The Pros and Cons of Going Limited

A high income tax bill for partners and sole traders is often the prompt to look at the pros and cons of becoming a Limited Company. The “bullet points” are shown here:

Please do not hesitate to contact us for more information and a calculation of the potential tax savings

Latest information on HMRC enquiries

TaxWise, who provide us with our fee protection insurance, have shared with me their latest statistics on HMRC enquiries. It makes dramatic reading. In the last 5 years, HMRC enquiries have increased 5 fold. You can see the information by clicking on the link below:

Claims by Month to TaxWise (July 2014)

Our clients are protected by the TaxWise scheme, which means that we will not charge our clients for time spent on HMRC enquiries (subject to some conditions).

If you are not a client, I strongly recommend that you consider getting some protection.

Help your business flourish with Growth Vouchers


At the end of January 2014, the government launched a £30 million research programme to help small businesses access professional advice.

The business support is delivered in the form of allocated Growth Vouchers, enabling businesses to receive a 50% subsidy towards the cost of obtaining advice on 5 key topics that help businesses to grow.

What are Growth Vouchers?

Subject to certain conditions, small businesses that participate in this programme will be allocated vouchers to spend on strategic advice from suppliers in the private sector, matched with their own funds, on one of 5 categories of support.

The 5 Categories of Support

Growth Vouchers can be used to obtain strategic advice in any of the following categories:

  1. Managing cashflow, late payments and negotiating finance (see below for further information)
  2. Developing skills and taking on staff
  3. Improving Leadership and Management
  4. Marketing, attracting and keeping customers
  5. Making the most of digital technology

Business eligibility

Your business must:

  • have 49 employees or less (including any employees of companies that own a stake in your business)
  • be registered in England
  • have been trading for at least one year
  • not have paid for business advice in the last 3 years*
  • be independent (i.e. no more than 25% is owned by other businesses or organisations)

* If your business has received “day-to-day” advice from an accountant, bookkeeper, and solicitor or as a member of a business organisation on completing your annual business accounts, or understanding the legal/ regulatory requirements of running your business, you should still be eligible for the Programme.

What is the value of a Voucher?

The Government will match your spend up to a maximum value of £2,000. This means you can spend as much or as little as you want on the advice but the maximum contribution from the Government will be £2,000. For example:

  • You spend £1,200 on support: £600 from you and £600 matched from government
  • You spend £4,000 on support: £2,000 from you and £2,000 from government
  • You spend £5,500 on support: £3,500 from you and £2,000 from government

On the Enterprise Nation marketplace you will find suppliers who meet the minimum standards required to be suppliers as part of the Growth Vouchers programme and with whom you can spend your vouchers. As the small business owner, you pay the supplier and then claim back up to £2,000 from Government.

How can I get a Growth Voucher?

You may apply for Growth Vouchers on a government website. If you meet the criteria, you will then be guided through a diagnostic filter which will help you assess your business needs. The process will be done either online or through a face-to-face meeting with an adviser. After this, you will be notified if you have received a voucher.

Apply for Growth Vouchers now

With a Voucher in hand, what do I do next?

You visit the Enterprise Nation Marketplace and find a supplier/ advisor with whom you can spend your voucher. Suppliers are members of Founding Trade & Professional Bodies so the quality of advice they offer is assured.

Find a Growth Voucher adviser

Could I spend my Vouchers with TaxAssist Accountants?

You may indeed spend your Growth Vouchers with your local TaxAssist Accountant. Due to the terms and conditions of the programme, the vouchers couldn’t cover the day-to-day services that we would provide you with such as preparing your accounts and tax return. However, they could very well cover more strategic work, such as:

  • A financial healthcheck – consultancy to review the financial health of your business and developing a strategy for growth
  • Financial planning, creditworthiness and investment-readiness
  • Cashflow and credit management
  • Basic business planning for debt finance
  • Enhanced business planning and evaluation for equity finance
  • Strategic management accounting

Due to the nature of the advice given, activities funded by the scheme should result in securing long-term change in the business, its operations and its capabilities.

The Shrewsbury Accountants, TaxAssist in Sundorne, give an insight into HMRC Tax Investigations

Most* TaxAssist Accountants’ clients in Shrewsbury have the assurance of knowing that if HMRC launch an investigation into their tax affairs, we will deal with HMRC on their behalf and that we will not charge them for our time. We promote this as TaxProtect and it is currently provided by Taxwise.

The article below is written by Taxwise and gives a very good explanation.

If you have any questions please contact us rather than the telephone number on the document.

TaxWise article on HMRC Investigations

*Subject to paying a minimum annual accountancy fee.


The Shrewsbury Accountants, TaxAssist in Sundorne, has some more information about the pensions and saving changes in the Budget

We are pleased to give some more information about the radical changes to pensions and ISAs  announced on Wednesday.

You can download the file from  here

Please remember that we are able to support you with an auto-enrollment pension solution. If you would like to know more, please contact us.

The Shrewsbury Accountants – TaxAssist in Sundorne have published their budget newsletter

We have summarised the key issues of yesterday’s budget in our newsletter which can be accessed from this link

If you are on our newletter mailing list, you will have already received this.  If not, you can subscribe to our mailing list and view past articles from this webpage version of the newsletter.

The Shrewsbury Accountants – TaxAssist in Sundorne have some advice about 2014-15 salaries for owner-directors

The introduction of the £2,000 employment allowance for the 2014/15 tax year, brings some added complications and opportunities regarding the amount that the Boards of Limited Companies approve as Directors’ salaries.

To re-cap – for the year from 6th April, 2014, most employers will be able to reduce their Employers National Insurance Contributions (NIC) (levied at 13.8% on monthly pay over £663) by a maximum of £2,000 for the year.

There are 2 options.

1/ If the company has other employees and is able to use all the £2,000 Employment Allowance in the year against employer NICs for them , then the best route is for the Company to pay the Director £663 per month. The Company votes dividends to the shareholder/directors to top up their earnings from the company. Care should be taken to avoid any higher-rate tax on the dividend. We can advise you based on your individual circumstances.

2/ If the company has NO other employees, then we suggest that the company pays a one-off bonus to each Director of £2,044 in the last quarter of the 2015 tax year (between 6th January and 31st March 2015). This uses all of the Director’s 2014/15 personal allowance to reduce company profits (saving a further £408 Corporation Tax). The Director pays £245 Employee’s NIC so there is a net benefit of £163.  The Company votes dividends to the shareholder/directors to top up their earnings from the company. Care should be taken to avoid any higher-rate tax on the dividend. We can advise you based on your individual circumstances.

If you are interested in option 2, we strongly suggest you contact us as there are some pitfalls that need to be avoided.

In both the above cases, please consider the flexibility offered by a rent agreement between the company and Director for use of home for business purposes (please see my earlier article).

Please note that Directors under IR35 will not be able to claim the Employment Allowance against their deemed salary, but if they actually pay themselves through the payroll under RTI they can.

Where a Director takes a monthly salary of £663 and has no other income, dividends of up to £30,500 can be received without additional income tax being charged.