Assured FD Services 1 Comment

Snapchat Chooses The UK For International HQ

Snap, the American company that owns popular messaging app Snapchat, has established its international headquarters in London, where it will book all non-US ad sales, in what some analysts note as a vote of confidence for the post-Brexit United Kingdom.

The decision to open an international hub in the UK by the California-based startup sets it apart from its peers in Silicon Valley. Top American technology companies like Apple, Facebook, Google, Microsoft, Uber, Twitter and several others have chosen Ireland, Luxembourg or the Netherlands as their international HQs to shelter their earnings from US tax laws, taking advantage of lower tax rates in these European countries.

United Kingdom’s corporation tax rates is also one of the lowest in the world, but plans to reduce it even further have made the country an attractive option for many companies with international operations.

Snap Group Limited, which is the company’s new UK entity, will be booking all revenues from customers in the UK and in all countries where it has no local office.

The company’s newly-minted international HQ will be stationed near its existing Soho office in London, which was established back in 2015. It currently has 75 people on staff, but will hire additional workers, including engineers.

“The UK is where our advertising clients are, where more than 10 million daily Snapchatters are, and where we’ve already begun to hire talent,” said Claire Valoti, general manager of Snap Group in the UK.

Snapchat’s move to establish a headquarters in Britain comes amid criticism of American companies’ practice of avoiding US taxation by setting up shop outside the US even though most its operations are inside the US.

Google chairman Eric Schmidt defended the industry’s much-criticised tax avoidance tactic, saying they do it “based on the incentives that the governments offered us to operate.”

The company is set to go public as early as March this year, with an estimated valuation of $25 billion.

If you are looking for expert Part Time FD Services in the Leeds & Yorkshire area contact Assured FD Services today.

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Phil Hall 1 Comment

VAT and Your New Business

All new companies should be made aware that, you can claim VAT on costs incurred before the business started trading This includes VAT incurred on assets used prior to VAT registration.

Subject to the normal rules on VAT deduction:

  • VAT on services received within six months of the effective date of registration (EDR) and used in the business at EDR is recoverable in full
  • VAT on stock is deductible to the extent that the goods are still on hand at EDR (for example, apportionment may be required)
  • VAT on fixed assets purchased within four years of EDR is recoverable in full, providing the assets are still in use by the business at EDR

Full recovery only applies if a business is fully taxable. If a business is partly exempt, has non-business activities or needs to restrict VAT deduction for any other reason, it will need to take that into account when calculating the amount of deductible VAT.

For further advice on Tax Compliance and VAT, contact Assured FD Services today. With over 20 years experience managing the finances of UK market leading companies, you can rely on receiving the best advice and guidance possible.

 

Assured FD Services 1 Comment

Financial Services Sector Is UK’s Top Tax Payer

The United Kingdom’s (UK) financial services sector paid £71.4 billion in tax last year, accounting for 11.5% of the UK’s total tax collection. This year’s contribution was the highest since 2007, accounting firm PwC noted in its annual report.

Banking institutions and insurance companies were the top contributing sub-sectors, paying an additional £8.4 billion and £3.4 billion respectively, thanks to reforms in corporate tax and the bank levy.

The report, which was commissioned by the City of London, underscores the potential adverse impact to public finances if Brexit limits UK’s access to the European Union’s (EU) single market.

Financial services firms in the UK have expressed concerns about the Brexit’s negative effect on their businesses. Main concerns include losing access to a skilled EU workforce and potential restriction on their ability to trade with the single market, among others.

About 1.1 million people are employed by the financial services sector in the UK, comprising 3.4% of the country’s total workforce.

Many are waiting to see whether the UK can retain “passporting” rights, which enable lenders to continue transact without restrictions across the EU.

Addressing reporters in Brussels on Tuesday, Chancellor Philip Hammond said the government would study the “costs and benefits” of continuing to pay for access to the EU single market after UK formally exits the union, echoing previous pronouncements made by Brexit Secretary David Davis.

Last week, Brexit Secretary David Davis said paying for continued access was a possibility.

Speaking at a tax event on Tuesday, Financial Secretary to the Treasury Jane Ellison acknowledged the concerns of the financial sector, and assured that the government would be negotiating for an deal that will help UK’s financial services sector to be “every bit as successful after our withdrawal as before.”

She adds that Brexit could also mean “new opportunities” for this economically-vital sector.

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Phil Hall No Comments

Pensions and Higher Rate tax payers.

One of the more interesting facts that I’ve discovered in the 18 months since I became a part-time Finance Director with Assured is that if you find an issue with one client, then invariably you’ll find it at another. And the issue can be a relatively straight forward one.
I read the other day that the coalition are considering plans to cut higher rate pension tax relief. That is to say limit relief to 20%. That reminded me of an issue I have found at a couple of clients I have worked with as FD.

The circumstances were the same in each case. The Company calculated income tax on their employees earnings BEFORE any pension contributions. The pension provider then claimed back the 20% tax from the Government and grossed up the pension pot accordingly. Fine. However, the Higher rate tax payers were not aware they could claim back another 20%.
Rather than wait for their tax returns, I drafted a letter to HMRC claiming back the relief for this AND earlier years and had their tax coding notices changed accordingly. Job done.

If you think this could apply to you or you need help with any financial management issues, call me now on 07817 676371 or e-mail me at assuredfd.co.uk.