As we all know, traditional bank funding for businesses in the UK market is difficult to find these days. Banks will still lend to good companies that can meet the banks’ criteria and demonstrate that their business is strong and they can service the debt. The trick to securing the funding is to be fully and carefully prepared before making an approach to any bank.
Here are our tips to help you achieve success:
- The presentations you prepare for the bank need to be succinct, accurate and positive and clearly set out the level of funding required for what specific purposes. Forecasts need to include an integrated profit and loss, balance sheet and cash flow;
- Ensure that you know exactly how and where the business is making profits;
- Demonstrate that you have your costs and overheads tightly under control;
- Show that margins and cash flow are sustainable; and
- Address any customers or products that are underperforming in terms of margins or cash flows.
If you would like to discuss any aspect of the fundraising process, please contact Andrew Williamson on 01727 838 255.
As reported in The Times it has been announced that HM Revenue and Customs (HMRC) have come up with an innovative way of encouraging the early submission of tax returns, by the introduction of an incentive. The scheme led by David Cameron gives workers the chance of winning £100,000 if they file their tax return by the end of November, as opposed to 31 January.
This initiative which could start as early as this year is set to save HMRC tens of millions of pounds which would usually be spent chasing people who pay their tax bill late. It could also save taxpayers millions, with an estimated £368 million in penalties being paid on self-assessment forms filled out late or incorrectly.
The tax return deadline for 2010/2011 is still 31 January 2012, hefty penalties are in place for late submission. To find out more about our tax return service and how we can help you please contact our Senior Private Client Tax Manager Paula Jeffs on 01727 838 255.
With 2012 now upon us, we urge all businesses to make sure that they are aware of and compliant with all the rules and regulations imposed by HM Revenue and Customs (HMRC).
HMRC are stepping up their compliance activity for 2012 and have their sights on certain sectors, these include:
- electricians and electrical fitters
- commercial traders on e-marketplaces
- construction
- scrap metal dealers
- fast food outlets
- landlords owning three or more rental properties
- individuals who own properties overseas which are rented out
- offshore issues
If your business is in any of the above sectors or if you have offshore dealings and you believe your tax affairs may not be completely correct or up to date it will be vital to act quickly as HMRC have been actively using their legal powers recently to gain information in these areas. In some cases there may be ‘disclosure opportunities’ available giving you a window of opportunity to make disclosures, so we urge you to act now.
Sectors that have been under scrutiny in the past have included plumbers and tutors, the plumbers campaign alone has generated over £2m for HMRC, and to date HMRC have arrested nine plumbers from whom disclosures were expected but not forthcoming and started almost 1,000 other enquiries.
An investigation by HMRC is a stressful and difficult experience. Tax can generally be recovered for up to 20 years together with interest. Penalties usually start from at least 30% (unless due to nothing more than carelessness) and can reach 100% of the tax due – or as much as 200% if relating to undisclosed overseas bank accounts. This year, for the first time, HMRC now has the power to publicly “name and shame” those found to have deliberately evaded or understated their taxes and to place defaulters under an intensive monitoring programme for up to five years.
For more details about the above, please read our full 2012 set to be a prosperous year for HM Revenue and Customs, don’t let this be at your expense article.
If you are affected by any of these issues specialist advice is essential and action should be taken before any direct contact from HMRC. For a confidential discussion please call Peter Davies on 01727 838255.
The statutory residence test (SRT), designed to help the government to determine residency of an individual and consequently their UK tax liability has now been postponed.
It had originally been proposed that the SRT would take effect in April 2012, however, this has now been postponed due to issues raised in the consultation and the legislation will be included in the Finance Bill 2013. It is proposed that the rules will take effect as of April 2013.
For further information about the proposed SRT please view the full the full UK Residence – new statutory test proposed from April 2012 article.
With Christmas just around the corner and the New Year fast approaching we would like to draw your attention to some key business and tax points that need consideration for 2012. We are optimistic that 2012 can be a financially prosperous year and hope that the following helps you along the way to achieving success in 2012.
We would like to congratulate Paula Jeffs, senior private client tax manager at WMT a leading accountancy and tax firm in St Albans, on passing her recent exams, making her a member of the Society of Trust and Estate Practitioners.
Paula’s recent qualification was obtained due to her significant practical experience and knowledge of this area, she is now one of the few tax advisors in Hertfordshire with this qualification. Paula Jeffs comments: “we are finding that we are getting more and more enquiries from people looking to plan for the future, many do not know what is available to them and the tax savings they could potentially make, being STEP qualified enables me to offer the best possible advice.”
If you would like further information about trusts and Inheritance Tax Planning, please call Paula Jeffs on 01727 838 255.
Whilst there may not have been many headline grabbing announcements in yesterday’s Autumn Statement, there are still enough points worthy of note for both individuals and businesses to consider.
Whilst the announcements do not predict a recession, there has been a revision in short term growth prospects for the UK economy which have dominated the headlines. This may cause many businesses to still feel rightly cautious about the outlook for their sector. However for some sectors the announcements of public spending plans will bring opportunities.
Some other announcements may encourage confidence in attempting new investment as enterprise is trying to be encouraged. There are incentives for investment in new businesses and attempts to make some areas such as employment law simpler for the small business.
The summary that follows not only covers some of the key announcements from yesterday, but also provides a reminder of other key developments which are to take place from April 2012.
Unfortunately draft legislation will not be published until 6 December 2011. The devil is always in the detail - and we will need to await that detail. We will provide an update for you if significant changes are announced on 6 December.
Please click on the following link to view our Autumn Statement 2011 commentary.
Following the Autumn Statement this afternoon, Anne-Maree Dunn, Tax Partner at WMT comments:
The Autumn Statement is one of the two formal statements that HM Treasury make to Parliament in the year – the other being the Budget. The Autumn Statement is utilised by our coalition government to outline economic growth and government finance projections.
The UK economy is currently faced with higher than expected inflation, slower than expected growth and several crises across the Eurozone. All of this uncertainty is leading UK households and businesses to be cautious in their spending, investment, borrowing and recruitment.
George Osborne spoke for about an hour this afternoon on plans to curb spending, keep interest rates low, assist the flow of credit to small businesses and accelerate enterprise in the economy. Much of the detail of the measures will not be published until 6 December. Not a lot to get excited about at present until we see more of the detail behind these measures.
The main points highlighted include:
- A new Seed Enterprise Investment Scheme (SEIS) that will give investors in start up businesses 50% tax relief; along with a capital gains tax exemption for assets disposed of in 2012/13 and invested in the SEIS in the same year
- State pension age set to increase from 66 to 67
- The planned 3p fuel rise in January is to be scrapped, a 3p rise is planned for August 2012
- A credit easing programme from small and medium sized businesses to underwrite up to £40bn in low interest loans will be introduced
- Finance partnership of up to £1bn to help secure funding for medium-sized firms will be available
- An extra £1bn in funding for regional growth regeneration fund
- A new build indemnity scheme for builders and lenders to the stimulate the construction of new homes
- Support package for energy-intensive firms
- Commitment to improve the energy efficiency of buildings
- Proposals for radical reform of UK employment law, including simpler, quicker and clearer dismissal processes
- 100 per cent capital allowances in Sheffield, the Black Country, Liverpool, Tees Valley, North Eastern and Humber Enterprise Zones.
As always our Team are here to answer any query you may have, to speak to a member of our Team call us on 01727 838 255.
An overseas investor can make a choice between owning property personally or through an offshore company.
Owning Personally
UK Income Tax
If the property is used for letting, the individual can register as a Non-Resident Landlord (NRL) and providing approval is received from HM Revenue and Customs (HMRC) the rental income can be received gross. This prevents the deduction of tax on rents at source and offers a cash flow advantage as any tax due is paid on the normal tax payment dates (January and July each year).
If an individual fails to register as a Non-Resident Landlord, the tenant or letting agent must withhold income tax at the basic rate (currently 20%) from the rental payments. The income tax withheld is then paid over to HMRC.
After the end of the tax year (5 April), a Non-Resident Landlord tax return is filed with HMRC which declares the rental income and enables a claim for expenses in connection with the property to be set against the rental income. Any remaining tax liability is paid over to HM Revenue & Customs.
UK Capital Gains Tax
Capital Gains Tax (CGT) is only chargeable on UK Resident and/or Ordinarily resident individuals. As long as Non-UK residence is maintained, CGT (in the UK) is not payable.
UK Inheritance Tax
Inheritance Tax (IHT) is payable on assets which are situated in the UK at the time of death. This means that property owned directly by an individual would be potentially liable to IHT.
Other Taxes Worldwide
You will need to consider if you also have a liability in your country of residence for all of the above – most regimes will provide for some measure of double tax relief if you have paid tax in the UK as well. Individual advice needs to be sought
Owning Through an Offshore Company
UK Income Tax
The income tax treatment is the same as when the property is owned personally. The rents would be declared through the Non-Residents Landlord tax return with the tax being paid in January and July each year. The return would be filed after the end of the tax year (5 April).
UK Capital Gains Tax
As long as Non-UK residence status of the company is maintained, CGT (in the UK) is not payable.
Care is needed however to ensure offshore company is operated correctly and does not become managed or controlled in the UK. Should this happen it would expose any gain on the disposal of the property by the company to UK corporation tax.
UK Inheritance Tax
If the property being acquired is of significant value then it may be better to consider buying the property through an offshore company. As the shares are owned in an offshore company they are not treated as a UK asset and thereby not subject to UK Inheritance Tax.
Other Taxes Worldwide
There is also a need to consider the tax rules of the country where the overseas company is registered. In particular, the tax position of the company and how the extraction of funds from the company could be taxed in the country where the shareholder is resident should be reviewed.
For more information please contact our Private Client Manager Paula Jeffs on 01727 838 255.
HM Revenue & Customs (“HMRC”) have today announced the launch of the “Tax Catch-Up Plan” (“TCP”) aimed at regularising the tax affairs of private tutors and coaches who may have not disclosed to HMRC all of their income. The Plan allows any tutors or coaches an opportunity to bring their tax affairs up to date in a structured way and with a limited penalty which is significantly lower than could be expected in a normal tax enquiry.
Earlier this year HMRC announced that tutors and coaches would be a target for compliance activity. Since July HMRC have been writing to colleges, schools and other organisations requesting information about payments made to individuals which haven’t been taxed under PAYE, and it is expected that more than 300 formal Notices will be issued. Colleges and others are legally obliged to comply and supply the information. In addition extensive research has been carried out on the Internet to locate tutors advertising their services but who may not have been declaring all of their income.
Under the terms of the TCP tutors and coaches have until 6 January 2012 to notify HMRC that they have a disclosure to make, and until 31 March to actually make the disclosure itself and any payment due. The opportunity is available to anyone who falls within the scope of “tuition or coaching” even if the disclosure relates to other income or gains unconnected with that work. The main exception to this will be if the disclosure relates to monies held in offshore bank accounts or deriving from criminal activities. Any tutor or coach who is currently the subject of an HMRC investigation will not be eligible for the TCP.
HMRC anticipate that “most” of those making a disclosure will only have to make good tax for a maximum of 6 years, but where the disclosure is of a more serious nature, or HMRC believe that the individual has deliberately not paid enough tax, then this can be extended. Similarly the level of penalties range from 10% to 20%, which is significantly less than the minimum of 30% and maximum of 100% charged in a normal tax enquiry.
The TCP offers no immunity from criminal prosecution for those making a disclosure, but HMRC state that it is “unlikely” that anyone who comes forward would be prosecuted and experience tells us this is only likely to happen if someone deliberately understates what they owe when making their disclosure. If you believe your circumstances are particularly serious we can help by exploring other options available to you to best protect your position.
Anyone who believes they may be affected, or that they have a potential disclosure to make, should take urgent advice. There is a strict time deadline and anyone who fails to make a disclosure will be at increased risk of investigation with higher penalties, or at worst criminal prosecution.
At WMT we have considerable experience in helping clients in making disclosures to HMRC. We work with you in a sympathetic and non-judgemental manner to present the facts to HMRC in the best possible light ensuring a greater chance of your disclosure being accepted without question and a lower level of financial penalty. To discuss your options, please call Peter Davies or Paula Jeffs on 01727 838 255.
