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					                                                                                            THE BIZ
                                                                                              Winter 2009
INSIDE                                          INSIDE                                       INSIDE
TAX PLANNING FOR                                A CLIENT’S STORY                             FUNNY MONEY
THE RECESSION                                   BALREED DIGITEC                              The column that proves conclusively
…turning the downturn to your                   Going national!                              that accountants aren’t boring!
tax advantage




Editorial
Welcome to what is now our 13th –
and hopefully that won’t be unlucky for
                                                General News
us – edition of The Biz newsletter. A bit
later than planned in publication maybe
but still as full as ever with the usual        The deadline for filing paper tax returns passes on
mix of tips, tools, information and of
course humour.                                  31 October.
      It has been an odd few months             If you have not already filed your tax return then you have until 31 January to file
since our last edition which came at a          online to avoid a fine of up to £100. If we prepare your return for you, your filing
time when global economic meltdown              date remains 31 January as we will file online on your behalf. The payment date for
seemed to be on the horizon as what             outstanding tax remains 31 January regardless of which filing deadline applies.
had previously been regarded as solid,
stable and venerable financial institutions
seemed to be dropping like flies. Since
then the talk of a depression to rival the      HMRC is using new legal powers to force all banks
1930s has subsided and whilst 2009 has
undoubtedly been a difficult year, I think      and financial institutions to release information
in retrospect most people expected to be        about UK taxpayers’ bank accounts and assets
harder hit than perhaps they have been.
      And whilst it is impossible to ignore     held offshore and overseas generally.
the downturn, most of us can have little        Armed with this wealth of new information, HMRC have generously launched the New
impact on the macro-economic situation          Disclosure Opportunity – one last chance for those with an offshore account to come
– all we can do is continue to play the         forward and bring their affairs up to date on favourable terms. Notifying is simple
hand we are dealt and make the best of          and if done before 30 November will carry a penalty rate of just 10%. It is likely that
our individual situations. And with that        anyone who fails to disclose this time will have the book thrown at them – which could
positive outlook plenty of businesses we        mean fines of up to 100% and perhaps even criminal prosecution. If you think you
see are still doing fine – either weathering    may be affected, do not delay. Speak to us straight away.
the storm or often continuing to prosper.
      And for that reason this 13th edition
of The Biz – although making reference
to the recession – will only do so from         HMRC has reported a massive surge in the number
a positive point of view. So we have an
article including tax planning for the          of scam emails claiming to be from them.
recession for instance. Any negative vibes      The emails all promise a tax refund and request the reader to click through to a website
which slip through the editorial cracks will    and enter bank or credit card details. Some of the emails are remarkably authentic
result in an instant £100 fine for the editor   with email addresses including the “.gsi.gov.uk” trailer but we can assure you that
– i.e. me!!! – to be donated to Drugsline       HMRC does not offer tax refunds in this fashion nor generally do they communicate
which is our nominated charity for 2009.        with taxpayers by e-mail. HMRC has recently closed down scam networks in Korea,
      It just remains for me to thank           Thailand, the UK and USA. Those wishing to report an email should contact
everyone for their help in putting this         phishing@hmrc.gsi.gov.uk, delete the email and not click through to the website
newsletter together and ask any of you          as requested.
that have comments, suggestions or ideas
for a feature to drop me a line at the e-mail
address below. Special thanks to those of
you who already have.
                                                                                              Tel: 0208 551 7200 Fax: 0208 551 0912
BARRY SORAFF
                                                                                              19-20 Bourne Court, Southend Road
barry.soraff@raffingers-stuart.co.uk
                                                                                              Woodford Green, Essex IG8 8HD
                                                                                              Email: info@raffingers-stuart.co.uk
                                                                                              www.raffingers-stuart.co.uk
A Client’s Story
Balreed Digitec
As it approaches its six year anniversary,      requirements.
Balreed Digitec – supplier of office                  Later that same year, the opportunity
equipment and bespoke solutions                 arose to acquire the business to whom
in printing, copying and scaning – is           the company had previous sub-
thriving. It is led by its managing director,   contracted its servicing. This company
Robin Stanton-Gleaves.                          – Balreed Limited – had been around
     Robin built his reputation in the          for more than a quarter of a century
industry with many years of service as          and although they shared a name, they
National Sales Director for one of the          were completely independent of each
biggest office equipment companies              other. And so in December 2007 the
in the country. In 2003 Robin took the          first of many acquisitions to come was
time to review his position and his career      completed. The plan was to integrate
overall and decided to set up on his own.       the staff and clients of Balreed into the       competitor in the market and their
His vision was to build a great business        much more modern and sophisticated              service and support infrastructure is
that nurtured its two most important            infrastructure of Balreed Digitec during        second to none.
ingredients; its staff and clients.             the early part of 2008.                              As it approaches its sixth birthday,
     So it was in November 2003 that a                2008 saw another addition to the          Balreed Digitec currently employs around
tiny start up company – Balreed Digitec         business with a new sales office in Bristol     100 staff operating across seven sites
(UK) Limited – was born. It started             to cover the South West of the country.         in the UK. Robin though is not one
trading from a small office in Maidstone        Sales continued to grow very quickly            to rest on his laurels. “I’m delighted
with a sales force made up of Robin and         throughout the year and eventually              with the way things have gone. We
two other friends and former colleagues         exceeded even Robin’s lofty expectations.       have worked hard and built a company
who shared his vision, Mark Hodges and                In Robin’s opinion it is this continued   completely from scratch with a respected
Colin Griffin. Mark and Colin remain with       total commitment to that original               brand, nationwide coverage and strong,
the business to this day.                       vision that has led to its success in the       profitable growth. But the next few years
     Robin himself takes up the story:          marketplace. “It’s a simple model really.       hold so many exciting challenges. New
“We had a clear vision for our future.          We treat our clients like kings always          technologies are arriving all the time and
We wanted to treat every client as an           striving not just to meet but to exceed         making these available to our customers
individual and to accommodate their             their expectations. And we continually          at prices they can afford with the service
requirements with the latest technology         motivate, drive and reward our team so          and support they need remains our
and top class service and support               that they continue to grow the business         number one priority.”
and a bespoke system to their exact             from strength to strength.”                          For further information on Balreed
requirements. Looking back now I’m                    Robin also took an important              Digitec visit www.balreed.com or email
not sure we had much more than just             strategic decision some time ago to             Robin himself at rsg@balreed.com.
that vision and though it sounds a bit          differentiate the company from its              Telephone the company’s Maidstone HQ
clichéd and obvious, we knew from bitter        competitors by ferociously retaining its        on 01622 620850.
experience that being client focussed just      status as an independent supplier with
wasn’t the normal culture in the industry.”     a portfolio of products and equipment
     With a main hub established in             from all of the leading manufacturers in
Maidstone, the decision was made for            the industry rather than being tied to one
the company to operate its own Service          or two.
and Support Department – something                    In 2009 the business continued
it had previously been sub-contracting          its growth and development with two
out. Graham Orr, now Director of Client         separate acquisitions. In April the Balreed
Services, was recruited and he built a          Group acquired Copyplan Midlands

                                                                                                Tax Tips
strong team of exceptional individuals          Limited, increasing the coverage to the
all hand picked for their experience,           Midlands with a second service and
knowledge and unique approach to                support team dedicated to this area.
customer service.                                     The second acquisition in 2009            There has been plenty of talk recently
     The sales force continued to grow          saw the takeover of KRL Corporate               about the ability of MPs to avoid tax by
and with the Kent operation now firmly          then based in Sheffield. The offices            “flipping” their second home. This is a
established, a second team was formed           were moved to Wakefield and the latest          perfectly legitimate means of avoiding
in London and based out of an office in         acquisition expanded the Balreed brand          capital gains tax on the disposal of a
the centre of town.                             into the North of England.                      property which you have used as a
     The second half of 2007 was a                    The integration of these two              holiday home or lived in on an occasional
historic period for the business. Firstly the   businesses is continuing and the teams          basis. If you have a “second home” and
Service and Support department moved            are expanding in both locations. At six         would like to “become an MP” without
into a new, purpose-built warehouse in          years old but with many more years              bothering with all that electioneering
Aylesford. A second unit soon followed          history and experience in the industry,         nonsense, give us a call and we will
to meet the ever increasing space               Balreed Digitec is now a nationwide             explain what you may be able to do.
Tax Planning For The Recession The Partner’s Rant
…turning the downturn to your tax advantage                                                     In the second in a series of regular features,
                                                                                                we give one of our partners the opportunity
Selecting a topic for the tax article in this   the additional 40% of any subsequent            to de-stress with a good old-fashioned rant
edition was almost impossible. There is         growth in value between the date of the         at the world. The man on the angry sofa
so much talk about the new 50% tax              gift and his eventual death.                    this time is Lee Manning:
rate from next April and what we can                  And this type of planning need not              I should start on a positive note – I
do to avoid it that it was tempting to          only apply to property – other assets           mostly love my job. One of the things
write about that. However in planning           which may have fallen in value – for            about it that I don’t like however is the
what to write it quickly became apparent        example, a share portfolio which may            amount of driving we are forced to do.
that whilst there are plenty of strategies      even generate a CGT loss – can be used          Actually I’m not being entirely fair – I don’t
to employ, the affairs of individuals           in this way.                                    hate driving at all. You can put the radio
earning in excess of £150,000 are rarely              Say Mr X also had a share portfolio       on, maybe a CD, make a few phone calls
straightforward enough for a one-size fits      that had cost £500,000 when acquired.           (hands free of course!) and generally get
all article. I can only suggest you get in      In 2007 it was worth £1 million but has         some thinking time in as you sit behind
touch if you are affected by the new tax        now fallen back to its original cost. A         the wheel in a perfectly controlled and
rate to see how we can help.                    transfer of the portfolio to children would     adjustable climate. What I hate is the
      So then I thought…what about              generate no CGT liability and with the          scourge of the modern highway and byway
the recession? There are plenty of tax          likelihood of the children receiving good       – the caravan!
planning opportunities thrown up by             capital growth over time.                             And again I’m not sure I’m being
that. So armed with my special editorial              Mr X has now potentially removed          completely accurate because in the same
dispensation from the £100 fine for taking      assets which had recently been valued           way that you can’t blame the out of control
a positive spin on the current economic         at £1.3 million from an IHT liability of        dog when there is invariably an owner at
climate, I have written something               £520,000 for a modest CGT payment               fault, the caravan I suppose can be a useful
designed to get you thinking a bit more         of £9,000!                                      tool if for some reason you enjoy spending
broadly about your personal circumstances             Even if Mr X didn’t survive the           your holiday holed up in a small box, using
and what options might be open to you in        requisite 7 years to get the assets fully       the toilet with your knees in your chest,
this short window of opportunity until the      removed from his estate for IHT purposes,       running out of water at key moments and
economic recovery begins.                       he would get partial removal after 3 years      emptying your own….well I’ll leave that to
                                                                                                your imagination!
                                                                                                      No, it is caravanners themselves whom
                                                                                                I detest with a passion I normally reserve
The problem is that he acquired his property assets                                             for speed cameras and traffic wardens.
some time ago and with the growth in their value, a                                             It’s not that they haven’t got the common
                                                                                                sense to work out that you can buy 100s
gift to his children would generate a significant capital                                       of flights and nights in hotels for the same
gains tax (CGT) liability.                                                                      price they paid for their box room and their
                                                                                                sculptured velour carpets (which typically
                                                                                                they would be embarrassed to have in the
Take the real life case of Mr X, a 73           growing in size year on year up to the          living room of their actual homes).
year old widower in good health. He             seventh year. In addition any add back                It’s not even that they hold up
knows that his estate will produce a            to his estate would be at the current           everyone behind them on the roads,
substantial inheritance tax liability (IHT)     depressed values rather than the probably       refusing to pull over and let people by even
on his death and is keen to make gifts          higher value at his death.                      as the M25 comes to a standstill in their
to his children as soon as possible to get           This is just a taster of what may be       not inconsiderable wake.
the assets out of his estate in time for        possible in the right circumstances. If               What I hate about caravanners is their
them to be excluded from inheritance            you are a client then we will – where           total and absolute belief that if you stick
tax. The problem is that he acquired his        we are aware of all the circumstances –         a tow-bar and some Jumbo-sized wing
property assets some time ago and with          consider the options for you as a matter        mirrors onto a small family saloon, you
the growth in their value, a gift to his        of course. So I suppose the real message        instantly transform it into something with
children would generate a significant           of this article is that if you are a client,    the speed and agility of an F-16 fighter jet,
capital gains tax (CGT) liability.              please make sure you talk to us and make        the pulling power of a Challenger tank and
     Has the current market helped him?         us aware of anything in your personal           the load capacity of an Airbus A380.
Well yes it has potentially. One property       circumstances that might be relevant. That            If you must tow a small bungalow,
was purchased for £150,000 in 1998.             is particularly important if we act for your    would you please ensure that you invest
In 2007 it was valued at £300,000 and           business too since we often have a great        in something suitable to pull it with. It
he was advised that a gift to his children      deal more detail about your business than       doesn’t necessarily have to be a Land Rover
would realise an immediate CGT liability        we do about your personal affairs.              Discovery but something with slightly more
of approximately £39,000 (allowing                   If you’re not a client then if you think   torque than an amputee tortoise might
for taper relief). With a fall in value to      we might be able to help, please feel free      mean that normal people who go on
£200,000 allied to the new CGT rules            to get in touch.                                holiday to do something “holiday-ish” –
capping the rate at 18%, he could                                                               like resting – and who regard the travelling
transfer that asset out of his estate for a     BARRY SORAFF                                    bit as a necessary evil rather than an
CGT cost of just £9,000.                                                                        integral part of the holiday, can actually get
     The saving in IHT – should he survive                                                      where they are going on time!
sufficiently long after the gift – would
be at least £80,000 and that ignores                                                            LEE MANNING
Employee                                                                                      Useful Links
Spotlight                                                                                     Our regular look at some of our
                                                                                              favourite websites includes some
                                                                                              useful business tools:
In this slot we like to introduce you
to a valued member of our team so                                                             Business Link
that you can put a face to the name                                                           (www.businesslink.gov.uk)
when you speak to them. This time                                                             Contains a huge database of articles,
round the man in the chair is our                                                             tools and tips on an enormous variety of
Head of Taxation – Martin Roberts.                                                            business related topics. Well organised
                                                                                              and easy to navigate, it is a useful place
Full Name: Martin Roberts                      Interests: Despite working all hours           to start for anyone looking for answers,
                                               for Raffingers Stuart, I do manage to          information or help with any issues in
Nicknames: Several unprintable ones            regularly play golf. My main other             their business.
although my close friends call me              interest is cars and more specifically
Gromit as in “Wallace & Gromit”                Formula 1 – though my interest is              Direct Gov
                                               limited to the first 10 laps after which       (www.direct.gov.uk)
Date of birth: 17 March 1969                   I usually sleep off the Sunday roast!          Their strap line – “Public services all in
(St Patrick’s Day)                                                                            one place” – pretty much sums this site
                                               Greatest personal achievement: I did           up in a nut shell. With links to just about
Status: Single – it’s cheaper and more         once go through a day without                  every national and local government
in keeping with my golf schedule!              someone telling me they were paying            as well as quango website, it is almost
                                               too much tax. It was a long time ago           impossible not to find the answer to just
Career history: Graduated from Exeter          admittedly and I was on holiday at             about anything somewhere on the site.
University where, inspired by Benjamin         the time!                                      From information about employment
Franklin and his belief that tax was                                                          rights to passports, driving licences,
one of life’s few certainties, I went          Favourite holiday destination: I recently      benefits, transport, health care, council
straight into the profession where I           travelled the Nile which was                   tax to name but a few. A useful place to
have been ever since. I have worked            fabulous. Relaxing with a good book            start for anyone who needs information
for a number of small and medium size          on a Caribbean island would always             about government services.
firms including one who specialised in         be my choice however.
the sports and entertainment business
where I came across some interesting
characters. I joined Raffingers Stuart
                                               Something you wouldn’t know about
                                               me: Can complete the Rubix Cube in             Funny Money
approximately two and half years ago.          around 2 minutes.
                                                                                              The column that proves
                                                                                              conclusively that accountants
                                                                                              aren’t boring!
                                                                                              Let us return in this edition to a well
                                                                                              worn yet rich seam of comedy - where


Practice News
                                                                                              we celebrate (though obviously not
                                                                                              condone) – new and ingenius methods of
                                                                                              attempting to evade taxes. Which leads
                                                                                              us to the recent story of Chicago banker
• We are delighted to announce that we have been shortlisted as finalists for the             George Michael (no, not that one!)
  Customer Service award at the prestigious Archant Thames Gateway Business                   who, seeking to avoid $80,000 a year
  Awards. Our thanks go to our whole team in helping us reach this fantastic                  in property taxes, decided to call his $3
  achievement. The awards dinner has not yet been held at the time of going to                million mansion a “church” and apply for
  press but no doubt we’ll be announcing the result at some point shortly. We are             tax exemption as pastor!
  of course also delighted that our client – Key Logo Limited – joins us on the final              Amazingly in July 2008 his
  shortlist and congratulate them wholeheartedly provided they don’t beat us!                 application was somehow preliminarily
• Our annual charity golf day – this year in aid of the Drugsline charity – was held on       approved by the Illinois Department
  7 October and was a huge success (although not for me personally as I finished in last      of Revenue. According to the Chicago
  place for the fifth year running). The day raised just over £3,640 for this worthy cause    Tribune, the application included a
  and a special thanks again to everyone that either attended and/or donated auction items.   photograph of the “church” which was
• So many of you are now referring business to us and we are always grateful for              just a shot of an outer wall of the house
  whatever recommendations we receive. We take it as a sign that we are doing things          with a large cross on it – except that the
  well and we would always hope that our clients recommend their contacts to us               cross was later discovered to have been
  precisely because they believe we can help and do a great job rather than for any           drawn on the photograph in marker
  incentive we might offer them to do so. Nevertheless we believe it is important to          pen! Sadly in July 2009 a judge finally
  thank people for helping us where we can and for that reason we have introduced a           reversed the earlier approval. George, we
  scheme where we will hand a £250 credit note to anyone who recommends someone               applaud the ingenuity if not the motives.
  to us who turns into a client of the firm. The credit note can be used any way you          Perhaps you were betrayed by a “careless
  wish including against bills we have already raised. Please make sure that you claim        whisper” from one of your neighbours!
  any credits which you think you might be entitled to.
                                                                                              BARRY SORAFF

				
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