Entrepreneur’s Relief and a Solvent Liquidation can see you keeping 90% of the money in your business

What’s Entrepreneur’s Relief?

Entrepreneur’s Relief is a UK government created scheme open to directors who own 5% or more of a company, which which allows them to enjoy a 10% tax rate when they sell their shares, on gains up to a lifetime limit of £10m, saving them two thirds of the tax they would otherwise have to pay without the relief.

The government are effectively saying ‘we know you’ve paid corporation tax on the profits in the company thus far, thanks for that, we are going to give you a break now that you are retiring / leaving this business, we are going to allow you to keep more of your money’.  It’s not one of those dodgy tax schemes we all read about!  And unlike a lot of tax law, this one is pretty simple.

Want to know more about Entrepreneur’s Relief?

Here are a few links you might like to go to to find out more:

Gov.uk’s site giving guidance on eligibility

Institute of Chartered Accountants In England & Wales webinar 

(A full hour’s webinar, more appropriate for accountants or tax advisers.  Skip the first 3 and a half minutes’ introduction)

Gov.uk’s site giving guidance on how your accountant claims relief for you.

 

So how do you make use of this?

  1. First off, talk to your accountant / tax adviser.  Their help will be needed, this is not something you will be able to do yourself.  They will assess whether your circumstances fit the legislation and later on they will submit your self assessment form claiming the relief.  Speak to your adviser before you sell the company/its business.  And if you don’t have an an accountant/tax adviser who can help you, call us, we’ll recommend one.
  2. You and your tax adviser liaise with us – we will plan how and when to put your company into a solvent, members’ voluntary liquidation.  The purpose of that liquidation is to distribute to you as shareholder what’s in the company whether it be cash or other assets (talk to us about the latter point, we have our own route for getting the cash / assets into your hands as shareholder very early indeed – not all liquidators do this).
  3. Your accountant claims for you the relief on your next self assessment tax return. You pay the 10% tax.

How much does it cost?

There’s no straight forward answer to this… it depends.  It depends on your and the company’s circumstances.  Ask for a fixed fee quotation – we are willing to work on a fixed fee basis, but will need to know what the role involves before we commit.  Suffice to say we work with companies whose owners save tens, even hundreds of thousands of pounds, making the exercise worthwhile.

 

 

Walk of shame! – Councils who have had people jailed for not paying their rates!

It’s hard to believe, but even in a sophisticated country like ours, today in the 21st Century, it’s possible to be jailed for the non payment of debts, or I should say, rates owed to local authorities.

 It’s archaic, almost Monty Python like, as the lord of the manor first takes the peasants’ chickens then throws them into gaol, hung upside down.

Here’s a list of shame of some of the councils who have had their residents jailed:

http://bit.ly/1ix9vQ7 – the New Forest District Council – they even brag about it on their own website!

 http://bit.ly/1l13vA1 – Wychavon District Council – an 81 year old woman

http://bit.ly/1gmup4U – Nottingham City Council – There’s a theme developing – another pensioner, this time a 71 year old man.

 http://bit.ly/ORo5I8 – Derby City Council – it’s definitely developing now – a 69 year old woman.  Let’s not worry too much about kids on ASBOs, aren’t these old ones troublemakers!

 http://bit.ly/1ljEQcI – North East Lincolnshire Council (who admit in the article to having jailed several people recently – I suppose congratulations are in order?)

 http://bit.ly/1pwxlwk – Doncaster Council – getting younger, this time a 46 year old.  These young whipper snappers!

http://bit.ly/1dsCjKR – East Northamptonshire Council – crikey, don’t hack them off, they got 4 jailed in a matter of days!

http://bit.ly/1ruN8zw – East Hampshire Council – another council who presumably got a BOGOF offer on jailing!

 http://bit.ly/ORreHO – and right on my doorstep – Dudley Council!

 http://bit.ly/1dnaWBC – Castle Point Council – Southend to you and me.

The list goes on and on….

 You know, in some ways I can understand why councils think it’s ok to jail people, as ‘they’re only protecting the public purse’.  Read the councillors’ comments on any of the articles above and they all say they are trying to ‘send out a message to people to get them to pay’.  No apologies there then!  Monty Python comes to mind…(no, not the Knights of Ni)

There are 3 points here. 

Firstly how much better is it to make your point by taking someone’s freedom away from them than seeking the solution other creditors have under the law, of, say, bankruptcy?

Secondly, it’s almost an accident of law that councils are given this privileged position.  Why in our enlightened, over-indebted society, should they have it?

Thirdly, isn’t it a shame we don’t attack councillors with similar vigour when they abuse the public purse? Or indeed when they lead our councils over the abyss into bankruptcy?

But do you know what?

The thing I find most amazing is that Citizens Advice Bureaux, those champions of the small indebted man and woman, have made no effort to get the law changed, even though they have railed against other areas where there’s debt injustice.

But then again the reason for that could be they have a vested interest in not biting the hand that feeds them – after all local authorities are by far the biggest provider of money to CABs!

I’ll leave it to you to judge who’s more immoral…

But to lighten things up, here’s a link to Monty Python and the Holy Grail on Youtube.  Classic!

     

Breaking up the family business on a divorce

Breaking up the family business on a divorce

Nowadays the family business has to be taken into account in a divorce settlement.

If it contains assets that can be readily split, say separate businesses or properties, it’s possible for the divorcing couple to get what they want without having to pay any tax until they eventually dispose of their interest.  This can save tens, even hundreds of thousands of pounds at a time when money is needed most.

Here’s how it works….

s110 on a divorce

But you do need a licensed insolvency practitioner to put the business through a solvent liquidation.  I can help there because I hold such a licence.

You know it makes sense!