Practical and intelligent tax saving solutions for you and your business

Tax Solutions

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.

Sections


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
• De-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.


Property Tax

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


Capital Allowances

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.


VAT Planning

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…

COVID-19: Can you furlough yourself if you are a sole director?

Tax Solutions Shipleys Tax Advisors

*****UPDATED 6 APRIL 2020****

As anticipated, HMRC guidance has been updated to confirm that Directors can be furloughed provided they do not do any work for, or generate any revenue for the organisation.

However, whilst the guidance says that they can still fulfil their statutory duties, it does not go into any detail about what HMRC will regard as a statutory duty for this purpose.

We anticipate that HMRC will expect to see a record of a formal board resolution having been made confirming the decision to furlough specific directors if your organisation was ever questioned. Minutes from any relevant board meeting should therefore be made and retained.

Previously the Cabinet Office confirmed that the Coronavirus Job Retention Scheme (CJRS) will also apply to off-payroll contractors working for public sector organisations, including those working through a personal service company (PSC).

This means that the CJRS can now be offered to those individuals:

  • working through a personal service company,
  • for a private organisation or public sector client,
  • where the worker is unable to carry on working due to the COVID-19 pandemic.

******************

The Coronavirus Job Retention Scheme has brought much relief for many businesses and employees. For others, like one man band companies it has brought much uncertainty. Initially the guidance was unclear as to whether a sole director could claim furlough, however the Government has confirmed “furlough” will be available to sole director companies (under certain conditions) and has published updated guidance.

What is the Coronavirus Job Retention Scheme?

The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. Under the scheme Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can use this scheme anytime during this period.

The Coronavirus Job Retention Scheme has brought much relief for many businesses and employees. For others, like one man band companies, it has brought much uncertainty.

The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020. For further details please see:

Website:  https://www.shipleystax.com/coronavirus-job-retention-scheme-new-guidance-on-how-to-claim/

Facebook: https://www.facebook.com/shipleystaxadvisers/

Twitter: https://twitter.com/shipleystaxltd

HMRC guidance is constantly changing, so we recommend you monitor the links above regularly. We also recommend seeking professional advice before taking any action.

The general rule is that once the employee is on furlough they will not be able to work but they can undertake training or volunteer subject to public health guidance, as long as they’re not:

·         making money for their company/employer

·         providing services to their company/employer

The issue with sole directors

Most sole directors are paid as “office holders” (at less than the minimum wage) and not a Director, topped up by dividends up to the 40% rate band. If they were an employee then they would need to write to themselves to put themselves on furlough. This would leave the company without anyone working in it and give rise to wider company law issues. For example, does this qualify as a business? Wouldn’t a director be trying to generate new work or get new contracts, deal with invoices/receipts etc? Or make plans for when the crisis is over?

Company Directors

HMRC has eased some confusion and confirmed salaried company directors are eligible to be furloughed and receive support through the job retention scheme as office holders. Although company directors owe duties to their company which are set out in the Companies Act 2006, they furlough themselves provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

Furloughed directors as employees on can only claim on their PAYE element, even if they are the sole employee. Basic conditions are as follows:

  • they can qualify as normal under CJRS
  • they must not provide any services that is income generating
  • can continue to perform their statutory obligations as directors/office holders e.g. official legal filings, Company secretarial etc
  • only the PAYE element can be furloughed – not dividends

If they were an employee then they would need to write to themselves to put themselves on furlough. This would leave the company without anyone working in it and give rise to wider company law issues.

How can furlough for directors be achieved?

HMRC state that where a company (acting via its “board of directors”) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, it can decide that such directors should be furloughed. The decision should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned. For sole directors, this effectively means

  •  record of a formal board resolution having been made confirming the decision to furlough specific directors
  • minutes from any relevant board meeting should therefore be made and retained.
  • email to your accountant notifying of the same.

What to do now?

The new HMRC portal to make an application for the Job Retention Scheme will not be available until mid to late April. Our advice would be to wait until then and look to claim furlough once the rules are fully clarified as you are able to backdate the furlough notice.

If you need help with the tax implications of the above please call us on 0114 272 4984 or email info@shipleystax.com.

Coronavirus Job Retention Scheme – Further guidance on how to claim

Tax Solutions Shipleys Tax Advisors

HMRC has today (15 April) published updated guidance for employers on how to claim for wage costs the on the coronavirus (COVID-19) Job Retention Scheme. We will be assisting employers on how to claim and have summarised these below.

The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. It is expected the scheme to be up and running by the end of April. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).

Employers can use a portal to claim for 80% of furloughed employees’ (employees on a leave of absence – email us for our detailed guide on this) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can use this scheme anytime during this period.

The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 19 March 2020 (the initial cut-off was 28 February 2020).

The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).

Who can claim

Any UK organisation with employees can apply, including:

  • businesses
  • charities
  • recruitment agencies (agency workers paid through PAYE)
  • public authorities

You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.

Employees you can claim for

“Furloughed’ employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts

The scheme also covers employees who were made redundant since 28 February 2020, if they are re-hired by their employer.

To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation. This includes providing services or generating revenue. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.

This scheme is only for employees on agency contracts who are not working.

If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed.

To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication.

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication.

Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.

You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you.

If your employee is on unpaid leave

Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February.

If your employee is on Statutory Sick Pay

Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.

Employees who are shielding in line with public health guidance can be placed on furlough.

If your employee has more than one job

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

If your employee does volunteer work or training

A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

If your employee is on Maternity Leave, contractual adoption pay, paternity pay or shared parental pay

Individuals who are on or plan to take Maternity Leave must take at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth.

If your employee is eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and they are entitled to claim up to 39 weeks of statutory pay or allowance.

Employees who qualify for SMP, will still be eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.

If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme.

The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.

Work out what you can claim

Employers need to make a claim for wage costs through this scheme.

You will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Fees, commission and bonuses should not be included.

HMRC will issue further guidance on how employers should calculate their claims for Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions, before the scheme becomes live. We will assisting our clients to make this calculation.

At a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but is not obliged to under this scheme.

HMRC will issue further guidance on how employers should calculate their claims for Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions, before the scheme becomes live. We will assisting our clients to make this calculation.

Full time and part time employees

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.

Employees whose pay varies

If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:

  • the same month’s earning from the previous year
  • average monthly earnings from the 2019-20 tax year

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.

Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim.

You can claim a grant from HMRC to cover wages for a furloughed employee, equal to the lower of 80% of an employee’s regular salary or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on paying those wages

Employer National Insurance and Pension Contributions

All employers remain liable for associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees.

You can claim a grant from HMRC to cover wages for a furloughed employee, equal to the lower of 80% of an employee’s regular salary or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on paying those wages.

You can choose to provide top-up salary in addition to the grant. Employer National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme. Nor will any voluntary automatic enrolment contributions above the minimum mandatory employer contribution of 3% of income above the lower limit of qualifying earnings (which is £512 per month until 5th April and will be £520 per month from 6th April 2020 onwards).

National Living Wage/National Minimum Wage

Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW) for the hours they are working.

Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

What you’ll need to make a claim

Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

To claim, you will need:

  • your ePAYE reference number
  • the number of employees being furloughed
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 weeks)
  • your bank account number and sort code
  • your contact name
  • your phone number

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim. We will be assisting employers to calculate the claim.

Claim

You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1 March if applicable.

What to do after you’ve claimed

Once HMRC have received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK bank account.

You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll.

You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.

What happens when the government ends the scheme?

When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

Employees that have been furloughed

Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.

Once the scheme has been closed by the government, HMRC will continue to process remaining claims before terminating the scheme.

Income tax and Employee National Insurance

Wages of furloughed employees will be subject to Income Tax and National Insurance as usual. Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have chosen to opt-out or to cease saving into a workplace pension scheme.

Employers will be liable to pay Employer National Insurance contributions on wages paid, as well as automatic enrolment contributions on qualifying earnings unless an employee has opted out or has ceased saving into a workplace pension scheme.

Tax Treatment of the Coronavirus Job Retention Grant

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

These are complicated issues at the best of times. We are on hand to assist employers to make the claim. Please call us on 0114 272 4984 or email info@shipleystax.com.

COVID-19: Self Employed to get £2,500 grant – but there’s a catch

Tax Solutions Shipleys Tax Advisors

At long last Chancellor Rishi Sunak unveiled measures for Self Employed earners affected by the coronavirus epidemic. As expected, this is broadly in line with the furlough scheme for those paid via PAYE.

The summary of the package is as follows:

  • The new self-employment income support scheme will pay 80% of an individual’s average monthly profit over the last three years, up to a maximum of £2,500 a month. It will be open to all across the UK for a three month period, with an extension if necessary.
  • Those who cannot produce three years of accounts will be able to submit either one or two years.
  • It will only be on offer for those with “trading profits” of up to £50,000.
  • Applicants for the scheme must have the majority of their income from self employment.

But the catch is the bail out makes it more likely that that national insurance contributions (NICs) will be aligned so that employees and the self-employed pay the same

  • They must also have already submitted a tax return for 2019. Those who have not submitted a tax return will not be eligible.
  •  Late filers of the January tax return will have until 26 April 2020 in which to submit a return.
  • Access to the scheme no later than the beginning of June, when the department will contact those eligible directly and ask them to fill in an online form. Payments will be made directly into their bank account, and will be back dated to 1 March, meaning a self employed taxpayer will receive three months’ money in one go.

The bail out now makes it more likely that national insurance contributions (NICs) will be aligned so that employees and the self-employed pay the same. We expect to hear more in the Autumn Budget no doubt.

If you need help with any of the above, please call us on 0114 272 4984 or email info@shipleystax.com.

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  • 0114 275 6292
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    Wharf Street Sheffield,
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