Monthly Archives: January 2015

Solicitors’ Tax Campaign

Solicitors are being given the chance by HMRC to bring their tax affairs up to date or face tougher penalties, as part of a new tax campaign.

The Solicitors Tax Campaign gives solicitors the opportunity to declare any undisclosed income by making a voluntary disclosure. The disclosure opportunity is available to those working within the legal profession either as a solicitor in a partnership or company, or as an individual.

Those affected have until 9 March 2015 to notify HMRC of the undisclosed income and need to complete a disclosure form and pay the outstanding liability by 9 June 2015.

Caroline Addison, Head of Campaigns, HMRC, said:

‘Information gathered by HMRC has allowed us to identify solicitors who thought they could operate without declaring income and paying the taxes that others have to pay. If you have not declared all of your income, you need to put your tax affairs in order. Take this chance to come forward and put things right in a straightforward way and on the best possible terms. It will be easier and cheaper for you to come to us than for us to come to you. Those who make a deliberate decision not to pay the taxes due could face a penalty of 100% or more of the tax due, or even a criminal prosecution.’

Internet links: Gov news1  Gov news2

Tax on the diverted profits dubbed the new ‘Google tax’

The government has published draft tax legislation to implement the new tax on diverted profits which has been referred to as the ‘Google tax’. The introduction of a new Diverted Profits Tax which was announced in the 2014 Autumn Statement will target multinational enterprises with business activities in the UK who ‘enter into contrived arrangements to divert profits from the UK by avoiding a UK taxable presence and/or by other contrived arrangements between connected entities’.

The Diverted Profits Tax will be applied using a rate of 25% from 1 April 2015 and is expected to raise £1.4bn over the course of the next five years.

Commenting on the new measure, John Cridland, Director General of the CBI said:

‘International tax rules are in urgent need of updating but there is already an OECD process underway to do this. It is unfortunate that the UK has decided to go it alone with a Diverted Profits Tax outside this process, which will be a real concern for global businesses.’

‘The legislation will be complex to apply, and if other countries follow suit businesses will have a patchwork of uncoordinated unilateral rules to navigate, which risks undermining the whole OECD approach.’

Internet link: CBI News

VAT and digital services

HMRC have issued some additional guidance for small businesses which supply digital services to consumers in other EU Member States.

The guidance advises:

  • how to comply with new VAT rules on the place of supply of digital services that came into force on 1 January 2015
  • how to register for HMRC’s VAT Mini-One Stop Shop (MOSS) and still benefit from the UK’s VAT registration threshold for sales to UK consumers.

On 1 January 2015, the VAT rules for cross-border Business to Consumer supplies of ‘digital services’ (for example broadcasting, telecoms and e-services) changed. Broadly from that date, VAT must be accounted for in the Member State where the consumer normally is, rather than where the supplier of the service is established.

HMRC have also issued more general guidance on the change to all businesses which can be found here

If you would like further information on this issue please contact us.

Internet links: News  Guidance