Pension schemes newsletter

A new pension schemes newsletter has been published by HMRC. The latest edition of the newsletter includes details of the following topics:

  1. Pension advice allowance. HMRC has been asked by pension scheme administrators if their members can request the pension advice allowance from their scheme by email. HMRC has confirmed that the member can make this request by email, however, it’s up to the pension scheme administrator to decide if they will accept requests by email.
  2. Relief at source – annual returns. A reminder that filing deadline for the 2016-17 return is due by 5 July 2017 and any subsequent interim repayments will be held pending receipt of the outstanding information. Historically, the deadline was 5 October but this has been brought forward to 5 July from this year.
  3. Scottish rate of Income Tax. HMRC published a newsletter in May 2017, for pension scheme administrators about the Scottish rate of Income Tax and how this affects registered pension schemes operating relief at source. A reminder of what was contained in the newsletter has been reprinted.
  4. Tax Return for the Trustees of Registered Pension Schemes (SA970). An SA970 is only required to be submitted by trustees of registered pension schemes if there has been a claim for tax paid or in the case of a first claim. This is separate to the pension scheme return (PSR) that provides HMRC with information about the scheme. A PSR only needs to be completed if HMRC issues a notice for you to do so and will be required even if you have already submitted the SA970 tax return.

A new pension schemes newsletter has been published by HMRC. The latest edition of the newsletter includes the following topics:

  1. Fixed protection. HMRC have introduced a new form of protection called ‘fixed protection’ for individuals with a pension pot which exceeds £1.5 million. Fixed protection helps reduce the lifetime allowance charge but an application to use fixed protection must be sent to HMRC before 6 April 2012. All applications must be made in writing to HMRC using the APSS227 form available on HMRC’s website.
  2. Registered Pension Scheme Return (PSR). A reminder from HMRC that penalties will be incurred if a PSR is not submitted on time. The deadline for submission was 31 January 2012. Appeals against any penalties will only be considered once the required PSR has been filed.
  3. Tax Return for the Trustees of Registered Pension Schemes (SA970). An SA970 is only required to be submitted if there has been a claim for tax paid or in the case of a first claim. The filing date for the return was extended to 2 February 2012 due to the possibility of industrial unrest.
  4. Relief at source (RAS). HMRC’s Pension Schemes Services (PSS) department have been reviewing the way RAS claims have been administered. The PSS team is currently holding a number of workshops with pension providers and a further update will follow when HMRC has fully considered the findings of the workshops.
  5. HMRC introduce new Customer Liaison Managers (CLMs). A new HMRC team has been established dedicated to managing the relationship between PSS and large pension schemes. To begin with, the new team will be issuing a limited number of invitations offering the services of a CLM.
  6. Automatic enrolment. Major changes to pension schemes are being introduced under which employers will be required to ensure that employees are either a member of their pension scheme or of the National Employment Savings Trust (NEST). The change are being introduced over four years, starting with the UK’s largest companies in 2012 and with other employers between 2013 to 2016.
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Case Studies

The Tax Man

Minimise the stress of an investigation and make use of our extensive experience in securing best outcome for our clients

Business Valuation in Distress

Take advantage of our impartial and rigorous due diligence procedures

FD in The Cupboard

Our innovative ideas are here to improve your business performance and secure appropriate and cost effective funding

The Tax Man

The Tax Man

A new client was introduced to us via a recommendation with whom we arranged to meet on a regular basis in order to determine a number of changes that we felt were needed to their business structure. The client was at the time operating as a husband and wife partnership. The business was flourishing and had a number of large contracts with big organisations.

At the start of the process they were still heavily immersed in their day to day operations so we can get a full flavour for their ambitions, aspirations and growth plans. We quickly recognised there were sufficient tax savings which can be achieved by changing the structure from a partnership to a corporate entity. We carried out a business valuation and disposed of the goodwill from the old to the new business. Unfortunately, as often is the case with efficient tax planning, HMRC got involved and disputed our valuation.

An HMRC investigation can be a very stressful time for any client, even for those best prepared. However, our client had minimal input in the HMRC communication as we dealt with this professionally behind the scene. As an added benefit, our client could rest on the security that all work was covered by insurance and therefore all costs and time in dealing with this enquiry were covered by the fee protection policy we had put in place.

The initial approach taken by HMRC was very aggressive and they tried to present an argument that there was no goodwill in the business. We challenged HMRC’s view that the goodwill was worthless. After lengthy correspondence and numerous telephone calls, HMRC agreed 100% with our original valuation, which preserved our original tax saving plan for the client. Tax savings on this case where in the region of £75K at the outset, with ongoing savings of £6,000 per annum. We are pleased to add another happy client to our portfolio.

Business Valuation in Distress

Business Valuation in Distress

Selling a business is never an easy process, but when disputes arise, the need for a reliable third party due diligence process is even greater.

Tearle & Carver have extensive understanding of the requirements for remaining objective when managing a potentially difficult company buyout. In one such case, we were approached by the courts to act as independent accountant for an acrimonious business sale in which one partner was exiting the business and selling shares to the other. Given the circumstances, both sides had totally polar views of what their business was worth.

After arranging an initial meeting with the company, we were thorough in ensuring we completed due diligence, validating the figures in the accounting records, carrying out adjustments where appropriate, and drafting a set of reliable management figures within the framework required by the court.

A draft version of the report detailing our findings and conclusions was submitted to both parties, giving them the opportunity to voice any queries or concerns and ensure all relevant factors had been taken into account.

Through this process, we were able to submit a final report to the courts that was both binding and acceptable to both parties, effectively resolving what could otherwise have been a time consuming and costly process for all sides.

FD in The Cupboard

FD in The Cupboard

For smaller companies, it is often not possible or cost effective to pay for a full-time Financial Director.
Many of our clients therefore make use of Tearle & Carver’s extensive expertise to provide the services of an FD as and when required.

In this case, we were approached by the management team of an organisation looking to acquire the existing business via an MBO (Management buy out). Their business plan had proved ineffective for securing funding, and what they needed was financial expertise from someone with a developed understanding of the company’s internal workings.

Tearle & Carver helped deliver the solution our clients were looking through utilising our bank contacts in order to make the MBO viable, while also building a robust business plan and preparing our client for the rigorous vetting process. To help with cash flow issues, we introduced factoring which led to improved cash flow management.

We advised on the appropriate business valuation and structure, and continued to prepare monthly accounts to track profgress once the management were fully in command of all the information they needed to move their business forward.

In order to best assist these clients through the crucial first year of ownership, we attended board meetings on a regular basis, a service that we continue to provide to date.

With our continually developing understanding of their business, this client is able to remain confident that Tearle & Carver can provide any financial support they may need, now and in the future.