Need rid of my accountant fast...Any good ones for under 50/pm

[THEPUMA]

Nope. You only have to go and look at the result of JLJ Services v HMR&C to realise that each case has to be taken on its own merits and that HMR&C are very fond of changing the goalposts. Personally I would forgoe £10k in tax savings to have the peace of mind of not having some Revenue inspector crawling all over my business but that's just personal opinion

Of all of the freelancers operating in this way, and there must be hundreds of thousands, how many have you heard of that have been challenged on this basis? OK we would only be likely to have heard of those that got to court. But I am sure there would be others whose position would be in the public domain. Eg those who post on these boards. It is common sense that their are no challenges though. Why would HMRC choose to focus their resources making challenges on an issue which the courts have held in the taxpayers' favour?

I therefore think that your stance is simply irrational. I would hazard a guess that the chances of a challenge (let alone a successful one) is well below 0.01%.

If you are that scared of HMRC, you may as well just pay all income out to yourself as salary (which, clearly, your clients do to a large extent). And I wouldn't have thought it would be a particularly good idea to be involved in an industry where you assist taxpayers in minimising their tax liabilities.

[Danielsjdaccountancy]

So do you also recommend that your clients operate on the basis that they are caught by IR35?

Incidentally, do you have any evidence that "HMRC are not fans of income shifting" in the context of contractors?

1st question: Of course not.


2nd question: If you type income shifting into Google it speaks of how it has not been put to bed and will be revisited.
If you speak to tax advisors or HMRC and ask them their views on income shifting, I think you'll find they are consistent with our response.

We err on the side of caution as we have a duty to our clients.

[aceboy]

I'm going to sack my piss poor accountant after this years records are done..Does anyone know any good ones who reply to emails etc, for around 50 pounds per month?

Just need someone to do the books each year, nothing fancy...for a limited

I pay 72+vat for an awesome service from Stilwell Gray - Stilwellgray - Accountancy, Tax and Business Services They can do hand holding as well as expert advice...

[THEPUMA]

1st question: Of course not.


2nd question: If you type income shifting into Google it speaks of how it has not been put to bed and will be revisited.
If you speak to tax advisors or HMRC and ask them their views on income shifting, I think you'll find they are consistent with our response.

We err on the side of caution as we have a duty to our clients.

You say of course not. I think your stance on income shifting would be totally consistent with advising clients to operate under IR35. Why do you disagree?

Re your second point, it may well be revisited but it hasn't been yet. If you are advising on the basis of possible future changes to legislation, that is worrying. As it would be if you were basing your tax advice solely on Google research. When I asked for evidence, I was hoping for something more tangible such as HMRC guidance (issued post the Arctic decision, naturally), case law or legislation.

Incidentally, if HMRC believe that the settlements' legislation can be applied as it stands, why do you think draft new legislation countering income shifting was published after Arctic? As you are presumably aware, at the present time, said proposed legislation has obviously not been enacted.

We also have a duty to our clients. That doesn't mean we advise them to comply with legislation that has been held, in the highest court in the land, not to apply in their case.

[Fred Bloggs]

Have to say, I think ThePuma has got it spot on here. Myself, I wouldn't consider an accountant who advised against a 50/50 share ownership with their spouse under the current legal situation and I consider myself pretty risk averse.

[northernladuk]

Have to say, I think ThePuma has got it spot on here. Myself, I wouldn't consider an accountant who advised against a 50/50 share ownership with their spouse under the current legal situation and I consider myself pretty risk averse.

I personally can't see how HMRC can be happy with people doing this, whether it stands up in court or not. It just doesn't 'feel' right. I was advised (but I don't) a 75/25 split as it reflects the main earner. This seems good advice just from a common sense approach as well as legal and also fitted my feeling. 50/50 is great off the back of what was probably a horrible time for the people involved in Arctic. If they could have avoided all that with a 75/25 wouldn't that be wise advice.

The reasons for this advice as well as the evidence I see make sense to me so would be ok with it, rightly or wrongly. It is me that has to sleep at night.

[Danielsjdaccountancy]

On 9th October 2007 the Chancellor announced in his Pre Budget Report that measures would be introduced for 2008-2009 to tackle tax avoidance by 'income shifting.'
These measures are in the wake of the loss of the Arctic Systems (known as 'Section 660a') case by HMRC early this year. The Revenue tried to attack the tax savings available by married couples who split shares in their company, and subsequent dividends - thus taking full advantage of the tax allowances of both partners.
Obviously these never came to the fore but it wasn’t cancelled, it was simply postponed.
In a newspaper interview (The telegraph) this time last year, John Whiting, the tax director at the OTS, said that income splitting could be under review once more, along with other vexed tax issues such as IR35 and national insurance.
Mr Whiting said: "Income splitting is in the pretty-difficult-to-do box because it has been looked at a heck of a lot. We have to come up with some ways forward. I hope we can come up with some quick tweaks that can make a difference, but I am no under illusions that some of the things we could come up with will require some serious study."
We also know that this consultation draft has not gone away, can still be downloaded, and will be revisited.
HMRC seem to have the power to do what they like, so we don’t want to risk the chance they could back date this to when they proposed it in 2007.
I don’t wish to argue this point any further; I just wanted to give some insight into why we advise what we do.
Again, I’ll reiterate, clients are free to take advantage of income shifting, it’s just that we don’t advise it.

[Mr.Whippy]

Until they are happy, we won't promote share splitting. That doesn't mean however we won't allow a client to do it.

Are you sure? Is this an SJD stance or yours? When I asked my SJD accountant about splitting shares with my non-working spouse, I was told this was a "good idea".

At the same time I was also advised that I should pay her a salary to use up her tax free allowance. When I queried whether or not this was also a "good idea" because any work would only be a couple of hours per month max....the response was basically "we have loads of contractors that do it and we don't know of anyone that's had any problems yet"... not the ideal response.

I don’t wish to argue this point any further; I just wanted to give some insight into why we advise what we do.
Again, I’ll reiterate, clients are free to take advantage of income shifting, it’s just that we don’t advise it.

I beg to differ... see above

Very concerning that you get different answers from different accountants in the same company.

[Wanderer]

Did you challenge this with your accountant? We advise a way of running your Limited company that is tax efficient and gives you as little exposure to HMRC as possible.

Yes, it was discussed at length in this thread. Considering that income splitting is backed up by a high profile precedent set by Jones v Garnett in the House of Lords, I think it would be very unlikely for the government to retrospectively change the law. Certainly if it did, they would cause a lot of tulip to hit the fan in the House of Lords as they would effectively be trying to quash the judgement of the highest court in the land by legislating retrospectively.

Even if hell freezes over and they did legislate retrospectively, what is our exposure? We would have to pay up the tax that we avoided (plus interest). That's a gamble that I'm willing to take. If they were going to come after contractors then the attack would be much more likely to be via IR35 than attacking what will very often be "family businesses" for income splitting.

The revenue will review income shifting on a case by case basis. So this means they could investigate regardless of the Arctic case, do you really want that hassle and HMRC crawling over your books.

How many of your clients have been investigated for income splitting then? I'm no expert but I get the impression that as long as you follow the rules set out by the Arctic Systems precedent (they must be "ordinary shares" and an outright gift to a spouse) then you've got a pretty strong case.

Here is what HMRC said about it:

We have been keeping open some similar cases to that in Jones v Garnett whilst we waited for the decision in the House of Lords. We will now review all these cases and will seek to settle them in line with the Jones v Garnett decision if appropriate. Not every case will be exactly the same as Jones v Garnett. We will consider each case on the basis of its individual facts, but unless there are any additional factors which might cause us to take a different view, we expect that most cases where the settled property comprises:

ordinary shares in a company, or
an ordinary (ie unlimited) interest in a partnership,
will be within the exemption for outright gifts between spouses.

I stick by my advice, if you would like to be running your Limited company in a certain manner, then first ask your accountant, challenge them if you are not happy with the response, research it and if you are still happy, then proceed to run it the way you want

Fair enough, SJD and I have already agreed to differ on this one.

[Wanderer]

I personally can't see how HMRC can be happy with people doing this, whether it stands up in court or not. It just doesn't 'feel' right. I was advised (but I don't) a 75/25 split as it reflects the main earner. This seems good advice just from a common sense approach as well as legal and also fitted my feeling. 50/50 is great off the back of what was probably a horrible time for the people involved in Arctic. If they could have avoided all that with a 75/25 wouldn't that be wise advice.

I really don't know how a 75/25 split is any different to a 50/50 split. If they are going to challenge it they they are going to challenge it.

Sure, HMRC "don't like" it but they don't make the laws - they only enforce them.

As for it "not feeling right", I agree 100%. Does it feel right that someone contracting through a LTD company can pay no National Insurance at all but still get a credit towards their state pension? Does it feel right that a contractor with a non working spouse could pay just 20% tax on £100k/year income? Common sense says no it doesn't. But we are talking about the law, not common sense and this is perfectly legal and people do it.

Of course, none of us push it that far. We all pay our "fair" share of taxes (whatever that may be defined as).