Business Tax Services

Self assessment

Under Corporation Tax Self Assessment (CTSA), the legal responsibility for correctly calculating the corporation tax liability falls on business owners. We understand the issues facing owner-managed businesses and can prepare tax returns in a timely and efficient manner. We will also calculate your company's tax liability and assist with the calculation of any quarterly instalment payments.

Planning

The increased reporting obligations, investigation policies on the part of the tax authorities and harsher penalties for non-compliance mean that your time and resources can be taken up with tax administration. We will help to minimise corporate tax exposure and relieve the administrative burden of compliance with current tax legislation. Effective corporate tax planning can also result in significant improvements in your bottom line.

Profit extraction

There are various methods of extracting profit from companies e.g. salaries, bonuses, dividends, benefits, etc. Each method has different tax and national insurance implications for the company and the individual. We can advise you on the most tax and NI efficient way to get profits out of your company.

Remuneration planning

In addition to being tax and NI efficient, remuneration packages should be appropriate to the circumstances of you and your employees, and if structured correctly will also help to motivate your employees. We can assist you in designing an effective remuneration package taking into account the needs of all parties.

IR35 – PCG Quality Accountant

Our expertise in relation to IR35 is signified by our being one of only nine firms in the UK to have received accreditation as a PCG* Quality Accountant. PCG is the UK's leading trade organisation for freelance consultants and contractors, and their QA accreditation is a real guarantee of our quality. We offer all of the usual services and advice needed by consultants and contractors, and our experience and expertise enables us to offer a complete service at very competitive rates.

The IR35 legislation is aimed essentially at individuals providing their services via limited companies, who extract profit from their company primarily by means of dividends. In certain circumstances, depending on the contractual arrangements, the dividends effectively have to be treated as salary. Consequently PAYE, Employers NI, and Employees NI have to be paid, which gives a far higher total amount payable to HMRC than would be payable on dividends.

Wherever possible HMRC will seek to apply the IR35 rules. The key to avoiding IR35 is to ensure that the status of the individual is not 'employee' in a hypothetical contract (that the IR35 legislation requires to be considered) between the individual and the end user.

We can review and advise on your contractual arrangements, and have the expertise to successfully argue your status with HMRC.

* PCG is The Professional Contractors Group www.pcg.org.uk

Subcontractors and status issues

Wherever possible HMRC will seek to reclassify subcontractors as employees. The tax treatment of payments to subcontractors depends upon whether the subcontractor is truly self employed. PAYE, Employer’s NI, and Employees NI have to be paid if the subcontractor has to be treated as an employee.

There is no statutory definition of “employee”. It is therefore necessary to look at case law (i.e. what has been decided in the courts, and in industrial tribunals, etc) to understand the rules for establishing whether an individual is an employee. The rules are complicated, and it is beyond the scope of this article to go into details.

Unfortunately HMRC tend to ignore what has been decided in case law. Instead they have created their own “checklist” approach, which often gives the incorrect answer!

We can review and advise on your contractual arrangements with your subcontractors, we have the knowledge to convince HMRC that their approach is incorrect (where appropriate), and we have the expertise to successfully argue the status of your subcontractors with HMRC.