7 Halloween ghouls and the tax issues that haunt them

For our accountants, the real spooky season comes in January when the tax deadline becomes eerily imminent, but if you haven’t managed to get your self-assessment tax return documents into us by the end of October then beware of transforming into one of these Halloween ghouls! The best way to prevent that from happening is to make sure we’ve got all your paperwork so that we can get your tax return completed before it’s too late and you’re faced with a horrible haunting from HMRC. It’s not just the scary self-assessment that sends chills down peoples’ spines though, so we also give advice on how to ward off other terrible tax issues before they turn into a monstrous nightmare. Continue to read below to see if you can relate to any of these 7 Halloween ghouls and the scary tax situations that haunt them:

The zombie taxpayer: Don’t forget that zombies were once just regular people like you or me. Unfortunately, it’s easier to turn into a zombie taxpayer than you might think. You don’t need to be bitten, but merely infected by the virus. What’s more the infection process takes a hold of you slowly and you may not realise anything is wrong until you develop an insatiable appetite for brains. Ok, so that’s not going to happen, but zombies are known for their slow and sluggish movements. They struggle to muster a sense of urgency, and this is their downfall when it comes to completing their self-assessment tax return on time. Whilst HMRC won’t be putting bullets through your brain, they will be putting penalties through your post box. The best way to avoid becoming a zombie taxpayer is to get your self-assessment documents in to your accountant as soon as possible!

The multi-resident vampire: We all know the infamous story of Dracula, but whilst most people were paying attention to the blood sucking, our accountants were looking into his capital gains tax and tax residency! In his defence, he did hire a solicitor to help him conclude his real estate transaction and there was probably no capital gains tax on his castle in Transylvania if it was his main residence, but did he declare any of his income that he brought over to the UK alongside the 50 cargo boxes of earth from his castle? Vampires often get caught up in complicated tax residency and domicile status rules due to their eternal lives and relocating from country to country to avoid the local tax authorities. You may find that you have similar issues to Dracula (bar the unquenchable thirst for blood) if you have recently relocated, bought or sold property abroad, or still receive income from another country. Be sure to speak to your accountant to get it sorted through your personal tax return.

Witchcraft practitioners: Did you know that in Romania, witchcraft is a taxable profession at 16% income tax? That’s not a Halloween horror story! Whilst we don’t have that tax rule in the UK, HMRC are always on the lookout for jiggery pokery when it comes to your tax return. Not only that, but some very common and innocent professions often feel their industry is targeted and that there’s a witch hunt out to get them, such as self-employed contractors. We would advise witches (and everyone else) to keep a hold of their receipts and invoices to prove that no supernatural accounting trickery has been used to evade their taxes, as well as invest in tax investigation fee protection should HMRC decide to put you on trial.

Mummified remains: Ancient mummies are known to amass a vast collection of heirlooms, artefacts, and precious treasures in their secretive tombs. However, they often neglect tax strategies in their lifetime which will help minimise their tax burden when it comes to transferring them to new custodians. Luckily for them, if they’re gifting their relics to a charitable organisation such as a museum then they’ll escape any capital gains tax due. If you find yourself in a similar position with assets you’d like to dispose of, and you’re not intending to donate to a charitable organisation, we would recommend transferring assets over to a spouse or civil partner where possible to make use of both parties’ capital gains tax allowance.

The mad scientist: Dr Victor Frankenstein is probably one of the most famous mad scientists of all time. He was known for creating a horrific monster that was grotesque yet highly intelligent. Although it’s hard to tell whether his creation could be considered as a success or a failure, what is clear is that he failed to claim for R&D tax credits! The lesson to be learned is that no matter whether you manage to achieve what you set out to accomplish, so long as you are trying to make a technical advancement in your field, you’re likely to be eligible to claim. Make sure you’re not doomed to only being able to claim R&D tax credits by following the state aid rules.

Goblin hoarders: Goblins are notorious for hoarding wealth, but ironically, they struggle to minimise their tax liability leading to a hefty amount at risk of slipping away. Our accountants have seen how their uncontrollable greed leads them to excessively stockpiling cash into pension pots, ghoulish-ly (foolishly) believing that it will stay safely hidden from HMRC. Unfortunately for them, their obsession with stashing the cash distracts them from the details and rules. Whilst it’s true that in most cases, saving money into a pension fund is an efficient way to minimise your tax liability, you need to ensure you do not go over the annual allowance, or any amount in excess will be added back as part of your taxable income and subject to income tax. If you’re an additional rate taxpayer, that could be a whopping 45%!

The werewolf trader: Werewolves are known to transform along with the luna cycle and this inclination can influence their investment decisions. Werewolf traders may regularly exchange their cryptocurrency assets for new currencies as well as invest in mining. Although not an illegitimate profession by any means, their curse is that they forget to declare their capital gains. Trading assets is still seen as a disposal in the eyes of HMRC. So, if similar to the werewolf trader, you’ve made a swap from one set of shares in a business for another, this will be subject to capital gains tax where a gain arises. It can be disorientating when you finally change back to human form, but don’t forget that you’re still required to declare your disposal regardless of whether you make a gain if you’re already required to complete a self-assessment tax return.

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