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Southbourne Tax Group Review: How to steer clear of huge debts

Southbourne Tax Group sought the wisdom of some financial coaches regarding staying out of debt and with their collected data the team will provide imperative guidelines to help you with your finances and to avoid falling into a huge debt or even hitting financial rock bottom.

The financial coaches all possess great traits and are all very good in doing their job but to the surprise of the Southbourne team, a few of those experts hit rock bottom already, but their ability to bring back again their personal finance on the right track is really admirable.

Getting your way out of debt requires commitment and dedication. And to spur people to reach their financial goals, those experts The Southbourne Group converse with decided to become financial coaches, so that they could beget inspiration to other people by sharing their own stories and struggles as well.

Take control

Bear in mind that you need to take control of your finances not tomorrow, but today. Don’t wait for your rock-bottom moment, but instead try your best to avoid it each day. Even if it seems everything is fine now and you can pay all your debts, does not mean you should ignore the possibility of falling hard on your finances. Always follow a strict budget and manage your money properly with a disciplined attitude.

If there are certain changes in your life like your partner losing his or her job, or from having a full-time job to a part-time job, you must conduct some changes as well on your part and adjust your financial lifestyle.

If you notice you are being out of control on your personal finance then you should face the problem instead of giving it a cold shoulder. Don’t blame others for facing financial challenges in your life because you’re the one responsible for it, but instead, start turning your financial life around.

Aim for financial freedom

Each of us holds different meaning to financial freedom, but let’s just say financial freedom entails “earning enough money and building the mental discipline to keep that money from controlling you” as Scott Young said. Those who are having a hard time on their finances should begin their journey to financial freedom today.

Examine your attitude towards money and begin from there. Don’t make huge spending then only depend on your belief that if you win the lottery, you could pay all those expenses - don’t make such excuses. When you find yourself trapped, avoid having a negative mindset and telling yourself there’s no way to solve your problem. Get up and find a solution because “there was never a night or a problem that could defeat sunrise or hope.”

As mentioned earlier, don’t think negative thoughts if you are currently having a bad financial situation because that could only worsen the problem, but have an optimistic mind instead. Start turning your personal finance around by planning and setting a good budget because it is imperative to know exactly where your each cent is going.

Money isn’t everything

Yes, you should be responsible for reaching your financial goals but at the same time, you’re a human being that also needs to build good relationships with other people and create wonderful experience and memories with your family. Don’t be a money-machine that forgets how to love and live.

Don’t add more debts

Always remind yourself not to incur any more debt, which can later develop to a mental discipline to keep you away from debts. Be committed once you start your journey to be debt-free since there’s always this “temptation” to add more to your debts. To avoid this, you need to have a stronger disciplined mindset.

The Southbourne Group needs you to remember that “there’s no easy, magical formula when it comes to getting out of debt. It takes a lot of time, hard work, and discipline.”

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Southbourne Tax Group Review: How to prevent making your personal finance worse

“Personal finance is about 80 percent behavior. It is only about 20 percent head knowledge”. At the end of the day, your personal financial life really depends on how you handle your money. It is very important to be in control and be organized on your own money since you are the one responsible for every cent you earn and spend. And you’re the one who will face the consequences of your own actions towards your money.

Handling your financial life should also include understanding the basics as well as the important aspects of personal finance. Educating yourself on such matter is a vital part of developing a good financial life. Southbourne Tax Group doesn’t want your personal finance to become worse. With the following advice, the team expects you to learn some important elements and use them to avoid having a bad financial life. They gathered different advice and tips from different research, added with some financial wisdom from a few experts.

Start ASAP

It seems like you’re being rushed but that’s not the case, Southbourne Tax Group only wants you to consider starting building your personal finance today. While you are still young, you should learn about personal finance and begin saving money as well. To those parents reading this, know that teaching your children about the basics of financial management can help them better handle their own money now and once they got older. Doing this, you can learn some new things too while giving your children the necessary financial guidance.

To young readers, understand that having a good personal finance at your age could result to a better financial life later. Open an account and save your money. Indeed, buying very expensive things can satisfy you for a while but it is much better to have a bountiful savings account than owning luxurious things that will eventually worn-out or get some damage. Put in mind that “studies show that people who learn to save early in life usually make smarter financial decisions later”.

Comprehend the details in your paycheck

Unknowing the other details included in your paycheck may leave you at shock once you receive it because of some amount disappearing without you even spending them. Understand better the national insurance contributions, pension contribution as well as the student loan payments and tax code.

Vital things first

It is part of being a responsible individual to make sure that you satisfy all your basic needs, from food, water, and clothing to shelter. Make certain that you’re up to date in paying your house rent, bills, foods, and tax.

Keep a good income and spending record

If you currently have a record, continue to update it and make sure you organize every detail properly. Make one if you still don’t have any financial record. You need to ensure that your income and spending are balanced. Don’t forget to follow your set budget as well.

“Save money and money will save you”

Growing a savings account should be a part of life. And part of it is getting those best deals as well. You can find the best offers easily by exploring comparison sites. Make some time to do your research.

Set a goal

Set a goal that makes you want to jump out of bed in the morning. Picture yourself achieving that goal every day while doing your best on your job, plus challenge yourself every day to do better and be better. “Save your money because you’re going to need twice as much money in your old age as you think.”

Do you still have lingering questions in your mind? Don’t be afraid to voice them out, Southbourne Tax Group is always ready to listen and give solutions on your financial predicaments, especially when it comes to taxes.

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Southbourne Tax Group Review: How to prevent huge mistakes on your personal finances

“The more disciplined you become, the easier life gets”. Southbourne Tax Group agrees that discipline is the key to having a better outcome in every aspect of life. Financial education is not an exception since it also needs your discipline.

In order to have a good and better financial life, a person must educate himself about personal finances and must apply discipline in handling money to prevent huge financial mistakes. Many studies had also shown that personal financial education is essential nowadays in the society.

Better management of personal finances could be learned with this short read provided by Southbourne Tax Group, which includes helpful tips gathered by the team from their careful research. The following are also made with the guidance of some experts.

Start now

If you are one of those young adults, learning about your finances and saving money must be done as soon as possible or if possible, begin now. Southbourne Tax Group aims to beget to individuals the importance of financial education to children as well. They should be taught significant financial information once they start their schooling. Educating a child at home is also recommended to those parents reading this. You might learn something new while supporting your child to manage their own money.

At an early age, one can build a stable financial foundation by understanding personal finances as well as growing a savings account. This is a strong testament to the favorite financial quote of many people: “Studies show that people who learn to save early in life usually make smarter financial decisions later”. If you’re a person equipped with a substantial amount of information on handling finances, you can apply that learning to make the right decisions that can lead to a better financial life in the future.

To give a scenario, we have two individuals who are 25 years old and 35 years old respectively. Both began putting the same amount of money on their accounts for a lot of years. When both reached the age of 65, it’s clear that the 25-year-old acquired double the amount of the 35-year-old’s money due to the accrued interest.

Be familiar with the details included in your paycheck

Shocked with some amount disappeared on your paycheck, and your chance to even spend them gone into thin air? You don’t need to be in such situation if you understand properly the things included in your paycheck. Understand the national insurance contributions, pension contribution, student loan payments, and the tax code as well.

First things first!

Make sure to settle first your basic needs such as food, water, clothing, and shelter. Ensure to pay your house rent, bills, food and of course, tax.

Assess your income and spending

After a careful assessment of your income and spending, you should then work out on balancing both. Southbourne Tax Group and other financial teams recommend keeping a proper record of your spending. This way, you can ensure you’re still following your set budget.

Savings, savings, savings

Working out your savings is clearly included in this short read. It would be nice to get the best deals for your savings too since you’d want the best for your hard-earned money, right? Dig into the World Wide Web and do your research, comparison sites can be a good guide to finding the best deal as well.

Set a goal

You’re saving for a specific goal, right? Having a goal to achieve makes you more inspired to put more effort in your work. Always picture your goal in your mind and make sure to make it into reality in the near future.

Should you require any assistance with your taxes and finances, or have any questions, please don’t hesitate to contact the Southbourne Tax Group. They are more than ready to help you.

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Southbourne Tax Group Review: How to make taxes easier as a property investor

Southbourne Tax Group has been a part of different projects that includes tax services to various businesses and individuals. Since its beginnings, the firm has been showing unrivaled commitment to their clients and giving them necessary guidance with their taxes.

Southbourne Tax Group targets to provide help specifically to property investors with this post. A few tips will be provided that can make taxes at least a bit easier to individuals or businesses. But first, as a property investor, remember to have a correct tax return.

As mentioned earlier, having an appropriate and complete tax return is indeed crucial for property investors since they often come under inspection when submitting returns. Call your accountant today and talk about important tax matters and define what can and can’t be claimed as a tax deductible expense.


Hiring a tax specialist is one of the recommendations of Southbourne Tax Group to help you make your taxes easier. Offsetting the net loss from negative gearing against other income can reduce your tax payable. Claiming the interest of a property is also plausible if it is available for rent.

Always confirm if you have the right coverage when checking your insurance policy. Experts add that a standard home and contents insurance policy won’t cover specific risks included in property investing. Make sure that you will never forget the costs you are rightfully entitled to as well.

As a self-managing landlord working from home, you surely have some expenses and such costs can be claimed as well but only a fair and reasonable part of it. On the other hand, Southbourne Group also recommends getting the service of a professional property manager because its costs can be a deductible expense too.

Moreover, a property manager can assist the organization while creating a potential tax benefit. Such professional can also handle very well the administrative responsibilities involved in an investment property. Completing and compiling paperwork are no problem to property managers as well.

Mentioned above were only some of the basics to make your taxes easier as a property investor, Southbourne Tax Group encourages you to contact them for further guidance.

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Southbourne Tax Group Review: How to properly handle your taxes as a property investor

For many years, Southbourne Group has been involved in giving a dependable tax service to businesses and individuals, thus it aims to give helpful tips especially to property investors through this article. And as their first friendly reminder, it is really important to have a complete and correct tax return as a property investor.

A complete and right tax return is essential for landlords because they often come under inspection when submitting returns. Keep in touch with your accountant to discuss matters regarding on what can and can’t be claimed as a tax deductible expense. This way, you can make sure about the legitimacy of all claims, as well as maximized tax return amount. Southbourne Tax Group also suggests hiring a tax specialist because one can be of great help in making your taxes easier. Don’t stop reading because more tips are provided below.

Offsetting the net loss generated by negative gearing against other income could reduce tax payable. As a landlord, you can claim the interest if a property is available for rent, however, if the given situation is that a property is lived for half a year and then leased as a holiday rental for the other half, you can’t claim the interest for the full 12 months.

See to it that you have the appropriate coverage when checking your insurance policy. Experts also said that a standard home and contents insurance policy won’t cover certain risks included in property investing. You surely have costs you are rightfully entitled to, so make sure not to forget them.

If you are one of those self-managing landlords, you surely have costs from working at home, and the good thing is that you can claim a reasonable part of them. It’s also a good option to hire a property manager because its costs can be a deductible expense.

Moreover, property managers can build a potential tax benefit while assisting the organization at the same time. They are also capable of taking good care of the administrative responsibilities included in an investment property as well as compiling and completing significant paperwork.

Handling your taxes properly can help you avoid huge problems on your taxes and as a property investor, Southbourne Tax Group hopes that those mentioned above gave you even a bit of help.

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Southbourne Tax Group Review: How to avoid doing taxes wrong as a property investor

Property investors should know how important it is to settle their tax returns correctly. The following are some tax tips prepared by Southbourne Tax Group to help you avoid having errors on your taxes.

When lodging tax returns, landlords usually come under inspection from the government so it is really crucial for them to have complete and accurate returns. In order to determine what can and can’t be claimed as a tax-deductible expense, Southbourne Tax Group suggests consulting your accountants as a landlord. With this, all claims are ensured legitimate and the tax return amount is maximized.

If you seek to make taxes easier as a landlord, it would be better to get the professional advice of a tax specialist. It is sometimes unavoidable to have tax-time stress but just continue reading and Southbourne Tax Group has a few more tips for you.

Negative gearing: In order to reduce the tax payable, the net loss which generates from negative gearing should be offset against other income. If a property is available for rent, landlords can claim the interest. However, you can’t claim the interest for the full 12 months of a property that is lived in for half a year and leased as a holiday rental for the other half.

Insurance: Making sure that you have the right coverage in checking your insurance policy is also important. Landlords won’t be covered for particular risks involved in property investing with a standard home and contents insurance policy.

Expenses: Southbourne Tax Group suggests not forgetting to claim the costs you are duly entitled to. As mentioned before, before submitting your claim, confirm first with your accountant on what can and cannot be claimed.

Offsetting costs: Are you one of the self-managing landlords? Working from home and its costs could be claimed as well, but not all since only a fair and reasonable part of it can be deductible.

Property manager: The cost of property managers can be a deductible expense said experts and they can be helpful to landlords as well. Landlords can save time by hiring a property manager because they can create a potential tax benefit while assisting with the organization at the same time.

Moreover, the administrative responsibilities included in an investment property can be taken good care of a trusted property manager, so with the help of such professional, the tax-time burden can surely be lessened.

You can contact Southbourne Tax Group today to know more steps on how to avoid doing taxes wrong with their proper tax guidance and service.


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The Southbourne Tax Group Review: How to Protect Your Business from Fraud

5 Commercial Fraud Prevention Tips

This March marks the 13th anniversary of Fraud Prevention Month. While the annual program focuses on protecting the consumer, businesses should take advantage of the time to better educate themselves on commercial fraud. A recent poll of Canadian businesses found that half of them know or suspect that they have been hit by fraud in past year.

There are numerous ways that business fraud can occur in a transaction. It can occur from business to consumer or consumer to business. It can come from internal staff or external threats. But the one familiar element is that the party committing the fraud has acted dishonestly. Business fraud is more common in some industries than others. Banking and financial services, government, manufacturing, healthcare, education, and the retail sector are all industries that struggle with fraud. However, no commercial enterprise, big or small, is safe.

As a business insurance and risk management expert, Park Insurance is here to provide you with some helpful tips that could save you from the impending threat of commercial fraud.

5 Fraud Prevention Tips You Need to Apply to Your Business Today

1. Preparing for Commercial Cyber-fraud

It should come as no surprise that cybercrime headlines this list of commercial fraud prevention tips. But the fact that 50% of Canadian executives admit that their businesses were hacked last year is alarming. Credit card fraud, identity theft, account takeover and/or hijacking attempts are becoming so common that businesses are hiring full-time staff and/or consultants to monitor cyber security. Cyber-fraud occurs from internal (employees stealing corporate information) and external culprits alike and they are becoming more sophisticated with each passing month. Improved staff awareness, real-time software updates, enhanced backup protocol, and encrypted communications will help stave off sophisticated cyber-fraudsters. Follow these six tips to protecting your business from cyberattacks.

2. Pre-Employment Screening

Internal fraud is one of the most common forms of business fraud and is certainly one of the most impactful. Not only can it go undetected and occur over a long period of time, devastating your business financially, it can ruin your corporate culture. Trust is immediately lost. From this point forward, institute an improved pre-employment screening program that includes intensive backgrounds checks and more thorough reference checks. If fraud is a significant concern (you operate in one of the higher risk industries mentioned in the introduction) consider using a professional service that specializes in pre-employment screening. Some human resource recruiters offer specialized screening.

3. Improved Internal Accounting (w/Redundancy)

You may think that placing one person in charge of accounting, including the processing of payments and invoices, making bank deposits, handling petty cash and managing bank statements is smart because it provides a single point of responsibility. It’s not. It opens you up to internal fraud, should that employee/manager seek to do your business harm. Even if the individual can be trusted, they are at risk of being compromised. If they hold all of the chips, your business can be hit and decimated in one shot.

Instead, spread and/or rotate these duties amongst qualified staff. In addition, create redundancy when it comes to the accounting of all financials. This will allow you, for instance, to check duplicates of a month’s invoices and statements to ensure that the numbers match. Have separate parties check financial statements too, for added caution.

All of these improved internal accounting policies should be compiled and posted for all to see. If you do have an internal threat working within the company, they will be less likely to take harmful action if they know that these redundant checks and balances are in place.

4. Encourage Whistleblowing

Whistleblowing may seem like a dirty word when it comes to fostering a trusting corporate culture, but in the end your staff should see that it is nothing to worry about – if there is nothing to worry about. Institute an official fraud reporting protocol for staff, vendors and even customers/clients to anonymously report suspected fraudulent activities. It is essential that everyone involved receives a clear document that explains what constitutes fraud. It must also state that the process should never be used to air grievances, which can happen when there is friction between employees. Reports should be backed by facts and evidence. Lastly, it must be made clear to employees, vendors, and customers/clients that all reports are regarded as confidential without reprisal.

5. Secure Insurance to Hedge Business Risk of Fraud

For all of your efforts, fraud can still occur. You want to protect your business from this, hedging the risk of all damages that can come in the form of financial loss, liability, and innumerable other concerns. For a comprehensive and unbiased accounting of your existing policy, secure the services of an independent insurance broker with expertise in all forms of commercial crime and commercial liability insurance. Contact Park Insurance before your business joins the approximate 50% of Canadian businesses that have been hit by fraud.

More related info:
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http://kizifriv.org/p/-southbourne-tax-group-3-tips-to-avoid-charity-tax-deduction-scams

Additional resources for business accounting tips are available here (http://www.thesouthbournegroup.com)

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The Southbourne Tax Group: 5 surprising things you can deduct from your income taxes

“Can I deduct this?” When Americans sit down to fill out their income-tax forms on or before the April 15 deadline, that’s the question they’ll likely ask the most.

They may be shocked by how often the answer is “yes,” and the sheer variety of expenses they can deduct. Most people know that business-related items are usually tax deductible — no matter how odd. That could include body oil for a masseuse or professional body builder, says Dave Du Val, vice president of customer advocacy at TaxAudit.com, which is based in Sacramento, Calif. Ditto, free beer used for a sales promotion. But a recent survey showed that only 51% of more than 1,000 people surveyed understood relatively basic questions about their income taxes, and the estimated average $2,840 tax refund for 2017 likely does not include the refunds that people did not know they could claim.

Of course, most people know many charitable donations are deductible, but some people are especially watchful for deductions others might miss. Grafton “Cap” Willey, managing director at CBIZ Tofias, an accounting and professional services provider in Providence, R.I., helped a client who’d bought a house and land — and wanted to build a better house — write off the fair market value of the windows, lumber and other usable items from the property that he donated to a homeless charity. And documentation is critical. “Take a photo with your iPhone of that bag of clothes you donate, and get a receipt. That all counts as evidence.”

[ Related info: http://harvycamern.blog.fc2.com/blog-entry-4.html ]

To help people think more broadly about the kinds of things they can deduct, here are five unusual tax deductions:

Swimming pools

Context is everything when it comes to deductions, especially when expenses are being characterized as being for medical purposes. Johanna Turner, senior partner at Milestones Financial Planning in Mayfield, Ky., had clients who successfully deducted the full cost of a $40,000 swimming pool. “Their child had been injured in an accident,” she says. “They received doctor’s orders for swimming therapy.” The key here is making sure a doctor signs off on the deductions, Turner says. There are also deductions taken for hot tubs and pools as long as they, too, are doctor-prescribed, adds Megan Thompson, a certified public accountant at Thompson Accounting in San Jose, Calif. Upgrading your property for lifestyle or reselling, for instance, would not count.

Abortion

This may be the most politically and ideologically divisive of all deductions. The IRS says: “You can include in medical expenses the amount you pay for a legal abortion.” So an abortion — which can cost from $500 to $1,000 — could be deductible if it was included with other medical expenses. Taxpayers can also include in medical expenses the amount they pay to purchase a pregnancy test kit to determine if they are pregnant, and the cost of a sterilization or vasectomy. When it comes to all medical expenses, you cannot include those that were paid by insurance companies or other sources, and the total medical expenses in question need to exceed 10% of your adjusted gross income (this falls to 7.5% for those who are 65 or over for all medical expenses).

[ Related info: http://southbournegroup.hatenablog.com/entry/the-southbourne-tax-group-3-tips-to-avoid-charity-tax-deduction-scams ]

Gambling losses

“If you have gambling gains, you can deduct a large number of expenses to go to Vegas up to the point where it offsets much or all of the gains,” says Scott Bishop, director of financial planning at STA Wealth Management in Houston. You can deduct your losses, but no more than your winnings in that tax year. Gambling income includes winnings from lotteries, raffles, horse races and casinos, and fair market value of prizes such as cars and trips. “To deduct your losses, you must be able to provide receipts, tickets, statements or other records,” the IRS states. For casinos, you need copies of check-cashing records. Some states don’t allow deductions on gambling losses, however.

Service dogs and dog food

Man’s best friends can be another tax-deductible expense. “I had a client with a warehouse deduct the cost of buying guard dogs,” Bishop says. Their pet food may also be deducted. He is aware of one case where a person deducted the cost of transporting their six dogs as a work-related moving expense. Taxpayers may also include as medical expenses the costs of buying, training and maintaining a guide dog or other service animal to assist a person with physical disabilities. This includes any costs, such as food, grooming and veterinary care incurred in maintaining the health of the service animal.

Gender confirmation surgery

In 2010, the federal tax court ruled in favor of a transgender woman, Rhiannon O’Donnabhain, who had taken up a case against the IRS for refusing to allow a $5,000 deduction for $25,000 in medical expenses for gender confirmation surgery, those costs “not compensated for by insurance or otherwise, for medical care of the taxpayer.” In its ruling, the tax court said gender-identity disorder is widely recognized in diagnostic and psychiatric reference texts, and all three experts testifying in the case consider the disorder a serious medical condition, and the mental-health professionals who examined O’Donnabhain found that her disorder was a severe impairment.

Additional resources for business accounting tips are available here ( http://www.thesouthbournegroup.com ).

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The Southbourne Tax Group Review: The state of play on tax evasion and avoidance

Sometimes it can be hard to keep up with the avalanche of government announcements on tax avoidance and evasion. This guide, produced by Jason Collins, a member of the CIOT’s Management of Taxes Sub-Committee, should bring tax agents, journalists and others with an interest in tax compliance up to speed with the rapidly changing landscape in this area

Offshore evasion

The 1st of January 2017 was a seminal date in the war against offshore tax evasion because it is the date on which financial accounts in existence in jurisdictions in the 'late' adopters of the Common Reporting Standard (CRS), will have to be reported, even if they are closed after this date.

Although the trigger dates were earlier for the Crown Dependencies and Overseas Territories (CDOTs) (1 July 2014) and early adopters of the CRS (1 January 2016), the late adopter countries are perhaps the most significant because they include the major financial centres of Switzerland, Hong Kong, Dubai and Singapore.

HMRC received the data from the CDOTs in September 2016 and has begun the process of matching that data to information it already holds in order to decide who to investigate. The data pot will be enhanced by the receipt of the CRS early adopter data in September this year and late adopter data in September 2018.

Enablers

The date of 1 January 2017 also brought the start of Finance Act 2016 penalties for enablers of someone else's offshore tax evasion or careless non-compliance. Penalties can be up to 100 per cent of that other person's tax liability.

It is worth noting here that the taxpayer will be entitled to mitigation of his or her own penalty if he or she provides information about any enabler.

Strict liability offence

HMRC is under pressure to prosecute more people for offshore tax evasion, and FA 2016 introduced a new 'strict liability' offence which may achieve this end. The offence will apply if a UK taxpayer fails to notify HMRC of his or her chargeability to tax, fails to file a return or files an incorrect return in relation to income, gains or assets in a non-CRS country and the underpaid tax is more than £25,000 per tax year. There will be no need for the prosecution to prove that the individual's actions were dishonest but the taxpayer can put forward a 'reasonable excuse' defence. The maximum sanction is six months of imprisonment. We do not yet have a definite date, but it is expected this will apply from April 2017.

Corporates

As with the above, HMRC is also under pressure from the public to see more companies and partnerships prosecuted – in particular those who fail to prevent their staff and agents from criminally facilitating third party tax evasion. A new offence is being introduced in the Criminal Finances Bill and will be effective by September 2017 at the latest. Liability is again 'strict', but it will be possible to advance a defence that reasonable procedures were in place to try to stop the misconduct (or that it was not reasonable in all the circumstances to expect there to be a procedure in place). The offence is being introduced because under the current law a corporate will only be criminally liable if very senior management (usually board level) were involved or knew about the facilitation, meaning that it can be all too easy for senior management to let unscrupulous practices go on, provided they know nothing about them.

Tougher civil penalties

Despite bringing more prosecutions, most cases will continue to be dealt with by HMRC levying financial penalties rather than seeking a criminal conviction. The current maximum penalties for offshore evasion depend upon the extent that the UK has exchange of information arrangements with the jurisdiction connected to the non-compliance, with a maximum penalty of 200 per cent of the tax for the most opaque regimes. The standard penalty payable can be increased by up to 50 per cent where there has been a deliberate attempt to move assets in order to avoid exchange of information regimes (Sch 21, FA 2015).

In addition, a new 'asset-based' penalty is being introduced (Sch 22 FA 2016) for the most serious cases of evasion with an offshore connection. It is levied in addition to the standard penalties for deliberate behaviour. The asset-based penalty starts at the lower of 10 per cent of the value of the asset and 10 times the potential lost revenue related to the asset and is subject to mitigation. It is not yet known when this penalty will come into force, but it is likely to be sometime in 2017.

Disclosure facilities and 'Requirement to Correct'

The Liechtenstein Disclosure Facility (LDF), which despite its name could be used for irregularities in other jurisdictions, has been withdrawn and replaced with the much less generous Worldwide Disclosure Facility (WDF). The WDF offers no tax amnesty, penalty reduction or guarantee of non-prosecution and therefore provides little incentive for the hard core who have resisted the numerous previous settlement initiatives to regularise their position. The WDF requires the taxpayer to pay the tax, interest and a self-assessed reckoning of the penalties which apply.

Linked to this, Finance Bill 2017 will include new measures applying to a person with any undeclared tax relating to offshore matters as at 5 April 2017. The law will impose a special 'new' statutory requirement to correct the issue between 6 April 2017 and 30 September 2018. The issue is treated as corrected if the taxpayer takes certain steps, including formally bringing it to the attention of HMRC under the WDF, before the deadline.

A failure to correct by the deadline will lead to two things. First, the time limit applying to HMRC's powers to assess will be extended so that HMRC is given a further four years beyond the usual timeframes in which to discover and collect the under-declared tax.

Second, the old penalty regime will fall away and a new super penalty will be applied. The penalty is between 100 per cent and 200 per cent of the potential lost revenue (depending on the levels of cooperation). The underlying conduct giving rise to the non-compliance is irrelevant. However, there is a 'reasonable excuse' defence and provision for reduction of the penalty in special circumstances.

This super penalty can be imposed in addition to the asset–based penalty mentioned above. It is also subject to an increase of up to 50 per cent under Sch 21 FA 1015 if HMRC can show that assets or funds have been moved in a deliberate attempt to avoid exchange of information (see above).

Obligation to write to clients

Advisers who have provided tax advice to UK residents in relation to offshore accounts, assets and sources of income and financial institutions who have provided offshore accounts are required to send a letter to their clients enclosing a HMRC leaflet and reminding them of their obligation to disclose offshore income and gains. It will apply in respect of advice provided in the year to 30 September 2016 and there are exclusions. A useful exclusion for advisers covers the situation where all the adviser has done is prepare tax returns disclosing offshore income. Letters need to be sent by 31 August 2017 but advisers need to start working out which clients they need to contact, if they have not already done so.

Requirement to notify offshore structures

HMRC is consulting until 27 February 2017 on a proposed new legal requirement for intermediaries (both within and outside the UK) creating or promoting certain complex offshore financial arrangements to notify HMRC of the details and provide a list of clients using them. The measure aims to target arrangements which could easily be used for tax evasion purposes. It is proposed that the requirement should apply to arrangements in existence at 31 December 2016, rather than just new arrangements entered into after the new measure comes into force, in order to tie in with the start of CRS.

Onshore evasion

More tax is lost to onshore evasion or non-compliance than to offshore evasion and avoidance but it does not always attract the same level of public interest - for example a former minister for tax was vilified for making the very valid point about the scale of the tax loss from paying tradespeople in cash. Indeed, the largest single type of loss to the exchequer is from the 'hidden' economy - for instance those who fail to register for tax at all (known as 'ghosts') or fail to declare an entire source of income (known as 'moonlighters'). In 2014/15 (the latest figures available), 17 per cent of the tax gap (some £6.2bn) was estimated to be down to this type of non-compliance.

As with offshore evasion, HMRC has adopted a two pronged strategy to counteract domestic tax evasion. This involves a combination of 'encouraging' recalcitrant individuals to come forward and increasing HMRC's powers to obtain information from third parties who may provide the key to finding those who are non-compliant.

Disclosure initiatives

Recent 'encouragement' initiatives involve HMRC targeting areas where they believe there may be non-compliance. In the past HMRC has focused on specific industries, eg plumbers, solicitors and doctors, but over the last year it has launched campaigns targeting specific types of income that may be relevant to the population more generally, such as buy-to-let rental income and income from second occupations. These initiatives enable a voluntary disclosure to be made of previously undeclared income and generally offer reduced penalties, compared to the position if it is HMRC that discovers the non-declared income.

'Nudge' letters

A more controversial aspect of the strategy to encourage non-compliant people to come forward voluntarily has been the use of 'nudge' letters. These letters to taxpayers reminding them of their obligations are sometimes not copied to agents, such as one that was sent out just before Christmas to those who had declared interest income on their 2014-5 tax return asking them to check the figures returned. It was not clear from the contents of this standard letter whether it had been sent randomly or to specific individuals as a result of HMRC receiving different information from banks and building societies about the interest paid. Anecdotal evidence from tax advisers suggests that the letter worried some individuals who had, in fact, complied with their obligations.

Increased HMRC powers

In relation to the second prong of the strategy, there were three consultations last year on additional powers to clamp down on the hidden economy. One consultation proposed extending HMRC's data gathering powers to enable it to collect data from money services businesses (for instance businesses that provide money transmission, cheque cashing or currency exchange services). As part of the 'Fintech' revolution, more and more people are buying bank services outside the traditional bank supply lines and HMRC has had to respond to try to ensure that the 'shadow banking' sector cannot easily be used to hide sources of income or wealth.

Another consultation proposed making access to public sector licenses such as licences for private hire vehicles, environmental health, planning and property letting conditional on registering for tax. As an alternative the government is considering measures which will effectively give financial services companies an indirect role in policing the hidden economy, by making access to business services such as insurance and bank accounts conditional on proving that you are registered for tax.

The third consultation document proposed tougher sanctions for those involved in the hidden economy, including higher penalties for those who repeatedly fail to notify chargeability, additional tracking and enhanced monitoring of taxpayers with a history of non-compliance, and strengthening the penalty regime where an immigration offence is also committed.

Connect

In this high-technology age, HMRC has invested heavily to keep up. It has spent a very large sum of money on a database, called 'Connect'. All information is fed into this data trove and reviewed in order to inform HMRC's deployment of resource to meet onshore and offshore risks, as well as identifying specific instances of non-compliance. The flip side is that as the country moves away from using cash, the traditional channels for the hidden economy are closing. Tax evasion is as old as the hills, but one wonders whether it has met its match.

Tax avoidance

A crackdown on tax evasion is probably only just ahead of a crackdown on avoidance in the political popularity stakes. In the eyes of HMRC, aggressive avoidance is no more acceptable than evasion and shares the feature that (because of their overwhelming success rate in challenging avoidance) tax is legally due but unpaid. This perspective has justified a barrage of measures in recent years.

Penalties for enablers of avoidance

The most contentious measure is the suggested imposition of penalties on the 'supply chain' in avoidance – not just the designers and promoters, but those who provide advice and who sell the arrangements to others.

A first consultation drew gasps from among the tax industry as it suggested penalties would be applied to any bank or adviser whose client was successfully challenged under, among other things, a targeted anti-avoidance rule. The penalty would be up to 100 per cent of the tax due from the client.

Thankfully HMRC listened to stakeholders' concerns about the breadth of the proposals and the draft legislation for inclusion in Finance Bill 2017 provides that the measure will only apply to 'abusive arrangements'. This uses the 'double reasonableness' test used for the general anti-abuse rule (GAAR) – arrangements which cannot reasonably be regarded as a reasonable course of action having regard to all the circumstances. The penalty will be capped at the fee received by the adviser/intermediary. It is proposed that the new rules will apply to activity taking place after Royal Assent is given to the 2017 Finance Bill.

Serial tax avoiders

A new 'serial tax avoiders' regime has been in force since 15 September 2016. It applies where a tax avoidance scheme is 'defeated' (either by the decision of a tribunal or court or by settlement with HMRC). Anyone who has participated in a scheme on or after 15 September 2016 can be issued with a warning notice which lasts for five years and imposes an annual obligation to notify HMRC of further schemes used, with enhanced penalties, possible 'naming and shaming' and restriction of access to tax reliefs if any schemes used within the period are defeated. A warning notice can be issued to those who entered into schemes before 15 September 2016 which are defeated on or after 6 April 2017, but then only the annual notification requirements apply and not the other sanctions.

Increased transparency

Tied in with international measures and the fight against tax evasion and avoidance we have also seen a number of measures to increase transparency. These include the requirement since April 2016 for certain UK companies and LLPs to formally identify and keep a register of 'persons with significant control' over them and to provide this information to Companies House at least annually. There are also proposals for a register of people controlling non-UK companies owning UK real estate as well as a register of settlors and beneficiaries of trusts which generate UK tax consequences. Further details are expected this year.

Large businesses will also be required to publish their tax strategy online. This will include details of their attitude to tax planning and their appetite for risk. Country-by-Country Reporting, under which large companies have to formally break down where they make profits and where they pay tax, will also go live in 2017.

VAT

Clause 95 of the Finance Bill 2017 provides for a new penalty which will apply to anyone found to have claimed input tax on a transaction which they 'knew or should have known' was connected with a VAT fraud (the input tax claim thus being bad in law). HMRC say that the current VAT penalty regime (which identifies careless or deliberate errors) requires HMRC to specify whether they are alleging one or the other of actual and constructive knowledge for the purposes of the penalty, whereas they do not need to make this distinction for the legal test in respect of the tax itself. Under this new fixed 30 per cent penalty, liability is engaged irrespective of the type of knowledge. The penalty cannot be reduced for co-operation with HMRC and company officers can be personally liable.

Tax Avoidance Disclosure Regimes for Indirect Taxes and Inheritance Tax

The Government will revise the VAT avoidance disclosure regime (VADR) and widen it to cover other indirect taxes from September 2017. Among the proposals is to move the principal obligation to report schemes from VAT-registered businesses to scheme promoters and align the penalties for non-compliance with VADR obligations with those chargeable under DOTAS. The Government insists that it will reduce burdens as the focus for compliance shifts from all taxpayers to a much smaller number of promoters. HMRC plans to introduce a wider disclosure mechanism applicable to all IHT arrangements that are contrived or abnormal, or which contain contrived or abnormal steps. More details are to be included in the regulations.

Conclusion

Although the pace of change has already been very rapid, a significant number of the measures outlined above are due to take effect in 2017. This will give HMRC considerably more fire power in its battle against tax evasion and avoidance. Tax advisers need to be aware of the impact these changes could have on their clients and of the increasing number of measures which could catch the unwitting tax adviser.

More related info:
http://www.release-news.com/business/the-southbourne-tax-group-beware-the-latest-tax-season-spear-phishing-scam
http://www.blurpalicious.com/the%20southbourne%20tax%20group%20business%20accounting%20services%20hong%20kong

Additional resources for business accounting tips are available here (http://www.thesouthbournegroup.com/)

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The Southbourne Tax Group Review: Struggling middle class give less to charity

Donations by wealthy Americans surge

The divide between the rich and not-so-rich in America can be seen most glaringly in the amount of money they give (and have stopped giving) to charitable causes.

The average American household is giving far less to charity than it did a decade ago, but this hides two vastly different patterns of charitable giving. Over the past 10 years, charitable giving deductions from lower-income donors have declined significantly, at almost the same rate that charitable giving from higher income donors increased. Itemized charitable deductions from donors making less than $100,000 a year declined by 34% from 2005 to 2015, while the same deductions from donors making $100,000 or more a year increased by 40%, according to a study of tax filings by the Institute for Policy Studies, a left-wing think tank.

“The growth of inequality is mirrored in philanthropy,” Chuck Collins, report co-author said. “As wealth concentrates in fewer hands, so does philanthropic giving and power.” As a result, charities are increasingly relying on larger donations from smaller numbers of high-income, high-wealth donors, which could lead to undue influence of funds in major charitable organizations. And they are receiving less from the vast population of donors at lower and middle-income levels. (The authors consider low and mid-range donor income as under $100,000 per year.) Overall, charitable giving increased 4% to $373.25 billion year-over-year in 2015, regardless of income level.

The number of donors giving at typical donation levels has also been steadily declining. (In terms of donations, below $10,000 is considered a low to mid-range gift, while over $10,000 is considered a high-dollar gift.) Lower and middle income donors to national public charities have declined by as much as 25% between 2005 and 2015. These are the people who have traditionally made up the vast majority of donor files and lists for most national nonprofits since their inception. This rate of decline “correlates strongly” with overall economic indicators, such as wages, employment and homeownership rates, the study said. And more and more giving is going into warehousing vehicles like foundations and donor advised funds, instead of to charities on the ground, it added.

It’s not all doom and gloom: Giving to schools and colleges is expected to grow by 6.3% this year and 6.1% next year, according to a separate report released last year by the Indiana University Lilly Family School of Philanthropy and presented by Marts & Lundy, a fundraising and philanthropy consulting firm based in Lyndhurst, N.J. But the middle class likely had less to do with this spike too. “This may be due in part to the increasing interest of donors, and especially wealthy donors, foundations and even corporations, in funding higher education, as well as a growing role for philanthropy in K-12 education,” the report added.

More related info:
http://kizifriv.org/p/-southbourne-tax-group-3-tips-to-avoid-charity-tax-deduction-scams/
http://harvycamern.blog.fc2.com/blog-entry-4.html

Additional resources for business accounting tips are available here (http://www.thesouthbournegroup.com/)

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