have the
original split of the purchase price between the cost of the
building and it's fixtures and fittings re-examined for tax
purposes. If you can provide the Revenue with sufficient evidence
(professional valuations etc) you may be able to increase the
amount attributed to fixtures and fittings. This can be achieved
even if a number of years has passed since you bought the property.
The benefit is an increase in your claim for capital allowances
from the date of purchase of the property until 5 April 2008.
(If you still own the property at that date.)
Time is running out so please give us a call if you would like
us to examine past claims on commercial property that you own.
Click here for a call back from our office regarding this
article.
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Vans - tax smoke screen!
Most users of commercial vehicles will now be aware that private
use of a van will trigger a benefit in kind charge of £3,000
per annum - this applies from 6 April 2007. Plus an additional
£500 if the van owner provides an employee with fuel for
private use.
The Revenue do allow certain incidental non-business use without
incurring a benefit charge including home to work mileage.
It is worth reviewing contracts of employment and other procedures
to keep employees the right side of the benefit legislation.
Of course they will then need to comply with the ban!
If commercial vehicle users would like more information on
the Revenue's definition of "incidental private use"
please give us a call.
What employers may not realise are the fines that may be levied
on themselves and/or their employees if they fail to observe
the new "Anti-Smoking" legislation that applies in
England from 1 July 2007. (In Wales these regulations came into
force on 2 April 2007, Northern Ireland 30 April 2007. Scotland
introduced the legislation on 26 March 2006).
Believe it or not a vehicle used solely for business purposes
is likely to be considered "business premises" for
the purposes of the Anti Smoking legislation. You are obliged
to display No Smoking signs in such vehicles.
- Smoking in a smoke free vehicle carries a potential fine
of £200.
- Failing to display a No Smoking sign carries a potential
fine of up to £1,000 per offence.
- Failing to prevent smoking in a smoke free vehicle carries
a potential fine of up to £2,500 per offence.
Again the requirements of this legislation should be included
in your contracts of employment.
Click here for a call back from our office regarding this
article.
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Tax Diary July/August 2007
1 July 2007 - Due date for corporation tax
due for the year ending 30 September 2006.
6 July 2007 - Complete and submit forms P11D
return of benefits and expenses and P11D(b) return of Class
1A NIC's.
6 July 2007 - Deadline for submission of new
Tax Credit application for 2007-2008, if you want to secure
a full years claim.
19 July 2007 - Pay Class 1A NIC's (by 22 July
2007 if paid electronically).
19 July 2007 - PAYE and NIC deductions due
for month ending 5 July 2007. (If you pay your tax electronically
the due date is 22 July 2007)
19 July 2007 - Filing deadline for the CIS300
monthly return for the month ending 5 July 2007.
19 July 2007 - CIS tax deducted for the month
ending 5 July 2007 is payable by today.
31 July 2007 - Deadline for Tax Credit renewal
submissions - notification of income for 2006-2007.
31 July 2007 - Due date for second payment
on account of self assessment tax 2006-2007.
1 August 2007 - Due date for corporation tax
due for the year ending 31 October 2006.
19 August 2007 - PAYE and NIC deductions due
for month ending 5 August 2007. (If you pay your tax electronically
the due date is 22 August 2007)
19 August 2007 - Filing deadline for the CIS300
monthly return for the month ending 5 August 2007.
19 August 2007 - CIS tax deducted for the
month ending 5 August 2007 is payable by today. |
