£75 to change FRS category

[craigy1874]

We are always happy to answer your questions.

Firstly, to clarify this offer has nothing to do with Limited Cost Trader changes effective on the 1 April, we are providing our advice on these changes entirely free to all clients.

The offer you comment on, which is entirely optional, refers to the changes that HMRC were forced by the Tribunals to make to their guidance on the selection of a FRS category. This correction provides an opportunity to consider your selected category, but to do so requires extensive analysis of the actual nature of the work each person does, and where appropriate to draft out the technical basis for requesting a change.

This work is entirely individual to each person. The £75 relates to that detailed analysis of your work, how that interacts with the revised guidance and then, in appropriate circumstances, to submit an authoritative argument with the notice to change the category. It also covers the resulting correspondence or any argument from HMRC. Of course, there is no charge when there is no change required.

If you were using the 14.5% category and for example on a turnover of £50,000 your FRS benefit would be £1,300 per annum. In the right circumstances, if as a result of this work the category is reduced to 12%, the benefit would increase to £2,800.

That is totally reasonable to be fair.

[radish2008]

That is totally reasonable to be fair.

Of course it does.

Accountant: What do you do ?

Me: IT consultancy and software dev ...

Accountant: Ok ... (reads the list and gets to Computer and IT consultancy or data processing) That will be £75 please.

The list isn't very long.

To be frank as well - trying to shoe horn a developer into 'Other business' at 12% is why the scheme got shut down in the first place ?

[AndrewK]

We are always happy to answer your questions.

Firstly, to clarify this offer has nothing to do with Limited Cost Trader changes effective on the 1 April, we are providing our advice on these changes entirely free to all clients.

The offer you comment on, which is entirely optional, refers to the changes that HMRC were forced by the Tribunals to make to their guidance on the selection of a FRS category. This correction provides an opportunity to consider your selected category, but to do so requires extensive analysis of the actual nature of the work each person does, and where appropriate to draft out the technical basis for requesting a change.

This work is entirely individual to each person. The £75 relates to that detailed analysis of your work, how that interacts with the revised guidance and then, in appropriate circumstances, to submit an authoritative argument with the notice to change the category. It also covers the resulting correspondence or any argument from HMRC. Of course, there is no charge when there is no change required.

If you were using the 14.5% category and for example on a turnover of £50,000 your FRS benefit would be £1,300 per annum. In the right circumstances, if as a result of this work the category is reduced to 12%, the benefit would increase to £2,800.

That is smartest BS answer ever. How much for it? Or is it generated?

[SueEllen]

Of course it does.

Accountant: What do you do ?

Me: IT consultancy and software dev ...

Accountant: Ok ... (reads the list and gets to Computer and IT consultancy or data processing) That will be £75 please.

The list isn't very long.

To be frank as well - trying to shoe horn a developer into 'Other business' at 12% is why the scheme got shut down in the first place ?

No it's because certain companies were doing naughty things in setting up multiple 2 person companies in regards to NI and VAT.

[Patrick@Intouch]

Of course it does.

Accountant: What do you do ?

Me: IT consultancy and software dev ...

Accountant: Ok ... (reads the list and gets to Computer and IT consultancy or data processing) That will be £75 please.

The list isn't very long.

To be frank as well - trying to shoe horn a developer into 'Other business' at 12% is why the scheme got shut down in the first place ?

This high-level understanding is precisely what the tribunal found was misleading in the HMRC guidance. A developer may not be a consultant, it depends on to what extent the developer is giving only advice (consultancy) and the extent that they perform the development personally and are not therefore just being consulted. HMRC were found to be flawed in saying you apply the category in this broadest sense.

Making an easy choice is not always the best choice, and HMRC must abide by the law even if that means less tax than they would like to suggest or provide flawed guidance is the case.

The FRS reforms were brought about by last year’s changes in Umbrella expenses, with some less compliant umbrella companies pushing everyone into limited companies to gain the FRS benefit. HMRC unofficially told us that one umbrella alone submitted thousands of applications on the same day.

[youngguy]

Must admit, I'm hating the new features of the portal already and they only came in last night

You may be talking about a more recent update?

I left last year after the 'previous' changes so I am talking historically.

[TheFaQQer]

You may be talking about a more recent update?

I left last year after the 'previous' changes so I am talking historically.

Patrick contacted me and I've highlighted my thoughts about the new update that went in yesterday privately.

[fullyautomatix]

Patrick contacted me and I've highlighted my thoughts about the new update that went in yesterday privately.

Well I have used two of the new features, dividends and contract management with auto invoice generator. Looks like useful features to me.

[fannyadams]

Would be fine if they were optional. My current contract is fixed price - there's no way to set that up.

[TheFaQQer]

Well I have used two of the new features, dividends and contract management with auto invoice generator. Looks like useful features to me.

Invoices that don't allow me to put on all the required information whilst making it mandatory to include additional information that is not required, not editable and not available (my contract has no reference number but this is mandatory) is worse than useless.

As fanny says, fixed price deals (or even where you invoice flat rate monthly as I do for some contracts) are impossible to set up.

Of my current contracts, the invoice generator generates an acceptable invoice for neither - yet defining a contract (with incorrect or made up details) is mandatory to be able to invoice.

I'm all in favour of being able to generate an invoice from a portal, providing the invoice generated is in a format that my business can use. At the moment the mandatory process does not make it any easier.

I'll appraise the quality of the dividend feature when I need to declare one.