3.3 Hackathon

WordPress 3.3 is about to hit feature freeze. This means it’s the last chance to squeeze in features that haven’t quite been finished, and enhancements and fixes that no one has had time to address yet. Around this time, there are often dozens of tickets that have patches, but the patches have not been tested enough to be committed to core. Then the contributors who worked hard on the patches are disappointed that their code doesn’t make it into the current release. You can help us prevent this!

This weekend, we’ll be running a has-patch needs-testing marathon for the 3.3 milestone. Basically, we’re looking for people who can help test patches and/or refresh patches that need updating. Lead developers and core contributors will be hanging around in the #wordpress-dev channel on irc.freenode.net to answer questions as needed, and will be committing patches as they get enough verification. As you test the patches, report your findings on the trac tickets in question. If all developers who make a living working with WordPress helped out for even an hour or two this weekend, we could clear the 200 tickets or so that are in this situation. To make it fun, why not get together with other WordPress devs and have an in-person hackathon meetup?

WordCamp Portland

At WordCamp Portland this weekend, some of the WordPress core team will be in attendance, including me, Nacin, and Koop. In addition to giving presentations and participating in the unconference sessions, we’ll be involved with a couple of other cool things at WCPDX:

• Hacker Room. There will be room set aside for people to work on core bugs and features slated for the 3.3 release. Hopefully PDX developers will hang out in here some of the time helping with the marathon.
• Welcome Free Software Projects! Normally WordCamps are 100% focused on WordPress, but in light of Software Freedom Day, the WC PDX organizers, in conjunction with the WordPress Foundation, would like to extend an invitation to all free software projects to participate in WordCamp Portland. There are a couple of rooms set aside that can be used for unconference sessions and/or hacker rooms for other projects. It would be great to have local representatives from a bunch of projects there — almost a micro version of OS Bridge or OSCON — to maximize the free software love and cross-pollinate ideas. Developers from other projects are also welcome in the WP hackathon room if they’d like to pitch in. Saturday will also feature the Software Freedom Day Happy Hour at the end of sessions. For more information or to get your project involved, contact the event organizers via the WordCamp Portland website or email support at wordcamp dot org.
• Usability Testing of 3.3 Alpha. As mentioned, we’re about to hit freeze, so we’ll be giving WordCamp Portland attendees a sneak peek at 3.3, seeing how they adjust to the new features, and getting feedback to help us with our last round of fixes before we get to Beta. There will be a signup sheet to participate.

So, if you live it the Portland/Seattle area and haven’t already bought a ticket to attend WordCamp Portland, hurry up, as it’s going to be a great celebration of Software Freedom Day and WordPress.

Is there a WordCamp coming up near you? Let’s find out!

Sep 15: WordCamp Cape Town Cape Town, South Africa

Sep 16-18: WordCamp Albuquerque Albuquerque, NM

Sep 17-18: WordCamp Portland Portland, OR

Sep 24: WordCamp Lisboa Lisboa, Portugal

Sep 24: WordCamp Germany Koln, Germany

Sep 25: WordCamp Sofia Sofia, Bulgaria

Oct 1: WordCamp Louisville Louisville, Kentucky

Oct 8-9: WordCamp Sevilla Seville, Spain

Input tax may however be claimed on individual purchases of capital expenditure goods with a VAT inclusive cost of £2,000 or more. Note that Input tax cannot be claimed on expenditure which relates to work performed on a capital item, for example the refurbishment or extension of premises.

A business which has newly registered for VAT may also claim VAT on stock and assets on hand at the time of registration subject to the normal rules for such claims.

If a business using the FRS is required to account for acquisition tax on the purchase of goods from a supplier elsewhere in the European Union (EU) this cannot be claimed as input tax unless it relates to the purchase of capital expenditure goods costing £2000 or more including the related VAT.

The main areas of risk within VAT input tax broadly fall into the following categories:

Record keeping

Good record keeping is essential otherwise your VAT Return may be prepared on the basis of inaccurate or incomplete information.

Where a business operates from more than one location it is also important that procedures are in place to ensure that all relevant accounting information needed for completing the return is reported to the person that prepares it in time for inclusion on the return.

Even when records are well kept, mistakes, duplications and omissions may occur, resulting in input tax being claimed too early, too late or in the incorrect amount. If a computer package is used to calculate VAT Return values, care should be taken to ensure that correct date ranges are set and that all relevant transactions within the period date range are included.

The requirement to add back input tax if the related expenditure remains unpaid six months after the date of the supply or the due date for payment (whichever is the later) is also often overlooked.

Private and non-business use

In many businesses personal and business finances can be closely linked and input tax may be claimed incorrectly on expenditure which is partly or wholly for private or non-business purposes.

A ‘Business purpose’ can be a complex area in relation to input tax.

When expenditure has a mixed business and private/non-business purpose the related VAT should generally be apportioned and only the business element claimed.

When a business purchases an asset, or services resulting in the construction of a new asset, which has mixed business and private use (but not mixed business and non-business use other than private use), the VAT may currently be claimed in full at the time of purchase but output tax must subsequently be declared to reflect private use.

The application of this “Lennartz” approach to new purchases of land, property, boats and aircraft will be restricted from 1 January 2011

When goods on which a business has claimed input tax in full (such as an item of stock or an office computer) are subsequently put to private or non-business use, there is a deemed supply for VAT purposes and output tax is normally due on the cost of the supply. The deemed supply is one of goods if the change of use is permanent and of services if temporary.

Partial exemption

When a business has expenditure which relates wholly or partly to existing or intended exempt supplies it becomes partly exempt and can only claim the related input tax if it is below the prescribed de minimis limit.

The partial exemption standard method determines how much input tax can be claimed unless an individual special method has been approved by HMRC. Many businesses do not recognise that they are partly exempt or carry out partial exemption calculations incorrectly, for example by using an unapproved special method or by omitting to carry out a longer period calculation.

If certain assets (computers or land/building works over specified values) have been purchased for use in the business, those assets are subject to adjustments under the Capital Goods Scheme (CGS) to reflect changes in the degree of taxable use. The need to consider CGS adjustments is often overlooked.

Business entertainment

Input tax is often claimed in error on the provision of business entertainment.

Business entertainment includes the provision of hospitality or entrance to theatres, concerts and sporting events and similar expenditure. Entertainment costs analysed to expense headings such as advertising or marketing are often overlooked and the related VAT claimed in error.

Cars and motoring expenses

Input tax errors frequently occur in relation to the purchase or lease of cars and to motoring expenses in general. Input tax cannot be claimed on the purchase of most cars while the recovery of VAT incurred in leasing a car which is available for private use should generally be restricted to 50 per cent.

If a business supplies fuel for cars, an output tax scale charge is generally due for each car unless records are maintained to demonstrate that fuel has only been provided for business journeys.

Input tax claimed in respect of business mileage payments must be restricted to the fuel element of the mileage rate and be supported by original fuel purchase invoices.

International transactions

There are distinct mechanisms for the payment and recovery of VAT on goods purchased from suppliers outside the EU (imports) and inside the EU (acquisitions).

If these are not applied correctly input tax error can result.

The purchase of many services from overseas suppliers requires the UK recipient to account for both output tax and input tax on the supply (the reverse charge), applying any appropriate restrictions to input tax recovery – this requirement is often overlooked or incorrectly performed.

]]> http://www.xebox.co.uk/tax/areas-of-risk-within-vat-input-tax/feed 0 http://www.xebox.co.uk/company/venture-capital-trusts http://www.xebox.co.uk/company/venture-capital-trusts#comments Fri, 02 Sep 2011 09:08:56 +0000 Xebox Article Repository http://articles.xebox.co.uk/?p=361 Read Full Article]]> Venture Capital Trusts

Venture Capital Trusts (VCTs) are complementary to the Enterprise Investment Scheme (EIS). Both are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies affected by the equity gap.

While the EIS requires an investment to be made directly into the shares of the company, VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment.

What is a VCT?

VCTs themselves are quoted companies which are required to hold at least 70% of their investments in shares or securities that they have subscribed for in qualifying unquoted companies. VCTs have a certain time period in which to meet the percentage test. If a VCT sells a holding and breaches the test, the VCT is allowed a six month period to

VCTs themselves are quoted companies which are required to hold at least 70% of their investments in shares or securities that they have subscribed for in qualifying unquoted companies. VCTs have a certain time period in which to meet the percentage test. If a VCT sells a holding and breaches the test, the VCT is allowed a six month period to reinvest cash received into another qualifying investment.

Other conditions are:

• they must distribute 85% of their income
• they must have a spread of investments with no single holding accounting for more than 15% of the value of total.

From 22 April 2009 the time limits concerning the employment of money invested are relaxed.

VCTs are exempt from tax on their capital gains and there is no relief for capital losses.

Reliefs available to investors

Income tax relief of 30% is currently available on subscriptions for VCT shares up to a limit per tax year of £200,000.

To qualify for income tax relief the shares must be held for a minimum of five years.

Investors are exempt from tax on any dividends received from a VCT although the credits are not repayable.

Capital gains arising on disposal of the shares are also exempt and, for this relief, there is no minimum period of ownership. There is no relief for any capital losses.

Qualifying companies

The definition of a qualifying company for VCT purposes is very similar to that applying for EIS. The company:

• must be unquoted, although shares on the Authorised Investment Market (AIM) are deemed unquoted for this purpose. They may become quoted later.
• must not deal in land, leased assets or financial, legal or accountancy services. In addition it must not be a trade that has a large capital aspect to it, such as property development, farming, hotels or nursing homes.
• VCT shares must be traded on an EU regulated market rather than being restricted to an official UK list
• the rules governing the amount of a VCT investments which must be held as equity, and the types of shares qualifying will change companies will be excluded from qualifying for VCT purposes where it would be regarded as an ‘enterprise in difficulty’ under the European Commission’s guidelines.

]]> http://www.xebox.co.uk/company/venture-capital-trusts/feed 0 http://www.xebox.co.uk/company/small-business-vat http://www.xebox.co.uk/company/small-business-vat#comments Fri, 02 Sep 2011 09:04:45 +0000 Xebox Article Repository http://articles.xebox.co.uk/?p=359 Read Full Article]]> Input VAT matters

Only registered traders can reclaim VAT on purchases providing:

1. the expense is incurred for business purposes and
2. there is a valid VAT invoice for the purchase.

Only VAT registered businesses can issue valid VAT invoices. VAT cannot be reclaimed on any goods or services purchased from a business that is not VAT registered. Proforma invoices should not be used as a basis for input tax recovery as this can accidentally lead to a duplicate VAT recovery claim.

Most types of supply on which VAT recovery is sought must be supported by a valid VAT invoice. This generally needs to be addressed to the trader claiming the input tax. A very limited list of supplies do not require a VAT invoice to be held to support a claim, providing the total expenditure for each taxable supply is £25 or less (VAT inclusive). The most practical examples of these are car park charges and certain toll charges.

The following common items however never attract input VAT and so no VAT is reclaimable – stamps, train, air and bus tickets, on street car parking meters and office grocery purchases like tea, coffee and milk!

Business purpose

This is often an area of contention between taxpayers and HMRC as VAT is not automatically recoverable simply because it has been incurred by a VAT registered person.

In assessing whether the use to which goods or services are put amounts to business use (for the purpose of establishing the right to deduct input tax), consideration must be given as to whether the expenditure relates directly to the function and operation of the business or merely provides an incidental benefit to it.

Private and non-business use

In many businesses, personal and business finances can be closely linked and input tax may be claimed incorrectly on expenditure which is partly or wholly for private or non-business purposes.

Typical examples of where claims are likely to be made but which do not satisfy the ‘purpose of the business’ test include:

1. expenditure related to domestic accommodation
2. pursuit of personal interests such as sporting and leisure orientated activities
3. expenditure for the personal benefit of company directors/proprietors and
4. expenditure in connection with non-business activities.

Where expenditure has a mixed business and private purpose, the related VAT should generally be apportioned and only the business element claimed. Special rules apply to recover input tax claimed on assets and stock (commonly referred to in VAT as goods) when goods initially intended for business use are then put to an alternative use.

Business entertainment

VAT is not reclaimable on many forms of business entertainment but VAT on employee entertainment is recoverable. The definition of business entertainment is broadly interpreted to mean hospitality of any kind which therefore includes the following example situations:

1. travel expenses incurred by non employees but reimbursed by the business, such as self employed workers and consultants
2. hospitality elements of trade shows and public relations events.

Business gifts

A VAT supply takes place whenever goods change hands, so in theory any goods given away result in an amount of VAT due. The rule on business gifts is that no output tax will be due, provided that the VAT exclusive cost of the gifts made does not exceed £50 within any 12 month period to the same person.

Where the limit is exceeded, output tax is due on the full amount. If a trader is giving away bought-in goods, HMRC will usually accept that he can disallow the tax when he buys the goods, which may be more convenient than having to pay output tax every time he gives one away.

1. Routine commercial transactions which might be affected include such things as:long service awards
2. Christmas gifts
3. prizes or incentives for sales staff.

Cars and motoring expenses

Input tax errors often occur in relation to the purchase or lease of cars and to motoring expenses in general. Some key issues are:

1. Input VAT is generally not recoverable on the purchase of a motor car because it is not usually exclusively for business use. This prohibition does not apply to commercial vehicles and vans, provided there is some business use.
2. Where a car is leased rather than purchased, 50% of the VAT on the leasing charge is not claimed for the same reason.
3. Where a business supplies fuel or mileage allowances for cars, adjustments need to be made to ensure that only the business element of VAT is recovered. There are a number of different methods which can be used, so do get in touch if this is relevant to you.

Output VAT issues

Bad debts

Selling on credit in the current economic climate may carry increased risk. Even where credit control procedures are strong there will inevitably be bad debts. As a supplier, output VAT must normally be accounted for when the sale is initially made, even if the debt is never paid, so there is a risk of being doubly out of pocket.

VAT regulations do not permit the issue of a credit note to cancel output tax simply because the customer will not pay! Instead, where a customer does not pay, a claim to recover the VAT on the sale as bad debt relief can be made six months after the due date for payment of the invoice.

Example

A trader supplies and invoices goods on 19 October 2010 for payment by 18 November 2010 (ie a normal 30 day credit period). The earliest opportunity for relief if the debt is not settled would be 18 May 2011. The relief would be included in the return into which this date fell, depending on the return cycle of the business.

The amount of the claim

The taxpayer can only claim relief for the output tax originally charged and paid over to HMRC, no matter whether the rate of VAT has subsequently changed. In the above example the standard VAT rate charged would have been 17.5% (not the current 20%) so a claim can be made for only 17.5%. The claim is entered as additional input VAT – treating the uncollected VAT as an additional business expense – rather than by reducing output VAT on sales.

The customer

A customer is automatically required to repay any input VAT claimed on a debt remaining unpaid six months after the date of the supply (or the date on which payment is due if later). Mistakes in this area are so common that visiting HMRC officers have developed a programme enabling them to review Sage accounting packages and to list purchase ledger balances over 6 months old for disallowance.

Preventing the problem?

Small businesses may be able to register under the Cash Accounting Scheme, which means you will only have to account for VAT when payment is actually received.

]]> http://www.xebox.co.uk/company/small-business-vat/feed 0 http://www.xebox.co.uk/vat/reclaiming-vat-on-purchases-made-before-registration-or-after-deregistration http://www.xebox.co.uk/vat/reclaiming-vat-on-purchases-made-before-registration-or-after-deregistration#comments Fri, 02 Sep 2011 08:59:22 +0000 Xebox Article Repository http://articles.xebox.co.uk/?p=357 Read Full Article]]> A business may reclaim VAT incurred on goods it has purchased no more than four years before the date of registration. The goods must, however, be for its taxable business purposes and remain on hand at the date of registration.

A business may also reclaim VAT incurred on services it has purchased for its taxable business purposes during the six months before VAT registration.

VAT cannot be claimed on goods and services purchased before registration which relate to exempt supplies or non-business activities.

Once a VAT registration has been cancelled there are limited circumstances in which input tax can still be claimed.

Input tax can be claimed on goods and services supplied to the business while it was registered for VAT. It can also be claimed on services (such as legal or accountancy advice) which relate solely to the activities of the business while it was VAT registered.

VAT cannot be claimed on goods purchased after deregistration.

• First-aid and medical treatment in the event of an accident at work
• Annual health screening and medicals, which also extend to cover for retiring employees
• VDU users may also receive eye tests and corrective treatment
• The cost of insurance and medical treatment when working outside the UK

Taxable

• Health insurance
• General medical treatments

Retiring employees

The cost of providing medical cover is not generally taxable as a benefit for an employee after retirement. However, a payment in connection with an unapproved retirement benefits scheme or a pension is, so some care is required in documenting the agreement.

WordPress-specific Sessions

This list is based on searching for “WordPress” in proposal titles, descriptions, and tags. Clicking the proposal title will take you to that page in the SXSW PanelPicker, where you can vote and comment. Names that are linked go to those people’s WordPress.org profiles.

Blog Wars: Movable Type vs. WordPress Revisited

Mark Jaquith – WordPress Lead Developer
Byrne Reese – Endevver
These days people tend to pit us against Drupal rather than Movable Type, but looking back at the early rivalry and learning from the positive and negative aspects of it would be cool as we position ourselves in competition with new platforms. I like seeing Mark present at conferences, he always prepares well and does a good job. Though I’m guessing these guys will be all friendly and collaborative, I might take a nostalgia hit and imagine them in a fistfight just to liven things up.

Designing WordPress

Jane Wells – WordPress User Experience Lead
Disclosure: This is me! Balancing the desire for truly open and participatory design processes against the often more efficient and consistent results of a more curated design method is something we’ve been working on for the past year or so in WordPress core. I’d use the design process for several recent core features (like the UI refresh and internal linking) to illustrate the issues we’ve faced and the results we’ve achieved.

Open Source Social Networking

John James Jacoby – BuddyPress Lead Developer
J-trip (as John James Jacoby is fondly known by many in the community) is the lead dev for BuddyPress and the new bbPress plugin. He’s proposing a panel discussion among reps from several open source social network platforms. It’s always cool hearing more about BuddyPress, but it would be even cooler to figure out how it fits in with and/or stacks up against other platforms.

Welcome to the Chaos – the Distributed Workplace

Nikolay Bachiyski – WordPress Core Developer, GlotPress Lead Developer
Lori McLeese – Automattic
This one isn’t about WordPress per se, though using WordPress as a communication tool is one of the topics and Automattic is obviously a WordPress-based business. The main reason I think people should vote for this session is because Nikolay, core committing developer for internationalization and lead developer of GlotPress, our translation tool, is an awesome speaker. He is hysterically funny when he presents. I would bet money this presentation will involve a bear.

Deploying WordPress: From Zero to Ninja

Grant Norwood – Michael & Susan Dell Foundation
When Mark Jaquith says a presentation on security and deployment is on his short list, I’m impressed. (He said it in the comments on the proposal.)

Beyond the Theme – Using WordPress as an API

David Tufts – kickpress.org
Obviously a hot topic in the community right now, seems like a no-brainer to choose.

Local Government Online: WordPress Beats Drupal

Jase Wilson – Luminopolis
There was a presentation at WordCamp San Francisco this month on moving a news site from Drupal to WordPress. More and more the question comes up of which tool is best for various situations and requirements. And obviously getting government to use more open source software would be a cost-saver in these tough economic times.

WordPress website built live in 45 minutes

Glenn Todd – Dvize Creative
Live walkthroughs are always fun, and help prove to the uninitiated how easy WordPress can be.

So: go vote on these session proposals and help spread the WordPress love. If you know of any WordPress-related proposals that didn’t come up in my search, let me know in a comment and I’ll update this post. Thanks, and maybe we’ll see you in Austin in March!