After another manic week and a sharp intake of breath, here are my thoughts…

Contractor cowboys
• I came across a major concern about a Contractor scheme, which none of our clients use, but several people we know have. It’s amazing what’s out there on the market – my conclusion being that it’s better dealing with people you have checked out and can eyeball! The stuff that people do without ANY due diligence is beyond me.

However the week ended on a positive note as Friday brought some great tax savings:

• A referral in Brentwood where there is so much to do to save tax and restructure the business – its shocking our predecessors hadn’t taken the trouble to do this, let alone review the bookkeeping. Simple to see how our client can save 40% of the time they spend. Immediate cash saving in tax of £3,750, not a bad result for an initial meeting, aside from the ongoing savings.
• Rang the referrer to say thank you and a deep discussion ensued which ended up with the identification of tax savings of around £9k to £10k per annum – some work to do, but the savings are absolutely there to be made.
• To cap it all, heard a client has received approval for a substantial pension fund loan. This completes an exercise we initiated back in May, soaking up 4 years unused pensions relief (with a huge Corporation tax saving of around £75k); dramatically improving our clients cash position by taking out personal rental income, used to repay the capital element of a commercial mortgage.

This instead will now go into the pension fund, so effectively the rent the company pays will become tax free. So it no longer eats up tax free pension income bands (that’s a saving of up to £15k per annum for the husband and wife); and providing a future loan back of cash to the trading company from the pension fund. Oh yes, and the property value can grow in a completely tax free environment – if we see growth return to property! With property values so low right now, this could not have been timed better.
Major planning exercise lined up for next week, looking to save an eye watering amount on a deal structure!

I hope some of this may be of interest to you – helping people save money and time in this way is my favourite part of what we do.

Until next time…

John Forbes