How to turn the dull into the delightful
I went to the ICPA's London Practice Evolution Seminar yesterday. On the train up to the capital, I was mulling over how boring one of the titles of the speaker sessions appeared to be. "Taxation of Rental Income: From repairs to interest deductions."
Reading it made me worry slightly about what sort of day I was going to be in for. As it turned out, I need not have been concerned. It was a lively and well-attended event with over 100 delegates... mostly accountants in practice.
There were some excellent sessions: from money laundering compliance expert Richard Simms; effervescent ICPA chairman Tony Margaritelli; engaging chartered accountant Elaine Clark; a classy keynote from Steve Pipe; a VAT pitfall avoidance strategy from Melanie Lord; and the latest on MTD from TaxCalc's Steve Checkley.
That suspect title
Daily Insight will be returning to what some of these good folk had to say next week. But, first, let's check out that suspect title. For someone who is new to the accounting world, I was amazed at how brilliantly Croner-i tax expert Colin Walker breathed life into tax aspects of property rental income business.
He reminded me of a law lecturer I had in the 1970s, who kicked off the course by saying: "You're going to enjoy the law... for one thing, it's got a bar!"
Colin started by focusing on repairs/renewals legislation, which has chopped and changed in definition over the years as a result of case law. As regards the HMRC Property Income Manual, he said dryly: "A word of caution. It might not be right and it might be out of date."
Taxable capital expenditure
His talk tapped into the growth in buy-to-let. And the attendees lapped up the knowledge, with lots of enthusiastic note taking. The area of whether expenses are deemed capital or repair is far from straight forward. Whether something is being used in the business.
Take the case of the renovated ship in Law Shipping Company v CIR in 1930. Or the post-war cinema refurbishment Odeon Cinemas v Jones in 1971. Or Burnley Football Club rebuilding a grandstand.
But this was my favourite quote on the subject of whether something is deemed taxable capital expenditure. "Say you had a house, took the roof off, and then turned it upside down and shook it. If it falls out, it's capital."
Excellent and informative stuff. See you next week!
