Energise your business

Transcription

1 Energise your business Services to companies in the offshore and renewables industry A guide to help you navigate the financial, tax and accounting considerations of your business 2016/17 Accountants Business Advisers Financial Planners

2 Contents Chapter 1. Introduction 2. Starting out 3. Day to day finances 4. Meeting your obligations 5. Trading overseas 6. Business planning and growth 7. Next steps and pricing

3 1. Introduction All businesses are different, with different needs and requirements. At Lovewell Blake our belief is simple, that all businesses are different and have unique needs and requirements. This is why we developed this publication, to set out many of the key service areas we provide to our clients in the energy sector. Our broad service range has been developed to ensure that whatever you need in business, Lovewell Blake have it covered. We have been advising successful businesses in the region for over 150 years and have seen many changes in that time. Our ability to modernise as a firm is why we continue to lead the way in the provision of advice and service locally. Our longstanding reputation for quality is one of the main reasons we appeal to so many established companies, whether new to Lovewell Blake or a lifelong client. We are also seeing a demand for a more rounded and diverse service offering. We are one of the only established local firms with our own financial planning company, our advisers work seamlessly with your accountant to provide a truly joined up approach. We also offer an in house HR function for assistance with employment matters. As a member of HLB International we work in partnership with firms in 130 countries worldwide. Wherever you are doing business we will have the knowledge, expertise and contacts to deliver a high quality service. The following pages provide a starting point to the services we can offer and complement the much more individual advice we provide around tax planning and international matters. When combined, we believe that you will receive the best possible all round service at a competitive price from a firm you can trust. James Shipp Partner

4 2. Starting out When you are starting out in business the early decisions can often be taken lightly, but there are many key areas to get right. At Lovewell Blake we offer a free no obligation introductory meeting with all new business owners. Use the experience of an accountant or adviser to make sure your business starts off on a solid footing. Here we set out some of the key topics to consider prior to starting your business. Other areas to consider include your marketing and sales strategy, social media presence and your business website. For a more detailed consideration of the relevant topics please also see the Lovewell Blake New Business kit. Business structure The form of entity you choose can have a significant impact on the way you are protected under the law, the way you are affected by taxation rules and regulations and administrative costs of operation. There are four basic forms of business organisation, each has its own benefits and drawbacks and is treated differently for legal and tax purposes. A limited company is still the vehicle of choice for contractors and remains the most tax efficient option for many, but the tax incentives have been tightened and need to be properly understood before proceeding. Trading as a sole trader or a partnership can be less of an administrative burden but ultimately legal protection provided by a company or limited liability partnership (LLP) may be needed. LLP s lend themselves to professional firms in many cases but can still be utilised effectively in other sectors. Where a limited company is the vehicle of choice you should also be thinking about share structure and dividend planning. Efficient profit extraction should be considered alongside IR35 and recent cases surrounding the settlements legislation. A good accountant will talk to you about risk and tax strategy before recommending the best structure for your business. We can also incorporate your company for you, host the registered office and maintain the statutory books. Taxes There are many regulatory requirements you will have to comply with as a new business owner. Not least is the need to register with HMRC for relevant taxes and schemes. Problems and penalties could arise if registration is not completed in a timely fashion. HMRC is moving towards electronic forms and online notification. You can appoint your adviser as your tax agent so these tasks can be dealt with by them on your behalf. Whether a company or unincorporated business you are required to register with HMRC using either a form CT41G or CWF1. You will be required to deliver an annual tax return to HMRC and pay tax on your profits. This process can be handled by your adviser, and we also engage as your tax advisers so that we can deal with HMRC on your behalf.

5 2. Starting out VAT VAT is a tax on consumer spending and should ultimately be paid by the final customer. As a business you may be required to collect VAT from your customers and pay VAT to your suppliers. The balance will be due to HMRC. Most business transactions involve the supply of goods or services and VAT is payable if they are made: in the United Kingdom by a taxable person in the course of furtherance of business and are not specifically exempt or zero-rated. VAT is collected by HMRC and is normally payable quarterly. When you commence in business you need to consider whether to register for VAT or not. You may be required to register due to business size or you may wish to register voluntarily for other reasons. Talk to your accountant about compulsory or voluntary registration and the flat rate scheme. In your sector in particular, voluntarily registering for VAT could be a proactive move. If you are undertaking qualifying services offshore and your customer is VAT registered it is simple and straightforward to register for VAT and potentially make significant savings. Whether you have the ability to reclaim VAT on your costs or benefit from the flat rate scheme. VAT registration is a key area to consider from the outset. Financing and grants As a start-up business or when in the early stages of trading there are often grants available to encourage employment, innovation or growth. At Lovewell Blake we work closely with local Enterprise Agencies to recommend relevant grants and assist with applications. Great Yarmouth and Lowestoft are often classified as development areas and so incentives for new businesses are common but often change. Appointing a local adviser with a wide remit of both experience and contacts can be a good move. Where a business plan or trading forecast is required for lending purposes, or for your own piece of mind, we work with you to formalise your plans into a financially credible document. Our corporate finance team have experience in dealing with equity and debt investors on the larger scale. If your business is smaller we work closely with local banks and other finance providers to introduce you to the widest range of options.

6 3. Day to day finances HMRC requires businesses to retain accurate accounting records and can inspect your records at any time. Business owners are more accountable now than ever before, self-assessment is with us to stay and with the closure of local HMRC offices the first contact with HMRC is often during a tax enquiry which could be too late. A good accountant will always provide feedback on your systems and record keeping, but also come into their own when you experience a tax investigation or enquiry. Technology has revolutionised the world of bookkeeping, and Lovewell Blake are at the forefront of this innovative approach to accountancy. If you are willing to consider modernisation there are a number of benefits to your business including significant efficiencies to your internal bookkeeping functions, having access to more up to date and relevant financial KPIs and the opportunity to completely revolutionise the relationship with your accountant. Bookkeeping, Sage and VAT support Whatever accounting package your business operates, Lovewell Blake will have someone to support you. We have bookkeeping teams in our local offices, and with modern packages providing online access we can often log into your system over the internet and provide immediate assistance. If you require regular support, for example on a quarterly basis ahead of the VAT submissions, one of our locally based accountants can visit you to assist with period end adjustments and electronic submissions. You will always see the same person and as we are locally based, the same accountant will also be available for ad hoc support whenever you need it. Our bookkeeping team also have access to our specialists so whether you have a query about VAT or need advice on employment taxes, your contact will be able to help you. Put simply, we will always be there for you, consistent and reliable. Outsourced bookkeeping Technology has come a long way in recent years. Much of the work previously done by hand or using spreadsheets can now be automated. At Lovewell Blake we are leading the way in the local market with our Xero hosted bookkeeping service. Your accounting system is based in the cloud with online access via a dedicated app. The system automatically links to your bank accounts and you can deliver invoices and receipts by simply taking a photo with your smartphone. We handle all the admin so that you can concentrate on running your business with all the information you need literally at your fingertips. Lovewell Blake Tax Investigation Cover One of the biggest worries business owners experience is that of a tax enquiry. No matter how much attention you give to your accounting records, there is always a concern that HMRC will forensically examine your transactions to such a level of detail that something will come to light. This is why we offer Lovewell Blake Tax Investigation Cover. Put simply, you pay a low annual premium and we deal with HMRC on your behalf, from hosting the HMRC visit in our offices to attending all meetings with the Inspector. Our costs will be covered, you can relax and leave everything to us. You can even take the support one stage further by pairing with our outsourced bookkeeping and payroll services for complete peace of mind.

7 3. Day to day finances MyLB MyLB takes much of the administrative burden of running your business away. It is an innovative package of complimentary products, and services provided by Lovewell Blake for a fixed monthly charge. We host your bookkeeping services by utilising Xero, the market leader in this progressive new technological approach to bookkeeping. You can access your finances from any PC, laptop, tablet or smartphone via the Xero App. MyLB service includes: subscription to Xero monthly or quarterly bookkeeping service completely outsourced payroll function quarter end VAT submissions year end statutory accounts preparation year end business tax return submission directors personal tax returns targeted KPI and benchmarking data specific to your business face to face meetings with your account manager or partner. If you are interested in learning more about what MyLB can do for your business, get in touch or go to Kevin Bunting Yarmouth office

8 4. Meeting your obligations Whether you have a limited company or you are trading as a partnership or sole trader, accounts and tax returns will be required and tax may have to be paid. We will take the lead and ensure you do not miss your deadlines. Not only could penalties be levied for late filing or payments but you may also incur interest charges and your business could be more likely to be selected for a tax enquiry. There have been significant advances in the technology available to good accountants and businesses alike. Your accountant should be talking to you about automated processes and cloud based bookkeeping options. If you are open to modernisation, there are significant savings to be made in terms of your internal functions and the value you receive from your adviser. Paying your accountant to talk through the year-end results is no longer good enough, at Lovewell Blake we are leading the local market in innovative solutions and work with our clients to look ahead rather than back. Year-end accounts Limited companies are required to file accounts with companies house nine months after the company yearend. These accounts have to be prepared in accordance with UK accounting regulations and presented in accordance with company law. Unincorporated business accounts need to follow similar regulations but are not as prescriptive when it comes to the presentation basis. We will work with you to prepare these accounts in an effective manner, and where you can make your work more efficient we will talk to you about this. Generally the year-end accounts work will include a meeting with your accountant but this is not a requirement. If your accountant is insisting on a meeting make sure you are receiving pro-active business advice, and not merely reading through the numbers each year. Statutory audit If your business is classified as medium sized you are likely to require an audit. There are also many circumstances where companies opt for an audit despite not requiring one by law. If you are no longer running your company on a day to day basis you may benefit from the assurance a full statutory audit provides. Check any large tender opportunities you are considering. Often there is a requirement for your accounts to have been audited. Lovewell Blake are registered auditors and, as such, can undertake statutory audit work either alongside accounting and taxation services or independently. If you require an audit or merely wish to discuss the benefits of the audit process, please get in touch. Assurance services With a full audit, the work undertaken is prescribed and covers all material areas of the financial statements. However, mini-audits are becoming increasingly popular. You can choose the areas you want us to focus on maybe stock control or cash management. We will develop and design procedures, agree our work with you together with our fee, and interrogate the areas most crucial to you and your business. We provide a report with our findings and recommend improvements to your systems and procedures. We can even oversee implementation of changes and improvements.

9 4. Meeting your obligations Grant audits and assurance services With many grant applications you will be required to incur the relevant costs before making a claim for repayment for all or a proportion of the costs. This is particularly common with innovation grants. Initially this will create cashflow pressures, and it is vital that the claim is turned around as quickly as possible. At Lovewell Blake we have a wealth of experience in grant audit work and our partners have the relevant professional qualifications to perform the required work where a grant claim audit is required. It is sensible to consult prior to incurring the costs so that the scope and timescale can be agreed, further speeding up the claim process. UK taxes Companies file a tax return 12 months after the year end but pay any tax due 3 months earlier. Unincorporated businesses work to the 5th April tax year and generally pay tax in January and July each year. We take control of our clients tax compliance affairs and ensure you meet all your deadlines. Our teams of tax advisers also work with you to structure your business affairs in the most efficient way. We will be in regular dialogue to ensure you are maximising tax reliefs and allowances and take a proactive role in keeping your tax bill to a minimum. Research and development Qualifying research or development expenditure can secure enhanced relief from corporation tax or a tax credit. Many areas of expense may qualify including equipment, parts and employment costs. Speak to us about your business, future plans and past projects to ensure you are not missing out on lucrative tax incentives. Patents If you have developed a product which is patentable, registering your innovation could secure significant relief from tax. Qualifying products must be formally registered and this needs to be considered commercially. Talk to us about patents and patentable technology as early as you can.

10 5. Employing and contracting The administrative burdens of engaging staff have never been so high. RTI and now auto-enrolment places increased pressures on the employer. If you are mainly contracting your operatives, you need to be clear on the basis of engagement. Contracts with staff and operatives must be legally robust and enforceable. This is a very hot topic and changes to guidelines are likely to continue.. Auto-enrolment is also now here for many, and if you are not already offering pension provisions to your staff you will soon have to do so, by law. Staying within the rules can be difficult and time consuming even for those businesses with the resource. Employment law continues to reflect changes to our society and the rights of the worker or employer is very rarely a clear picture. It is not surprising therefore that we are seeing a heightened demand for our HR consultancy services. Outsourced payroll Our local payroll teams handle the entire process for you, from calculating the pay amounts to paying your employees by BACS transfer and posting a payslip direct to their home address. Take the service one step further by providing a dedicated online portal for your employees to view their pay information and payslips on their laptop, tablet or smartphone. We can also pay HMRC the PAYE and NIC amounts direct from your business account. We work with you to tailor the service to your needs, developing a deliverable structure and timetable that works for you. With all the software based add ons and additional processes launched to meet the requirements of RTI and auto-enrolment, many clients are finding that our services are more cost effective even before taking account of time savings in your accounts team. Ask us for a quote to see what you can save. Auto-enrolment Employers are now required, by law, to enrol all relevant workers on a pension scheme. The administrative burden this will present to small businesses is potentially enormous. There are regulations around who you have to enrol, who can ask to be enrolled and who the scheme will apply to. There are set minimum amounts employers must deduct from salaries and amounts the employer must top up, and these minimum levels will increase. Not to mention trying to offer your employees the best scheme at the most efficient price. Lovewell Blake has a team of local specialists who can take on the entire process from administering the fund choices to presenting to your staff. We work with you to design a service which fits your staff, your ambitions as an employer and your budget. HR consultancy For some time the line between an employment relationship and contractor has been blurred. Whilst this has been clarified in recent months with clearer guidance, HMRC are motivated to classify as many workers as employees as possible. The contracts you issue to your contractors and employees need to be robust and legally enforceable. Our HR consultancy team can carry out a review of your current contracts and highlight any areas of weakness. We will draft new contract terms and can even oversee the transition period. If you are looking to sell your business in the future, weak contracts can have a significant impact on the business valuation following due diligence. Employment taxes The offshore industry has to work in an extremely fluid manner with regard to resource utilisation. Whether you are sending UK national overseas or engaging with foreign nationals both at home and abroad the tax issues can be complex. Working with a firm like Lovewell Blake means that a locally based and charged tax specialist will always be available to assist with queries and strategic planning in this area. We also host a number of international payrolls for locally based employers in our Great Yarmouth office, taking on these issues plus those of administration and compliance. Take the level of advice up a notch by utilising the expertise of HLBI specialists located in the territories you are trading in.

11 5. Trading overseas Whether your business has been trading overseas for years, or you are looking to move into new markets for the first time the advice of a good accountant can be invaluable. Lovewell Blake are a member of HLB International. A world-wide network of independent accounting firms meaning wherever you are doing business, we will be there with you. Advisory services around this area can be particularly diverse, and the issues summarised below are just a few of those which may be relevant to your business. At Lovewell Blake we have significant experience advising local companies and can offer a free initial meeting to discuss your plans and the specific matters you need to be thinking about, whether or not you decide to use us to assist. Guides When planning an expansion into a new territory for the first time some basic advice from a local expert can be priceless. HLB International produce Doing Business In guides for this very reason. These guides are prepared by the local HLB office in each country and they cover everything from taxes and employment issues to logistical matters and local law. These guides are available for free at and are used by many as a very useful introduction to a new country. If nothing else they will enable you to frame the key issues in preparation for a more focussed discussion with your adviser or accountant. Corporate structure Just as the legal entity you choose in the UK can make a big difference to your business, so can the manner in which you choose to operate overseas. Where you have a strong product and only require an agent approach you may be able to pair up with local operators, avoiding the need for much of the administration that comes with establishing a permanent overseas presence. If you do need to establish a base this could be done as a division of your UK business or by way of a new company incorporated in the local country but owned by the UK parent. Many foreign counties will insist on a local company and others allow flexibility. The tax rules will also vary significantly so taking advice before you commit is absolutely critical. Overseas taxes Depending on your corporate structure, the taxes you are required to pay on profits and how these profits are calculated can vary significantly. Many overseas territories operate very different tax structures to the UK. Quite often you will receive a UK tax deduction for overseas taxes suffered but this is not always the case, so make sure you prepare detailed forecasts and budgets for the tax which will fall due. With overseas subsidiaries within your group there is increased flexibility around tax planning and recharging relevant costs. This process is undertaken by even the largest global businesses and can effectively mitigate taxes in countries with higher rates. However, this is a very hot topic at the moment so advice on this subject is absolutely vital to ensure you plan effectively whilst staying within the law. VAT The VAT rules for overseas trading are dependent on a number of factors; such as who your customer is and what type of work you are carrying out. It is therefore important to establish at the outset the exact details of your supply. For example, there are scenarios where you could be working outside of the EC and still charging UK VAT on your supplies. There are further areas to consider when making certain electronic supplies to customers throughout the EC as well as considering the impact of import and export procedures, how they will affect cash flow and ensuring you have the correct documentation are all important. There are schemes that you can use to simplify and even save money in some cases when accounting for VAT which is why planning is essential to ensure the correct VAT treatment is taken into consideration with minimal disruption to the day to day business.

12 6. Business planning and growth In a world of commoditisation of service the compliance based approach of traditional accountants needs to modernise. Clients demand more from their accountant and at Lovewell Blake we take this expectation seriously. Strategic growth should not be reserved for the few, some simple steps could set you on the way to a whole new world of success. Our attitude to working with our clients to facilitate growth is what sets us apart and why we are the preferred choice for ambitious entrepreneurs. But it is not all about fast growing, innovative companies. Most businesses want to make more money and grow, but find it difficult to adapt to the modernisation of markets or move in a changing world. Whatever your ultimate aim, we work with our clients to understand what is important and facilitate the development of a strategy which suits the business and the directors. Financing support Banks are lending to businesses but the proposition needs to be right. They expect knowledge of your sector, a credible business plan and reasonable collateral. Our partners work closely with all local banks and can provide insight and connections into the right people to progress applications. We will work with you to develop your business plan, budgets and cashflow forecasts. In addition, many of our clients find that having Lovewell Blake on their side opens doors and adds credibility to their proposition. Grants We can work with you to identify specific local or national grant schemes which may be relevant to your business, strategy and location. For example, many grants are linked to generating employment in certain geographic areas. Our experts will identify available grants and even assist with the application. Many grants also specify the need for a grant claim audit or accountants check, we will work with you to secure repayment at the earliest stage. LB Energiser We have developed a series of interactive toolkits which we call Energiser Sessions. The purpose is to facilitate high level strategic discussions about your business, what each stakeholder ultimately wants to achieve in business and how the business needs to change to get there. This is a revolutionary approach to your relationship with your adviser and not for everyone, but we have seen local businesses grow beyond all recognition following a series of these sessions. We can even build these sessions into the overall professional service you receive from Lovewell Blake so it becomes part of your routine. Corporate finance services When you are looking towards acquisitions or mergers as part of your growth strategy, Lovewell Blake will work with you every step of the way. We can help identify suitable targets and undertake business valuations. We will even head up price negotiations and advise on terms. There are numerous considerations to be aware of when acquiring a business, and having an expert on your side can make the difference between a successful transaction or not. We have good working relationships with local law firms and banks which means that our deals will often run smoother, complete quicker and cost less. Our expertise, local base and network of contacts provide a fully rounded service to our clients.

13 7. Next steps and pricing The reason our clients value us as their adviser is because we make a point of building a picture of each client, which pulls in all the things that make each one different. Their aspirations, likes, dislikes, family set-up, history, commercial operation it all goes in. This allows us to wrap individual service and advice around each client, which suits them perfectly and which they really appreciate. This is way over and above the straightforward services you should expect from any professional accountant and financial adviser. That s why we re different because each of our clients is different. We believe our levels of service and advice are second to none, but in a competitive and commercial world we understand that our clients demand value for money. That is why we are completely transparent with our fees and offer fixed fees and even monthly payment plans. If you would like to hear more about what Lovewell Blake can do for your business, please get in touch to arrange a free no obligation meeting. During this meeting we will cover the topics included in this booklet and also talk through current business and tax related issues which will be affecting your business. If you would then like a quotation for the services you require we will confirm this in writing. We offer this meeting free of charge, as we have every confidence we will be able to tailor a service to your requirements, but also appreciate that it may not necessarily be the right time to move advisers. In which case we will happily add you to our mailing list for relevant updates and look forward to hearing from you in the future. Where we are providing monthly or quarterly services you may benefit from paying your fees via a fixed monthly payment plan. Many of our payroll and bookkeeping clients already utilise this option. Either way, we will provide a fixed quotation for the agreed work. Where a level of special work, for example tax planning projects, is being undertaken we will provide you with an estimate and only exceed this with your express agreement. Having peace of mind that our fees are fixed and affordable is one less thing to worry about. Please get in touch if you would like to meet for a free initial consultation meeting. If you would like to proceed with appointing Lovewell Blake the process is simple, we will prepare engagement paperwork for you to sign and put in place authority with HMRC so that we can access your tax history. If you have an existing adviser we will write to them directly in order to obtain all the accounting and tax related documentation we need, accounting institutes require outgoing advisers to provide requested documentation to your new accountant. Where you also need to transfer your company registered office to Lovewell Blake we will take care of this process for you either online or by submitting a simple form to Companies House.

14 Your notes Disclaimer: Please note that this document is provided for your information only. Whilst every effort has been made to ensure its accuracy, information contained herein may not be comprehensive and you should not act upon it without seeking professional advice. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at under reference number C Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. Lovewell Blake Financial Planning Limited is available for advice at all Lovewell Blake offices. Lovewell Blake Financial Planning is authorised and regulated by the Financial Conduct Authority. Lovewell Blake LLP is a member of HLB International. A world-wide network of independent accounting firms and business advisers. Nov 16