Jon Pickles

@JBCVAT @DanNeidle Agree. I'm just highlighting some more VAT inconsistencies. Set up a business training company, register for VAT. Set up a medical services company, exempt. Opt to pay for hip op rather than NHS, no VAT. Opt for fee paying school rather than state, VAT. Cakes v biscuits again!

@jonpickles @DanNeidle A sole trader guitar teacher, private tution exemption applies*, but incorporate and now those guitar lessons are plus VAT. *private tution exemption not same law as private school VAT.

@DanNeidle Dan, given VAT now applies to private education, do you think private medical care should remain exempt? There would appear to be many parallels between the two.

@DanNeidle Just as obvious business training customers are businesses, who can recover VAT.... so why the difference between private medical companies and business training companies?

@jonpickles VAT doesn’t apply differently to different types of customers. The point is that obvious private medical customers are businesses, who can recover VAT

@DanNeidle Of course, it may be that VAT and indeed tax in general is based more on political expediency and layer on layer of tweaks rather than logic and sense! (I expect you might agree with me on that) 😀. 3/3

@DanNeidle Secondly, isn't applying VAT exemption based on customer type is rather like the old sales tax? First 20 years of my career was spent in SMEs delivering training almost exclusively to businesses. Training companies are allowed to reclaim input VAT but not medical? 2/3

@paulbhampton @DanNeidle Sadly, many reputable accountants promoted these schemes and similar ones such as EFRBS. When your accountant advises you incorporate your business, or use the flat rate VAT scheme, etc, to legitimately save tax, you listen. So when these schemes were recommended….

@DanNeidle If something looks too good to be true, it almost always is. If you were being really generous, you could say at best it was a grey area and at worst tax fraud. So if you’re going to join in then at least put an amount equivalant to the tax you have ‘saved’ away for a rainy day.

Important message for anyone impacted by the loan charge: this is your opportunity to send comments to the Loan Charge Review. It will likely be the final chance to change the outcome for the thousands of people affected. Quick thread:

@DanNeidle @cmackinlay @ICAEW @CIOTNews @UKLabour Dan, any reason why conditional exemption could not have been an option (like is it with historic houses open to the public)? This way for as long as the next generation continue to farm no IHT, but if they sell up and cash in at any point then they pay full IHT. Seems fairer?

@cmackinlay @ICAEW @CIOTNews @UKLabour “Other IHT reliefs used up” means he has at least £500k of home/other assets. Unclear to me why his estate shouldn’t have a £200k bill when anyone else with £2.5m in assets would have an £800k bill.

As an @ICAEW & @CIOTNews member, just considering full reality to #farming families of @UKLabour #APR #IHT proposals. Example: company farm, historic (very low land base cost), 150 acres at £10k per acre (smaller than most), equipment. Little in the bank. Elderly owner, similarly little in 'cash'. Other IHT reliefs used up. Co Value £2m. Tax on death: £200,000. Payable 6m after death in cash, else interest applies. The big question is where to find this sum? A 10yr instalment option exists: interest applies. Answer: Executors will need to sell land. But how many acres? 20 acres at £10k per acre? Very wrong! 1. Company needs to sell land to raise cash. 2. Company pays Corp tax on the gain at 25%. 3. Net cash has to be extracted to the beneficiaries; tax as dividend likely at 33.75% & some at 39.35%. If extracted as PAYE, 40% plus ER NIC (now higher) and EE NIC, but Corp Tax deductible. By my reckoning, nearer 40 acres at £10k needs to be sold (plus fees?) to get the cash to pay the IHT - 27% of the farmland. #Devastating @NoFarmsNoFoods @Conservatives @DailyMailUK @Telegraph @DanNeidle, do you broadly concur?

@DanNeidle @TaxFoundation Isn’t this a bit misleading - you couldn’t claim twice for the cost of the asset. Just once for the *actual cost* of the asset, and once for the *interest* incurred on the borrowing to finance it, i.e. just once for the all-in cost of the asset?

@TaxFoundation If that's the only reform that was made, it would be very expensive. It would also exacerbate the current distortion in favour of debt finance - you could claim tax relief twice for the same asset (once for the purchase of the asset, once for the financing cost).

If the Government is serious about delivering growth, we need tax reform. Cutting tax or raising tax is an argument for another day. This post, and more in the next few days, are about making the tax system better. Today: corporation tax reform.

@mikecosgrove @DanNeidle Only applies to listed PLCs. Many PLCs are not listed.

@DanNeidle Every PLC does get punished when this happens. Usually in the form of their share price falling. Jailing directors for late filling is a dumb idea and that’s why it’s not been implemented properly. Imagine the cost to go after 10,000s of companies.

We publish an automatically-updating list of PLCs that unlawfully failed to file their accounts on time. It's a criminal offence for which nobody ever seems to be prosecuted. Until now...

@ungagged13 @DanNeidle If the company is a listed PLC then the shares will indeed be suspended (also LSE deadlines require information to be published quicker than CH).

@DanNeidle If the company is a PLC its shares should be suspended until it publishes accurate financial information

@RobertBasnett @edlonguk @DanNeidle No, the increase is not “on the school”. The school must add 20% VAT to its fees, which means the increase is “on the parents”. Schools may of course reduce their fees to lessen the impact if they can make savings (or offer discounts to particular parents who may struggle).

VAT on private schools *is* applying from January 2025, and there is an "anti-forestalling" measure so advance payments for the January term are, from today, also taxed.

@RobDotHutton @DanNeidle So the reality is it may work in reverse for the very wealthiest schools but for many it will mean redundancies and many more will mean closure. 3/3

@RobDotHutton @DanNeidle ...if school fees become subject to VAT and the providers don't pass on the increase, they lose 16.7% of their revenue. A very significant number of schools can't afford that on their current cost base (many are operating at margins of around 10%, and many more at breakeven). 2/x

This is a terrible proposal. Scrapping VAT won’t reduce prices. This is well-established.

Surely this (along with the marshmallow size conundrum, the hot pasty debacle, the nutrition bar mystery, and countless others…) is a huge waste of resources. Why are none of the parties proposing VAT reform / simplification?

@DanNeidle A system that says a small marshmallow (ingredients) and a large marshmallow (food requiring onward prep) are zero rated but a medium sized marshmallow (confectionery) is standard rated - without specifying what counts as small, medium, and large - is clearly nuts. Reform needed!

Excellent article on fixing VAT:

@KP24 @SadiqKhan WTF? I go into London every day and plenty of nights and for 30 years never had an issue.

Gotta go into London today. NO WATCH and a plastic ring! Congrats, @SadiqKhan ! 👍🏼

@ChrisGiles_ If the UK imposes VAT on private schools, it will be the only western economy to tax education in this way. Education is VAT/sales tax exempt throughout Europe and the USA.

Seems not to be worth it given the numbers paying up in advance are small. Without the class war aspect, the policy is standard orthodox fiscal neutrality advice. Shouldn’t be VAT exemptions, as Conservatives used (correctly) to believe

@eezyian @ChrisGiles_ @AnnaSophieGross @PickardJE @Laura_K_Hughes @rafeuddin_ VAT can be a very complex tax, but VAT tax point is generally taken as the earlier of when cash changes hands, VAT invoice is raised, or service is delivered.

@ChrisGiles_ @AnnaSophieGross @PickardJE @Laura_K_Hughes @rafeuddin_ @ChrisGiles_ question. Does pre-payment even avoid VAT? Surely the school must book revenue at a time when the service is delivered? So the school can't avoid oaying VAT on its revenue???

Labour is exploring imposing VAT retroactively on private school fees to stop parents avoiding the tax by paying for years of education upfront. Some parents are already paying years in advance 🙏 it will work. W/ @PickardJE @Laura_K_Hughes @rafeuddin_ ft.com/content/11e3c3…