I have been aproached by a client working as a self employed bod in the Middle East he has asked if I can do his books for him, he's a 'non resident'. Please could someone take the time to explain what this entails, I have heard of this and read about it but never put it into practise - I am a little worried I may be out of my depth but also feel that a new exciting challenge would be good.
If hes a non resident is he a British citizen and how does he pay his taxes? I am just curious on this one as to how it would work if hes abroad? I have never had one like this and would love to know.
Yes well I assuming he is a british citizen but paying his tax in the Middle East. I'm not entirely sure but think I may have to set up a phone conversation with him to find out. I have been very honest and explained that although I have worked for companies with branches in diffrent countries, I have never dealt with a self employed person working in another country since starting up on my own.
I really want to take it on as it sounds interesting and the experience would be excellent but in the same breath, don't want to take on something that I'm going to struggle with and also not provide him with a competent service to which he deserves.
This is a very specialised area and because in the UK the rules are not in statute it means what happens is not always "black & white".
I have a few clients who work abroad, think they are non-residents (you can be resident in more than one country), but aren't really. I would guess he is UK domiciled, but this can casue problems if he is remitting money to the UK, which may be then taxable.
It is unlikely that he is pay any tax in the middle east, especially if he is self-employed.
Although I do a lot of this type of work, I still have to consult a specialist I know from time to time (who I pay fees to), to make sure I get it right. Something I have found is I never try to explain to clients the options - because its too complicated, and it is getting more complicated each year as HMRC manage to stop income from overseas not being taxed here in the UK in one way or another.
I guess the question is - are your just doing "his books", or does this include his accountancy & tax work?
If its just doing "his books" then it makes no difference, there is nothing to stop you from doing it. If you are also doing his final accounts & tax work, that may be a different matter.
I think I will let this one go, I can't help but feel I will be completely out of my depth and do not believe I can offer the service that he requires. He informed me today that himself and the other 10,000 UK people that work in his field call people like us ''keeping Mr Taxman at bay''. Apparently, one of the perks of the job is not paying any tax..... I must say alarm bells started to ring!
All of this would be far too advanced for what I am qualified to do, I am very interested to learn all about it but would not practice it until I have some training and feel completely confident to do so.
I guess the question is - are your just doing "his books", or does this include his accountancy & tax work?
If its just doing "his books" then it makes no difference, there is nothing to stop you from doing it. If you are also doing his final accounts & tax work, that may be a different matter.
Hello again,
Just reading through our recent messages and did ponder on the point you made here.
I actually do ''the books'' for a number of clients and file their SA every year as part of my service to them. Would you say that I shouldn't be offering this as a service?
you are MAAT. Doing the books and filing self assessment is all part of the territory. Some things may come along and throw you a wobbly but you will work past all of them.
Frauke is right in that this is a complex area but it's not so complex to be insurmountable.
The subject is too large for me to give explanations here but for info its covered in some depth in the Kaplan ACCA paper P6 advanced taxation book which whilst it's dark side tax I would recomend it as a read to everyone. (I've now got it down to 32 days a year cover to cover. First year was nearer 3 months!).
The key to cases such as this is two fold. Country of residence and country of domicile.
As a starter course try this handy starter guide : http://www.accaglobal.com/content/dam/acca/global/PDF-students/2012s/sa_jan13_p6uk_travellers.pdf
says quite a lot in 9 pages and best of all its free.
have fun with that and never despaire, we're always here to help even if we don't always answer all of the posts that we should as fast as we should.
kindest regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
No I am not saying you should not be offering SA services. Thats the trouble with writing, rather than speaking, it can cause misunderstandings.
I meant that perhaps you should not be thinking about doing SA for non-resident tax payers. Of course there would be nothing to stop you from doing his book-keeping as you are a qualified to do this type of work, no matter the type of business.
I know a lot about the taxation of trusts, but I still am happy not to accept this type of SA work and leave it to people who specialise in it. It is very interesting, but I think it would dilute the quality of the work I currently do if I didn't refuse to do this type of work.
I only started out on my own just under 2 years ago and have absolutely loved every second. I just get a little worried sometimes that I might be taking on work that i'm not actually really supposed to be doing, but you have just cleared that one up for me - thank you! I have two small children who are not at school yet so this fits in perfectly with them. Next year my youngest will be starting pre-school so I would really like to look forward into studying for my ACCA. Would you suggest Kaplan as a good route to follow? In AAT we worked a lot with BPP and some Osbourne. It will be a lot different this time as I will be studying from home, I studied my AAT at college - I understand that ACCA is alot more complicated and a few people on my course who went on to study ACCA actually dropped out, so you could say I am a little nervous.
I used to swear by BPP books until 2007 when they changed their formatting which really doesn't work for me as I tend to learn best by doing something which is the Kaplan approach.
For the first three papers I don't feel that it matters which you go with but you will have exemption from those anyway.
Of the remainder I would say that F4, F8, P1 and P7 being pure memory and appication rather than calculation then BPP is just as good as Kaplan.
For all other papers I would choose Kaplan over BPP.
There are a couple of other books that you will need during your studies.
- Management and Cost accounting by Drury
- Exploring Corporate Strategy by Johnson, Scholes and Whittington.
Also don't forget the Opentuition lectures. The one's given by Mike are brilliant and cn turn quite amusing.
On the dropping out front I came accross something similar. I started out by doing the OU course b680 (certificate in accounting). Many of the people then went on to ACCA but I'm the last of them, the others mostly falling at the first hurdle (F4, then 2.2). I believe that the reasoning for that is that they took the exemptions from the first threee papers where I sat them even though I had exemptions which got me into the ACCA way of thinking before things start to get complicated at F4 (the law paper).
Remember that within each banding you can take the papers in anf order so you could do financial rporting before law if you are happiest that way around. I would advise that you take Audit (f8) and Financial reporting (F7) at the same time as those two are very closely linked papers.
Good luck with it and if you need any advice at all just post on here and the likes of myself or Nick are generally around to offer our words of wit and dubious wisdom,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I know a lot about the taxation of trusts, but I still am happy not to accept this type of SA work and leave it to people who specialise in it.
Hi Frauke,
funny you should mention that. In the Kaplan text for paper P6 after doing lots of complex things with it seems absolutely everything else when it gets to tax on trusts it's just a one liner that states that due to the complexity of this area it is beyond the scope of advanced taxation!
When even the ACCA give up on it, like yourself I'm quite happy to leave that stuff to the CTA's out there.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
The IAB Level 4 Diploma in Personal & Business tax includes Inheritance tax & trusts, which I why I know a lot about it. The ACCA include VAT instead, with their equivilent qualification. The IAB include VAT within their lower level Bookkeeping courses, so they felt there was no need to include it with this qualification. So Inheritance tax & trusts was included in detail to ensure the qualification covered sufficent subjects as required at this level.
Its nice to know as a subject, even if its to know its not something I want to do in my normal work. I like to discuss it with clients, but happy to let others handle it as part of thier work load........
Trusts are covered under inheritance tax at P6. What I was saying was that the actual taxation of the trustees and the more complex areas of taxation of the trust itself is deemed too complex rather than the effect of using a trust on IHT.
From an IHT perspective things such as the effect on the lifetime allowance as to whether or not it is the trustee's who pay the tax on CLTs are covered in quite some depth but I would tend to bundle that under IHT rather than the taxation of trusts per se.
Also, on the VAT statement. VAT was covered at the lower level but only really for single companies plus the administrative aspects of VAT. At P6 its more complex matters such as group registration (not that that's particularly complex) and overseas aspects of VAT.
Like yourself I'm a bit of a knowledge sponge even of things that I know that it is very unlikely that I will ever need to use... Which does sometimes seem a bit of a waste but at least it gives me a grounding to pop on here for chats with yourself.
talk later,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
