The General Data Protection Regulation – New requirements for all businesses!

HeroEuropean data protection laws are changing and come into force 25 May 2018. These new laws will affect all businesses in the UK and the current Data Protection Act (DPA) will be updated to reflect the GDPR obligations.

The GDPR is a framework with greater scope, much tougher punishments and judicial remedy for those who fail to comply with new rules around the storage and handling of personal data, be it in physical or electronic format.

Why are these new laws being introduced?

Making Tax Digital (MTD)

I am getting increasingly fed up reading articles about the delay in Making Tax Digital being a positive. The hint is in the word “delay”. Ok so some unpopular bits of MTD have been changed but that doesn’t mean it will never happen. HMRC have a target and a “big” budget to achieve this target so it will happen. We simply have an extra few years in which to be ready.

So does this mean accountants can just relax and say “great I don’t need to worry about this for another two years.”  What???  Of course not. It takes time to train clients in using the cloud accounting software needed to cope with MTD and they also need time to practice. The accountants will need to cope with this extra work while still doing their everyday stuff.

Legally anyone can call themselves an accountant

 Unlike the term Solicitor, Independent Financial Adviser (IFA) or Architect, the word Accountant is not protected. Yes an unqualified solicitor can lose you money, lose your rights, even lose your property so it is important that a solicitor is formally qualified so you are protected. Yes an unqualified IFA can lose your cash in a dubious investment or put your pension into a poorly performing fund so it is important that your IFA is formally qualified so you are protected. And yes an unqualified Architect can design a building which could fall over so your biggest investment you will ever have could be left valueless so it is important that your Architect is formally qualified so you are protected.

Can I claim my gym membership as a tax deductible expense?

This is a common question from many of our clients and the answer does depend slightly on whether you are a sole trader, partner in a partnership or you are employed.

The general rule for a business (so that is the sole trader, partnership or limited company) is that an expense should be “wholly and exclusively” for the purposes of the trade. If you apply this principle correctly tax relief will be denied on any expenses which have “duality of purpose”. So if there is both a personal benefit and a business benefit then HMRC will not allow you to deduct it as an expense. Gym membership is not for the benefit of a business even if you occasionally meet a business client there so in all normal situations tax relief is not available.

Making Tax Digital creates headlines yet again…

Making Tax Digital continues to have a torrid time and on this occasion caused by the early general election. The majority of this year’s Finance Bill has been dropped to ensure it can be passed quickly and without potential delays because of the general election. 110 out of 135 items in the original plan have now been dropped including the Making Tax Digital provisions. So the finance bill has gone from 760 pages down to just 140 pages.

Does this mean the end of Making Tax Digital?