Trust Registration Service

When the Trust Registration Service (TRS) was first set up in 2017, only trusts that were liable to pay tax were required to register.

New rules were introduced on 6 October 2020 which mean that non-taxable UK trusts are also now required to register with HMRC, regardless of whether the trust is liable to pay any tax. 

The deadline for this registration is 1 September 2022. This deadline also applies even if the trust has since been closed.

Non-taxable trusts that are created from 6 October 2020 will need to register with HMRC by the later of 90 days of creation or by 1 September 2022.

Generally speaking, trusts that need to be registered are:

• All UK express trusts (unless they are specifically excluded, see below)
• Non-UK express trusts that acquire land or property in the UK and have at least one trustee resident in the UK

Certain trusts are excluded and are not required to register unless they are liable to pay UK tax, these include but are not limited to:

• Trust required to open a bank account for a child or vulnerable person
• Charitable trusts
• Trusts for bereaved minors or adults aged 18-25
• Will trusts which are wound up within two years of death
• Trusts of life policies paying out on death, terminal illness or disability
• Trust imposed by courts or created by legislation
• Co-ownership trusts

Information held on the register about the people associated with a trust (taxable or not) also have to be kept up to date to comply with anti-money laundering regulations. Any changes have to be reported within 90 days.

If you think that you may be affected by these changes, please get in touch and we will be happy to assist with your reporting obligations.

To find out more about the Trust Registration Service (TRS), please contact us using the details below.

(E)enquiries@advaloremroup.uk or (T) 01908 219100 (W) advaloremgroup.uk

EIS & SEIS Funding

What is SEIS Funding and how does it work?

The Enterprise Investment Scheme (EIS) and The Seed Enterprise Investment Scheme (SEIS) are schemes which help companies to raise money to help grow their business by providing tax relief to individuals who invest. These schemes are known as tax- advantaged investments. 

Companies can raise a lifetime maximum of up to £12 million from tax-advantaged investments, subject to a 12-month limit of £5 million. The lifetime maximum that can be raised through SEIS funding is £150,000. Investors will be able to obtain Income Tax and Capital Gains Tax relief on their investments if they are eligible. 

Is my business eligible?

There are several requirements for EIS and SEIS funding. Such as:

EIS Funding

• The Company is required to to be an independent company which trades in the UK. 
• Must have of less than £15 million before the share issue and £16 million immediately afterwards.
• The company must also have less than 250 full time employees. 

SEIS Funding

• The Company is required to be an independent company which trades in the UK. 
• Must have assets of less than £200,000 
• The company must also have less than 25 full time employees. 

Certain trades are specifically excluded from EIS and SEIS such as property development, hotels, farming, market gardening and legal or accountancy services. Qualifying companies must also have a permanent establishment in the UK and not be listed on a recognised stock exchange. Your company must have carried on the trade for which the money was raised for at least 4 months in order for an investor to be eligible for EIS relief. 

Common questions asked about EIS & SEIS Funding

• Am I eligible for EIS/SEIS? 

Not all companies are eligible to register for EIS/SEIS status. There are a number of qualifying conditions that your company must satisfy, including that you are an independent company trading in the UK, and restrictions on your asset values prior to undertaking investment. There are also a number of criteria that needs to be met by investors to receive their tax relief. 

• Why should I undertake EIS/SEIS Funding? 

EIS/SEIS funding is a great way to attract investors to your company. It is win-win for your company and your investors, as your company will receive an injection of funds and your investor could be eligible for tax relief, which isn’t usually available for standard investments. 

• How much funding can be raised? 

Your company will be able to raise up to £12 million from tax-advantaged investments over its lifetime, subject to a 12-month limit of £5 million. For SEIS there is a lifetime maximum of £150,000 that can be raised for each company. 

• How much time will it take to set up? 

There are several steps that you will have to follow to acquire your EIS/SEIS approval, depending on the requirements it can take between 2 – 6 months to get approval from HMRC from start to finish. 

• Will the investors have control over my company? 

Not if you do not want them to. 

How can Ad Valorem help with obtaining EIS/SEIS Funding?

• We can help you with every aspect of registering your company for EIS/SEIS funding. 
• We can check your company’s eligibility and apply for Advance Assurance which ensures that your investors will receive the tax reliefs if they are eligible. 
• We will also ensure that the correct compliance forms are submitted to HMRC at the right time to make sure the process is completed as soon as possible. Why should I use Ad Valorem’s services instead of doing it myself? 

If you would like any further information about EIS or SEIS, please don’t hesitate to contact us to arrange a consultation with our tax specialists. Call us on 01908 219100 or drop us an email on enquiries@advaloremgroup.uk. 

Options for closing your company: Creditor Voluntary Liquidation or Strike Off?

Winding Up Petitions

Restrictions on issuing Winding Up Petitions (WUPs) to UK companies formed part of the Government’s temporary measures aimed at helping businesses weather the pandemic. These measures have gradually been phased out and as of 1st April 2022, Winding Up Petitions can again be issued by creditors.

Creditor Voluntary Liquidation, Member’s Voluntary Liquidation, or Voluntary Strike Off?

For businesses facing WUPs issued against them for HMRC debt, a Bounce Back Loan, or any other debts it cannot settle, what options are available? Can business owners opt for Creditor Voluntary Liquidation (CVL) or Voluntarily Strike Off their company? Is a Member’s Voluntary Liquidation still a possibility? And what is the difference between these options?

What are the tax implications for informal Winding Up and Liquidation?

Makayla Combes, our Head of Tax and Business Consultancy explains the tax implications for informal Winding Up and Liquidation.

Informal Winding Up:

A distribution by a company is usually an income distribution. However, when a company makes a distribution following an application to be struck off, the distribution may be treated as capital. 

If the balance of the assets in the company are £25,000 or under then distributions up to £25,000 will be treated as a capital distribution for shareholders. Capital distributions are taxed at the Capital Gains Tax rates of 10% for basic rate taxpayers and 20% for higher rate taxpayers. If certain criteria are met then the Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) rates may apply and the whole distribution could be taxed at 10%.

If the balance of the assets in the company are over £25,000 then the distribution will be treated as income. Income distributions will be treated as a dividend payment and will be taxed at the income rates for dividends currently 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional taxpayers.

Despite the additional cost of a Formal Liquidation, it is often the most tax efficient route. 

Liquidation:

If a company is formerly liquidated, Members Voluntary Liquidation, then the distribution will be treated as capital (unless it is caught by anti-avoidance legislation) and tax is payable at the Capital Gains Tax rates described above.

(E) enquiries@advaloremgroup.uk or (T) 01908 219100 (W) advaloremgroup.uk  

Xero Refresh – Are you using Data Capture?

There are many reasons you should be using automated data capture; it’s fast, effective, and secure, but if you’re still not sure about using it, we’ve put together some big benefits to using automated data capture, that might just change your mind. 

The benefits of using Data Capture

These benefits include:

• No room for errors – Human error is part of all manual data handling, sometimes it can’t be helped; however, with automated data capture, it reduces the risk of mistakes and improves accuracy by using sophisticated technology. Automated quality control allows the capture process to efficiently and quickly can information.   
• Fast and easy storage – automated data capture sends your captured images straight to an easy access folder or if linked, straight to your Xero account. Keeping receipts and expense paperwork takes up valuable office space and is unnecessary.     
• Never miss a beat – Sophisticated data capture will recognise a wide variety of typefaces and fonts along with handwriting. This means all text and numbers will be stored digitally without missing a single figure or letter.  
• Safe and sound – Data capture services can also help to eliminate many of the security issues that come with dealing with paper. There is sometimes a lack of accountability and oversight when manual capturing is used. Advanced user access controls and access records are included in automated capture systems, allowing for improved security and accountability.

Using Data Capture software – We recommend Dext

Receipt Bank, now rebranded and known as Dext, continue to provide financial transparency and efficiencies through their easy-to-use mobile app software. Previously known as Receipt Bank, Dext allow you to prepare accounts using automatic supplier and customer rules, bank matching, and have connections to more than 1,400 suppliers, and sales invoice uploads, all direct to your accounting software.

Such intelligence aids businesses to create financial efficiencies when completing monthly tasks such as book keeping and bank reconciliations. It is now more important than ever to keep your business accounts up to date in order to predict and manage cashflow. With the help of Dext this task becomes easier and frees up more time to focus on other aspects of the business. 

Dext provides real time insights to help your business be more productive and more profitable. The software allows you to save time and sorts tax deductibles automatically for your business. Automatically code and categorise codes by setting up supplier rules. Dext also allows you to smartly split tax and match bank costs and produce insightful business reports.

To find out more about Dext and its capabilities, please give us a call on 01908 219100 or drop us an email on enquiries@advaloremgroup.uk. We would be happy to help!

SDLT

What is SDLT?

Stamp Duty Land Tax (SDLT) is charged if you buy a property or land over a certain price in England and Northern Ireland. You pay the tax when you:

• Buy a freehold property
• Buy a new or existing leasehold
• Buy a property through a shared ownership scheme
• Are transferred land or property in exchange for payment (including if you take on a mortgage or buy a share in a house)

How much SDLT will I pay

The amount of SDLT you pay depends upon the amount of consideration payable and reliefs available to you. The total value you pay SDLT on is usually the price you pay for the land or property. Sometimes it might include other typesof payments such as goods/services swapped in exchange for the land or property, transfer value of any outstanding mortgage or other consideration given in exchange for the land or property.

Individuals can also end up paying an additional 3% surcharge if buying a new residential property means you own more than one property. Surcharges can also apply to non-UK resident individuals and corporate bodies for example.

Can I reduce the amount I have to pay?

• First time buyers’relief
• Multiple dwellings relief
• Employers buying an employee’s house
• Property developers providing amenities to communities
• Charities buying for charitable purposes
• Purchasing non-residential property in freeport tax sites (this can entitle you to 100% SDLT relief)
• Relief for mixed-use (e.g., Buildingswith both residential and non-residential use)
• Claiming back additional 3% SDLT surcharge paid to HMRC

The above list is just some examples –get in touch to discuss your circumstances.

How does the claim work?

With the property purchase, your SDLT return must include the claim for relief. If your solicitor has already filed your SDLT return as part of your purchase, an amended SDLT return may be required to submit your relief claim. We can submit an amended SDLT return on your behalf. If you have overpaid your SDLT, a refund will be issued.

What is the deadline for claiming the relief?

A SDLT return is due for filing within 14 days of your effective date. This is usually the date the transfer completes but it can be the date the contract is substantially performed if this is before completion.

Usually, we can claim a relief on your behalf within 12 months from the filing date. Some reliefs (such as reclaiming surcharges)can be claimed within 2-3 years of your effective date.

If you would like any further information about SDLT, please don’t hesitate to contact us to arrange a consultation with our tax specialists. Call us on 01908 219100 or drop us an email on enquiries@advaloremgroup.uk.