Thursday, May 22, 2008

We launched the Tax Advice Network 6 months ago today.

The website went live on 22 November 2007. Over the last 6 months more than 900 accountants and other users have registered with us and we've raised £450 for TaxAid (with more to come).

Thousands of searches have been performed on the site; perhaps the strangest being for 'VAT on colonic irrigation'!

Dozens of users have telephoned or emailed one or more of the tax adviser members of the network and tens of thousands of pounds of tax advice has been provided by members of the Tax Advice Network over the last 6 months.

Our T.A.N.K has been filled with:
- Almost 30 weekly practical tax updates (we started them before the site went live);
- On average more than one new article a week.

We have also published over 40 shorter items on our blog. And we recently launched a facility for users to rate the individual advisers and to provide testimonials to assist subsequent users of the Network.

Also the Tax Adviser members' forum has had over 100 active discussion threads.

We have had around 7,000 visitors to the site and more then 70% of them, on average, have a good look around. Users typically spend over 4 minutes on the site and look at 5 or 6 pages. I'm told this is all pretty impressive but to me it's just the start. My marketing, PR and Search Engine advisers all tell me that I'm simply being impatient and that we have achieved an enormous amount in a short period of time.

When we were planning the launch I never expected that the biggest tax consultancy in the country, and one of our major competitors, would be swallowed up by BDO Stoy Hayward just weeks before our website went live. Another smaller tax consultancy was bought out by Begbies Trayner not long afterwards. All much too soon to be a function of the change we have introduced to the marketplace but fortuitous developments in the tax support for accountants arena.

I'm quite sure that our niche will become deeper and our reputation for good quality, cost-effective and personal tax advice will grow over time.

Thank you to all of the tax adviser members, the registered users and to everyone who has contributed to the development and promotion of the Tax Advice Network on it's first 'half-birthday'.

You ain't seen nothing yet!

Monday, May 19, 2008

Tax assurance for tax partners in smaller practices

This idea was put to me recently. I wonder how much interest there would be among the hundreds of accountants and tax advisers who have already registered on the Tax Advice Network website?

Almost no one can be an expert in all areas of tax - especially those that they don't have to consider very often. Are there ever situations where a report or paper is required for a client but where you have neither the time or inclination to research and write something from scratch?

Would it be helpful to instead choose and brief a suitable tax expert from the Tax Advice Network? Your role could then be focussed on guiding your client through the advice and helping them to decide what and how to take action. You'd be adding value and everyone would benefit from the way you have effectively 'outsourced' the specialist tax work. You will also have reduced the risk to your practice of giving advice on a subject with which you are not really that familiar.

Of course some people prefer to research new things all the time and are able to recover all of the associated fees from clients. But even then, wouldn't a second opinion be a valuable part of your tax assurance process?

Monday, May 12, 2008

LLPs can score over Limited companies (re Entrepreneurs' relief)

Over the years I written and lectured extensively about the issues to consider when deciding on the 'right' structure for a business. (For example in my talk on Incorporation and in my September 2007 issue of Tolley's Tax Digest: Incorporation, Disincorporation and related issues)

I've long maintained, for instance, that the headline tax savings that many people sought through incorporation were just one of the factors to consider. Indeed the tax changes announced over the last couple of years mean the pendulum is swinging. Starting a business as a limited company is no longer even as superficially attractive as it was.

Now there is another factor to consider - in the context of Entrepreneurs' relief. If there are going to be minority investors (shareholders) in the business, they will need to hold at last 5% of the shares to benefit (in due course) from the entrepreneurs' relief and pay just 10% of their capital gain when they sell their shares.

There is no such 5% requirement for members of an LLP.

NB: This distinction will be more relevant for start-ups than for established businesses. The latter would need to first 'disincorporate' but this can be fraught with tax problems as no reliefs or exemptions are available to mitigate the normal tax rules that apply on disposal of business assets (including goodwill) by a company to related parties.

Wednesday, May 7, 2008

The end of the old paper bag jobs?

The provisions in Schedule 36 and 37 of the Finance Bill 2008 have the potential to revolutionise the way that accountants deal with smaller clients and will increase demand for quality bookkeepers.

Schedule 36 includes, at part 2, new powers for any officer of HMRC to enter into business premises to documents...if such an inspection is 'reasonably required for the purpose of checking the tax position of any person'.

In effect this anticipates the prospect of 'in year' visits for direct taxes in the same way as has long been the norm for VAT and PAYE inspections. Only, in future, these checks may be designed to risk assess the quality of the accounting records DURING THE PERIOD OF ACCOUNT and with the provisions in Sch 37 in mind (see below).

Schedule 37 deal with 'record-keeping' and makes a small but important change to the existing fairly general requirements in s12B TMA 1970. New subsection 3A permits regulations to be introduced to provide:
- for certain specific records to be kept; and
- that those records may have to include specified SUPPORTING DOCUMENTS.

In due course when those regulations and supporting guidance are issued, it surely won't be long before HMRC start using their new powers to make spot checks and 'in year' visits in an effort to ensure that all is as good as it could be.

Once this all becomes commonplace I suspect that the demand for good bookkeepers will grow dramatically.