Amit Roy

Wet signatures from client

Today a question cropped up – should accountant always take wet signatures from clients as their approval?

HMRC is of the opinion that it is not compulsory.

Client can give approval by electronic or non-electronic means.

When I use to live on rent, I use to have a list of people and organisation to inform whenever I moved houses like employer, bank, subscriptions etc.

One of them was HMRC.

We need to inform HMRC in number of scenarios:

Change in personal details

Change in Income:

income from a new source, like self-employment or rental income
taxable benefits
benefits from your job, such as a company car
lump sums from selling things you pay Capital Gains Tax on, such as shares or property that’s not your main home
income from property, money or shares you inherit, such as dividends from shares or rent from property

Relationship or family changes

For more details and the process of how to inform HMRC see link below: https://www.gov.uk/tell-hmrc-change-of-details

How many companies are registered with Companies House UK ?

Circa 3.8 million

How many new companies are formed each year ?

Circa 600,000

How many individual annual accounts Companies House is expecting each year ?

Circa 2.9 million

How many individual annual accounts are actually received by Companies house each year ?

Circa 2.7 million

i.e. 200k companies are late or do not file the accounts at all.

Often client are confused when we tell them that we will need to file two tax returns for the first year of the company’s life.

GOV website has explained it lucidly:

Under the existing rules, which apply generally to interest other than that paid by banks or building societies on deposits:

Where the borrower is a company who pays interest due to an individual, the borrower is required to deduct income tax at source from the interest for payment to HMRC, and pay the interest to the lender net of tax.
Where the borrower is a company who pays interest due to another UK company, the borrower is not required to deduct tax at source, and interest may be paid gross.
Where the borrower is an individual (including a sole trader) who pays interest to either an individual or a company resident in the UK, the borrower is not required to tax deduct at source and interest may be paid gross. ·
However where the interest is due to a lender who is resident outside the UK, the borrower is required to deduct income tax at source from the interest for payment to HMRC, and to pay the interest to the lender net of tax, regardless of the identity of the borrower.

Primary legislation:

Income Tax Act 2007 section 874.
Rate of deduction – Basic rate : presently 20%
DTAA: Where DTAA exemption exists. HMRC prior permission required to pay gross.
Main guidance: HMRC Manual: CTM35000 Contains detailed provisions for deducting tax and depositing it with HMRC
Form to be submitted: CT61