Ecommerce Startup
12.05.2022 Ecommers and micro business online For some time, you have been thinking about starting a company? Hoping for the dream come true of eventually
TAX ADVISORY
Representation in disputes and during tax enquires
We specialise in handling tax disputes and investigations for all our clients, including private individuals, family businesses, entrepreneurs and corporates, both small and large.
Effective management of tax disputes and investigations requires specialist expertise, in particular a thorough understanding of tax law and legal process as well as HMRC’s scope of operations and powers. This includes practical insights into how HMRC fight and settle tax cases, as well as detailed knowledge of the UK tax legislation. Our team provides specialist advice to guide clients through what can be a complex and stressful process.
If you have learnt that HMRC are investigating your affairs, a professional advice is essential. From this point it is absolutely crucial to interact with HMRC the right way.
We have a very high success rate in resolving tax matters and have in-depth experience with:
- Personal tax issues
- Corporation tax
- Personal non-disclosure
- Bounce back loans
- Offshore and other non-resident structures
- IR35 and other employment tax issues
- Tax planning arrangements and tax avoidance schemes for both corporates and individuals
- Complex remuneration and incentive structures; VAT issues, including input VAT recovery in multi-party contractual arrangements
Tax planning arrangements and tax avoidance schemes for both corporates and individuals
The term tax planning remains in close proximity with financial planning in general and tax optimization.
In the process of building wealth and protecting assets, a clear financial plan is required.
This means the plan that evaluates your current financial situation and predicts what your future finances might look like, based on the financial decisions on cash flow, assets, sources of income, investments, and retirement plans.
Abacus bureau Accountants provides services for the development and implementation of tax strategies by means of the use of well proven and low risk solutions, that reduce the tax burden in terms of direct and indirect taxes.
We also provide preventative advice, assessing tax risk in relation to proposed arrangements and giving guidance on mitigating it.
We believe, that only when you have a broad understanding of the elements of tax planning such as your tax liability, deductions, and investment options, you can make informed decisions.
Part of making tax planning decisions is optimization, which is the process of reducing or eliminating your tax liability through tax-efficient choices.
The most common elements we are refining to include the following:
- Seed Enterprise Investment Scheme
- Capital loss deduction
- Charitable contributions
- Employer-sponsored pension and retirement plans
- Retirement income planning
- Health Savings Accounts (HSAs)
- Home office and remote work expenses
- Medical expenses over a certain threshold
- Tax breaks for real estate investments decisions
International tax-law biliteral and multilateral tax agreements
The area of tax planning and optimisation has a substantial cross-border element. Therefore, the international tax planning is an essential and important element in conducting any business, management, transaction or investment and has a significant impact on business decision- making. That requires a comprehensive knowledge and expertise within the subject of bilateral and multilateral tax treaties adapted and implemented to the UK tax order
We regularly work in collaboration with other professional advisers both in the UK and overseas.
Double tax treaties or double tax agreements are represented by governmental level contracts between two countries which define the tax rules when it comes to a tax resident of both countries.
Double tax treaties are complex and often will require professional assistance, but they are created to eliminate doble taxation. In other words, to ensure that an individual can claim tax relief rather than having to pay tax on the same income in two different jurisdictions.
It is essential to determine whether it will be possible to implement the relief and then how to apply a double tax treaty in establishing the individual’s “treaty residence” position, as it is the country of treaty residence which generally assumes the taxing rights.
As there are many rules and complications which can arise when attempting to apply double tax treaties, it is important to seek professional assistance from experienced tax advisor.
Therefore, we offer a free initial consultation with a qualified advisor who will be able to provide you with answers to your questions and help you understand whether a double tax treaty could apply to you and help you save significant amounts of unnecessary tax.
Long-term tax strategies for family businesses
Choosing the right business structure for your family run business is a key.
We know that most family-owned businesses are structured as companies, but some others are partnerships.
Companies and partnerships, however, are taxed in completely different ways.
Companies pay corporation tax and, although the rates of tax may initially come across as lower than the taxes involved in a partnership, a company’s tax burdens overall often rise when profits are extracted, especially if the business must pay National Insurance Contributions in the case of directors’ salaries or bonuses.
Partnerships are generally considered to be more transparent from a tax point of view. This means that partnership profits are being taxed only once, simply when they arise and even if they are not drawn down. The tax liability falls on the individual partners whereas, as a company is recognised as its own entity, a company is taxed directly rather than in the names of the individual directors.
For most business owners and shareholders, the opportunity to exit a business whether via a trade sale, a sale to a strategic buyer or indeed a sale to a financial investor is often a once in a lifetime opportunity.
The current base rate of 28% for Capital Gains Tax is good, but not as good as the 10% rate
that was widely available before April 2008.
The Entrepreneurs’ Relief was significantly expanded for disposals of qualifying business assets on or after 6 April 2011. However, at Budget 2020 the Chancellor of the Exchequer announced that the lifetime limit of Entrepreneurs’ Relief would be reduced from £10 million to £1 million for Entrepreneurs’ Relief qualifying disposals made on or after 11 March 2020.
These disposals in essence allow you to apply a reduced rate of 10% capital gains tax on the profits made on sell qualifying assets (such as your business). It’s also important to note, from 2020/2021, Entrepreneurs’ Relief has been renamed to Business Asset Disposal Relief.
A minimum stake of 5% in the company is required,
however, the shareholder must also be an employee or director Even so, with the right structuring, Business Asset Disposal Relief can potentially be opened to various disposal scenarios and family members.
Therefore, planning for a successful exit often requires an unswerving focus on developing;
A strategic plan and ability to scale-up
An overall financial performance
Testing strength of the organisation’s cashflow position
Valuation of liquid assets and intellectual property
Reviewing contracted and/or recurring revenues
Testing the organisation’s reliance on key customers, suppliers and staff
Crucially, tax planning for family businesses must involve real dialogue between the tax adviser and the directors/stakeholders in the business. The adviser must understand the nature of the business and what the family members really want to achieve both for today and tomorrow.
Bankruptcy and company liquidation, consumer bankruptcy
It is worth noting that virtually every company that operates on the commercial market is exposed to the risk of bankruptcy.
Periodic insolvency can happen to anyone. However, it can take a very dangerous form and then the entrepreneur should know how to proceed and when to file for bankruptcy.
We work with registered Insolvency Practitioners who are authorised to advise in the event of insolvency. However, we would like to emphasize that our team is also able to advise your organisation on certain rules and guidelines that will help to detect and avoid the risk of bankruptcy well ahead of the trouble.
However, we would like to emphasize that our team is also able to help your company adapt certain rules and guidelines that will help to detect the risk of bankruptcy in advance.
Surely, tax arrears are one of the biggest triggers for insolvency of small companies in the UK and HMRC is often the largest creditor in most company insolvencies. In our experience these arrears are often caused by the indirect or delayed nature of most tax liabilities. The business must be structured in a way that ensures the means for taxes due are properly reserved for.
The law makes it clear that every director is expected to be competent enough to ensure that such legal obligations are met. Ignorance is no excuse
Insolvency
against HMRC?
From our experience we can conclude that most company insolvencies origin from HMRC owed VAT and PAYE/CIS. Where a director or individual has had previous business failures in which HMRC were left unpaid and where HMRC suspects this failure to account may be repeated,
tax office may request that security be given to reduce HMRC’s exposure to further bad debt. The requirement to pay a cash deposit as security for VAT or PAYE can significantly impact a Company’s cashflow. However, non-payment of a VAT or PAYE security notice is a criminal offence and can lead to a fine.
It is therefore vital that you take early advice and act within the timeframes set down by HMRC.
Seeking an early advice is particularly advisable where an individual is linked to a company that owes HMRC money for unpaid National Insurance Contributions, HMRC may issue a personal liability notice transferring the company’s liability for the unpaid contributions, to the individual.
Notices will be issued if HMRC believe that there has been a deliberate non-payment of National Insurance Contributions. This is a further option available to HMRC to address taxation fraud. Non-payment of a personal liability notice can result in recovery action by HMRC. Early advice is therefore advisable.
