Practical and intelligent tax saving solutions for you and your business
Whether personal or business tax affects our everyday life and it never stands still.
In the current climate clients expect their advisers to help them make more savings each year through careful tax planning.
Shipleys have a team of knowledgeable tax and accountancy experts who constantly look at ways to add value and provide practical effective solutions whether it’s an owner-managed business or a multi-national group. Our clients know that we genuinely value their custom and ensure that they are always more than satisfied with our work and costs.
- Structuring your Business
- Property Tax
- Capital Allowances
- Inheritance Tax Planning
- Asset Protection and Preservation
- Non UK Resident Domicile & Property Holding Structures
- Tax & VAT Investigations
- VAT Planning
Structuring your Business
Did you realise that the way your business is structured could be affecting how much tax you’re paying?
Do you get the feeling that you could be paying too much tax?
Operating through the appropriate legal entity is vital but can often be neglected if a business has grown organically.
We can provide advice on the most suitable business structure – sole trader, partnership, company, limited liability partnership.
We can help you to structure your business in the most tax efficient way, saving you tax and improving the efficiency of the business.
We also have the expertise to advise on all areas of corporate structuring issues such as:
• Reorganisations and mergers
• Company Purchase of Own Shares
• Reductions in share capital
• Planning with share rights
• Group tax planning
The taxation issues can be complex, but with our expertise we can guide you through, helping you meet your commercial objectives in a tax efficient way.
One of the most common questions we hear is “how do I get my profits out of the company paying as little tax as possible?”
We work with our clients to consider the tax picture as a whole – getting an understanding of both personal and corporate, short term and long term goals.
Because we take into account the whole picture, we can ensure that when it comes to tax, you won’t miss a trick and that all avenues of tax relief are explored.
We know that working with us, through careful planning, you can extract tax from the business without facing a hefty tax bill.
We can also help you to calculate the taxation impact of extraction policies by dividend or salary/bonus; provide advice in relation to pension contributions and also have particular expertise in tax planning using different classes of share capital.
If you like the sound of working with people who have your goals and aspirations at the heart contact us now.
Shipleys are experts when it comes to property tax matters, advising you on how to arrange your property transaction in the most tax efficient manner. With effective strategies, we can significantly reduce the exposure on property transactions.
Speak to us about:
- Services for developers
- Services for investors
- Professionals working in the property sector
- Services for property agents
When you buy, lease or improve a commercial property, HMRC allows you to offset some of that expenditure for tax purposes. Your advisors have probably claimed for the more obvious features, but as capital allowance specialists we dig much deeper to make significant additional claims on your behalf.
Typically, we identify Capital Allowances of between 10% and 30% of the commercial property purchase price.
We use specialist surveyors with tax expertise, to visit your property to uncover this extra layer of allowable items. This service is relevant for two types of clients:
1. Commercial property owners and investors who can retrospectively claim for unused allowances, (going back many years in some cases), for alterations, extensions and upgrades to their buildings.
2. Buyers and sellers of commercial property who need to agree a value for plant and machinery as part of the purchase process.
Inheritance Tax Planning
IHT has been commonly described as a ‘voluntary tax’ and with good reason. It can usually be reduced with proper and often simple planning, ranging from lifetime planning, will planning or even after death variation or disclaimer can mitigate tax.
IHT planning will assist in preserving family wealth and will reduce tax bills for your heirs, With careful lifetime planning, you can even reduce your exposure to IHT whilst retaining the asset and income.
Asset Protection and Preservation
Asset Protection Essential for protecting and preserving company and family assets from third party claims, divorce, bankruptcy, spendthrift spouses, and youthful improvidence. Asset Protection has a number of forms, including:
Company Asset Protection – The valuable assets in a company, namely property, cash and brand, may in certain circumstances be protected by a restructuring exercise, using group structures, all without triggering taxes on the restructure whilst affording protection.
Family Asset/Wealth Protection – Family assets/wealth can be protected and preserved from claims, bankruptcy and divorce. Typically assets are placed into a properly constituted trust within certain limits with the result that the preservation and protection of the family assets is achieved without adverse tax consequences.
Non UK Resident Domicile & Property Holding Structures
This topic always seems to raise the most debate about the fairness of the UK tax system. And has been squeezed over the years, however if you are in the tax privileged position to be either non UK Dom or non UK Resident the tax benefits are still extra ordinarily valuable in the right circumstances, to say the least. However, this valuable status is generally under used (except by the super rich).
A key area of tax planning is on property holding structures for non UK resident and non UK domiciles individuals as properly structured solutions achieve significant tax savings.
Tax & VAT Investigations
Tax investigations by HMRC often come as an unpleasant shock to individuals or businesses and can be very stressful. Those under enquiry often feel targeted and victimised.
At Shipleys we are non-judgmental, vigorous in defending our clients and aim to resolve the investigation in the most efficient manner possible without compromising the quality of our work.
We have the experience and know how to handle local district cases to large tax fraud cases both in direct and indirect (VAT) tax.
Our VAT experts trained with HM Revenue & Customs (HMRC) and have a complete understanding not only of the legislation but of HMRC’s policies and procedures.
Our work extends to every aspect of VAT but some of the services we are most often asked to provide involve negotiation with HMRC on liability issues and agreeing partial exemption methods, providing VAT planning ideas for clients to improve cash flow, assisting clients through the maze of VAT property law, and advising them on EU and other international transactions.
Some of the areas we cover most include:
• VAT and property
• VAT and not-for-profit organisations
• VAT and offshore companies
Contact us now for a free no obligation consultation with a tax consultant.
Latest news & blogs…
IN THE CURRENT economic climate, companies are sadly going bust. A frequently asked but often misunderstood so called tax planning idea doing the rounds involves paying £30K “tax-free” whilst the company undergoes voluntary liquidation.
At Shipeys Tax we consider the viability of this in the tax note below. Needless to say, never take tax advice from someone around a dinner table (unless of course he/she is an experienced tax adviser!).
Due to the unfortunate impact of COVID-19 and lack of demand, a sole director and shareholder of an hitherto successful company personal company has decided to put the company into voluntary liquidation. As part of the process the director decides to pay herself a redundancy or termination payment from the limited company as she has heard that such pay-outs are tax-free.
What is a redundancy/termination payment?
Broadly, this refers any payment to an employee for compensation for loss of employment that is not contractual, non-customary, related earnings or to the notice period. If it qualifies then the payment can potentially benefit from a statutory £30,000 exemption to tax and NIC. Nice.
Can a sole director shareholder receive a tax-free redundancy or termination payment from the company?
Generally speaking, in some circumstances it is possible for a director to receive termination payments that fall within the exemption. However, the old adage that the position should be reviewed on a case by case basis applies. Whilst the tax treatment of qualifying termination payments are quite well established, those involving sole director shareholders are somewhat trickier to navigate.
To employ or not to employ?
Firstly, it is important to identify whether the sole director is employed by the company. To receive a tax-free statutory redundancy payment, a worker must have an employment contract with their employer
Evidence that could point the employment status includes the existence of an employment contract, payment of salary, duties etc which point towards employment.
The payment conundrum
Assuming the sole director is clearly employed by the company, it is then necessary to determine to what extent the payments relate to the termination of the client’s employment rather than their position as shareholder. Was the payment in actual fact compensation for loss of office or was it an extraction of “profits”, i.e. a dividend distribution? HMRC will obviously argue the latter, especially for one-man band companies where no other employees have been made redundant and paid termination payments. In other cases, payments to those close to retirement can be classed as part of the package an amount that arises from what is known as an employer-financed retirement benefits scheme (EFRB). Essentially, this is an unregistered pension scheme. If there is a payment that HMRC deems to be an EFRB, it will be fully taxable.
Secondly, even if a sole director satisfies the first condition and has clear evidence of employment, there is another issue to consider: as the owner and director of the business making themselves redundant, they are effectively making the decision to cease trading and leave, and so fail the condition that they cannot resign or leave of their own volition.
An employee has to be made redundant by their “employer” – they have no choice in whether their role continues to exist.
In the case of a sole director/owner employee who is also a company director controlling the company, choosing to make themselves redundant is the same as choosing to end the employment. This will most likely nullify the redundancy argument. In addition, HMRC would also challenge a sole director company making a corporation tax deduction for their own redundancy in the company accounts, the nature of the payment not being deemed to be for the benefit of the trade.
However, it is possible some termination payments may fall within the £30,000 exemption, provided they are not subject to tax under any other part of the legislation such as earning or benefits. The circumstances in which can occur are very few and far between and you would need specialist tax advice to help you navigate the tax traps. This is a fairly complex area as evidenced above and the facts of any case will need to be reviewed to determine whether any termination payments for the director would fall within the £30,000 exemption, but with the right set of circumstances some relief may be available.
At Shipleys Tax we have a team of experts who can advise on the above and whether a redundancy payment can be tax-free. Contact us on 0114 272 4984 or email email@example.com.
IF THERE’S ONE thing the tax man loves more than collecting tax, it’s dishing out penalties. But where you have forgotten to file your tax return or have made a mistake giving rise to a HMRC penalty, and you or a family member were ill with coronavirus, you may have a get out clause via the ‘reasonable excuse’ route.
In today’s note we explain what reasonable excuses are and how coronavirus might fall into this category.
Generally, HMRC may allow an appeal against a penalty if the taxpayer has a ‘reasonable excuse’ for failing to comply with an obligation, i.e. you filed a return late or paid your tax late.
A ‘reasonable excuse’ is something that prevented a taxpayer from meeting a tax obligation despite the fact that they took reasonable care. HMRC usually take a hard line as regards what they constitute as a ‘reasonable excuse’; providing the following examples of ‘acceptable’ reasonable excuses:
- the taxpayer’s partner or another close relative died shortly before the tax return or payment deadline;
- an unexpected stay in hospital that prevented the taxpayer from dealing with their tax affairs;
- a life-threatening illness;
- the failure of a computer or software just before or while the taxpayer was preparing their tax return;
- service issues with HMRC;
- a fire, flood or theft which prevented the completion of a tax return;
- postal delays which could not have been predicted; or
- delays relating to a disability.
By contrast, HMRC cite the following example of excuses that they will not accept as a valid reason for failing to meet a tax obligation:
- relying on someone else to send the return and they failed to send it;
- a cheque or payment bounced due to insufficient funds;
- the taxpayer found HMRC’s online system too complicated;
- the taxpayer did not receive a reminder from HMRC; or
- the taxpayer made a mistake on their return.
Impact of coronavirus
HMRC have confirmed that they will consider coronavirus as a reasonable excuse. Where claiming this, the taxpayer should explain in their appeal how they were affected by coronavirus. As a rule of thumb, HMRC are more likely to accept it as a reasonable excuse where the virus led to one of the circumstances listed above as ‘acceptable reasonable excuses’. Thus, the contention that the taxpayer had a reasonable excuse for failing to meet a tax obligation would be strong if a partner or close relative (such as a parent) died of Coronavirus around the tax deadline, the taxpayer was seriously ill with the virus or was in hospital unexpectedly.
Where the taxpayer appeals on the grounds that they had a reasonable excuse for failing to file a return or pay a tax bill, they should file the return or pay the bill as soon as they are able after the reason for the reasonable excuse has been resolved.
If you have been hit with HMRC penalties or an HMRC enquiry, call our Specialist Tax Investigation Team on 0114 272 4984.
MEASURES REQUIRING businesses to submit and record VAT returns via digital means is to be extended to all companies from April 2022, the government announced this week.
The requirement is part of the government’s much vaunted Making Tax Digital (MTD) strategy which aims to see the end of the annual tax return and transform the tax system. The government say these reforms are “intended to make it easier to pay tax due, enhance resilience, effectiveness, and support for taxpayers”. Shipleys Tax Advisers, like most industry tax experts, are somewhat guarded about these aims.
Currently from April 2019, most VAT-registered taxpayers with a turnover above the VAT threshold have needed to operate Making Tax Digital for their VAT returns, keeping their records digitally and updating HMRC through secure software.
In their announcement, the government set out the road map for the programme.
From April 2022, MTD will first be extended to all VAT registered businesses with turnover below the VAT threshold to “ensure every VAT-registered business takes the step to move to a digital tax service”.
Then from April 2023, it will be extended apply to businesses and landlords who file self-assessment tax returns for business or property income over £10,000 annually.
The government says this timetable will allow businesses, landlords and agents time to plan, while HMRC will expand its pilot service from April 2021 to allow businesses and landlords to test the full end-to-end service before the requirement to join.
What does this mean for you?
At Shipleys Tax Advisers we take most government announcements with a heavy pinch of salt. The current government has an unenviable track record of making far reaching changes with little thought and trying to do too much too quickly, it is usually the taxpayer and/or their agent/accountant who has to deal with the inevitable fall out (e.g. see the debacle around the introduction of RTI for PAYE, and more recently, the much-maligned original MTD roll-out).
So more admin, more red tape and more people being trapped by the overly complicated UK tax system. Is it all bad news then?
Surprisingly, not quite. At Shipleys Tax Advisers we have noted that, if implemented properly, there are valuable advantages to be gained with the right MTD process.
Efficiency – there is growing evidence that using software for VAT and record keeping does free up your time to focus on other aspects of your business.
Flexibility – not all taxpayers will want to be forced online. Those who run very small simple businesses the cost of digitalisation can be off-putting, however the system can be modified to accomodate a non-online solution.
Tax planning opportunities – for the serious business owner, MTD expanding should give agents room for tax planning. At Shipleys Tax Advisers, having an accountant or tax professional review your business performance regularly means avoiding unexpected tax bills and not miss tax planning opportunities.
Much like the current pandemic, MTD will not go away anytime soon and as such taxpayers and businesses alike will need to get up to speed quickly.
Those company owners and sole traders currently behind the digital curve will need make plans to implement MTD especially if their bookkeeping is offline as well.
If you need help with MTD implementation or would like to discuss options, please call 0114 272 4984 or email us at firstname.lastname@example.org.