The Problem
The word ‘tax’ seems to make a lot of business owners shudder! Why is this? It’s usually because it combines the idea of ‘owing money’ with the threat of ‘serious action’ if it isn’t paid. And of course, that’s not a good combination!
As is the case with most finance related matters, the worry usually stems from not having a strategy in place to deal with the issues which arise (there are always more pressing concerns…)
Most CEOs and MDs don’t like ‘finance’ but feel a responsibility to ‘do something’ and show the rest of the team that they are in control. Trying to manage the financial strategy in the business without the right level of knowledge whilst simultaneously trying to manage and grow the rest of the business is pretty much an impossible task.
This is especially so when it comes to tax planning and legal issues. Specialist advice is critical but does not mean a new full time member of staff is needed – a part time finance director can help shoulder the burden.
It is dangerous to allow unqualified people to deal with your company’s tax planning strategy or to deal with legal matters.
As soon as the business owner accepts that they need a tax specialist as part of their team, the faster they can offload the burden knowing that their back is covered.
In other words, because tax is inherently complicated it really doesn’t make sense for CEOs and MDs to spend their own time trying to understand the detail. Accepting that this is the case and delegating out the responsibility to a capable, experienced part time FD removes a really big weight off the shoulders.
When we conduct reviews with our clients we often discover a deep-seated anxiety about the pitfalls of failing to understand tax issues. The main concern is usually around the idea that the business may be building up significant arrears of tax, which remain unpaid. There are often worries about whether or not the accounting system used is recording information in the right way and will reveal significant holes in the event of a tax inspection.
Corporation tax, VAT, the implications of capital gains tax vs. income tax, failing to claim tax breaks, understanding R&D credits and getting PAYE right are common areas of discussion with our clients as is the desire to keep up to date with incoming legislation (for example changes in the new Companies Act).
Most business owners simply want to know that their company (and personal) tax affairs and legal issues are being properly looked after; that they are as tax efficient as they can be and that all statutory requirements are being met. Most companies do a poor job of this because tax is inherently complicated and when things get complicated in business the most common reaction is to move onto something else!
The Solution
Every FD Centre FD is a qualified accountant and has experience of the kind of challenges, which many business owners may feel are beyond solving.
In certain cases where the structure and complexity of the business dictates, it may be necessary to seek out a tax specialist (or even tax specialists) to work alongside us. Our role is to determine the requirements for your business and ensure that the plan is implemented in the most effective and efficient way possible.
There are many aspects to what we term ‘tax planning and legal’. By way of a summary a FD centre part time finance directorwould work with you to:
- Determine your requirements and devise a tax planning strategy and remove the fear of the unknown so that the business owner and senior team can ‘offload the burden’
- Work with our wider network of tax specialists to solve complex issues as and when required
- Undertake negotiations with HMRC on your behalf
- Implement processes which ensure that tax deadlines are met
- Translate specialist terminology into business owner language and explain the plan in plain English
- Prepare cashflow forecasts for HMRC that support applications to defer payments
- Simplify procedures such as P11D dispensation
- Devise an optimal tax efficient exit strategy for the business
- Discuss the most efficient ways for the business owner and employees to be remunerated
- Ensure that your company is kept fully up to date with new tax legislation
- Establish systems which record data the most effectively for tax purposes
- Deal with day to day legal issues – such as Ts and Cs – and make sure your company is compliant
- Work with our wider network of solicitors to solve important/complex legal issues
- Help interpret legal letters and contracts
- Collaborate with our own internal network of FDs and draw on over 2000 years of combined expertise to find solutions to unusual problems
Our review process will enable to us to find out where you require help and quickly begin the planning process.
Benefits To The CEO, MD And Senior Team
Delegating out your tax planning and legal responsibilities is a must and we would never recommend that you use unqualified people in these areas.
If you have not yet created a comprehensive tax planning/legal strategy then we would love to help. Your FD Centre part time FD will work closely with tax specialists who are most appropriate for your business and make sure that your best interests are being catered for.
It is always a great relief to our clients to know that this high risk area is being looked after for them. Knowing that you are not paying tax you don’t need to be paying and having peace of mind that all your tax deadlines will be met without you having to take on the responsibility personally will allow you to focus on growing the business while we take care of the details.
