Essex accountant – a week in the life
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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
Why accountants aren’t boring
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Whilst sitting in the new Forbes – Chartered Accountants office in Dunmow, Essex just the other morning, John Forbes was thinking about how wrongly
some/all accountants are considered to be boring and dull by the general public and where this theory has come from and why it is thought.
When a child is asked what he or she would like to be when they grow up replies of teacher, police officer, fireman and vet are all greeted with enthusiastic coos. Not many children receive a warm reception to their announcement they want to be an accountant. These number crunchers are perceived as being exceedingly dull and little more. Their ability to work with numbers misleads some into believing that they have no ability to use words adequately, that their level of communication is sub-par.
Accountants are not boring or dull as they are people like any others. They are no less or more interesting than teachers, police officers, firemen or vets even if their job is seen as being less ‘exciting’. However, the job of an accountant is often misunderstood. The image of a grey man stooped over a calculator tirelessly punching in sum after sum is perhaps true of some accountants but by no means all.
The world of finance has changed dramatically, even in just the past three decades. Finance is growing in influence and importance, and accountants help realise that. The need to have a wider understanding of the financial world at large has led to a broadening of expertise, business acumen and even personality. The job of an accountant is multifaceted and accountants need to be multidimensional to keep up.
Perhaps it is not that accountants are boring people but that they get excited over boring things. But accountancy is not just about pounds and pence and plus and minus columns. Accountants help revolutionise businesses, help develop programmes that will improve efficiency and ensure high standards throughout businesses. Financial law can be a significant aspect of an accountant’s job and the law is rarely seen as dull and boring since it is constantly evolving.
Accountants are constantly making financial decisions, the consequences of which go beyond the business or individual they are dealing with. Sensibility and reason are necessary qualities for accountants but that is not the same as being dull or boring.
Well at Forbes Chartered Accountants things are different to other accountants and things aren’t boring and dull. To see this for yourself, why don’t you visit www.forbesca.co.uk to find out exactly how and why John Forbes at Forbes – Chartered Accountants is definitely very different from the rest.
Forbes – Chartered Accounts new office address, Suite 5, Melville House, High Street, Dunmow, Essex CM6 1AF
Sunny thoughts on SIPP, IR35 and the Flat Rate scheme
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More ramblings from John Forbes on a sunny afternoon in our Great Dunmow office in the heart of Essex.
Finally we completed the lease on our new Dunmow offices and moved some furniture in. Fingers crossed BT are ready for our move on 22 August.
Been spending time looking at tax planning again and interestingly at the VAT flat rate scheme which is showing savings for a number of clients – even on my own SIPP I can make nearly £900 out of thin air for doing nothing but use the flat rate VAT scheme – which is fine whilst it only holds property – need to watch out if it does other things!
Lot of client discussion around IR35 in the past week – as always trying to negotiate a distillation of the inherently simple into answers to clients’ inherently convoluted questions – as always it would be lovely to tell them what they want to hear – as always, life ain’t that simple. There are a lot of contractors in Essex and Stantsted is a great route straight in the City so the number of enquiries and clients in this area is always on the up, especially in the current
climate. Unfortunately they all understand the tax savings straightaway, but not the tax costs that go with it, nor the pitfalls and rules that need to be complied with to make the savings!
For more help and advice on IR35 and other tax planning issues, please do not hesitate to contact us at Forbes Accountants.
John,
You may need to pay class 4 NIC
0Just a reminder from John Forbes at Forbes Accountants based at the heart of Essex in Great Dunmow. Please remember if you are self-employed you need to pay your income tax and class 4 NIC on-account payment for 2010/11 by 31 July. 
A company with a 30 September 2010 year end must pay its corporation tax by 1 July 2011. Employers must pay class 1A NICs on benefits by 19 July.
Quarterly payments of PAYE are due by the same date. Monthly payments of PAYE and CIS deductions are due by 19th of every month, or by 22nd if paying electronically. If you or your company will not be able to pay the tax due on time you should contact the Tax Office business payment support line (0845 302 1435) without delay, or we can do this for you. Once the tax due is actually late, even by a day, it is much more difficult to negotiate a reasonable payment plan with the Taxman.
Please note that the Taxman is now very keen to chase every penny of tax owed, and you will start to receive aggressively worded letters if you don’t pay on
time. If you do not react or pay promptly you will receive telephone calls and possibly personal visits from professional debt collectors. The situation can
escalate quite quickly into bailiffs being authorised to seize your goods, or a court judgement being enforced.
If you receive a letter demanding tax due, don’t ignore it. React immediately and call Forbes Accountants and keep more of what you earn.
John.
Sponsorship
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John Forbes of Forbes Accountants Dunmow, Essex are more than happy to continue, support and sponsorship of the local Arts Centre Dunmow.
About: The Arts Centre is a non profit organisation, which opened on June 3rd 2007, after spending 4 weeks turning an old industrial building into an Arts Centre. This was done with the help of lots of volunteers. This year we have been selected to be Finalists in the Essex Business Excellence Awards and are excitedly awaiting the result. The evening event is to be held on September 23rd 2010 We are a studio hire facility where we currently have 5 studios of various sizes, also an arts & craft studio and now a creative studio for one off events or long term hire. We have a hive of activities each day from the Play & Learn Nursery and Jo Jingles for the little ones as well as Scene II Theatre school and Theatre groups to adult clubs including Yoga, Zumba, Pilates, and Karate. During all the school holidays The Arts Centre is full of activities for children aged 5 and over. Each evening The Arts Centre is alive with activities for Adults.
We aim to encourage all local people of all ages and abilities by bringing them together in our local community by broaden peoples abilities whilst giving them new skills and confidence, with a precedence on occupying young peoples spare time.
Contact details for The Arts Centre Dunmow. Telelephone: Great Dunmow 01371 – 878020 E.mail: theartscentre@aol.com Website: www.theartscentre.giving.officelive.com
John Forbes. Forbes Chartered Accountants.
Moving Office
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Moving business premises can be a very stressful time even for an accountant, it’s not just the premises and parking that have to be considered but the location, however we have finally agreed everything on the lease of our new offices in Dunmow – just down the road, but a big improvement – especially when the lift is fixed which will be a while. Of course this is just in time for us to move right in the holiday season – deep joy, short staffed and loads of cardboard boxes paperwork and files.
Everything considered Dunmow is actually an ideal location for our practice – the A120 improvements mean we are within 20 – 30 minutes of Harlow, Braintree, Stansted Airport, Witham and Chelmsford – our local Essex patch – and Stansted, Stansted Airport and the access to the M11 motorway makes it really easy to meet clients in the City and for them to get to us or indeed from overseas, finding a number of overseas clients are now happy to meet at our offices rather than in London as the transport network is so good and close to the airport infrastructure! Next up must remember to notify our clients and of course the telephone providers.
Until my next thought John Forbes of Forbes Accountants Dunmow Essex.
Contractors
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John Forbes of Forbes Chartered Accountants Great Dunmow, was talking to a contractor today – we set up a meeting as he isn’t happy with the umbrella company he is working through. He pointed me to another Accountants web site where it warns about take home pay calculators and they say – logically, your take home must be 80% if you draw dividends and Corporation tax is 80%. HELLOOOOO Did no one ever hear of IR35 (we can work with you on this!) Assuming that’s not an issue (bit of a big assumption, we would rather check before quoting tax rates) then, what if you make a good living?
After a salary of £7,068 per annum, and using up basic rate tax bands I calculate Profit 100 Corp tax 20 Dividends 80 Higher rate of tax on dividends effective rate of 25% = 20 You are left with 60 Start 100 left with 60 means a 40% tax rate on higher rate income (after 20% on basic rate). Funny that, it’s the income tax rates If you make lots then a higher higher rate kicks in over £150k… So is the saving just in National insurance – well, yes!
Assuming a spouse is not a profit contributor … but that’s another matter. Scary for contractors looking to understand things if they go to the web site I mentioned above! Made me wonder whether we should focus on Contractors Accountants. Just another thought from John Forbes of Forbes Chartered Accountants, Great Dunmow Essex. “Maybe that’s why we are different! John. www.forbesca.co.uk Twitter @EssexAccountant Facebook: Forbes Accountants
Welcome to Forbes
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Welcome to my blog – a look into an Accountants world…From behind the scenes at Forbes Chartered Accountants.
Aside from Accountancy at the speed of light, we advise clients across a range of financial matters. But whats in a typical day…
Well it’s a week back to normality after 4 days of meetings in London (including Sunday) –
A client complained why wasn’t he asked for a testimonial for our web site – and then promised it by return, funny its not arrived (yes
Gary this is YOU) – this is about the best start to the day I could have! I think its because he wanted his accounts out….
Great tax planning session with a client whose business is booming – mind you given his reputation I am not surprised; then a prospect (now client) selling a really unique solution to environmental behaviour change – something I hadn’t even thought about! Finally faced with 3 inches of leases to read from our lawyer I chose Corrie and a doze before succumbing to blog session 1.
Until the next time John Forbes,
Forbes Chartered Accountants, Taylors Piece, 9 – 11 Stortford Road, Great Dunmow, Essex. CM6 1DA.
