Audit & Assurance
Can you help me prepare a business plan and forecasts for the bank?
Our trained facilitators will work with you and your team to help arrive at an action plan with milestones to ensure progress is measured throughout. We can then help to create the financial forecasts matched to the business plan. Being able to demonstrate that your bsuiness has a specific plan to achieve the forecasts will give the bank comfort that the forecasts are robust. - Elaine Jess & Simon Atkinson
Do I need an audit?
As a rough guide, you will not need an audit if you are a private limited company and your turnover is less than £6.5 million and your assets are less than £3.26 million (for accounting periods commencing on or after 6 April 2008). - Elaine Jess & Simon Atkinson
You will need an audit:
- If the company was at any time part of a group requiring an audit.
- For companies below the £6.5 million threshold, if any member or members holding not less in aggregate than 10% in nominal value of the company's issued share capital, requests an audit for that year in writing no later than one month before the end of the year.
- If the company was at any time during the financial year a public company, a banking or insurance company, an e-money issuer, an ISD investment firm, a UCITS management firm or carries on insurance market activity.
Why have an audit if I don't have to?
It is an independent examination. Your accounts will have more credibility if they have been examined and an audit report produced. It also depends on your attitude to risk - risk identification and risk management. - Simon Atkinson
At the end of an audit we will report to the Board of Directors and the main points will be summarised in a management letter relating to exposure to risk and weaknesses in internal controls and will give suggestions and recommendations for improvement. - Elaine Jess
What are the deadlines for reporting to Companies house?
Generally, for accounting periods commencing on or after 6 April 2008, these are:
- For a private company: nine months after the end of the relevant accounting reference period
- For a public company: six months after the end of the relevant accounting reference period
Can you recommend a good accounting package?
There are many accounting systems available and the decision as to which one to choose for your business is crucial.
Our team will work with you to understand your needs and then help you put together costings and timelines to ensure the implementation of the system runs smoothly. We can provide support throughout the whole process. By working closely with our clients we can help ensure that your business has the best accounting system for its needs that produces the information needed to run the business effectively. - Simon Atkinson
How should I structure my business?
Each circumstance will be different and needs to be considered individually. We will always work with you to firstly understand the commercial needs of your business and also your plans and aspirations. Only once we understand fully what you and your business needs will we be able to begin to design the best structure to meet those needs whilst ensuring maximum tax efficiency and structural flexibility is achieved. - Joanne Cooper & Tony Collier
How can I improve my management information?
First of all, find out what you really need to know - key drivers and performance indicators - and then put in place and develop the system to produce and monitor these on a regular basis.
We can help you to identify the information you need to know and methods of reporting on it - to the very best effect! Tony Collier
How much money can I give to my (adult) children without paying inheritance tax?
Currently inheritance tax is only an issue if your entire estate is valued at more than the nil rate band (£325,000 for 2010/11).
Each year, you can make gifts of up to £3,000 in total without worrying about inheritance tax. Gifts totalling no more than £250 per annum are ignored. More substantial gifts to your children can be made when they get married. Above these limits, inheritance tax won't be payable when you make the gift, but may be payable if you were to die within 7 years of making the gift. Substantial gifts out of income can be made tax free in certain circumstances. - Malcolm Storer
I want to set up in business - must it be a limited company?
The structure of your business is a very important decision and advice must be taken to ensure that your chosen vehicle suits your needs now and in the future.
The business itself may well determine the form it takes: sole trader, partnership, limited company or limited liability partnership.
Owners withdrawing their profits in the form of dividends from a small company (excluding personal service companies) will suffer tax at the rate of 21%. This will usually be more tax-efficient compared with drawing remuneration as this is liable to employer's and employee's national insurance contributions. Otherwise, a company has considerable flexibility on how profits can be extracted. In addition, a number of reliefs have been introduced over the last few years only available to companies.
I run a small business and have heard about the VAT flat rate scheme. Should I use it?
Whether the flat rate scheme will benefit your business depends on its VAT profile. One of the principal claims is that the flat rate scheme will reduce administration. While there will probably be some administrative time saved - the VAT requirements are less onerous, for example - a business will still need to keep good records for accounting purposes.
From a cost point of view, the scheme may result in a business paying less VAT than under the normal rules. Even if it increases the VAT payable, you may feel the administrative time saving is worth the extra. Before opting into the new scheme, we advise you to compare the situation for the previous 12 months with what it would have been under the flat rate scheme.
Other schemes are also available to some businesses, such as cash or annual VAT accounting. These should also be considered. - Tony Collier
I have a small business - when do I need to register for VAT?
VAT is triggered by turnover, not profits. You must register:
- At the end of the month in which the value of your supplies in the past 12 months has exceeded £70,000.
- As soon as you expect the value of your supplies in the next 30 days to exceed £70,000.
You will not have to register if you can satisfy Customs that your taxable turnover in the next 12 months will not exceed £68,000. In some circumstances, it may be beneficial to register before it is compulsory to do so. This would apply, for example, where you are incurring substantial VAT on your purchases, which is only recoverable once registered. In many cases being VAT registered gives a new business credibility in the eyes of their customers. - Tony Collier
A friend wants to invest in my company - shall I just sell him some shares?
If you sell your existing shares, you will have a capital gain if the proceeds exceed your original cost. Your friend will also have to pay stamp duty on the purchase - equivalent to 0.5% of the value of the shares.
As an alternative to selling existing shares, your friend could subscribe for new shares issued by the Company. You will avoid capital gains tax as you have not sold your shares (although the proceeds of the share issue will belong to the Company and not to you), and stamp duty is not payable on new issues of shares, saving your friend money. In addition, if the company meets the requirements, your friend could be eligible for Enterprise Investment Scheme (EIS) relief, which could produce significant potential tax savings. - Joanne Cooper & Tony Collier
I have my own business and pay tax at 40%. Can my wife become a partner and share the profits?
There is no reason why your wife can't be a partner in the business, provided there is a genuine partnership, and you will have to draw up documentation that satisfies HM Revenue & Cusoms regarding this. HM Revenue & Cusoms may dispute any arrangements that are not commercial. If you do choose to make your wife a partner and give her a profit share which exceeds the value of her services to the business or the capital she has invested, HM Revenue & Customs may treat the income as yours and tax it accordingly. No tax would therefore be saved if HMRC took this view. - Joanne Cooper & Tony Collier
I want to leave my entire estate to my wife - I don't need a will do I?
It depends on your family circumstances and the value of the estate.
Under the rules of intestacy, should you die without a will and be survivied by your wife and children, your wife will only be entitled to a statutory legacy of £250,000 and the income from one half of the remaining estate. Your children will receive the remainder.
Even if the intestacy rules distributed your estate in line with your wishes, having a valid will simplifies the administration of your estate and makes sure all your wishes, such as nominating guardians for minors, are followed.
In practice, we recommend that everone has a will and, once prepared, that the will is reviewed regularly. Even with the introduction of the transferrable nil rate band there are circumstances in which you may want to leave your entire estate directly to your wife.
In addition to a will we would recommend that you consider making an Enduring Power of Attorney (EPA). Should you be seriously injured in an accident, or lose mental capacity, an EPA will let your nominated attorney manage your affairs on a daily basis without a costly and time consuming application to the courts. - Malcolm Storer
In my spare time, I restore old cars that I then sell. Do I have to pay tax?
It will depend on whether the activity constitutes a trade. If you purhcase the vehicles with the intention of restoring them and selling them at a profit, this will be a trade and any profits will be taxable. If it is a trade, you have to think not only about tax but also National Insurance and, depending on the total turnover, VAT. - Malcolm Storer & Joanne Cooper
I already pay top level salaries. What other options are available to reward employees?
Share schemes, which give the employee a stake in the future success of the business, are popular. For owner-managed businesses, the enterprise management incentive (EMI) scheme is particularly suitable and is not too expensive to implement. You can also reward your employees by offering a flexible benefits package, which provides a menu of benefits for the employee to choose from. They may include:
- Pension schemes, life insurance, income protection, critical illness, private medical insurance (PMI) etc.
- Allowing an employee to purchase extra days holiday, or even sell back to the business some of their holiday entitlement - subject to minimum holiday entitlement regulations.
- Providing vouchers to help with the weekly shopping or with the cost of childcare
- Allowing a more flexible working pattern, for example finishing work at lunch time on a Friday.
Flexible benefit structures need not be expensive to implement and can greatly increase employee commitment and motivation. However, schemes must suit the business. It is no use all employees leaving at lunchtime on a Friday if there is no one left to answer the phones! - Joanne Cooper
We are buying a holiday home abroad. If we charge our friends a modest fee to use it, do we have to pay tax on the income?
For UK purposes, any income you receive from the property will be taxable. However, you will be able to offset some expenses against the income, including some of the interest on the loan to purchase the property. If you are only charging a modest fee, it is possible that the allowable expenditure will cover the actual income.
When you sell the property, any profit you make may be subject to capital gains tax at either 10% or 18% (the lower rate possibly being available for properties let that qualify as Furnished Holiday Lettings (FHL's) although these rules are likely to change for 2011/12).
If you have foreign domicile you may be able to defer the tax on overseas income and gains.
You also need to consider the tax position of the country where the property is situated. - Tony Collier
I pay far too much tax is there anything else I can do to reduce this?
The media often reports on the mis-selling of financial services: what makes you different?
Our reputation depends on providing fairness and value for money and we will not jeopardise our relationship by compromising on these objectives.
There is a close alignment between our accountants at Milner Boardman Ltd and independent financial advisers at Milner Boardman Financial Strategies Ltd so that our advisers are thoroughly briefed and clients receive comprehensive recommendations.
Do your Independent Financial Advisers talk in English or financial jargon?
We comply with the Financial Services Authority's Treating Customers Fairly initiative to present information in clear form whilst using compliance consultants to ensure that recommendations are technically accurate.
How can I be sure that an Independent Financial Advisor really is independent?
Please refer to the Financial Services Authority register (www.fsa.gov.uk/register) and our register number 228796.
Will I have to pay up front for financial services?
From January 2013 the regulator requires that all financial services remuneration for investments, pensions etc. will be on a fee basis. Milner Boardman Financial Strategies Ltd already operates on a fee basis for the establishment and monitoring of funds, full details being set out in our client agreement.