TaxLab

Fact

More than £10 Billion of Tax is Paid in Error! Recent research says that the average person unnecessarily pays more than £190 tax a year and 4/5 of taxpayers do nothing to reduce the amount of tax they pay. Our experience says that most of these overpayments simply result from lack of good tax advice. At a time of ever increasing taxes, it makes sense to carefully plan your tax affairs and receive tax advice in a proactive way.

Making the Right Decisions can Save You or Your Company Taxes - Here are Some Examples:

  • The legal format of your business (e.g. company or sole trader or partnership etc).
  • How you take profits out of the company into your pocket (e.g dividends or salary or rent or loans etc) affects the overall tax paid by you and the company together.
  • How long to keep your capital-appreciating business assets (e.g property or goodwill or shares) before you sell them.
  • How to own those capital-appreciating business assets (i.e. personally or else) before you sell them.
  • Replacement of certain business assets (e.g. goodwill, land & buildings)can postpone taxes on the gains until many years later if you get the timing of the replacement and the type of replacement assets right. (Do you remember the scene in the film "The Firm (1993", in which Gene Hackman tries to persuade the digruntled client to take up the recommended tax strategy of postponing taxes for years as it will have the effect of slashing his taxes because of the diminishing future value of money?)
  • Structuring the "sale" of your business to your limited company the right way to avoid income tax on profits you extract from the company for years.
  • How to use your company as a "bank" to get short-term finance that comes free or much much cheaper than borrowing money on the high street.
  • How long to keep certain business assets (e.g. your business or interest in a partnership, shares, land & buildings) before you pass them on to the next generation (e.g. on your retirement) to avoid completely (or have substantial reductions) inheritance tax.
  • Did you know that you may not have to pay any UK taxes at all when you sell any business assets or investments abroad, depending on your UK tax status?
  • How to shift your income to members of your family effectively, without being caught for tax avoidance.
  • How to claim home expenses againt your business income to lower your taxes when you work from home (either as self-employed or an employee).
  • How to claim tax relief for money -both capital and interest- you lent to a business (either yours or another person's) and you subsequently lost.
  • One of the biggest rip-offs in the tax system is how heavily it penalises light private use of company cars. Make the right decisions about business travelling to steer clear of the unreasonableness and unfairness of the taxman.

The above list of tax savings opportunities is not exhaustive (despite being shortened more and more nowadays as a result of the taxman making a habit of closing loopholes). Please note that all strategies we recommend to our clients do work and are absolutely legal.

The Case for Action

At present, taxes keep rising and tax legislation is rapidly increasing and gets more and more complicated. Even tax professionals have difficulty keeping up with the changes and complications in the tax system...

In addition, changes in a person's personal and business circumstances can have an impact on their tax position; thus they need to be monitored. Such changes are: a marriage, a divorce, a move abroad, a significant change in the value of your estate, a new business, the disposal of a business, a retirement and so on (the list is endless).

Tax planning works best when you make decisions from the very start. Tax planning errors made at the start can be costly for years to come and their reversal can be a complicated and costly affair. I will give you an example:

A new client recently walked into my office saying that he purchased some buy-to-let properties and was advised to form a limited company to own the properties, which he did. That's an absolutely catastrophic scenario! As the client plans to sell those properties in the foreseeable future, he will face a large capital gains tax bill on the sale by the company because the capital gains tax regime for individuals is much more generous than for limited companies (individuals pay 18% whereas companies pay 28% on gains above £300k).

Alternatively, if he decides to reverse his decision by taking the flats out of the company (transfer to him), the company woyuld still pay Capital Gains Tax on the transfer (that's because capital gains tax is calculated on the difference between market value and cost, never mind that no actual sale takes place!).

To add insult to the injury, the owner-director would be faced with personal taxes on the perk as the taxman is likely to treat the transfer as a dividend in kind or even as a taxable perk to the director! Any way you look at it, this taxpayer is on the losing end! And all that, because of lack of some basic, sensible tax advice from the start (see client case studies for more examples of good and bad tax planning).

True Value Comes from Thinking

Some years ago, we were struk by a sudden flash of inspiration: to create a tool that would make our firm different from other firms (and make a difference for our clients). We therefore devoted years thinking, developing and updating a Tool, which we believe is successful in identifying tax savings opportunities. We are not claiming that we now know everything or that this is the ultimate panacea (cure) for all tax problems; no such product can exist as every person's circumstances, both personal and business are unique and therefore different from any other person. In addition, tax legislation is a chaotically complicated maze where there are millions of different routes and combinations and alternatives which no software can capture; a beast with millions of ugly rearing heads (see traps) every step of the way, threatening to suck the unsuspected and unprepared unfortunate taxpayer; or even a sword hanging over your head, waiting for you to make a wrong move so that it can fall on you. Enough with the metaphors though!

What we can confidently claim is that we have done our very best to put our many years of front line experience and knowledge dealing with small businesses' and individuals' tax affairs into it. It covers all different taxes. Its true value lies in that it will make you (and us) think and give you (and us) the knowledge - an insight into areas where improvements can be made to organise your tax affairs more efficiently and minimise your taxes.

We have gone to great lengths to ensure that it is delivered in a jargon-free, understandable language that respects the fact that you are not an accountant and hence you need to be able to gain understanding in order to benefit from it. We also guarantee that your privacy and confidentiality is fully protected. You will not be approached by sales-oriented contacts.

Our firm offers it to all new clients as standard service and to anybody else who would be interested in attending a meeting with us. You may answer the questions online or you may download this product and send us the answers by email or post. We will then prepare a free Report based on your answers and discuss the findings with you at an absolutely non-obligation meeting with you. May we emphasise that we do not expect you to change accountants as a condition for receiving this product. We know and respect the fact that you are not going to change your accountant unless you are personally completely convinced that it would save you a considerable amount of time, effort and worry by doing so. You are therefore welcome to use the information you will receive in re-negotiating your service agreement with your current accountant. As a thank you for taking the time to complete the Questionnaire, we will give you an automatic subscription to our free Weekly Tax Tips series. Each tip is written in plain, understandable language, away from technical jargon and they contain tax-cutting suggestions.

Thank you for your time and good luck in your business.