Let our clients tell you about us
Testimonials
The greatest compliment we receive is a client recommendation. Below are just a few of the kind words our clients have shared about working with Shipleys Tax.
The value of a close relationship
“We value the close working relationship we have with Shabeer and the specialist teams at Shipleys Tax and have found them very knowledgeable, friendly and quick to respond to our queries. Shabeer has attended several of our practice meetings and his advice regarding partnership succession issues has been invaluable. I would highly recommend Shipleys to other GP practices.”
Dr Khan, GP Surgery — Yorkshire
Dubai expat return — saved from a £1.2m UK tax bill
“After selling my business in Dubai I was planning to return to the UK the following year. A friend suggested I speak to Shipleys Tax before booking flights and it turned out to be the best decision I made. Shabeer quickly identified that I was about to walk into the temporary non-residence rules and face a UK tax bill in excess of £1 million on gains I had assumed were safely outside the UK net. With their guidance we restructured the timing of my return and my affairs completely legitimately — the tax saving was life changing. I cannot thank them enough.”
Imran — UK Entrepreneur, returning from Dubai
Fixed fee promise and no surprise bills
“One of the most frequent issues we had with our previous accountants was not being made aware, in advance, of the fees to be charged. Shipleys Tax were a breath of fresh air, always completely transparent — and no charges for any phone calls or meetings.”
FM Medical Practice — Manchester
CGT planning for dental practice sale
“Selling the dental practice I had built over 25 years was always going to be emotional, but I wasn’t prepared for the tax complexity. Abdul and the team at Shipleys Tax walked me through every option, explained the capital gains tax implications in plain English, and structured the sale in a way that saved me a significant amount of tax. Their attention to detail and proactive planning made all the difference — I only wish I had spoken to them sooner.”
Kevin — Derby, Dental Practice Owner
Property portfolio incorporation
“After Section 24 mortgage interest changes my buy-to-let portfolio had become a nightmare. I was paying tax on income I was never actually seeing. Shipleys Tax took the time to properly assess whether incorporation made sense for my specific situation — no hard sell, just honest advice. They modelled out ten years of projections, handled the entire restructuring including the SDLT planning, and now my portfolio is fit for the future. Genuine property tax specialists, not just accountants who dabble.”
Rashid — Leeds, Property Investor
Partner-led client service promise
“Accountants seem to promise the earth but don’t deliver do they? Well we found the opposite. Abdul made himself available on so many occasions and even on weekends when we had a really major panic with a sale. Really grateful to him for his advice and foresight. If we needed to talk, they listen. It really is that simple.”
Sabina — JL Healthcare
Inheritance tax mitigation and estate planning
“After losing my husband I was concerned about the inheritance tax exposure on our family estate. Shabeer took the time to properly understand our family situation before recommending anything. The advice I received on IHT mitigation was clear, practical and completely tailored to us — not an off-the-shelf solution. My children and grandchildren are now in a much better position and I have genuine peace of mind. I cannot recommend Shipleys highly enough.”
Louise — Leeds
Family Investment Company succession planning
“My family business had reached a point where I wanted to start bringing my children into ownership without giving up control or triggering a huge tax bill. Shipleys Tax designed and implemented a Family Investment Company structure that achieved everything I needed — I retain voting control, future growth passes to the next generation, and the inheritance tax position is now properly protected. Shabeer took the time to understand our family dynamics as well as the numbers, which was invaluable.”
James — Sheffield, Family Business Owner
GP practice incorporation
“Our GP partnership had been considering incorporation for years but no one could give us a straight answer on whether it was right for us. Shipleys Tax produced a detailed review of our specific circumstances, modelled out the tax savings over five years, and handled the entire incorporation process end to end. The transition was seamless and the tax savings have already exceeded their projections. A genuinely specialist firm that understands GPs.”
Gill — Manchester, GP Practice
HMRC tax investigation defence
“When HMRC opened an enquiry into my company, my existing accountants were completely out of their depth. A colleague recommended Shipleys Tax and within a week they had taken over the correspondence, identified the technical issues HMRC had got wrong, and put together a robust response. The case was closed within months with a fraction of the adjustment HMRC originally proposed. Their calm, experienced handling of what was a genuinely stressful time made all the difference. Having ex-HMRC Inspectors on their team was clearly a huge advantage.”
Dr Ahmed — Manchester, Private Practice Consultant
VAT reclaim for locum doctor agency
“We had been charging VAT on locum doctor supplies for years, assuming HMRC’s position was settled. When Shipleys Tax flagged the Isle of Wight tribunal decision to us, they didn’t just send a generic update — they actually reviewed our contracts, ran the numbers on partial exemption, and built a properly evidenced reclaim. The recovery was substantial and the process was completely painless on our side. The fact they understand both the VAT technical side and the commercial reality of running an agency made all the difference.”
Medical Staffing Agency — Yorkshire
Employee Ownership Trust exit
“I had built my company over 20 years and wanted an exit that looked after my staff rather than selling to a trade buyer who would strip it down. Shipleys Tax walked me through the Employee Ownership Trust route in detail — the pros, the cons, and honestly the complications too. They didn’t just sell me a product. When we went ahead they handled the entire transaction, including the HMRC clearance, and the result was exactly what I had hoped for. The team continues to thrive and my legacy is intact.”
David — Leeds, Business Founder
Going above and beyond
“I came to Shipleys Tax through a personal recommendation, at the time I was in a transitional period. I had already taken some steps towards self-employment, however I had no idea what I was doing and the information I received from others was inaccurate for what I needed. I needed someone to understand and help me resolve all the mess I was creating.
Abdul stepped in just at the right time. He dealt with all the paperwork, as well as giving me valuable advice on how to save tax, which was brilliant. I felt I was looked after, my needs taken care of without me feeling like being a burden.
I would recommend Shipleys to anyone that wants an experienced professional team. They are always eager to help and support your company and offer advice when needed, but above all they are always willing to go over and beyond expectation every time.”
Bella
Latest news & blogs…
HMRC’s New Dividend Non-Disclosure Campaign
HMRC HAVE ADVISED that they have commenced a “One to Many” letter campaign directed at shareholders who they suspect may need to declare income from dividends (and/or distributions).
Unfortunately, this typical “wide net” approach from HMRC means that many individuals, perhaps including vulnerable ones, will receive HMRC letters which could be misinterpreted as an accusation of tax avoidance. If you have receive a letter, don’t panic.
In today’s Shipleys Tax brief we look at what you need to know about HMRC’s One to Many letter campaign and how to respond effectively to avoid escalation.
What is HMRC’s One to Many Letter?
The HMRC has initiated a campaign targeting taxpayers who may not have declared income from distributions or dividends. Using data from company year-end accounts, which show significant drops in profit and loss account reserves, HMRC is pinpointing individuals who might have received a distribution or dividend but not declared it on their self assessment tax return.
HMRC… have commenced a “One to Many” letter campaign directed at shareholders who they suspect may need to declare income from dividends
The letter provides a 30-day window for recipients to either declare any undeclared income or to inform HMRC that all income has been accounted for. Ignoring the letter could lead to a compliance check and potential penalties.
Why You Might Have Received The Letter
HMRC’s usual method involves analysing publicly available company accounts to spot decreases in reserves and other factors, which could indicate dividend payments. However, this typically broad approach doesn’t account for dividends payments which may not be chargeable, e.g. they fall within personal and dividend allowances and are tax-free or issues relating to timing. Accordingly, if you’ve received such a letter, it may simply be part of this blanket strategy to ensure tax compliance but it’s best not to ignore it.
How to Respond to the Letter
If You Have Declared Everything:
- Contact HMRC using the details provided in the letter.
- Confirm that all necessary declarations have been made.
If You Need to Make a Declaration:
- Review your tax return and determine if there’s any undeclared dividend income.
- Visit the HMRC’s GOV.UK link on making a disclosure and use the specific online disclosure facility.
The Implications of Not Responding
Failing to respond to the HMRC’s letter can result in a compliance check and possibly higher penalties if undeclared income is discovered. It’s crucial to take action within the specified 30-day period stated in the letter. If they believe that they have no income to declare, the letter asks them to let HMRC know either by telephone or by email, again within 30 days. If they do not respond, the letter says that HMRC may open a compliance check and charge higher penalties.
Conclusion
The One to Many letter from HMRC is part of a proactive approach to tax compliance. If you’ve received one, take a moment to review your finances and speak to your adviser. With the right response, you can quickly resolve any issues or confirm your compliance, ensuring peace of mind and maintaining good standing with HMRC.
For further assistance or queries, please contact us by phone or email.
Please note that Shipleys Tax do not give free advice by email or telephone. The content of this article is for general guidance only and should not be considered as tax or professional advice. Always consult with a qualified professional before taking action.
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The ABC of Tax Planning with Alphabet Shares
THE USE OF so-called Alphabet shares has been a staple in the world of tax planning for some time. These types of shares generally allow for a flexible approach to how dividends are paid out to shareholders of a company, enabling a tailored distribution that can be adjusted according to the individual tax circumstances of the shareholders.
In today’s Shipleys Tax brief, we will cover the basic concept of Alphabet shares, their benefits and drawbacks, and the likely approach adopted by HMRC to their use.
What are Alphabet shares?
Alphabet shares are so named because they categorize shares into different classes, each denoted by a letter of the alphabet (e.g., Class A shares, Class B shares, etc.). This classification allows companies to assign different rights to each class, particularly concerning dividend payments. The flexibility in dividend allocation means that shareholders can be paid varying amounts, which can be adjusted to optimise their personal tax positions.
What are they used for?
Historically, Alphabet shares have been used as a popular method for family-run businesses to manage internal dynamics and tax liabilities. Families could allocate different dividend rights to members based on their involvement in the business or their financial needs, without altering the overall control or structure of the company.
They have also been employed in start-ups and growing businesses looking to reward key employees with a stake in the company without immediately giving away voting rights or an equal share in the distribution of profits. By issuing different classes of shares to employees, businesses could align staff interests with the company’s performance without giving away significant control.
Families could allocate different dividend rights to members based on their involvement in the business or their financial needs, without altering the overall control or structure of the company.
In corporate fundraising they provided a means to attract investment by offering variable dividend rights while retaining management control. This aspect is particularly attractive to small and medium-sized enterprises (SMEs) that are keen on securing capital but wary of outside influence over business decisions.
This flexibility makes Alphabet shares a valuable instrument for companies to structure their equity in a way that satisfied a multitude of shareholder requirements.
Tax Planning and Tailoring to Specific Needs
For certain commercial transactions, tax planning with Alphabet shares can be particularly useful in the right circumstances. Generally, you would find the following potential benefits:
– Minimise personal tax liability: shareholders can receive dividends up to the higher-rate tax threshold, effectively reducing their income tax liability.
– Utilise allowances and rates: shareholders can make full use of their dividend allowance and lower tax bands.
Minimise personal tax liability: shareholders can receive dividends up to the higher-rate tax threshold, effectively reducing their income tax liability.
– Planning for succession: Different classes can be allocated to future generations for long-term planning, without disrupting the current control of the company.
– Family estate planning: Alphabet shares can help in assigning income to family members in lower tax brackets where circumstances allow.
Not all a bed of roses…
While Alphabet shares offer flexibility as seen above, they come with a rack of potential drawbacks that can complicate their use.
– Administrative Burden: maintaining different classes of shares requires meticulous record-keeping and administrative oversight. Each class may have its own dividend schedules, voting rights, and restrictions, which must be managed and documented appropriately.
– Legal Challenges: alphabet shares can sometimes lead to legal challenges, especially if shareholders feel their rights are being impinged upon. Disputes may arise over the interpretation of rights attached to various classes, or if there are allegations of unfair treatment among shareholders.
– Corporate Governance: having multiple share classes can complicate corporate governance. The differing rights and privileges can lead to conflicts of interest and make decision-making processes more complex.
What sayeth the Taxman?
HMRC views Alphabet shares with a healthy degree of suspicion because they can be used to artificially manipulate income streams for tax advantages. One specific piece of anti-avoidance legislation (“the settlements legislation”) can apply if HMRC believes that Alphabet shares are being used to divert income to someone else and reduce tax liability.
In the context of family businesses, the use of Alphabet shares for estate planning must be done with caution. HMRC may challenge arrangements that appear to be designed to avoid inheritance tax, particularly if shares are rapidly transferred between family members in a way that seems to be timed to minimise tax liability for example.
HMRC views Alphabet shares with a healthy degree of suspicion because they can be used to artificially manipulate income streams for tax advantages.
As such, if not structured correctly, the arrangements can be easily challenged under these anti-avoidance regulations, leading to the tax advantages being negated, tax investigations and potential penalties.
Conclusion
Alphabet shares can be a useful tool for tax planning when used correctly. They allow for a high degree of flexibility and can be tailored to meet the specific needs of both the company and its shareholders. However, their use must be considered carefully, with a clear understanding of the potential pitfalls and the close scrutiny they attract from HMRC. As always, when considering the use of Alphabet shares, it is prudent to seek professional advice to ensure that they are implemented effectively.
For further assistance or queries, please call 0114 272 4984 or email info@shipleystax.com.
Please note that Shipleys Tax do not give free advice by email or telephone. The content of this article is for general guidance only and should not be considered as tax or professional advice. Always consult with a qualified professional before taking any action.
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Taxman Targets Online Sellers
WITH THE GROWING popularity of online selling platforms like TikTok and Etsy, HMRC has increased attention on the tax implications for those earning income from these sources.
In today’s Shipleys Tax note we briefly look at what’s happening and what you should do avoid falling foul of these new tax measures.
What’s the deal?
From the 1st of January 2024, digital marketplaces such as eBay, Vinted, Airbnb, and Etsy, have been mandated to gather and report details of seller transactions and income to HMRC. These platforms have until January 2025 to report sellers’ income from the previous year. This measure is part of a broader initiative to ensure tax compliance and to capture undeclared income from individuals who trade with the intention of making a profit but fail to report their earnings correctly.
The targeted platforms include:
- eBay
- Vinted
- Airbnb
- Etsy
- TikTok
From the 1st of January 2024, digital marketplaces such as eBay, Vinted, Airbnb, and Etsy, have been mandated to gather and report details of seller transactions and income to HMRC.
These platforms will need to collect and report the following information:
- Seller Details: Identification of the sellers.
- Transaction Details: Information on the transactions made by the sellers.
- Income Information: The income generated by the sellers through these platforms.
This measure is part of the UK’s implementation of the OECD rules to improve international cooperation and tax compliance.
While there’s been talk in the media of a new ‘side hustle’ tax, it’s important to clarify that no new taxes have been introduced. However, understanding the existing tax laws and how they apply to online selling is crucial.
What should you do?
As an online seller in the face of HMRC’s focus on side hustles, it’s important to take proactive steps to ensure you’re on the right side of tax laws. Below we have summarised the key issues you need to consider.
Are you Trading or Hobby-ing?
First and foremost, determine whether your online selling activities constitute a hobby or a trade. This is tricky at best and HMRC considers several factors to make this distinction. These include the frequency of transactions, profit motive, nature of the goods, and sale method. Regular sales of new or self-made items with the intent of profit are typically considered trading, whereas selling personal, used items occasionally is generally seen as a hobby. For online sellers, understanding these nuances is critical to accurately ascertain tax obligations.
Trading Allowance
One key aspect is the trading allowance, which allows individuals to earn up to £1,000 annually from self-employment, including online selling, without the need to declare this income to HMRC. This is particularly beneficial for small-scale traders or those starting out. However, it’s vital to note that once your income surpasses this threshold, the entire amount becomes reportable.
First and foremost, determine whether your online selling activities constitute a hobby or a trade. This is tricky at best and HMRC considers several factors to make this distinction
For those earning profits exceeding £1,000 from online selling, income tax and National Insurance contributions may be applicable. These profits must be reported via a self-assessment tax return, even if no tax is due, such as when profits fall below the personal allowance (currently £12,570. This rule also applies if you are using online selling as a secondary income source, with the £1,000 limit still relevant.
If you have already received income over the £1,000 allowance, or if you have received a ‘nudge’ letter from HMRC indicating you may have undeclared income, take immediate action. Do not ignore these letters; they are a prompt for you to review your tax situation.
Record it
Maintain good records of all your online selling activities, including receipts, listings, and correspondence. This documentation will be invaluable for completing your tax return accurately. If your online selling is a side hustle in addition to your main job, remember that different rules might apply, especially if your main income already exceeds your personal allowance.
Consider the use of digital tools and accounting software that can assist in tracking your earnings and expenses, making the process of reporting to HMRC more straightforward.
Information Sharing by Online Platforms
It’s also important to be aware that online selling platforms may share information with HMRC, including seller identities, transaction volumes, and values. This increased transparency aims to ensure tax compliance and makes accurate self-reporting by sellers more important than ever.
Maintain good records of all your online selling activities, including receipts, listings, and correspondence. This documentation will be invaluable for completing your tax return accurately.
Conclusion
If you’re unsure about your tax position or obligations, consult with a tax professional. A tax expert can provide clarity on your individual circumstances, help you understand your tax liabilities, and ensure you’re taking advantage of any allowable deductions or exemptions. This step is not just about compliance; it’s also about optimizing your tax situation.
For further assistance or queries, please call 0114 272 4984 or email info@shipleystax.com.
Please note that Shipleys Tax do not give free advice by email or telephone. The content of this article is for general guidance only and should not be considered as tax or professional advice. Always consult with a qualified professional before taking action.
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