The practice has considerable experience of, and expertise in, all aspects of the following areas:
Where we are dealing with a business, more often than not the practice is dealing with the implications of income tax after the end of a client's accountancy period in the relevant tax year. So, the role can often be one of simply computing the data as a matter of fact.
Wherever possible the practice seeks to be involved in planning the coming year. Considering and scheduling capital purchases, assisting in employee levels and related remuneration packages in an attempt to plan performance.
When we are dealing with an individual rather than a business our opportunity to assist in planning will depend on the scope of the individual's activities, most of which are explained below.
Several of our private limited companies do not come under the Corporation Tax regime as they are Not For Profit, Management Companies holding the freehold interest and common area interest of a combination of members' flats, shops and offices. As such they are exempt.
Most, however, of our SME private limited companies are within the scope of Corporation Tax. Here the practice expects to be, and is usually, involved in the planning stage of any trading period with a partner acting as Company Secretary and, more often than not, the practice office acting as the Registered Office.
By being involved in the planning stage for a forthcoming year, it is possible, as with other unincorporated businesses, to help plan based on expected performance, investment in R & D, capital purchases, employment levels and remuneration packages, as well as training on a range of subjects.
This level of involvement provides added value to the mechanical process post year-end of producing Financial Statements (Accounts), preparing and filing the Corporation Tax Return CT600 with HMRC under the IXBRL regime.
Dividends and Dividend Warrents
Flowing mostly from the above sub-heading will be the consideration of dividends to be awarded. Whilst in some SMEs the directors and shareholders may be the same people, it is not exclusively so. Nonetheless, the key issue, in particular where it is the case is to decide, based on historic reserves and current profits, what the level of dividend ought to be.
To date, in many SMEs, the concept of a low salary and high dividend has been a practice; although recent moves by successive Chancellors has sought to make this concept less attractive.
In other SMEs the dividend is not contingent on a low salary. The business may support relatively high salaries, even into the higher tax rates. So it is then simply giving guidance on dividends without depleting reserves and current profits or impacting on cash flow.
It should be borne in mind that any dividend awarded will fall into the tax year the decision is taken. So planning whether the dividend will be awarded and paid before the current year has ended or rolled into the coming year is important to the recipient's overall tax burden.
It is essential to record by minute both interim and final dividends, as well as where and when they are waived and not strictly awarded in relation to shares held. Warrents ought to be produced to support each series of dividends. In the absence of a clear decision, recorded by minutes and supported by Warrents, there is the risk that HMRC will seek to have the dividend treated as additional salary.
We advise on all aspects of this process.
Capital Gains Tax (CGT)
This practice assists both individuals and businesses on how to plan for and legitimately minimise the impact of CGT where it is practical to do so. This includes timing disposals and taking advantage of so called rollover relief against future capital or qualifying purchases.
Inheritance Tax (IHT) and Probate
Whilst the practice can and does become involved in assisting with forward planning, often in conjunction with St. James's Place Wealth Management for whom we are a Formal Introducer, usually our IHT work is in conjunction with Probate where we regularly assist the beneficaries of the deceased in pulling together the information needed by the Probate Registry. This is in order for the Probate Registry to make a grant of administration of the estate of the deceased and vest in the personal representative of the deceased in the form of a Grant of Representation, the certificate which is stamped by the Court.
Ordinarily the appropriate HMRC form, where there is no need to pay IHT, is lodged with the application for a Grant of Representation to the Probate Registry.
Where IHT is payable, the appropriate form will be sent separately from the Probate Registry application to HMRC Trusts and Estates in Nottingham, who will confirm when the process is complete by the Probate Registry.
The practice assists in assembly and processing all aspects.
Child and Working Families Tax Credits
Using information supplied by the client, the practice assists in both completing the statutory forms and any supporting information.
These are allowances given for capital purchases where the item purchased clearly has a life of more than one trading year.
This will include items such as plant, machinery, equipment, office equipment, fixtures and fittings, motor vehicles of all types and motor cycles in some circumstances.
The businesses will undoubtedly depreciate the asset over a number of years, by one of several methods. For profit and tax purposes, however, HMRC disregard depreciation and make available different first and subsequent years capital allowances, which are used to reduce trading profits for tax purposes.