Accountancy Services Guide

1st Group, Bow Court, Coventry, CV5 6SP Tel: +44 (0) 2476 691757 Fax: +44 (0) 2476 997 350 New Enquiries Tel: 0800 089 0110 Email: helpdesk@1st-option.co.uk Website: www.1st-option.co.uk Accountancy Services Guide 2015 Edition Disclaimer This document has been prepared based on 1st Option s understanding of current legislation and guidance issued by HMRC, and is correct at the time of printing. The document is prepared to assist clients and potential clients in understanding our services and any costs or fees associated with those services. This document can be used as a reliable source of information. 1st Option Consulting Services Limited Registered Office: 1st Group, Bow Court, Coventry, CV5 6SP Registered in England No: 03186435

ACCOUNTANCY SERVICES GUIDE About us 1st Option is an established financial management group, including a professional accountancy practice, a dedicated book-keeping service and an independent financial advisory business. In addition the Group can assist with legal services, marketing support and IT solutions. We provide tailored accounting and related services across a range of professional and Industry sectors. Since 1996 the Group has evolved into a nationwide operation, with 4 operating divisions. The approach has always been to support clients through quality service and pragmatic advice, by making things as straightforward as possible. Our Mission The mission of our Accountants is to help clients achieve their short, medium and long-term financial goals. We do this by a)helping clients to identify goals and objectives and then planning to achieve these and b)providing clients with accurate, relevant, and usable financial information and services in the most efficient, effective and timely manner possible. As we strive to achieve this mission, your accountant will:- adhere to the highest professional and ethical standards in all our of dealings; exercise honesty, diligence, and objectivity in all our activities; safeguard the integrity of confidential or proprietary information entrusted to us; treat everyone with courtesy, respect, and understanding; maintain a development programme in order to grow in knowledge and experience; and use technology and knowledge to constantly improve the quality of our work. Click here for a link to our corporate values. Accountancy Services Guide 2015.01 Page 2

Customer Excellence We aim to ensure that you are our main focus. To fulfill our Customer Excellence Programme we will get to know and understand your requirements and needs. We can then deliver a service bespoke to you. Working with 1st Option will ensure you are able to achieve the personal goals and objectives you have in any area of life. We will support you with the running of your business and all aspects of life and financial planning, insurance and much more. Our Accountants are tremendously experienced at advising clients who supply services via a limited company and, wherever possible, we build our services and costs around the company. This often means that any fees are subject to tax relief. This document is designed to bring together these desires and aspirations. It will be split into the key areas below: Long-term Individual Programmes(LIP) Outline of Services Formation Only Service Annual Accounts Only Extended Service Premium Service Additional Services Personal Tax Return Service Summary Having spent some time discussing your personal information at our initial consultation, we firmly believe that we can help you and add value to your business. We hope that you will engage our services, and we look forward to providing you with support and advice for many years to come. Accountancy Services Guide 2015.01 Page 3

Your Long-Term Individual Programme One of the unique features about working with each division of the 1st Option Group is that we are all focused on supporting you. Your Long-Term Individual Programme (LIP) aims to identify your plans and objectives for the future, and then each member of our Team will advise you with those goals in mind. Within the Accounts Team this means advising you on how best to achieve your financial goals and objectives by ensuring that your Limited Company is structured to achieve this. Our Financial Team will offer you an initial consultation where we seek to identify the goals that you have for your family, your business and your personal life. We will then start to advise you on a strategy for each aspect of your LIP, in an attempt to help you achieve your goals. You have the option of building your personal LIP on the Client Vault. If you take this option we will review the progress of your planning and compare this progress to your goals. In addition, you will be able to use the Client Vault to record all of the transactions of your business, communicate with your Accountant, check your tax position, and link to the planning tools available in order to achieve your lifestyle planning. Accountancy Services Guide 2015.01 Page 4

Our Clients A Case Study In the section below we have highlighted a typical client who has varying financial planning needs. Wayne When Wayne approached us he was 51. He had worked for the same company for many years and had benefited from a sizable redundancy. He was embarking on a new career as an Interim Manager specialising in Human Resource Management. Wayne lives in Reading and has generally secured contracts in London. Wayne is married and has children who have flown the nest. He has no significant mortgage or debts. The initial consultation with Wayne identified that he was keen to build and consolidate wealth over the next 10-14 years to enable him and his wife to have a good and secure retirement. Wayne engaged a number of different parts of the 1st Option Team including the Accounts Team to help run his company. Wayne s end goal was not just about job satisfaction. He had personal goals he wanted to achieve and the 1st Option Team recognised this. Taxation Planning One of the key drivers for Wayne is to plan his affairs with a heavy focus on tax mitigation and minimisation. Wayne provides his services via his own limited company and an integrated taxation strategy is key to his overall successful planning. Mortgage Planning* Wayne and his wife plan to build a portfolio of three further residential properties, which they will let out. Our mortgage advisers have helped raise flexible lending, which Wayne reduces with each dividend drawn from his business. Maximising Income Wayne s wife is currently a non earner and is interested in contributing to the success of the business. Involving her in part ownership of the business, as a shareholder, can have significant benefits. Long term Savings & Investment* Wayne is part-way through building an investment portfolio. His goal is to have 250,000 invested, split between himself and his wife, by retirement. This objective will be met by regular ISA investments. Cash Retention Wayne does not need to draw all of the funds from his business and wanted advice on the best way to build reserves. His accountant has recommended a strategy to use the Entrepreneurs Relief concession to achieve this tax efficiently. Pension Planning* Wayne funded pensions from his limited company and plans to use short-term part-vesting to access cash in future years, particularly if he has some years of limited company income. Clearly for Wayne to achieve his goals he has to build plans that cover all aspects of taxation and financial planning. *Advice in these areas can be provided by 1st Option Financial Consultants Limited who are independent financial advisers authorised and regulated by the Financial Conduct Authority. Accountancy Services Guide 2015.01 Page 5

This is our second case study... Penny Our Clients Case Study 2 When Penny approached us for advice she was 25 years old. She is a single parent, and her daughter was just under 3. Penny lives in Liverpool and generally provides contract services to clients in the North West of England. Penny has a good personal network and a supportive family, but she likes to get home every night. She pays for child care for four days each week. Like Wayne, Penny also engaged the 1st Option Accounts Team, which advised her on the operations of her limited company. Penny also sought help from our Legal Services who have protected her assets for the sole benefit of her daughter, ensuring that her future assets do not fall within the control of her ex-partner. The Accounts Team and Financial Team worked with Penny on a number of different strategies, and the chart below shows how the advice areas supported Penny... Taxation Planning Penny also wanted to ensure that her long-term planning was as tax efficient as possible. Penny s first assignment failed IR35, so building financial plans that incorporated taxation planning was imperative in order to achieve the goals. Mortgage Planning* Penny lived with her parents when she first contracted. Our mortgage team helped secure a mortgage after 3 months of contract life and Penny moved into her first home after 6 months. Her mortgage allows flexible payments suiting her income. Childcare Penny s daughter is under 15 years of age. Her accountant therefore advised Penny to rake advantage of the tax and NIC free childcare vouchers via a childcare voucher scheme. Long term Savings & Investment* School fee planning was very important to Penny she is keen for her daughter to be privately educated from ages 5 to 16. Our Investment Advisers support Penny by building savings that can be called upon in future years to fund education. Salary Strategy Although Penny s first contract was caught by IR35, a salary strategy was created to maximize income and safeguard against non earning periods giving Penny assurance should she be out of work. Pension Planning* Long-term retirement planning is currently lower on Penny s priority list, because the school fees are so expensive. Our retirement advisers have started a programme that will grow as the daughter becomes less financially dependent. Once again, long-term goals will be achieved by integrating plans, ensuring that Penny s company affairs are consistent with her legal and financial planning. *Advice in these areas can be provided by 1st Option Financial Consultants Limited who are independent financial advisers authorised and regulated by the Financial Conduct Authority. Accountancy Services Guide 2015.01 Page 6

Client Vault Both Wayne and Penny have been able to record their affairs on the Client Vault. This is a secure portal, exclusively available to 1st Option s clients. In the screenshot below you will see how the Client Vault can be useful for clients like Penny and Wayne Both Penny and Wayne can record their personal details that then link to other tools on the Vault. For Penny this includes her daughter s details for school fees planning, and for Wayne it s about retirement and investment. Both clients record their business transactions and keep their company records electronically. The Vault takes business assets and uses them as part of the planning tools elsewhere in the client s goals section. Penny is able to record details of her mortgage debt, including adding reminders about rate review dates, and linking it to her buildings insurance records. Penny was very keen to create a will and trust to ensure that assets pass to her daughter, rather than her ex-partner. Both clients have a focus on retirement. This is more important for Wayne, given his age. Wayne uses the planning tools to ensure that he is on target for his retirement income. So you will see that the Client Vault is not only a useful tool for handling the financial affairs of your business, but it also enables all parts of your lifestyle and financial planning to be linked together. Once your business is set up, our Helpdesk Team will release your log-in details and our entire Team will start work on making it fit for your own purposes. Accountancy Services Guide 2015.01 Page 7

Client Propositions - Outline Although Wayne and Penny are at extremes of the Long-Term Individual Programme (LIP) spectrum, the majority of clients have some needs around the following areas, but the emphasis changes from client to client. Taxation Planning and Mitigation Strategies for Income extraction from their businesses Savings & Investment Protecting the Family, Dependents and Personal Assets House Purchase and Debt Management Retirement Planning As can be seen from the case studies, the emphasis placed on each category should and will change for most people as time passes. Inevitably, income needs change; taxation planning increases; any debt becomes easier to manage as it reduces over time; the cost of child care (and upbringing) should reduce as children become self-sufficient; and retirement planning becomes more important as the number of years that one has to build assets reduces as we age etc. The key to successful planning is to therefore embark on a Programme that is flexible enough to grow with you and ensure that your business is structured to meet such needs. This is what the 1st Option Accountants will help you do within your own Long-term Individual Programme. We offer a company formation service plus three ongoing client propositions that you can chose from for your business to ensure these goals are met. The table on page 10 shows the different propositions available to you. Each proposition brings different elements of tax planning and can be adapted as you and your business strive to achieve your goals. Accountancy Services Guide 2015.01 Page 8

Client Proposition Formation Only Service The first thing you will need to do is incorporate your business. We offer a Limited Company formation service and assistance with registrations which is detailed below: Introductory Consultation Basic Information Gathering Company Formation Webinar Legal Obligations We will spend time discussing your existing affairs with you. We will ensure that our formation service is the correct course of action for you. We will send you a Personal Data Record (PDR). This record will enable us to form the company for you online at Companies House. It also gives you details of our Data Protection Policy. Our Helpdesk Team will then transfer your data from the PDR to our Client Database and will also complete the same on our Company Formation Software. Once we have received confirmation from Companies House (usually a couple of hours), we will send you full details of your newly formed company, including the Certificate of Incorporation. One of our advisers will take you through the basics of running your own business. They will show you the various advantages and discuss the basic principles of how a company works. They will discuss your income needs and show you the best way to achieve your goal. They will agree with you your future requirements from 1st Option. Our adviser will also explain any legal obligations associated with your Limited Company and advise some of the ways you can protect yourself in business. 199.99* or 19.99 *The Formation Only Service is a one off payment of 199.99, which is discounted by 180.00 to 19.99 if you engage any other recurring client proposition offered by 1st Option. Our Helpdesk Team will happily speak with you about the benefits of our recurring services. Should you choose to engage a recurring service with us the formation fee can be collected with your first monthly direct debit payment. The above service assumes you will form a company for you with a name of your choice. Occasions may arise where a client insists on use of a shelf company. A shelf company is a company that has already been formed and is waiting for a buyer. It has a predefined name and incorporation date. Given that it takes only a matter of hours for us to form a company with a name of your choice demand for shelf companies is very low. The fee for purchasing a shelf company is 236.99 discounted to 56.99 if you engage a recurring service with us. Fees are subject to VAT. Accountancy Services Guide 2015.01 Page 9

On-going Client Propositions - Outline Once your business is incorporated you will need to decide a level of accounting and taxation support that best suits you. 1st Option has developed a range of recurring client propositions that allow you to select a service that suits your needs, with a predefined cost. The following matrix will help you to understand the services that we offer to support with your Limited Company, and the costs associated with our services. Annual Accounts Service Extended Service Premium Service Optional Additional Services Web Consultation Formal Engagement Access to Vault (Portal) Initial Meeting Annual Return Annual Accounts CT return Prepared & Filed Personal Accountant Monthly Payroll and RTI advice Unlimited Accountant Meetings Unlimited Telephone advice Monthly Bookkeeping Expense Reconciliations Quarterly Management Reports Quarterly VAT Monthly Management Reports Income Extraction Mortgage References Invoicing Assistance with Visa Renewals 1st Option Registered Office Prepare / File Personal Tax Return Cost 75 per month 120 per month 150 per month Varies please see Page 14 The above charges do not include the fee to file the Annual Return at Companies House. All above fees are subject to VAT and include a 10% discount for paying by direct debit. Details of these recurring Client Propositions can be found over the next few pages. All fees quoted above are based on services being provided by one Director or employee. If you wish to have more than one active Director or employee fees may increase. Please speak to us should you wish for more than one active Director or employee. Accountancy Services Guide 2015.01 Page 10

Client Proposition Accounts Only Service Our Accounts Only service is generally suited to those who want to manage the day to day bookkeeping requirements of their business themselves and simply outsource the statutory requirements. The Accounts Only Service enables you to do this, coming back to us at the end of the year in order to prepare your statutory accounts and annual returns. Formal Engagement Access to Vault (Portal) Personal Accountant Initial Meeting Payroll Annual accounts Corporation Tax Annual Return Fee We will write to you after your company has been formed with our Letter of Engagement and Terms of Business. These will stipulate our responsibilities and those of your directors. Whenever possible, we will layout the Record referred to above on your secure Vault. The Vault will be extended over time, and you will have access to planning tools as they are developed. Within 48 hours of your company records being passed from our Helpdesk to your Accountant, he or she will contact you to discuss in more detail how to supply services through a Limited Company. This will involve discussions on what expenses can be claimed, how to raise an invoice, how to operate VAT and any other matters you wish to discuss related to your business s accountancy and tax affairs. Your Accountant will also advise how to keep your company s books and records as required by the Companies Acts. This call will last 30 minutes. Within 8 weeks of becoming a Client, your Accountant will meet with you to discuss any concerns you have. They will also advise you further on other benefits you can derive from your company. They will explain LIP further and how it can benefit you. You will be required to bring along other documents to finalise our client database requirements. This meeting will last 45 minutes. We will prepare a payroll for a salary based on the level that you have deemed appropriate. We will offer advice on Real Time Information (RTI). Your Accountant will prepare for your approval your Statutory Accounts and they will be signed off by 1st Option Accounting Services Limited, Chartered Accountants. These accounts will be filed online with HMRC and an Abbreviated version will be filed online at Companies House. We will calculate your corporation tax liability based on these accounts and we will prepare the company s corporation tax return CT600. Once you have approved it we will file it online with HMRC. We will compare Companies House Records with 1st Option s and prepare the Annual Return for your approval. Once approval and the filing fee are received, it will be filed online at Companies House. 75 per month If you choose to engage the Accounts Only Service, the company s books and records should be completed to include a trial balance sufficient to be able to create a basic set of accounts. All bookkeeping, VAT returns, dividend calculations and any other company administration will have been completed by you during the year and you will supply us with summary information at the year end. The services detailed above will include up to one hour per year consultation with your personal Accountant to allow us to focus on any long term planning or strategic goals. Accountancy Services Guide 2015.01 Page 11

If the records are not completed sufficiently, we reserve the right to charge extra fees to cover our time producing this information. You are able to extend the Accounts Only Services at anytime in the future. Your Accountant will speak with you about upgrading to a different service should any benefits be available. All fees quoted above are based on services being provided by one Director or employee. If you wish to have more than one active Director or employee fees may increase. Please speak to us should you wish for more than one active Director or employee. All Fees are subject to VAT. Accountancy Services Guide 2015.01 Page 12

Client Proposition Extended Service Many clients need a little more support with their business affairs. Our Extended Service is ideal for those clients who want to provide their services via a Limited Company but who may fail IR35, do not require VAT registration and want to keep things as simple as possible. The following schedule explains how the Extended Service works. Bookkeeping Payroll Expenses Quarterly MI Report Unlimited Telephone Advice Unlimited Accountants Meetings All of the features of the Accounts Only Service plus: We will prepare your company s books and records in accordance with the Companies Acts from the information you provide. We will prepare a payroll for a salary based on the level that you have deemed appropriate after any expenses claimed. We will offer advice on Real Time Information (RTI). We will advise you which expenses you can claim and record them accordingly. Your Accountant will review your expenses, and advise you the amount of expenses that you can pay yourself. We will prepare a quarterly Management Information report, giving details of current assets and tax liabilities of the company and will predict any corporation tax that may become due. We will provide unlimited telephone assistance and advice. You will receive contact details for your personal accountant We will meet with you at a time and place convenient to you. Your personal accountant can facilitate such meetings. 120 per month You are able to upgrade the Extended Service at any time in the future. Your accountant will speak with you about upgrading to a different service should any benefits be available. All fees quoted above are based on services being provided by one Director or employee. If you wish to have more than one active Director or employee fees may increase. Please speak to us should you wish for more than one active Director or employee. All Fees are subject to VAT. Accountancy Services Guide 2015.01 Page 13

Client Proposition Premium Service Our most popular service by far, the Premium Service, supports clients who want to delegate much of their businesses routine administration, and benefit from some of the financial advantages arising from VAT registration and passing IR35. The following schedule explains how the Premium Service works in detail. VAT Monthly MI Reports Income Extraction Income Splitting Mortgage Reference All of the features of the Extended Service plus: We will prepare your company s quarterly VAT return and advise on the most suitable VAT scheme. We will prepare a monthly MI report, giving details of all assets and tax liabilities of the company and will predict any corporation tax that may become due. We will advise you on the overall income extraction strategy for your business including the significance of different salary and dividend calculations. We will advise you on the benefits and pitfalls of any income splitting planning strategies, and complete all administration relating to any changes in your company s corporate structure. We will prepare and sign any mortgage reference letter required by mortgage lender or broker. 150 per month You can purchase any of our optional additional services at any time. You should discuss your additional requirements with your accountant. All fees quoted above are based on services being provided by one Director or employee. If you wish to have more than one active Director or employee fees may increase. Please speak to us should you wish for more than one active Director or employee. All Fees are subject to VAT. Accountancy Services Guide 2015.01 Page 14

Client Proposition Optional Additional Services We often find some clients need assistance with additional matters over and above the recurring service they have chosen. The following schedule explains additional services we offer and provides estimations of the costs for such services: Visa Forms Registered Office Invoicing Reference Requests* Change of company details* HMRC Investigation* We will assist with the provision of any information required for your visa application and we will certify any of the required documents. 1st Option s Coventry offices can be used as the Registered Office of your company should you wish. We will forward any mail to you electronically. We will submit invoices to your client based on the timesheets you provide. Please note this is an annual service whilst you are engaged with us and not based on the amount of timesheets received and invoices submitted. We will prepare and sign any mortgage or tenancy reference letter required by mortgage lender or broker or for any rental properties. We will amend any company details such as change of company name or Director and inform the relevant authorities. Your Accountant will assist you with any enquiries made by HMRC and attend any HMRC investigations. From 150 150 per annum 150 per annum 50 per reference 50 per change From 250 *Included free of charge in the Premium Service. It should be noted Companies House will require a nominal fee to change the details which is not included in the Premium Service. The above fees will be collected with your monthly direct debit. All Fees are subject to VAT. Accountancy Services Guide 2015.01 Page 15

Client Proposition Personal Tax Return Service You may be required to complete a Personal Tax Return each tax year to account for any other forms of income aside from salary. Our Personal Tax Return Service allows us to take this administration away from you as we will prepare and file your tax return. Prepare Personal Tax Return File Personal Tax Return Your accountant will prepare yourself assessment tax return in accordance with the information you provide. They will send you a copy of the return, together with a calculation of the tax due based on this return. You will be responsible for checking the return. Once you have approved the return in writing, your Accountant will file the return online with HMRC. Your Accountant will confirm with HMRC that your return has been filed and advise you accordingly. 75 per* annum *The fees for a personal tax return may vary if you have self-employed income, excessive investment income or capital gain tax calculations. We are happy to review the work required to prepare the tax return and give you a quote for of the prospective fee you will incur. Accountancy Services Guide 2015.01 Page 16

Summary What Happens Next Our Helpdesk Adviser will help and advise you how to form a Limited Company. Our advice will focus on your goals and objectives and our adviser will steer you towards a client proposition that achieves your objectives in the short and long term. Once your company has been formed and all the requisite paperwork has been completed, our Helpdesk will pass all your paperwork to your new Accountant. Your Accountant will then be in contact with you to discuss in more detail your requirements. You Helpdesk Accounts Financial Services Accounts Department You Legal Services You and 1st Option Your Accountant will also discuss with you your goals and aspirations. They will advise you how 1st Option can assist you to fulfill your goals. You will be introduced to other advisers within the 1st Option Group to advise you in other key areas in Your Long-Term Individual Programme (LIP). LIP We will be delighted to provide services to you, and we remain committed to helping you achieve the goals and objectives contained in your Long-Term Individual Programme. We will endeavour to maintain as many of your records as possible via the Client Vault our online portal. 1st Option Consulting Services Limited is a member of the Institute of Chartered Accountants in England and Wales Practice Assurance Scheme. More information about 1st Option and our group details can be found at http://main.1st-option.co.uk/group.aspx. We look forward to be of service to you for many years to come. Your 1st Option Team. Accountancy Services Guide 2015.01 Page 17