Getting a quote for tax advice

[Ian Geary]

In my work role, I am in need of some tax and accounting advice.

My organisation created a ltd company (which it controls), and formed an LLP with it, call it llp1

A charity has been set up, that has formed an LLP (LLP 2) with the aforementioned LLP1.

I have been asked to complete all financial administration for these companies.

The charity and llp2 are not controlled by my organisation.

Llp2 carries out a business activity circa £1m turnover, that makes a very small amount of profit. It has assets of £22m. No business is carried out by llp1 or the ltd company. No employees anywhere, as llp2 buys services from my organisation.

The charity receives a small amount from the llp2 (under £50k) and apart from it's ownership of llp2, has no assets.

Llp1 owns 10% of LLP 2, the charity 90%

My organisation owns 99% of llp1, the final 1% owned by the ltd company.

My organisation is a local authority, and my finance team haven't got the capacity to start researching how to account for these companies, and how to calculate their corporation tax returns (councils are exempt, so there's little experience in the sector)

Record keeping and vat we're fine with.

I've approached our internal auditor for (chargeable) advice, but am I right in thinking that this would be fairly straightforward questions for a high Street tax accountant to answer for me?

Our auditor is probably in the top 10 and I'm worried I'd be paying a high premium for fairly run of the mill stuff.

If I could clear my team's diary for a few days, i'm sure we could cobble the answers together, but I feel there must be people who do this stuff every day who would just get it right straight off.

I would welcome any thoughts on this as I can't say I've ever engaged an accountant either personally or professionally (well, apart from my wife)

Thanks

Ian

[Eric Mc]

Did you not get accounting and tax advice BEFORE setting up this fairly complicated structure?

[selmahoose]

[Ian Geary]

The lack of tax advice obtained before hand is kind of implicit in my question about seeking such advice now.

My organisation obviously felt the need to get the structure up and running quickly was more of a priority than sorting out the administration side of these companies.

6 figure sums were spent on legal advice when setting up these structures (and preparing several dozen associated lease and contract documents), yet none of the questions I'd posed about finance (when told I had to take this on) had been considered.

So, with that out of the way, is this sort of tax advice fairly "run of the mill", that a high Street type accountant could turn out fairly easily?

Thanks

Ian

Edited by Ian Geary on Friday 18th January 22:00

[Eric Mc]

Simple answer is, the set up looks over complicated to me although it's not clear why such a set up was instigated. I assume that there were other issues besides tax on the minds of those who decided to go down the route chosen.

Most accountants could handle the permutations arising from the mess that has been created but you would have to pay for the privilege of either untangling the mess or continuing in its present state.

[Ian Geary]

Eric Mc said:

Simple answer is, the set up looks over complicated to me although it's not clear why such a set up was instigated. I assume that there were other issues besides tax on the minds of those who decided to go down the route chosen.

Most accountants could handle the permutations arising from the mess that has been created but you would have to pay for the privilege of either untangling the mess or continuing in its present state.

thanks Eric

yes, the structure was set up with a particular legislative obsticle in mind that had to be manouvered round legally (which the set up sucessfully achieved, saving several million for the tax payers in the Council I work for over the medium term).

So I acknowledge my organisation will need to spend a few grand on fees to clarrify the accounting and tax arrangements. It will be money well spent, and no less than any other company structure would have to do at some point of it's evolution.

To be honest, I was expecting more answers along the line of "easy, that's a few hours work, my firm would charge £x", or "tssk, that's quite a few days of work plus some meetings, my firm would charge £y"


But as it is, I have now got quotes from my internal auditor and a local accounting firm, and will proceed accordingly.


Ian


Ian

[Eric Mc]

Things are never as straightforward as people think (or wish).