Press release: October 2008

Many businesses could be doing more than they are already are to mitigate the effects of the tough economic climate and outlook, according to a local tax specialist.

Stuart Sheldrick, a tax-adviser director of London and East Anglian-based accountancy firm, LB Group, says that the next stage is to review accounting systems and how tax affairs are structured. By doing this, he says, many businesses could improve cash-flow and reduce their tax liability too.

Stuart offers his top 10 tips for review:

1. Check if the business qualifies for accounting for VAT under the cash accounting method. From 1 April 2007 the threshold increased to £1.35m for turnover in any tax year, so it now applies to more businesses. It is a potential money-saver and can improve cash-flow. Other methods for accounting for VAT can be both cost effective and simple to administer, such as the flat rate scheme.

2. The Small Business Rates Relief scheme means that small businesses occupying non-domestic premises can qualify for a reduction on rates bills, depending on the rateable value.

3. Check staff remuneration packages to ensure they minimise National Insurance liabilities. By restructuring an employee´s remuneration to include pension contributions, mobile phone and childcare vouchers, savings are possible.

4. For companies involved in research and development, R&D tax credits may apply.

5. Implement strict credit control procedures. In the current economic climate bad debts can become a real problem. Chase up debts relentlessly. Obtain credit reports or ask for payment up-front when dealing with new clients.

6. Implementing basic tax planning. With recent changes in the capital allowance regime for example, there are opportunities to defer and reduce tax liabilities.

7. Deal with tax affairs promptly. This will limit exposure to the new penalty regime that HM Revenue & Customs has implemented. Deadlines for filing accounts have also been brought forward, so it is important to ensure that everything is meticulously recorded and kept up to date. There are tough penalties for non-compliance.

8. Structure personal financial affairs to make the best use of tax efficient products such as ISAs (Individual Savings Accounts), pensions, child-friendly tax funds, etc.

9. Benefit from recent changes in the Capital Gains Tax regime. Speak to professionals to make sure that you optimise the opportunities.

10. Company directors often fail to identify the most tax-efficient ways to extract profits from their company. Again, an expert´s view is essential.

For more information, please contact Stuart Sheldrick at LB Group on 01245 254780 or stuart.sheldrick@lbgroupltd.com

Contact: Stuart Sheldrick at LB Group, 129 New London Road, Chelmsford,
CM2 0QT. Tel: 01245 254780. Email: stuart.sheldrick@lbgroupltd.com

Or Chris Annis, LB Group, 82 East Hill, Colchester, CO1 2QW. Tel: 01206 867551. Email: chris.annis@lbgroupltd.com