Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

New queries

07 October 2019
Issue: 4715 / Categories: Forum & Feedback
Spreadsheets and MTD; Last to know; Numbers up; Guinea pig


Spreadsheets and MTD


After making sure that my own business and my one compulsorily VAT-registered client are on annual accounting to delay the onset of MTD, I am finally having to face up to it (accounting periods commencing from 1 October).

The thing that has galled me is the apparent necessity to spend money on expensive software for businesses that are too simple to need an accounts package, with insufficient economies of scale to spread the cost.

It now occurs to me, reading the regulations, that the digital VAT account does not have to be part of an integrated accounting package. It would be very easy to set up a spreadsheet that only recorded the VAT information and was sufficient to meet the requirements of the law for input tax and output tax, and was completely separate from any other part of the accounting records.

I am hopeful that a cheap piece of bridging software would then be able to pick up the totals of the spreadsheet and submit them to HMRC. I wonder if anyone else out there is doing this, and what their experience of it is?

I look forward to replies.

Query 19,447 – Technophobe.


Last to know


I appreciate that in large corporate transactions there will be a team of corporate financiers, lawyers and acquisition accountants. However, in my modest practice I am quite often faced with the situation where directors/shareholders in an owner-managed business agree to sell their shares to one another, and not tell me. Indeed, several months may pass before I have details of the transaction.

When I do finally find out, it usually falls to me to draft an agreement to reflect the transaction. I will also then attend to the J30 stock transfer form and Companies House form to record a director resignation.

I appreciate that documents cannot be backdated.

My queries are as follows.

  • When I draft the agreement can I draft the terms to record the transaction date as occurring in the past, even though it is signed in the present?
  • What date should be recorded on the forms J30 and TM01 – the date of the past transaction or the date of signature on the J30?
  • What is the tax point for capital gains tax – the date of the past transaction or the date of signature on the J30 and TM01?
  • Should the confirmation statement at Companies House reflect the date of the agreement or the date the J30 and TM01 was signed?

I hope that Taxation readers are able to provide some advice here.

Query 19,448 – Confused.


Numbers up


I act for a limited company which owns a number of properties that are rented out, both commercial and residential. The company has been VAT registered for many years. On 31 March, the company sold its only property where an option to tax election was in place. This meant that it should have deregistered on that date because it was no longer making taxable supplies, all other rental income being exempt from VAT. However, it decided to keep the VAT number active, and there now appears to be a problem with input tax on our fees for the September VAT return.

In the past, the company has claimed 50% input tax on our fees (residual input tax), based on the standard method of partial exemption; in other words, taxable rental income divided by taxable plus exempt rental income (T/T+E). The opted property was a big building and had high rental income, hence the 50% figure in the overall calculations.

However, for the September 2019 period, when our fee invoice was raised, the company only has exempt rental income, which means no input tax can be claimed under the T/T+E formula. But this seems unfair because all of our work relates to accounts and tax issues in the year ending 31 March 2019, when 50% of the company income was VATable.

Do readers see any way around this problem?

Query 19,449 – Property Pam.


Guinea pig


My client tells me that he is taking part in a medical trial. Apparently he has received a couple of hundred pounds and will receive a higher amount for a follow-up trial. It seems that some trials can result in four-figure payments and my client is thinking of taking part in these – it appears that the medical centre is always looking for volunteers.

This makes me wonder what should be declared on the client’s tax return. Are the payments taxable or are they simply designed to cover expenses? It seems that the payments are made gross without a tax deduction. If they are taxable can, for example, the costs of travel to and from the medical centre be claimed and are there any other costs that might be deductible?

On the first trial, my client had to follow a particular diet. Some foodstuffs were supplied to him; would that be part of the ‘profit or gains’ from taking part? Further he had to buy some particular foods himself. He says he would not normally eat these so I wonder whether the cost of these might be deductible if the income is taxable.

I await replies with interest.

Query 19,450 – Hammy.

Issue: 4715 / Categories: Forum & Feedback
back to top icon