Winter 2010 PROFILE News, Views & Financial Updates Youth Wins the Day! Tax Avoidance Schemes VAT Rate Change Countdown to the Olympics Clarified ISAs Nurturing Small Businesses Young Enterprise Princecroft Willis will once again be company rooted in the community. This is playing an active role in the latest Young one way we can put something back into Enterprise company programme. Last that very same community.” year more than 300 young people from This year James, together with James 21 Dorset schools gained a valuable McDougal, Tax Assistant, will be providing insight into the real world of business by mentoring and advice skills to students at Study any successful business or taking part in the innovative scheme. Poole High School. In addition, Claire Wait, organisation and one thing always PcW Partner James Robinson and Gemma Accounts Senior, is mentoring students at stands out. They are constantly Chatfield, Business Services Senior, St Aldhelm’s Academy in Poole. “The evolving, ensuring their goods and provided help and advice to a group of Young Enterprise programme is an services remain in tune with both Year 12 students at Poole High School (see excellent scheme which really brings existing and future clients. That goes front cover image). Their company, business alive for young people. We’re for our business as much as yours. The Squeeze, sold a coffee coaster with a built- proud to be associated with such a sad truth is that companies who stand in puzzle aimed at office workers and the successful programme,” added James. still ultimately wither and die. commercial market. If this is of interest and you would like In the case of Princecroft Willis we “The students got a lot out of it and, to know more please contact James place huge emphasis on the quality of to be honest, so did we,” explained James. Robinson on 01202 663607. our team. Which is why we’re delighted “PcW prides itself on being a locally-based to welcome two new senior team members. Heather Williams has joined us as Corporate Tax Director while Chloe Tout is Director of Audit and Accounting Services. We also welcome Private Client Services a further 16 team members who have joined us during the course of the year. Their arrival is a further demonstration In a climate of tax rises and more • Structuring wills that work from a tax of our determination to invest in our aggressive tax collection, individuals are perspective and protect assets from people, making sure you have access to looking much more closely at legitimate changes in family circumstances; the best specialist skills available. tax planning and ordering their affairs so • Doubling entitlement to Entrepreneurs’ as to minimise their tax exposure. But, of course, we accept that one size Relief on a share sale; Demand for our Private Client services is doesn’t fit all. As you’ll see in this at an all time high. Examples of recent • Advice on residence and domicile edition of Profile, we now have a assignments include: planning; and dedicated Small Business Unit at both our Poole and New Forest offices. It • Income tax planning to preserve • Saving inheritance tax on the offers an efficient and cost effective personal allowances and reduce tax family home service to start-ups and smaller exposure at the higher rates; Many strategies are simple to implement businesses. Big or small, sole trader, • Using main residence relief to and just require some forward planning. multi-million pound turnover company eliminate capital gains tax on a Others are more complex but are well or somewhere in between, we really “buy to let” property; worth the effort. Julian Smith heads our can cater for your every need. Private Client group and will be happy to • The use of trusts to transfer That, incidentally, includes outsourcing. provide further information. He can be investments to the next generation The savings can be significant as the contacted on 01202 663613. without generating any capital gains team at our outsourcing company, tax charge; PW Business Solutions, will be happy to confirm. Payroll, bookkeeping, management accounting services - these are just some of the services offered by PWBS. It really is worth Sparkle Appeal putting a call in to them. Finally, have you checked out Our private client tax partner, Julian our new-look web site at Smith, is running the London Marathon www.princecroftwillis.co.uk? on 17 April 2011 in aid of the Sparkle It gives you all the information you Appeal Dorset which is raising money for need – and a lot more as well. You can a new hydrotherapy centre at the Victoria even sign up for our Twitter feed! Education College in Poole. Such is his As always, my thanks for your determination to raise as much money as continued support and, on behalf possible for this worthy cause that he is of all the team at Princecroft Willis, training daily and has even joined a our very best wishes for Christmas running club! He is aiming to break the and the New Year. 3 hour barrier. If you would like to sponsor Julian, MARK AITCHISON please visit his fundraising page at www.virginmoneygiving.com/JulianSmith1 Would you Countdown to the Olympics Like Tax Relief of up to 65%? There have been a considerable number of changes in the pensions world over recent years and the new coalition government has decided to continue with this! However the proposed changes from next year do provide some significant planning opportunities for some. With the number of ways of reducing tax becoming limited it’s worth looking at this area again. In particular : Ben Ainslie. Photo courtesy of Skandia Team GBR/Ocean Images • Remember that everyone can pay Less than 600 days to go before the Olympic classes Great Britain have some money into a pension up to a certain 2012 Olympics and the eyes of the world of the very best talented sailors in the level and get tax relief, even if you focus on the UK. It’s an exciting time, not world. It’s not unrealistic to say that all don’t actually have any earnings or just for the athletes competing for the sailors selected to represent us in pay tax. We have seen many clients selection but also for the team at Weymouth will have a genuine chance of take advantage of this to fund Princecroft Willis. There aren’t many success,” explained Martin. pensions for children or grandchildren accountancy firms that can proudly for example; “Great Britain Is the world’s top Olympic boast several of the UK’s top sportsmen Classes sailing nation with the British • If you are lucky enough to earn over and women, particularly in sailing, Olympic team sailors topping the medal £100,000 you now begin to lose among their clients. But we can. table at the past three Games in 2000, your personal allowances (this is the In fact, PcW Partner Martin Aldridge – 2004 and 2008. The selection process for first slice of income you earn before himself a former windsurfing world the 2012 Olympics begins in earnest in paying tax) until those with earnings champion – looks after Ben Ainslie, Iain 2011. Needless to say, we wish all our over £112,950 have no personal Percy, Andrew Simpson and Paul Goodison clients the very best of luck for 2011 and allowances. A pension contribution as well as Nick and Sarah Dempsey and onwards to 2012.” for those affected by this effectively other top athletes. “In many of the reduces your taxable income and gets back your allowances. It means tax relief of up to 60%; IT Corner • If you are even luckier and are a “high earner” (i.e. you earn over £130,000) you will have had limitations on how much you can pay into pensions over the last couple of years. From April E-MAIL ADDRESSES 2011 this looks set to change and In order to send high quality information an annual amount of £50,000 to clients on a timely basis, we are is available. You may also be able increasingly communicating with our to pay an increased amount to clients by e-mail. We are “purging” the catch up from previous years. information on our database in order to This for some could mean tax relief ensure that it is up to date. To ensure you of 50% on these contributions plus receive our publications, if we have not savings on National Insurance; communicated with you by e-mail in the past or your address has changed, please • If you are a director or are employed e-mail Chris Baker at chris.baker@ look again at “salary sacrifice”. princecroftwillis.co.uk so that she can This reduces your salary from the update your details. company in exchange for a tax allowable pension contribution. It OUR WEB SITE means tax relief at source and saving You may have seen our recent on National Insurance. Combine this articles on the “new look” web site. with point 2 above and the effective We will be using this more and more to rate of tax relief can be 65%. communicate with our clients so please If you would like to discuss this further, visit www.princecroftwillis.co.uk and add please get in touch with our Business us to your “Favourites”. Tax Director, John Caithness (01202 We intend to use Twitter and LinkedIn as 663620) a tool to advise of new additions to our web site. PcW Nurtures Company Small Businesses Annual Returns Many businesses grow, taking on employees and expanding With the change to electronic filing of Annual Returns, premises, but others will intentionally stay small. Not everyone Companies House has changed the way it contacts companies is looking to build an empire! to remind them of the need to file these. We recognise that all businesses are different and have a Previously they sent out a partially completed Return to the dedicated Small Business Unit in both our Poole and New Forest registered office a couple of weeks before the required date. offices. The unit provides an efficient and cost effective service They are now sending out a letter headed up “NOTICE – Annual to our start-ups and smaller businesses, and helps manage each Return – REMINDER”. This is sent out a few days before the date business throughout its lifecycle. that the Return has to be made up to and can give the false impression that the Return has been overlooked and not Going into business for the first time brings the excitement and prepared. Actually, the Return can’t properly be prepared before challenge of working for yourself. However, this enthusiasm can the date it is due to be made up to in case the information often be dampened by all the decisions and form filling required changes in the intervening period. at the outset. To help small businesses get started we offer a free initial meeting. Once the business is up and running there will Please be assured that if we deal with the company secretarial always be someone at our offices to help with any queries that matters for your company we have a system which flags up the arise. When the business begins to grow we’ll be there every step due dates for Annual Returns and these will be completed and of the way providing strategic support and ensuring that the sent to you for approval as soon as possible after the date they business meets any compliance deadlines that arise. need to be made up to and before the 28 day filing deadline. We appreciate that most smaller businesses try to keep costs If we do not deal with company secretarial matters for you to a minimum and we are able to provide a fixed fee option. and you would like us to undertake this work we would be happy If this is of interest, please ask your engagement partner. to do so. Please contact any of our Company Secretarial Team for assistance. Our Small Business Unit at Poole is headed by Partner James Robinson (01202 663607) and at New Forest by New Forest Office Carol Cook (01425 625524) Partner Anne-Marie Gates (01425 625533). Poole Office Sharon Fee (01202 663677) or Sue Ormond (01202 663691) Welcome to the Team We continue to invest in high quality team members to enable POOLE OFFICE us to provide the best possible service to clients. Over the past Karen Maple (Assistant Secretarial Team Manager); Mary year we have been delighted to welcome the following new Acreman (Business Services Assistant); Dan Holt (Accounts team members to the firm. Senior); Shona Cox (Accounts Senior); Chris Way (Graduate Accounts Trainee); Helen Ford (Secretary); Emma Symons Heather Williams (Graduate Accounts Trainee); Jelena Ibragimova (Placement Corporate Tax Director Student – Accounts); Sue Tellier (Receptionist); Katy Oxley Direct: 01202 663612 (Business Services Trainee); Jamie Bennett (Business Services Mobile: 07703 496156 Trainee) and Rob Crocker (Graduate Tax Trainee) firstname.lastname@example.org PWBS OFFICE Chloe Tout Director of Audit & Accounting Services Helen Phillips (Assistant Payroll Manager); Kelly Fugill (Payroll/ Office Administrator); Adrian Christie (Accounts Assistant) and Direct: 01202 663617 Gill Aberdein (Accounts Assistant) Mobile: 07766 014410 email@example.com We go to Great Lengths! Clarified ISAs UK auditing standards have been updated by the Auditing Practices Board (APB) to comply with the new clarified international auditing standards. The new International Standards on Auditing (UK and Ireland), referred to as Clarified ISAs, will replace the previous ISAs for audits of financial statements for periods ending on or after 15 December 2010. WHAT’S CHANGED? The Clarified ISAs have a new structure which reflects the purpose of the clarity project – to make the requirements of the standards easier to understand and to make clear what is required. The main areas of change L-R: James Robinson, Jo Tolley, 19-month-old Annabelle Chapman, Sam Chapman. for the typical Princecroft Willis audit client include: Some people take to running their own highly enough. “They’ve been amazingly • Related parties - The revised business like a duck to water. In the case supportive and very knowledgeable,” said ISA includes a number of specific of Steve and Jo Tolley it would be more Jo. Of course, not every small business new requirements to improve accurate to say a baby to water. For the can ‘swim’ in the same way as Water the identification of related party couple own the Dorset franchise of Water Babies. PcW’s Small Business Unit in both relationships and transactions. Babies, the world’s largest baby our Poole and New Forest offices is swimming company. dedicated to not just keeping ventures • Estimates - The ISA introduces afloat but positively flourishing. new requirements to the audit of Since taking the plunge and going it alone accounting estimates, including in 2008 Steve and Jo have seen dramatic It provides an efficient and cost effective consideration of indicators of growth. Their business now teaches more service to start-ups and smaller possible management bias. than 500 babies a week, aged from two businesses, and helps manage each weeks to four years, at 13 pools across the business throughout its lifecycle. • Communicating deficiencies in county. “It’s taken off faster than we control - This is a new ISA which is For further information please contact thought,” said mother-of-three Jo. “In designed to improve the way in which James Robinson on 01202 663607. fact, we now have a waiting list.” auditors report control deficiencies to management. Water Babies became a client of Princecroft Willis last year and can’t praise • Groups - The ISA introduces the firm – and Partner James Robinson - significant requirements in to the audit of groups especially those which include overseas or remote companies where a greater emphasis VAT Rate Change – is now placed on the collection of data and assessment of audit risk. Are You Ready? There have been a number of articles about Clarified ISAs in the business press and the number of compulsory requirements in the Clarified ISAs 4 January 2011 will see the VAT standard increasing by 35%. The impact of the rate rise to 20%, the third change in the changes will obviously vary from audit rate in 27 months – as many as there to audit and are not necessarily a have been in the previous 27 years!! driver of increased cost, as many of HMRC have issued detailed guidance on the new requirements were already how the change will be implemented and established good practice. its effects, which is consistent with the One consequence however is that treatment applied for the last change companies requiring an audit will introduced on 1 January 2010. need to ensure they have good PcW have published a summary guide systems in place and seek good advice to help clients and professionals manage if they feel their systems of control the change, which can be found at could be improved. www.princecroftwillis.co.uk/whats-new/ All of our team involved with audits publications, or for more detailed have now had training in the guidance, please contact our VAT Director, application of the new standards and Simon Anslow, on 01202 663611. your engagement partner will be able to give you guidance as to how it affects your company. Client Success: Tax Avoidance Intec Printing Schemes - Not for Solutions the Faint Hearted You have probably heard Government ministers repeatedly saying that tax avoidance schemes must be stopped although this is easier said than done. They also deliberately blur the distinction between tax avoidance which is legal and tax evasion which is illegal. Tax avoidance schemes are normally created by very clever tax barristers in London and seek to exploit loopholes in the tax legislation. As soon as the Government closes one loophole, another one appears. The schemes are generally marketed by specialist tax boutiques and come with quite chunky fees. We can introduce interested clients to scheme providers, where the possible tax savings can be justified. The two most common schemes relevant to our clients are: • Employee Benefit Trusts which attempt to get company profits into the hands of the owners by avoiding the income tax which would be payable on dividends; and • Stamp Duty Land Tax avoidance schemes in connection with the purchase of expensive residential or commercial property. L-R Bill Law, Ian Melville, Robert Syms MP. Photo courtesy of Deep South Media We are often asked whether a scheme works. This is impossible Ian Melville’s story is inspirational. He started his company, to answer since schemes rely on a particular interpretation of Intec Printing Solutions (www.intecprinters.com), on the old legislation with which HMRC will generally not agree. Often the Enterprise Allowance scheme paying £40 a week. answer will not be known until a scheme goes before the courts. Beware of anyone who claims that a tax scheme is Within six months Ian had been kicked off the scheme for making Revenue approved or guaranteed to work as this is simply not too much money. By the end of his first year the business had the case. turned over £250,000 and made a £48,000 net profit. Twenty years later Intec employs 22 staff, has a £4 million turnover and Any client undertaking a tax avoidance scheme should expect exports to 60 countries. Princecroft Willis, and its predecessor to undergo a Revenue enquiry and this can often take several firms, has been with him every step of the way. years to resolve. The client will also give themselves a high profile with the Revenue which may result in other aspects of Poole MP Robert Syms was the special guest at Intec’s their tax affairs being investigated. anniversary celebrations. The Hamworthy based firm, which began life distributing manufacturers’ branded products to the The Government have announced that action will be taken to pre-press and graphics industry, now manufactures a range of stop the use of Employee Benefit Trusts and Employer Financed printing solutions. Retirement Benefit Schemes for tax avoidance from 6 April 2011. There are no details of how this will be done but there is It also supports a number of overseas projects including all the probably a short window of opportunity to take advantage of funding for a new church and community centre in the tea these arrangements. growing highlands of Sri Lanka. Ian, who is Intec’s owner and Managing Director, said: “One thing that really motivates me is There is also talk of a GAAR (general anti-avoidance rule) being able to make a difference.” being introduced although we understand that the Revenue is lukewarm to the idea because of the uncertainty it would create PcW Partner Bill Law said: “In business the goalposts always between tax avoidance and sensible tax planning. move but over the years Ian has proved adept at changing his business model to react. Please contact John Belinger (01202 663605) or Julian Smith (01202 663613) if you are interested in further information. “Above all, the success of Intec shows the importance of nurturing small businesses. It’s that ‘acorns to oaks’ approach which has led to the formation of our dedicated Small Business Unit.” Contact Us Poole Office Towngate House New Forest Office The George Business Centre 2-8 Parkstone Road Christchurch Road Poole Dorset BH15 2PW New Milton BH25 6QJ Tel: 01202 663600 Tel: 01425 610166 Fax: 01202 663601 Fax: 01425 638080 firstname.lastname@example.org email@example.com www.princecroftwillis.co.uk The information within this newsletter is published without responsibility on our part for loss occasioned to any person acting or refraining from action as a result of the articles appearing herein.