I made a comment this week on twitter that we had “Taken on another new client today - previous accountants charges beat by over 50%”. Nothing unusual about this you may think......There are lots of firms competing for business so compete on price and win the work......Well if that is your train of thought it is wrong but I will come to that later.
I (through my twitter account) received a comment or two from within the world of twitter and accountancy that I disagree so strongly with that I felt I had to pen to paper (so to speak).
The gist of the replies was that because our fee for completing this work was 50% less than the previous accountant we were not going to provide a complete service or “add value” and that in order to do a good job for our new client we needed to increase our new client’s fees by 50%
As I said, I disagree with this way of thinking and I will try to explain why.
Firstly, I do not see how anyone can comment on what a service should cost if they do not know the full ins and outs of the service to be provided.
Secondly and most importantly I disagree fundamentally with accountants or any other professional for that matter using any kind of jargon to bamboozle clients and I particularly disagree with trotting out the term “ADDED VALUE SERVICE” as an excuse to increase fees!
These replies got me thinking “What does added value really mean?” The majority of professional firms will use the term (ourselves included) and most will not have a clue what it means to them or their clients. Most will use the phrase because they heard it in a marketing seminar or read it somewhere and will use it because it sounds good in front of clients.
If you complete a Google search of “accountancy adding value” you will come across numerous firms of accountants offering added value services. Some offer to look beyond the basics. Others say that they will offer a personal service and some just say that their service add's value.
As a professional should we not be doing all of this anyway? I think we should.
I believe that we have a duty to our clients to aim to do the best for them. We are being engaged by them as experts and have their total trust. Should they not rest safe in the knowledge that they are getting what they paid for; an expert service from qualified professionals, doing the right thing by them ALL of the time and not just when we see fee earning potential.
Please don’t get me wrong we as professionals are running businesses just like anyone else and need to charge for our services. However our charges should be FAIR.
We don’t use jargon. We don’t bamboozle clients and we don’t charge excessive fees. We just provide a good, honest, professional yet relaxed service aimed at doing the best for our clients. We look beyond the basics as part of our standard service and aim to provide our clients with a personal service that we think is second to none.
It is because of this, because we treat our clients differently from traditional firms, because we respect the fact that each client is different, because we CARE that our clients recommend our services and we are able to convert prospects to clients.
Accountants should go that extra mile as standard and I think we do.
If you would like to see how we can help you please do get in touch.
Tim Pearce
Director
Crump Pearce & Co Ltd
Chartered Certified Accountants
43 Merstow Green
Evesham
WR11 4BB
01386 49999
hello@crumppearce.co.uk
www.crumppearce.co.uk
The views and opinions expressed in this article are not designed to offend nor are they aimed at anyone or any firm in particular.
1 July 2010
17 June 2010
Tips for reducing your tax bill
I am often asked by clients and potential clients, what is the best way to reduce my tax bill?
Unfortunately there is no stock answer for this question. Each person and situation will be different and individual circumstances will need to be reviewed in detail before any specific advice can be given.
However, the following 10 points are the items that could easily be reviewed and may help to reduce your tax bill now or in the future.
1. If you are a sole trader paying tax at the higher rates and your spouse or civil partner helps out in your business and is a lower rate taxpayer it may be beneficial to make them a partner in your business. You could then allocate profits to them at a lower rate of tax.
2. If you are a sole trader or a partnership have you looked into the potential tax saving benefits of incorporating your business?
3. If you work at home (including simply writing up your business books) do you make a claim in your business accounts for ‘Use of home’? Even if you do make a claim are you claiming enough?
In most cases business owners or their accountants simply claim a set amount, say £3 per week, however HM Revenue and Customs actually allow you to claim a proportion of the actual expenses of running your home, i.e mortgage interest, gas, electricity, water rates, council tax etc. It is often the case that this method results in a bigger deduction.
4. If you are planning to spend money on capital equipment or plant do you ensure that you time the purchase correctly? For example if you purchase equipment just before your yearend you will bring forward the tax relief claimable on expenditure which will normally be due at 100% of the cost for the first year.
5. If you trade as a limited company have you made sure that you are extracting money from the company in the most tax efficient way. You could look to use dividends to avoid national insurance and often the most tax efficient route is a mixture of a low salary and dividends.
There are other ‘higher level’ extraction methods available such as the use of trusts, LLP partners and pensions.
6. If you operate as a limited company and have a company car, have you looked at whether or not it is better to own the car personally instead? If you own the car personally you will not be taxed on a benefit in kind which is based on the list price of the car when new and the cars CO2 emissions and can claim a mileage allowance for the business miles covered in the car at the approved rate of 40p (first 10,000 miles) or 25p (over 10,000 miles) per mile.
7. If you pay your staff bonuses why not save them up and pay them half yearly or yearly rather than monthly. Doing this can save on employees National Insurances meaning your staff keep more. This is not available for directors.
8. Do you make sure you always have a pre year-end tax planning meeting with your accountant to make sure all necessary action is taken before your year end? After then it will probably be too late.
9. Inheritance tax could be a big drain on your estate. Have you reviewed your will lately? There are a number of tax efficient strategies available to reduce the burden of IHT.
10. Do you take advantage of your ISA investment limit? The income and capital growth on savings in an ISA is tax free.
All of the points mentioned above a totally legal and above board however just implementing one of them could save your hundreds or potentially thousands of pounds in tax.
As a director of Crump Pearce & Co one of my main aims is that our clients do not pay a penny more in tax than they legally have to. I work with my clients to ensure that all available reliefs, claims and deductions have been made and that my clients are fully aware of all of their options at all times.
If you would like to discuss any of the points raised above please do get in touch to arrange a FREE no obligation consultation where we can discuss your individual circumstances and whilst we cannot guarantee to save you any tax we will give it a good go!
The above is provided for guidance only and should not be relied upon in any way without first seeking professional advice. Crump Pearce & Co cannot accept any responsibility for any loss however caused as a result of reading this article.
Tim Pearce FCCA
Director
Crump Pearce & Co Limited
Chartered Certified Accountants
43 Merstow Green
Evesham
Worcestershire
WR11 4BB
01386 49999
hello@crumppearce.co.uk
www.crumppearce.co.uk
16 June 2010
If things go wrong! - Why you should have a Shareholders Agreement
I am currently in the process of advising a group of companies regarding the ‘merger’ of their business and one of the key areas (apart from the tax, legal and accounting considerations) that I have advised they give further thought to is putting in place a formal shareholders agreement.
A Shareholders’ Agreement is a formal document that contains the rules (as agreed by the shareholders) that the shareholders of the company must abide by.
In simple terms a Shareholders’ agreement should provide:
• Individual shareholders with an element of protection
• A basis for dispute resolution
• The procedure for making key decisions
• Details on the individual powers of one, or a group, of shareholders
There is no legal requirement for a shareholders’ agreement to be drawn up however I would suggest that most professionals would agree it is best practice and I would recommend that all companies where there is more than one shareholder, even if the other shareholders are family or friends, have an agreement drawn up.
Unfortunately one size does not fit all and any agreement should be fully tailored to the specific circumstances of the company and the shareholders. This said the following are the key points that you should consider including in your agreement.
• Company Name and Registration Details
• Initial Shareholders Details
• A brief summary of what the business will do
• Remuneration Policy
• Dividend Policy
• Key Decisions
• Non Compete, Non Deal and Non Solicitation
• Shareholder rights
• Right to purchase other shares
• Right to sell other shares (and who to)
• Basis of Valuation of shares
• Provisions should shareholder die
• Shareholder protection
Obviously dependant on circumstances there may be other points that your specific business needs to consider and we suggest that you seek professional advice regarding your individual circumstances.
Putting an agreement in place could save time and money should a disagreement occur and in my opinion is the only sensible option.
The above is provided for guidance only and should not be relied upon in any way without first seeking professional advice. Crump Pearce & Co cannot accept any responsibility for any loss however caused as a result of reading this article.
Tim Pearce FCCA
Director
Crump Pearce & Co Limited
Chartered Certified Accountants
43 Merstow Green
Evesham
Worcestershire
WR11 4BB
01386 49999
hello@crumppearce.co.uk
http://www.crumppearce.co.uk/
• Individual shareholders with an element of protection
• A basis for dispute resolution
• The procedure for making key decisions
• Details on the individual powers of one, or a group, of shareholders
There is no legal requirement for a shareholders’ agreement to be drawn up however I would suggest that most professionals would agree it is best practice and I would recommend that all companies where there is more than one shareholder, even if the other shareholders are family or friends, have an agreement drawn up.
Unfortunately one size does not fit all and any agreement should be fully tailored to the specific circumstances of the company and the shareholders. This said the following are the key points that you should consider including in your agreement.
• Company Name and Registration Details
• Initial Shareholders Details
• A brief summary of what the business will do
• Remuneration Policy
• Dividend Policy
• Key Decisions
• Non Compete, Non Deal and Non Solicitation
• Shareholder rights
• Right to purchase other shares
• Right to sell other shares (and who to)
• Basis of Valuation of shares
• Provisions should shareholder die
• Shareholder protection
Obviously dependant on circumstances there may be other points that your specific business needs to consider and we suggest that you seek professional advice regarding your individual circumstances.
Putting an agreement in place could save time and money should a disagreement occur and in my opinion is the only sensible option.
The above is provided for guidance only and should not be relied upon in any way without first seeking professional advice. Crump Pearce & Co cannot accept any responsibility for any loss however caused as a result of reading this article.
Tim Pearce FCCA
Director
Crump Pearce & Co Limited
Chartered Certified Accountants
43 Merstow Green
Evesham
Worcestershire
WR11 4BB
01386 49999
hello@crumppearce.co.uk
http://www.crumppearce.co.uk/
7 June 2010
Emergency Budget – What will affect you?
There is a lot of talk in the press at the moment about the new government’s first (emergency) budget which is set for 22 June.
We currently know a little of what to expect (there is a statement on tax within the coalition agreement) however there are still a number of areas where we must ‘expect the unexpected’.
The main area of speculation is Capital Gains Tax (CGT) where it is widely expect the rate will increase from the current rate of 18 per cent (10% after the application of Entrepreneurs Relief) possibly to 40% or even 50%.
It has also been widely tipped in the press that the level at which CGT starts to be paid (currently £10,100) could be cut to £2,000.
Some experts have estimated that it would mean the number of investors forced to pay CGT each year would quadruple to about a million and there is already evidence of second-home owners putting houses on the market in an attempt to avoid the tax. However, there are also suggestions that the tax change could be backdated meaning any sales pre budget would be caught.
Other potential tax changes include:
We currently know a little of what to expect (there is a statement on tax within the coalition agreement) however there are still a number of areas where we must ‘expect the unexpected’.
The main area of speculation is Capital Gains Tax (CGT) where it is widely expect the rate will increase from the current rate of 18 per cent (10% after the application of Entrepreneurs Relief) possibly to 40% or even 50%.
It has also been widely tipped in the press that the level at which CGT starts to be paid (currently £10,100) could be cut to £2,000.
Some experts have estimated that it would mean the number of investors forced to pay CGT each year would quadruple to about a million and there is already evidence of second-home owners putting houses on the market in an attempt to avoid the tax. However, there are also suggestions that the tax change could be backdated meaning any sales pre budget would be caught.
Other potential tax changes include:
- An increase in the personal allowance from its current level of £6,475. The Liberal Democrats election policy was that this should be increased to £10,000 although it is doubtful that an increase to this level will come in one lump
- An increase in the rate of VAT. There is no mention of VAT in the coalition agreement however most economists have hotly tipped an increase
- A review of Child Tax Credit and Working Tax Credit
22 June will be an important day and we will keep you posted on any announcements as and when they happen. However anyone who has a second home or other assets we recommend you talk to your accountant or tax adviser as soon as possible.
Tim Pearce FCCA
Director
Crump Pearce & Co Ltd
Chartered Certified Accountants
43 Merstow Green
Evesham
Worcestershire
WR11 4BB
01386 49999
www.crumppearce.co.uk
The information in this article should not be relied on anyway and Crump Pearce & Co Ltd do not accept any liability what so ever for any loss caused as a result of decision made as a result of reading the article. Professional advice should always be sought.
11 May 2010
In the name of decency.....
It has long been recognised that an employee stands little chance in obtaining tax relief on the cost of business clothing unless it is special clothing which fulfils the role of protection. The technical reason for not being able to obtain tax relief is that there is a dual purpose in spending the money – personal as well as business – and furthermore the clothing is suitable to be worn outside of the working environment even though the employee may not wish to do so.
The latest employee to make a claim and lose it at the Tax Tribunal stage is Sian Williams of BBC Breakfast fame. A novel argument made on her behalf was that the clothing expenditure was necessarily incurred for her work because whilst she was prepared to present the programme without wearing any clothes, the BBC would not accept that. Quite apart from the image which comes to mind at breakfast time, this argument received short shrift.
The above article was first published in a e-tax bulletin.
As ever the information provided is for reference only and should not he relied upon in any way. Crump Pearce & Co cannot be held responsible for any loss caused as a result of acting or not on the information included within this blog. Professional advice should always be sought before making any decision.
Tim Pearce FCCA
Director
Crump Pearce & Co Ltd
Chartered Certified Accountants
43 Merstow Green
Evesham
Worcestershire
WR11 4BB
01386 49999
hello@crumppearce.co.uk
www.crumppearce.co.uk
The latest employee to make a claim and lose it at the Tax Tribunal stage is Sian Williams of BBC Breakfast fame. A novel argument made on her behalf was that the clothing expenditure was necessarily incurred for her work because whilst she was prepared to present the programme without wearing any clothes, the BBC would not accept that. Quite apart from the image which comes to mind at breakfast time, this argument received short shrift.
The above article was first published in a e-tax bulletin.
As ever the information provided is for reference only and should not he relied upon in any way. Crump Pearce & Co cannot be held responsible for any loss caused as a result of acting or not on the information included within this blog. Professional advice should always be sought before making any decision.
Tim Pearce FCCA
Director
Crump Pearce & Co Ltd
Chartered Certified Accountants
43 Merstow Green
Evesham
Worcestershire
WR11 4BB
01386 49999
hello@crumppearce.co.uk
www.crumppearce.co.uk
FURNISHED HOLIDAY LETS - Again
A quick update on the Furnished Holiday Let situation.......
This is a strange story, where political issues have had a direct effect on tax legislation.
The special tax regime applying to holiday lets of furnished accommodation is very advantageous. However, they only applied to UK properties and under the guise that the UK tax-favoured rules may not be compliant with European rules, the intention was to repeal them from 6 April 2010. Indeed, the necessary legislation was in the Finance Bill following the Budget. With the General Election around the corner, the Government had to get the Bill passed in a ridiculously short time (in fact, they allowed a paltry 2 ½ hours’ debate!). Under pressure from the Opposition, the Finance Act received Royal Assent only if the repeal legislation was dropped.
This means that we still have this special tax treatment and it is quite possible that it will remain with us indefinitely. Furthermore, it applies also to non-UK lettings in the EEA as well as in the UK provided the basic requirements are met. This could give some new tax advantages and we will be pleased to discuss the opportunities with you.
As ever the information provided is for reference only and should not he relied upon in any way. Crump Pearce & Co cannot be held responsible for any loss caused as a result of acting or not on the information included within this blog. Professional advice should always be sought before making any decision.
Tim Pearce FCCA
Director
Crump Pearce & Co Ltd
Chartered Certified Accountants
43 Merstow Green
Evesham
Worcestershire
WR11 4BB
01386 49999
hello@crumppearce.co.uk
www.crumppearce.co.uk
This is a strange story, where political issues have had a direct effect on tax legislation.
The special tax regime applying to holiday lets of furnished accommodation is very advantageous. However, they only applied to UK properties and under the guise that the UK tax-favoured rules may not be compliant with European rules, the intention was to repeal them from 6 April 2010. Indeed, the necessary legislation was in the Finance Bill following the Budget. With the General Election around the corner, the Government had to get the Bill passed in a ridiculously short time (in fact, they allowed a paltry 2 ½ hours’ debate!). Under pressure from the Opposition, the Finance Act received Royal Assent only if the repeal legislation was dropped.
This means that we still have this special tax treatment and it is quite possible that it will remain with us indefinitely. Furthermore, it applies also to non-UK lettings in the EEA as well as in the UK provided the basic requirements are met. This could give some new tax advantages and we will be pleased to discuss the opportunities with you.
As ever the information provided is for reference only and should not he relied upon in any way. Crump Pearce & Co cannot be held responsible for any loss caused as a result of acting or not on the information included within this blog. Professional advice should always be sought before making any decision.
Tim Pearce FCCA
Director
Crump Pearce & Co Ltd
Chartered Certified Accountants
43 Merstow Green
Evesham
Worcestershire
WR11 4BB
01386 49999
hello@crumppearce.co.uk
www.crumppearce.co.uk
12 April 2010
Furnished Holiday Lettings – an update!
Furnished Holiday Lettings - All change (for now)!
The change to the favourable tax treatment of furnished holiday lettings (FHL) has been dropped from the 2010 Finance Bill. The reason – to get the legislation passed in time to dissolve Parliament ready for the general election.
However this is not the end of the story!
Labour finance ministers have stated that should Labour win an outright majority at the election the changes would be re-introduced in the next Finance Bill (which will be produced immediately after the general election).
What is not clear is both the Conservatives view on the changes (i.e what will happen should they win the election) or; when the legislation would become effective if Labour do win the election (i.e will then make a retrospective change, backdating the legislation to 6 April 2010 as was first wanted or will there be a 1 year reprieve for the favourable rules with the changes starting on 6 April 2011).
Those with FHL’s should keep a careful eye on the outcome of the election.
The above is provided as a guide only. Crump Pearce & Co Limited cannot be held responsible for any loss caused as a result of reading this information and professional advice should be sought before any action is taken.
Tim Pearce FCCA
Crump Pearce & Co Ltd
43 Merstow Green
Evesham
Worcs
WR11 4BB
01386 49999
hello@crumppearce.co.uk
http://www.crumppearce.co.uk/
However this is not the end of the story!
Labour finance ministers have stated that should Labour win an outright majority at the election the changes would be re-introduced in the next Finance Bill (which will be produced immediately after the general election).
What is not clear is both the Conservatives view on the changes (i.e what will happen should they win the election) or; when the legislation would become effective if Labour do win the election (i.e will then make a retrospective change, backdating the legislation to 6 April 2010 as was first wanted or will there be a 1 year reprieve for the favourable rules with the changes starting on 6 April 2011).
Those with FHL’s should keep a careful eye on the outcome of the election.
The above is provided as a guide only. Crump Pearce & Co Limited cannot be held responsible for any loss caused as a result of reading this information and professional advice should be sought before any action is taken.
Tim Pearce FCCA
Crump Pearce & Co Ltd
43 Merstow Green
Evesham
Worcs
WR11 4BB
01386 49999
hello@crumppearce.co.uk
http://www.crumppearce.co.uk/
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