Tax Newsletter 03 Dec

1 January 2010 sees the introduction of new VAT rules for cross-border selling and a new procedure for reclaiming VAT paid in other EU countries. We have some practical advice on how you can help your clients by taking action now in both these areas. We also set-out the new advisory fuel rates for company cars.

Survey
We have had a significant response to our recent user survey and will shortly be analysing the responses and making any necessary changes. We will also put in place appropriate developments for 2010.

Thank you so much to those who have already shared their views. If you have yet to complete our user survey, please do so now. By way of a small thank you we will send you a list of over 150 tips and ideas to help you to control your PI premiums. This list is derived from feedback and ideas supplied by previous attendees at my seminars on "How to avoid professional negligence claims".

The survey will only a take a few minutes and gives you the opportunity to tell us what you think and to influence future developments. You can reach the user survey here.

Membership

One thing that has become apparent from early responses to the survey is that you may not be aware that you are currently a 'silver' member. We will shortly change the description to make this clearer. Please note that 'silver' membership is complementary and that as such you no longer qualify for the full version of this newsletter.

Upgrade to Professional Membership

You can secure your continued entitlement to the full newsletter each week as well as to discounts and other membership benefits - depending upon which professional membership level you choose. So do please remember to upgrade now.The longer you leave it the more you will miss.

Here's a list of the benefits you can secure simply by upgrading to silver-plus membership:

• Our full weekly tax update newsletter written specifically for accountants in general practice (Value £200)
• Discounted places at our seminars for accountants (Saving £30 each time)
• Free access to notes and slides presented at recent Tax Advice Network seminars (Saving £37 each time)
• An increasing range of special offers and facilities that are not available to 'complementary' members.
  
  

And there are further benefits available if you upgrade to Gold or Platinum membership levels. Full details here.

Most people find it simple enough to upgrade online. If you do have any problems though just call and ask for Morag who will do what she can to assist.

And now, on with this week's practical points:

Cross-border services

If your clients, or perhaps your own practice, supplies services to customers based in other EU countries you need to bone-up on the new rules that determine where the place of supply is considered to be for VAT purposes. This place of supply determines what VAT must be applied to the sale/service; be that VAT by reference to the country where supplier is based or the country where the customer is based.

Where the customer is a non-business customer (known as B2C sales) there is no change in the VAT treatment; the place of supply is where the supplier belongs. If your practice is VAT registered and you prepare personal tax returns for a client who lives in France you must charge UK VAT on your invoice. There are exceptions to this general rule, for example where the supply relates to land, in which case the place of supply is where the land is situated.

Where the customer is a business (a B2B sale), the general rule from 1 January
2010 is that the place of supply is....

Sorry - key elements of this item, our practical advice and useful links are only available to silver plus, gold and platinum professional members.

Refunds of VAT in the EU

This could be really good news for your clients who a take a lot of international business trips. Until now the VAT paid on business expenses incurred in other EU counties has been difficult to reclaim. Each claim had to be made in the language of the country where the VAT was paid, within six months of the end of the calendar year. Some counties took forever to make the refund, and would not pay interest on late payments. The minimum size of the claim was also different for each country.

From 1 January 2010 all claims for VAT rebates from other EU countries must be made.....

Sorry - key elements of this item, our practical advice and useful links are only available to silver plus, gold and platinum professional members.

Advisory fuel rates revised

In our newsletter on 19 November 2009 we forewarned you that HMRC was no longer going to give a month's notice for the application of new advisory fuel rates (AFRs).

The new AFRs were announced on 27 November and HMRC want employers to use these revised rates in relation to journeys taken from 1 December 2009. The petrol and diesel rates have increased but the rates for LPG vehicles remain unchanged. Hybrid petrol/electric cars are treated as petrol for AFR purposes. The new AFRs, with the old rates in brackets, are:

The AFRs are used to reimburse company car drivers for the cost of fuel they pay for, which is used for business journeys. However, the AFRs can also be used to calculate the amount an employee should reimburse his employer in respect of road fuel paid for by the employer, which was consumed during private journeys in a company car.

If an employer continues to reimburse mileage expenses to an employee based on the pre-December rates, perhaps because the expenses system has not been adjusted in time, this has no income tax consequences as the AFRs are not statutory rates.

However, where an employee has under-paid the employer by using the lower pre-December rates for fuel used in December 2009 or later, this could trigger a car fuel benefit charge for that employee. This is because HMRC regard the employee has receiving a fuel benefit if he/she does not repay the cost of all fuel used for private journeys, using the AFRs as guide to the cost of that fuel.

AFRs to be used from 1 December 2009
http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm

Spotlight on: Dave Cooper

Dave is one of our newer tax adviser members and a very exciting one at that. He's a partner in a specialist employment tax consultancy, providing unique and innovative solutions, and which promises 'Big 4 style advice at a fraction of the cost'.

Dave has been a CTA since 1995, and has worked for 13 years within the 'Big 4'. Prior to the mid-1990s he was an HMRC inspector; however he assures us that since leaving the Revenue, his sense of humour has been grafted back on!

Dave's specialisms include company car tax planning, flexible benefit plans for employers, employer compliance reviews, employment status issues and CIS. He and his partner have also developed a highly innovative calculator tool to determine probable tax and NIC treatment of Payment in Lieu of Notice and other termination payments.

You can contact Dave by email or phone through his full profile here.

You can see all of the other tax adviser member profiles simply by choosing a topic from our list of over 30 specialisms - or using the free text search bar which you will find at the top right of the screen on every page of the website.

Tax Fun spot

My apologies to anyone confused by the SIX bullet points in last week's newsletter under the heading "Five things taxpayers can expect HMRC to do but which are not stated in the new Charter" - and thanks to those who pointed it out to me - especially the kind member who noted the irony given an old story that I've shared previously:

Dave Hartnett thinks accountants can't count - and it's my fault

At the ICAEW Tax Faculty AGM earlier this year the pre-lunch guest speaker was Dave Hartnett, Permanent Secretary for Tax. During his opening few words he explained how much he enjoys being in the Institute's Great Hall as he always remembers what happened when he was opposing the motion at the Wyman Debate in 2003.

I was Chairman of the Faculty at the time and therefore chaired the event. The motion under debate was:
This House believes that tax is not a moral issue - it's purely a matter of law.

With help from Tax Faculty staff we took a show of hands at the start and then again at the end to assess whether the debate had impacted the views of those present.

If memory serves the majority of hands at the outset supported the motion. By the end of the debate however there had been a shift and I think I called it a draw. Dave was convinced that a majority now opposed the motion. Thus his view that I (and therefore other accountants) can't count. Six years down the line and he still won't let me forget it ;-(

I apologise and would simply note that at least I'm no longer in practice!

Items appearing in this 'tax fun' spot are taken from the Accountant-Jokes.com blog - with my permission!

Survey
If you missed the message above then do please take a few minutes to complete our 2009 user survey. Let us know what you think and have your influence on future developments. You can reach the survey by clicking here.

Upgrade to Professional Membership

You can secure your entitlement to the complete unedited newsletter each week as well as to discounts and other membership benefits - depending upon which professional membership level you choose. So do please remember to upgrade now.

The sooner you upgrade the less you will miss. Most people find it simple enough to upgrade online. If you do have any problems though just call and ask for Morag who will do what she can to assist.

And finally
Much as I like to receive positive feedback I also welcome constructive comments that can help us to improve your experience of our site and services. So do let us know of your good or bad experiences and especially if you have any problems with our website or facilities. Our objective is to ensure everything works as smoothly as possible for you.

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