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SORP 2015 bite size guidance: Recognising income from contracts

Posted on: November 27th, 2014 by Joanne Taylor No Comments
Joanne Taylor, Senior Charities & Not for Profit Manager, Broomfield & Alexander

Joanne Taylor, Senior Charities & Not for Profit Manager, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

Income from the sale of goods and services under contract is normally classified as unrestricted income because it is not a gift so cannot be restricted by trust law and any service may normally be spent on any purpose of the charity.

However, if a contract specifically requires all income received under it is to be spent on a particular purpose of the charity and any unspent income is to be returned to the funder or only applied for that purpose, then in substance the income may be regarded as restricted.

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The curtain goes up on the new Theatre Tax Relief

Posted on: November 26th, 2014 by Denise Roberts No Comments
Denise Roberts, Tax Director, Broomfield & Alexander

Denise Roberts, Tax Director, Broomfield & Alexander

Whilst taxes are generally viewed as a necessary business expense, once in a while a new relief comes along which is the exception to the rule. The new Theatre Tax Relief is expected to cost, not generate, the Treasury money.

The relief does have some pitfalls to be aware of, but the government’s aim is to support live theatre productions which should be viewed in a positive light for the industry as a whole. The Treasury is predicting this benefit will be worth up to £15 million annually and comes at a time when public funding is being cut, so it is critical that opportunities to make claims are correctly identified.

These claims then need to be maximised within the framework of the scheme whilst not innocently inflating a claim which may attract unwelcome attention from H M Revenue and Customs.

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UK proposes ending the current patent box scheme after agreement with Germany

Posted on: November 26th, 2014 by Denise Roberts No Comments
Denise Roberts, Tax Director, Broomfield & Alexander

Denise Roberts, Tax Director, Broomfield & Alexander

In an attempt to place the UK in the ‘good citizen camp, the UK has agreed to put forward a proposal to end its current patent box regime. The patent box regime came into force on 1 April 2013 and over a period of time aimed to provide a 10% rate of corporation tax for profits earned from patented innovations and certain other IP rights. This concession to Germany addresses the concerns raised over the alleged competitive advantage it gives Britain over its fellow EU member states.

The draft proposals which will need to be ratified by the G20 and OECD – will require tax benefits to be connected directly to R&D expenditures. There will also be amendments to issues in relation to qualification of expenditure, grandfathering and tracking of qualifying R&D expenditure.

If the proposals are agreed by the OECD Forum on Harmful Tax Practices, the patent box will close to new entrants in June 2016 and will stop operating in June 2021. An agreement between the UK and Germany  refers to a “transition to new regimes” but does not give details as yet for the replacement of the patent box.

It is clear that any new regime will curtail the taxation benefits available under the current system, as ever the devil will be in the detail.

Buildings constructed for a charitable purpose: What zero rating for construction services could your charity access?

Posted on: November 25th, 2014 by Liz Mounfield No Comments
Liz Maher, Director, Centurion VAT Specialists

Liz Maher, Director, Centurion VAT Specialists

Even a charitable organisation which is not VAT registered will often face the question of whether they have to pay VAT on the construction of a new building. Frequently it comes as a real surprise for the charity to learn that the building costs will be subject to VAT at 20% – often funding and donations have been raised to fund the build costs and professional fees but not the VAT!

Being a Charity does not exclude the body from having to pay VAT on the costs of any construction project although there are some specific VAT reliefs available on new construction projects for commercial buildings – if the charity can show that the building will be put to a non-business use.

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No need for DIY investments

Posted on: November 25th, 2014 by Liz Mounfield No Comments
Austin Broad, Technical Director, Broomfield & Alexander Wealth Management

Austin Broad, Technical Director, Broomfield & Alexander Wealth Management

In last month’s article we covered the reasons why people invest money and the importance of returns exceeding inflation in the long term. We also covered the direct relationship between the level of risk you take when investing and the long-term returns in excess of inflation; as well as investor’s tolerances to different levels of investment risk.

The starting point for investing your money is to “do it yourself” (DIY). But for many, there may be multiple reasons why this is not appropriate. For example, they don’t have the time, or have no interest in learning about investment research. In fact, for many, it is the mystery of investments, coupled with a lack of experience to make investment decisions, which simply makes DIY investment inappropriate.

It is for these reasons that firms offer investment services to help avoid the need for a DIY approach.

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Banish all thoughts of tax this Christmas

Posted on: November 24th, 2014 by Jane Mellor No Comments
Jane Mellor, Tax Manager, Broomfield & Alexander

Jane Mellor, Tax Manager, Broomfield & Alexander

It is very easy to focus on the 31 January filing deadline as being the date to work towards in dealing with your tax affairs for the previous year.  But with over half a million people filing their returns on the last day, this inevitably can cause the system to be slow in accepting your submission. The stress levels attached to meeting this deadline can easily be avoided.

Many of our clients use the Christmas break to gather together their tax return information to then forward to us in the New Year for preparation of their tax return. Why spoil the run up to Christmas and your well earned festive break with thoughts of completing your tax return and trying to locate all of those relevant bits of paper that have been hanging around for over 6 months. There are many reasons to turn your attention to this matter now and then enjoy the run up to the festive season with all thoughts of tax banished. Not least is the risk of incurring penalties and interest.

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SORP 2015 bite size guidance: Legacies

Posted on: November 24th, 2014 by Sarah Case No Comments
Sarah Case, Director, Broomfield & Alexander

Sarah Case, Director, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

In order to recognise a legacy there must first be a will that the charity is aware of, and the death of a benefactor.

Entitlement to a legacy

Evidence of entitlement exists when the charity has sufficient evidence that a gift has been left to them and the executor is satisfied that the gift will not be required to satisfy claims to the estate.

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New funding for Pembrokeshire businesses

Posted on: November 20th, 2014 by Mike Fenwick No Comments
Mike Fenwick, Director, Broomfield & Alexander

Mike Fenwick, Director, Broomfield & Alexander

The Welsh Government have recently announced 2 new funds for Pembrokeshire businesses in response to the recent decision by Murco to close its refinery operations at Milford Haven.

The new funds are:

The Pembrokeshire Small and Medium Enterprises (SME) Small Capital Investment Grant will offer grants of between £5,000 and £25,000 (or for exceptional projects up to £50,000) to a maximum of 50% of project costs. The fund will be open to SMEs based in Pembrokeshire and support projects that create or sustain jobs, exploit new markets to grow business, or invest in Superfast Broadband. The scheme is particularly aimed at SMEs in the energy and environment sector who have been affected by the closure of the Murco oil refinery, and businesses located in deprived wards within the county.

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SORP 2015 bite size guidance: Income – to defer or not to defer?

Posted on: November 20th, 2014 by Claire Thompson No Comments
Claire Thompson, Charities and Not for Profit Assistant Manager, Broomfield & Alexander

Claire Thompson, Charities and Not for Profit Assistant Manager, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

Income is the inflow of economic benefits to a charity from the activities that it undertakes.

Many charity’s struggle with whether or not the income they receive should be deferred or recognised in full in the period in which it was received.

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Legal updates: FATCA and Solicitors Handbook Version 12

Posted on: November 20th, 2014 by Seamus Gates No Comments
Seamus Gates, Director, Broomfield & Alexander

Seamus Gates, Director, Broomfield & Alexander

This week, there are two notable updates which I will cover. Firstly relating to how the Foreign Account Tax Compliance Act (“FATCA”) provisions affect Solicitors Client Accounts.

Our in-house expert, Jane Mellor, recently published a blog post providing a general update and overview of FATCA.

In my blog post, I am going to build on Jane’s blog to focus on this one element of FATCA that is easily overlooked, in all of its lengthy complexity, but has specific relevance to our legal clients and contacts.

Do you appreciate that your solicitors client accounts may come under the new FATCA legislation?

HMRC have issued guidance on the FATCA legislation, and paragraphs 3.15 (referring to Escrow Accounts) and 3.16 (referring to undesignated/designated accounts) may be relevant to your legal firm.

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Latest From The Blog


SORP 2015 bite size guidance: Recognising income from contracts

Joanne Taylor, Senior Charities & Not for Profit Manager, Broomfield & Alexander

Joanne Taylor, Senior Charities & Not for Profit Manager, Broomfield & Alexander

Welcome to our series on SORP 2015 where the specialist charities and not for profit team at Broomfield & Alexander will bring you bite size guidance on the changes that SORP 2015 will bring to your organisation.

Income from the sale of goods and services under contract is normally classified...

Read more

The curtain goes up on the new Theatre Tax Relief

Denise Roberts, Tax Director, Broomfield & Alexander

Denise Roberts, Tax Director, Broomfield & Alexander

Whilst taxes are generally viewed as a necessary business expense, once in a while a new relief comes along which is the exception to the rule. The new Theatre Tax Relief is expected to cost, not generate, the Treasury money.

The relief does have some pitfalls to be aware of, but the...

Read more