Tag: Agent

Are you an agent for supplies to your clients? VAT

You’re an agent if you act for, or represent, someone else (your principal) in arranging supplies of goods or services. The supplies that you arrange are made by, or to, the principal you represent.

Principals cannot avoid their liability to account for VAT on their supplies or to pay VAT on their purchases by using an agent.

Persons who carry on a business on their own account sometimes use the words ‘agent’ and ‘agency’ to describe their trading style. For example:

# distributors, sole concessionaires and motor agents usually trade as principals on their own account
# employment agencies and travel agents are not usually agents in all their activities

On the other hand, some people who normally trade as principals, such as solicitors and architects, may occasionally arrange supplies as agents for their clients.

To act as an agent, you must have agreed with your principal to act on their behalf in relation to the particular transaction concerned. This may be a written or oral agreement, or merely inferred from the way you and your principal conduct your business affairs. Whatever form this relationship takes:

# it must always be clearly established between you and your principal, and you must be able to show to HMRC that you’re arranging the transactions for your principal, rather than trading on your own account
# you will not be the owner of any of the goods, or use any of the services which you buy or sell for your principal
# you will not alter the nature or value of any of the supplies made between your principal and third parties

https://www.gov.uk/guidance/vat-guide-notice-700#section22

Supplies made through an undisclosed agent are those where the supplier and purchaser are not known to each other as the agent acts in his own name.

Supplies of goods through an agent acting in his own name are treated as to him and by him and consequently count towards his turnover for VAT registration.

VQOTW: Agency Status and Impact on VAT Turnover

steve@bicknells.net

Are you letting property – watch out for your Schedule 23 notice!

Schedule 23 Notices are being sent out by HMRC to all Lettings Agents.

If you’ve received a notice under schedule 23 of the Finance Act 2011, you are legally obliged to make a return to HM Revenue and Customs (HMRC) of the information specified in the notice by the date given in the notice.

To comply with the notice agents must provide a spreadsheet including

Landlord’s name

This must include the full name of the recipient of the landord.

Address

When showing addresses use the 5 fields provided, showing each part of the address in a separate field (see below regarding postcodes). For example:

Address 1 Address 2 Address 3 Address 4 Address 5
Hillcrest Cottage Mountain View Watchgate Kendal Cumbria
2 Speyside Avenue Hillington Basingstoke Hants

Start in the ‘Address 1’ field and leave any unused fields blank. Don’t use commas in any part of the address.

Postcode

Enter the postcode only in the dedicated column provided.

Gross amount paid

Show the amount of the total gross rent received from the tenant for the landlord for the period shown in this notice.

Don’t include commas or minus amounts.

Please show amount in pounds and pence without any currency symbol, for example 2105.32.

Currency codes

Enter a code for each amount to identify the appropriate currency. These currency codes are recognised internationally, commonly used currency codes are:

  • UK sterling – GBP
  • euro – EUR
  • United States dollar – USD
  • Canadian dollar – CAD
  • Australian dollar – AUD

Full list of currency codes

If the currency code column in your return is blank HMRC will assume that the amounts are in UK sterling.

Letting address

Please enter the full address of the property or land managed on behalf your client.

Postcode

Please enter full postcode of the let property/land separately from the address.

Tax year

This the tax year of the return. Please use ‘yyyy/yyyy’ format for example 2015/2016.

Your company/organisation’s name

This is your organisation’s name.

Source reference

If available, please insert a reference number from your accounting system to identify the record (in case we need to contact you).

 

To use the HMRC template

  1. Open the spreadsheet template.
  2. Save the spreadsheet to your computer using the filename shown in your notice.
  3. Use the saved spreadsheet to compile your return.

If you are Landlord who hasn’t declared all you properties now would be a good time to do it before HMRC come after you!

steve@bicknells.net

Do you need help with HMRC?

Unhappy office worker on the phone, isolated on white

HMRC aren’t easy to speak to and unless you know the tax rules its easy to make mistakes, that’s why HMRC allow you to appoint agents to help you with your tax affairs.

To appoint an agent you use form 64-8

Form 64-8 covers authorisation for individual tax affairs (partnerships, trusts, tax credits and individuals under PAYE) and business taxes (VAT, PAYE for employers and Corporation Tax). If you’re a personal representative you can use form 64-8 in certain circumstances to ask HMRC to deal directly with an agent.

There are times when you might want extra help for example with an HMRC Compliance Visit and you can appoint a temporary agent using form COMP1.

The Comp1 relates only to the appointment of an adviser to deal with a compliance check. It does not authorise us to deal with that adviser for anything outside that check. Form Comp1 does not replace or amend any existing authorisation made using form 64-8 or the online authorisation facility, or in CITEX cases a letter giving authority for the agent to act.

The temporary authorisation can be used to:

  • extend an existing authorisation, for example where there is an adviser acting for one tax under a form 64-8, and the customer wants that adviser to act for more taxes just for the purpose of the compliance check
  • appoint an adviser to deal solely with the compliance check where there is no existing adviser authorisation
  • appoint a ‘specialist’ tax adviser, for example in Specialist Investigation cases, just to deal with a compliance check. In such cases this will allow the existing adviser to continue to act for the customer in their day to day tax matters.

[HMRC CH201550]

Do you need help?

steve@bicknells.net

Is your act theatrical enough to have tax deductible agents fees?

Las Vegas Elvis impersonator

Actors, singers, musicians, dancers and theatrical artists are permitted to make a deduction for agents fees under ITEPA 2003 S352.

But its more complicated than you might think based on recent cases…

Richard Madeley and Judy Finnegan (2006) SpC 547 it was only on appeal that the Special Commissioner agreed that their chat show was considered theatrical.

The Special Commissioners also thought that Bruce Forsyth and Ant and Dec qualified.

But that Quiz shows were borderline, for example they felt Jeremy Paxman (University Challenge) and John Humphry (Mastermind) didn’t qualify, but Anne Robinson (The Weakest Link) did qualify and Chris Tarrant (Who wants to be a Millionaire) was borderline.

So do you think the special commissioners would see your act as Theatrical?

steve@bicknells.net

When the HMRC inspector visits get some extra help

HMRC campaigns and task forces are on going and Compliance checks are becoming common.

So its worth knowing that you can appoint an extra advisor to help you answer the inspectors questions, its quick and easy to to arrange using this link

http://www.hmrc.gov.uk/forms/Comp1.pdf

Its a temporary authorisation that does not cancel or amend permanent authorisations ie your normal advisers/accountants

HMRC have also issued new Fact Sheets for Compliance Checks and Penalties

http://www.hmrc.gov.uk/compliance/factsheets.htm

Sometimes we all need a little help and specialist advice can be invaluable

steve@bicknells.net