The Importance of Paperwork
Most of us will implement some tax planning on behalf of a client which requires some paperwork to support the actions which have been taken. The incorporation of a business requires an issue of shares ,if appropriate a changing of the name of a PAYE scheme, the setting up of a company bank account and new headed notepaper and invoice books to reflect the change to a company.
A transfer of a property from a company to a director requires a notification to Land Registry. I have come across a number of cases recently where transactions or tax planning have taken place but there has been no paperwork to evidence/support what has happened. This can create significant problems with HMRC who will understandably take the view that in the absence of paperwork the transaction/planning should be ignored. Unexpected tax liabilities can arise – in the case of a property transferred to a director with no supporting paperwork HMRC would look to charge a benefit in kind on the director using the property as his residence.
We must have a fair tax in the United States. We have to re-adjust it, we must be fiscally responsible.
A recent tribunal case – Terrance Raine v HMRC concerned the setting up of a company where the shares were intended to be allotted equally between Raine and his partner. The paperwork was never completed and the annual return of the company showed Raine as the sole shareholder.