The View from No 50





January 2017


K P Bonney & Co

Chartered Accountants and

Chartered Tax Advisers

50 Cleasby Road  Menston

Ilkley  LS29 6JA

Tel:  01943 870933

Fax:  01943 870925






“Clean your windows, governor?”


“How much?”


“Twenty quid.”


“How much for cash?”


“Twenty quid.  My accountant says I have to record all my takings.


“How about I let you help yourself to as much fruit as you can pick from my garden?”


Er, where do I stand tax-wise with that?”


“How should I know?  Ask your clever accountant.”


It is a good question.  I have always taken the view that, whatever its form, the reward for doing self-employed work is reportable as business income.


HMRC has also taken this view but it now seems there is doubt.  Or perhaps because small businesses are now allowed to report their income and expenditure on a cash basis, HMRC is worried traders will try to claim that non-cash consideration is not taxable.


Anyway, to put the matter beyond doubt, the government has introduced in Finance Act 2016 a provision which confirms that non-monetary forms of consideration received in the course of a trade are taxable income.


So that’s twenty quid then.






HMRC has published guidance on the residence nil rate band (RNRB) including 18 case studies.


The new relief starts for deaths on or after
6 April 2017 and applies where there is a home included in the estate that is inherited by a direct descendant and the total estate is £2m or less.


The home does not have to be the main residence, but it does have to be one that has been lived in at some point by the deceased. A direct descendant includes a child, step child, foster child, a minor child for whom the deceased was the guardian and any lineal descendants. If the total estate value exceeds £2m, the relief is reduced by £1 for every £2 the estate exceeds £2m.


The relief starts at £100,000 from 6 April 2017 and increases in tranches of £25,000 to £175,000 by 6 April 2020. It will then increase in line with the consumer price index.


If the deceased downsized on or after
8 July 2015, either by moving to a cheaper home or selling up altogether, then provided the former home would have qualified for the RNRB had it been retained and at least some of the estate is inherited by a direct descendant, the RNRB can be claimed. The provisions for calculating how much can be claimed are complex and require an understanding of algebra. The professional bodies have expressed their concern about the complexity of the RNRB in general and the downsizing provisions in particular.


The final paragraph of the guidance is an understatement:  “The downsizing rules can be complicated where the RNRB is transferred or trusts are involved. Whilst this guide explains the basic rules, it can’t cover more complex situations. You should get professional advice about how to work out the RNRB in these situations.”


It is quite unacceptable to pass legislation that applies to a large proportion of the UK population, but which requires professional advice in order to understand and implement it.





You have seen their vans transporting cash around our towns and cities.  Getting close to their drop off and pick up points is important and involves the drivers parking in awkward places.  G4S racks up huge parking fines.


G4S claims the fines as an expense in its corporation tax return.  It argues it makes commercial sense to incur the fine as parking close to the delivery point improves security and keeps customers happy.  What could be more ‘wholly and exclusively for the purposes of the trade’ than that?  Fair point.


S54 Corporation Tax Act 2009 provides no deduction is allowed for fines and penalties.


HMRC disallowed the G4S claim.


Who won at the tribunal?


The judge accepted the commercial logic of incurring the fines.  But, irrespective, he held that the fines were not paid for the purpose of the trade but because the company had a statutory liability to pay.  Through the prism of all relevant authorities the fines could not qualify as deductible expenditure.


Next time you take a chance with your parking ‘whilst going about your business’ you might bear this in mind.





Self-assessment balancing payments for 2015/16 fall due for payment on 31 January 2017.  If you filed your 2015/16 tax return by 31 December 2016 HMRC will send you a paper statement to remind you to pay your tax and a payslip to help you to make your payment.  If you didn’t meet the 31 December deadline HMRC will send you nothing.


As HMRC charges interest at 2.75% pa and imposes a surcharge of 5% on any 2015/16 tax still unpaid at 28 February it is advisable to settle up on time.


You can make payment to




Sort 08 32 10


Account 12001039


Quoting your self-assessment unique taxpayer reference number (UTR) followed by the letter K.


For more information go to


If you are ‘old-school’ and insist on paying by cheque through the post I can save you the price of a stamp.  I have a small supply of old HMRC prepaid envelopes so feel free to call in and take a few.  I test them from time to time to check they still work.  I am pleased to report they do.



Later this month we should find out whether HMRC and the government have listened to the opinions of you, me and thousands of others who responded to the MTD consultation. 


If this goes the wrong way it will be the biggest bombshell to hit small businesses and landlords in years.


Watch this space.







I wish all readers a happy and prosperous 2017.







A consulting dietician was giving a lecture to a group of community nurses.

'The rubbish we put into our stomachs should have killed most of us sitting here, years ago.  Red meat is terrible.  Fizzy drinks attack your stomach lining.  Chinese food is loaded with msg.  Vegetables can be disastrous because of fertilisers and pesticides and none of us realises the long-term damage being done by the rotten bacteria in our drinking water.  However, there is one food that is incredibly dangerous and we all have, or will, eat it at some time in our lives.

Now, is anyone here able to tell me what food it is that causes the most grief and suffering for years after eating it?'

An old nursing sister sitting in the back row piped up, 'Wedding cake!'






Copyright:  K P Bonney & Co LLP 2017.  All rights reserved.  No part of this publication may be produced, stored in a retrieval system, or transmitted in any form or by any means, electronic mechanical, photocopying, recording or otherwise without prior written permission of the publishers.  Disclaimer:  The publishers have taken all due care in the preparation of this publication.  No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication can be accepted by the authors or the publisher.

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