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Making tax digital

From 1st April 2019, if you are VAT registered and have a turnover of more than £85,000 then the making tax digital (MTD) scheme for VAT will be mandatory.

If you are eligible you must join the scheme and if, for whatever reason, your turnover falls below the £85,000 threshold you must stay on the scheme and cannot revert to the old way of submitting returns – unless you deregister or become exempt for MTD.

If you qualify then you will need to change the way you file your VAT return with HMRC starting for your VAT period starting after the 1st April 2019:

  • If your VAT quarter end is March then your first MTD submission will be June 19
  • If your VAT quarter end is April then your first MTD submission will be July 19
  • If your VAT quarter end is May then your first MTD submission will be Aug 19

The new regime means that HMRC will receive the same VAT return information as before, but it needs to be sent by an API (electronic) link to HMRC and can’t be typed in manually via online services.

VAT frequency and payment deadlines will remain the same as will eligibility for VAT special schemes.

When filing your return, the transactions that make up the return need to be kept digitally, this can be done using an accounting software package or by using spreadsheets.

Some software accounting packages that are up to date will have the API link required already in (SAGE ONE for example) so you will just need to send your return via the software package.

However, some older versions and spreadsheets won’t have this capability and therefore two options are available:

  • Upgrade your software for the latest version with the API link. This may not be practical, or possibly cost prohibitive.
  • Use our software to send the data to HMRC. We have already invested in the new software to enable our clients to maintain their existing VAT return process in a compliant way.

If you have any questions about ‘making tax digital’ and what it means for your business, speak to Jane Marquez in our team and she will help you make the transition.

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Tax specialist Clare Bradbury joins Alexander Knight & Co

Clare Bradbury and Murray Patt of Alexander Knight & Co accountants

We are delighted to have boosted our team of accountants in Hale with the appointment of experienced tax specialist Clare Bradbury.

Clare is an experienced tax specialist and will advise our SME clients on tax planning issues as well as guiding company directors on tax issues during and after a corporate transaction. During her career she has worked at EY, KPMG and Mazars in Manchester.

There is high demand for specialist tax advice in the region and we are delighted to have appointed Clare to our team. We are confident that our clients, who range from fast-growth businesses to seasoned entrepreneurs will be well served by her specialist tax skills.

Clare Bradbury (pictured above with our founder Murray Patt) said:

I’m delighted to join the team and I’m looking forward to working with our clients to make sure their tax position works effectively for their business at whatever stage it is at in its lifecycle.

Clare Bradbury, tax specialist at Alexander Knight & Co.

Welcome to the team Clare!

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Don’t be an easy target for HMRC in 2019

Get insured against the costs of a tax investigation by HMRC

We are seeing more and more professional services firms – and their clients being investigated by HMRC for tax evasion. HMRC issued 1,414 production orders to accountancy, law and other professional services firms in relation to investigations into tax evasion according to this report by economia.

At least two Manchester United stars were reported to have been investigated by HMRC over alleged image rights tax evasion as the authorities opened new cases against top footballers in the Premier League.

As enquiries escalate amongst top flight footballers, tax investigations into the affairs of small business are also on the increase and we say it is because both groups are easy targets for HMRC.

Are you under investigation by HMRC?

Murray Patt, founder of Manchester-based accountants Alexander Knight & Co, said:

“It increasingly feels as if small and medium-sized businesses and Premier League footballers are two of the most targeted groups for tax investigations by HMRC.

“In the case of footballers, forming an image rights company to receive payments of up to one fifth of a player’s salary is actually a legitimate tax strategy approved by the authorities if set up appropriately.

“However, it’s logical for the authorities to launch investigations into high profile players who earn their wealth via multiple sources because it can be a rich source of extra income, particularly for players who are new to the Premier League from other countries where tax rules are different.

Get insurance for HMRC investigations 

“Let’s not forget that small and medium sized businesses are an even easier target. If you don’t take care as a small business owner you’re at risk of being pulled up over minor mistakes or small disparities, which could incur disproportionately heavy fines and penalties imposed by HMRC.

“It’s important to have insurance in place to cover the cost of an investigation if you are a small or medium sized business, since in most cases you won’t have the funds of a top-flight footballer. Don’t get caught offside by HMRC.”

Alexander Knight & Co will arrange insurance for you and your business against the costs of an expensive HMRC investigation. Don’t get caught offside by HMRC. Speak to our specialist tax team now on (0161) 980 8788.

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Alexander Knight & Co advises on tax as Travis Perkins acquires Stockport business

TFS acquired by Travis Perkins

We were pleased to advise the owners of a successful Stockport-based business when it was acquired by a major PLC on their tax liabilities.

TF Solutions, (TFS) is one of the UK’s leading air conditioning and refrigeration distributors and was recently acquired by the country’s largest builders’ merchants, Travis Perkins.

The purchase enables Travis Perkins to expand its offering through the sale and supply of air conditioning units. Our specialist tax role on the deal was highlighted by North West Business Adviser magazine – you can read all about the deal here.

Tax advice on deal

TFS was founded in 2001 and distributes a range of refrigeration and air conditioning products from three sites in Stockport, Burton on Trent and Dunstable. It will continue to trade as TF Solutions following completion of the deal.

Murray Patt,, founder of Alexander Knight & Co, said:

We were delighted to provide our client with the tax advice on this transaction and expect them to go from strength to strength as part of one of the most trusted brands in the building materials marketplace.

Andrew Cherrill has been confirmed as the new managing director at TF Solutions. He said:

We fully intend to continue operating as we have always done giving our customers a service level which is second to none in the industry. The acquisition deal will allow us to grow as a company and expand that service.

Frank Elkins, CEO of Travis Perkins’ Contracts division, added:

“TF Solutions have an extremely strong identity within the air conditioning and refrigeration market.”

The business currently employs 48 people at its three branches trading across the whole of the UK.

Speak to us to get specific tax advice before you agree any kind of deal. You need to know how to minimise the level of tax you will pay when you sell your business.