Taking the risk out of tax planning.
Discussion
We're imminently restructuring one of the businesses and require some tax planning advice.
I've spoken to several firms, all of whom seem to agree on a few things and disagree on a number of others.
I am wary about paying a fat fee to a firm for advice that turns out ultimately to be poor, or riskier than it's presented. However, it is difficult to assess the expertise of someone you've engaged because they know more about a subject than you do!
Has anyone been through this and got any advice on the subject please?
Been through what? You need to be more specific about the 'restructuring' and the amounts of money involved.
I would use a local accountant if it's small numbers (like you say, no point in paying a 'fat fee' if it's not worth serious dough) or a well known brand if you're talking high six / low seven figures and want some kind of indemnity.
ETA, as an example, for my annual tax return I use a small 2 man accountant (income from PAYE, divi, LLP, 4 different sources so not complex, but also not the simplest). When we recently 'restructured' a small business (£3m t/o) into a larger business we used KPMG to get HMRC clearances / produce a report for warranties and indemnities on the sale and purchase agreement.
I would use a local accountant if it's small numbers (like you say, no point in paying a 'fat fee' if it's not worth serious dough) or a well known brand if you're talking high six / low seven figures and want some kind of indemnity.
ETA, as an example, for my annual tax return I use a small 2 man accountant (income from PAYE, divi, LLP, 4 different sources so not complex, but also not the simplest). When we recently 'restructured' a small business (£3m t/o) into a larger business we used KPMG to get HMRC clearances / produce a report for warranties and indemnities on the sale and purchase agreement.
Edited by foliedouce on Wednesday 9th December 22:47
foliedouce said:
Been through what? You need to be more specific about the 'restructuring' and the amounts of money involved.
I would use a local accountant if it's small numbers (like you say, no point in paying a 'fat fee' if it's not worth serious dough) or a well known brand if you're talking high six / low seven figures and want some kind of indemnity.
ETA, as an example, for my annual tax return I use a small 2 man accountant (income from PAYE, divi, LLP, 4 different sources so not complex, but also not the simplest). When we recently 'restructured' a small business (£3m t/o) into a larger business we used KPMG to get HMRC clearances / produce a report for warranties and indemnities on the sale and purchase agreement.
We do similarly. We have a firm of bookkeepers who have an accountant and they do the accounts, but what we need is beyond their capabilities.I would use a local accountant if it's small numbers (like you say, no point in paying a 'fat fee' if it's not worth serious dough) or a well known brand if you're talking high six / low seven figures and want some kind of indemnity.
ETA, as an example, for my annual tax return I use a small 2 man accountant (income from PAYE, divi, LLP, 4 different sources so not complex, but also not the simplest). When we recently 'restructured' a small business (£3m t/o) into a larger business we used KPMG to get HMRC clearances / produce a report for warranties and indemnities on the sale and purchase agreement.
Edited by foliedouce on Wednesday 9th December 22:47
We also have a firm of tax advisors who do odd bits and pieces and we MIGHT use them for this. But the fee they have quoted appears at first glance excessive for the work involved and the size of their firm. I note that their compensation liability is limited to four times their fee. However, if they mess it up the cost may be a few hundred thousand. However I don't know whether that limit would apply if their advice was negligent.
Alpinestars: I don't want to be more specific here. But it relates to restructuring a business, disposing of some assets and moving the business into a slightly different area. The conflicting advice relates to what reliefs are available / usable.
Edited by 13m on Thursday 10th December 06:50
Obviously you want to get the advice right in the first place, however if it's the liability clause cap that's holding you back, offer them the work if they change their terms and increase the amount to give you comfort. If they're confident that they have the advice correct, this shouldn't be a problem.
It's such a nightmare area, We used Grant Thornton for years for everything, audit on main business, accounts on smaller businesses and personal returns. You'd think with full end to end visibility of my tax / income affairs a well known mid tier company would get tax computations right. Wrong, over a period of 6 years they didn't account for our expenses properly and we ended up with a £43k back dated tax bill plus interest (luckily no penalties as we fessed up to HMRC as soon as we found it). Just goes to show, paying for decent tax advice, doesn't always get you decent tax advice!
It's such a nightmare area, We used Grant Thornton for years for everything, audit on main business, accounts on smaller businesses and personal returns. You'd think with full end to end visibility of my tax / income affairs a well known mid tier company would get tax computations right. Wrong, over a period of 6 years they didn't account for our expenses properly and we ended up with a £43k back dated tax bill plus interest (luckily no penalties as we fessed up to HMRC as soon as we found it). Just goes to show, paying for decent tax advice, doesn't always get you decent tax advice!
foliedouce said:
It's such a nightmare area, We used Grant Thornton for years for everything, audit on main business, accounts on smaller businesses and personal returns. You'd think with full end to end visibility of my tax / income affairs a well known mid tier company would get tax computations right. Wrong, over a period of 6 years they didn't account for our expenses properly and we ended up with a £43k back dated tax bill plus interest (luckily no penalties as we fessed up to HMRC as soon as we found it). Just goes to show, paying for decent tax advice, doesn't always get you decent tax advice!
We had exactly the same problem. We used a firm of chartered accountants for absolutely everything from our personal self-assessments to company compliance to VAT. Everything. Big bill every year.They completely messed up the VAT in one of the companies over a number of years which resulted in a big VAT liability right in the middle of the GFC. We couldn't trade out of it and had to wind up the firm. I personally lost around £100k.
That problem and the recent high-profile film scheme debacle is making me very wary about getting the right advice.
don't use an accountant for restructuring work its not their skill set (although most accountants seem to think it is).
use a proper corporate lawyer to achieve the restructuring plan and bolt on a tax expert for the specific tax advice you need.
I would also look at using a mid-tier firm where you will have a partner led process.
a personal recommnedation is Rod Thomas/ Charlotte Thornton Smitth at Harrison Clark Rickerby https://www.hcrlaw.com/business_services/corporate... but there are lots of others (i use these guys to restructure my clients businesses as and when required).
something like a 110 reconstruction is really only a transaction that a lawyer can achieve properly and getting it wrong can have severe tax consequences down the line (as you clearly realise)
use a proper corporate lawyer to achieve the restructuring plan and bolt on a tax expert for the specific tax advice you need.
I would also look at using a mid-tier firm where you will have a partner led process.
a personal recommnedation is Rod Thomas/ Charlotte Thornton Smitth at Harrison Clark Rickerby https://www.hcrlaw.com/business_services/corporate... but there are lots of others (i use these guys to restructure my clients businesses as and when required).
something like a 110 reconstruction is really only a transaction that a lawyer can achieve properly and getting it wrong can have severe tax consequences down the line (as you clearly realise)
PugwasHDJ80 said:
don't use an accountant for restructuring work its not their skill set (although most accountants seem to think it is).
use a proper corporate lawyer to achieve the restructuring plan and bolt on a tax expert for the specific tax advice you need.
I would also look at using a mid-tier firm where you will have a partner led process.
a personal recommnedation is Rod Thomas/ Charlotte Thornton Smitth at Harrison Clark Rickerby https://www.hcrlaw.com/business_services/corporate... but there are lots of others (i use these guys to restructure my clients businesses as and when required).
something like a 110 reconstruction is really only a transaction that a lawyer can achieve properly and getting it wrong can have severe tax consequences down the line (as you clearly realise)
Thanks.use a proper corporate lawyer to achieve the restructuring plan and bolt on a tax expert for the specific tax advice you need.
I would also look at using a mid-tier firm where you will have a partner led process.
a personal recommnedation is Rod Thomas/ Charlotte Thornton Smitth at Harrison Clark Rickerby https://www.hcrlaw.com/business_services/corporate... but there are lots of others (i use these guys to restructure my clients businesses as and when required).
something like a 110 reconstruction is really only a transaction that a lawyer can achieve properly and getting it wrong can have severe tax consequences down the line (as you clearly realise)
There's no insolvency involved. Just trying to move a profitable business to the next stage in a tax-efficient manner.
13m said:
PugwasHDJ80 said:
don't use an accountant for restructuring work its not their skill set (although most accountants seem to think it is).
use a proper corporate lawyer to achieve the restructuring plan and bolt on a tax expert for the specific tax advice you need.
I would also look at using a mid-tier firm where you will have a partner led process.
a personal recommnedation is Rod Thomas/ Charlotte Thornton Smitth at Harrison Clark Rickerby https://www.hcrlaw.com/business_services/corporate... but there are lots of others (i use these guys to restructure my clients businesses as and when required).
something like a 110 reconstruction is really only a transaction that a lawyer can achieve properly and getting it wrong can have severe tax consequences down the line (as you clearly realise)
Thanks.use a proper corporate lawyer to achieve the restructuring plan and bolt on a tax expert for the specific tax advice you need.
I would also look at using a mid-tier firm where you will have a partner led process.
a personal recommnedation is Rod Thomas/ Charlotte Thornton Smitth at Harrison Clark Rickerby https://www.hcrlaw.com/business_services/corporate... but there are lots of others (i use these guys to restructure my clients businesses as and when required).
something like a 110 reconstruction is really only a transaction that a lawyer can achieve properly and getting it wrong can have severe tax consequences down the line (as you clearly realise)
There's no insolvency involved. Just trying to move a profitable business to the next stage in a tax-efficient manner.
13m said:
We had exactly the same problem. We used a firm of chartered accountants for absolutely everything from our personal self-assessments to company compliance to VAT. Everything. Big bill every year.
They completely messed up the VAT in one of the companies over a number of years which resulted in a big VAT liability right in the middle of the GFC. We couldn't trade out of it and had to wind up the firm. I personally lost around £100k.
That problem and the recent high-profile film scheme debacle is making me very wary about getting the right advice.
That is horrendous. Is there not some kind of liability insurance on the accountants to cover their mistakes? Scary.They completely messed up the VAT in one of the companies over a number of years which resulted in a big VAT liability right in the middle of the GFC. We couldn't trade out of it and had to wind up the firm. I personally lost around £100k.
That problem and the recent high-profile film scheme debacle is making me very wary about getting the right advice.
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