‘Sugar Sugar’ - Trying to Make Sense of the Budget – March 2016


Trying to make sense of the Budget – 8th July 2015


March 2015 Budget Review


New rules allow barristers to trade through limited companies


A Bit of William Shakespeare


The Taxman


General review


Charles Darwin - Business Guru?


Drinking at the Last Chance Saloon...


Is there ANY light at the end of the tunnel?


Night of the Living Dead


Turning Circle Solutions sponsors football team


Standing up for the Tax Man


Words of wisdom from Sir Isaac Newton….


Where’s Cicero when you need him? Trying to make sense of the Budget – 25th March 2010


Crystal ball gazing is for mugs.....

Turning Circle Solutions

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‘Sugar Sugar’ - Trying to Make Sense of the Budget – March 2016

George Osborne has now delivered 8 Budget Speeches. Where has the time gone?  

He is arguably the most political Chancellor of Exchequer of recent vintage so with the EU Referendum looming and with his reputation, (and the Prime Minister’s), firmly on the line if the nation votes for BREXIT, this was never going to be a boat rocking speech.

No wonder it was pitched as the Budget that ‘put stability first’.

However if you dig behind the headlines, (and the pictures of Jamie Oliver gallivanting on College Green on live TV to celebrate the new sugar tax), there are a number of matters of tax and commercial interest for our clients and key contacts.


Encouragement for business investors

The Chancellor announced an extension to Entrepreneur’s Relief. Previously, you had to be an employee working for a firm holding more than 5% of the shares in the company to take advantage of the 10% reduced rate of capital gains tax on sale of the shares. This restriction has now been done away with.  All long term investors with shares in unquoted trading companies can now claim the reduced rate of CGT on a share sale. This is on the proviso that they hold onto the shares for at least three years.  

Comment: With property investments being subject to a higher rate of CGT, (28%), on sale, could it be that investors will now pile into private companies? If so, then this will provide a great boost to the SME sector.      

Welcome relief for the High Street

The threshold for business rates relief has been increased from £6,000 to £15,000. 600,000 businesses will apparently no longer need to pay business rates. 

Comment:   Constantly under pressure from on-line retailers, (most  of whom are not obliged to pay business rates), hundreds of thousands of UK shop keepers were due a break. The down side of this announcement is that many local councils who are already under pressure from central Government with funding cuts will see a further drop in revenues.     


Encouragement for younger people to save for property purchases and their retirement  

From April 2017, adults under the age of 40 will be able to open a Lifetime ISA and save up to £4,000 in each tax year. For every £4 you put into this new product before you reach 50, the government will contribute £1. The maximum the Government will contribute is £32,000.
You are allowed to take your funds out tax free if you’re purchasing a first home worth up to £450,000 at any time from 12 months after opening the account and for any purpose once you reach the age of 60. If you decide to take the funds out for any other reason than the Government top up will be taken away and you will be charged 5%.


Comment:  This is a big development. We wonder whether this is the thin end of the wedge prior to tax relief eventually being further limited and eventually abolished on other pension products. The Lifetime ISA is like a pension, in that tax relief is effectively given to you at source. Unlike pensions however you are able to take out all of your pot tax free without charge once you reach the age of 60. As the scheme develops it may be possible for individuals to borrow from the ISA  before the age of 50 without charge as the long as the amount borrowed is fully repaid.
 Young people need all the help they can get to afford a deposit for their first homes so we welcome this new product. Higher rate tax payers under the age of 40 also have to decide whether to continue paying into existing pension schemes, (where they will get more tax relief at source), but face exit charges on draw down or to instead invest in a Lifetime ISA. The pensions market has therefore become much more flexible. In passing, we also note that the annual ISA limit has also increased by around £5,000 to £20,000.  


Good news for hobby traders and amateur landlords  

From April 2017, the Government will introduce a new £1,000 allowance for property income and a £1,000 allowance for trading income. Individuals with property income or trading income below £1,000 won’t need to declare or pay tax on that income. Those with income above the allowance will be able to calculate their taxable profit either by deducting their expenses in the normal way or by simply deducting the relevant allowance.

Comment: So if you are already working and, say, do a bit of EBay trading or want to let your property out through Airbnb you’ll receive a welcome tax break. This new measure should act as an encouragement to micro entrepreneurs. Nobody seems to be sure yet how this property rental allowance will tie in with the rent a room tax break, (which had already been increased to £7,500 per year.)  

Taxman turns the screw

A £12 billion anti tax avoidance package was announced. 

There were clampdowns on the use of offshore trusts providing beneficiaries with disguised salaries.  


Comment: Tax avoidance schemes have already been under attack so the offshore trust developments are not unexpected.

Restrictions were also applied to large companies claiming tax deductions on interest paid on loans taken out to fund their activities. 

Comment:  Large businesses that use debt to fund their activities will now pay more tax. It will become more tax efficient to raise equity to fund your business expansion plans rather than by taking on additional bank debt.


There will also be restrictions on the use of ‘personal service companies’ where individuals set up limited companies to house their personal earnings and where in the past significant sums of tax have been avoided. From April next year public sector bodies will become responsible for ‘ensuring that their workers pay the right amount of tax’. This will apparently generate a further £550 million for the Treasury by 2020. 

Comment: As far as personal service companies are concerned the changes announced earlier with regard to the taxation of dividends, (which come into force next month), had already made these limited company vehicles much less tax efficient. With this new announcement it simply won’t be worth setting up a limited company, if you are for example a freelance computer contractor and you are working on a long-term contract for a Government body. You will be taxed as if you are their employee.

So much for encouraging individuals to go it alone by working for themselves... The tax regime for one man companies has therefore changed significantly.

 As a further example of HMRC’s tough approach, we note that charities have recently been denied millions of pounds of donations because donors wrote personal message on the Just Giving website. Gift Aid allows charities to claim back 25p every time a taxpayer donates £1. Just Giving officials were told to remove Gift Aid from any donations that came with a supportive message from two or more people, including parents, grandparents and other close relatives owing to a change in the tax rules. HMRC are being asked to collect as much loose change from the national ‘sofa’ as possible.  

Sugar Sugar

A new sugar levy will be imposed on the soft drinks industry. The government will consult on the details over the summer, for legislation in Finance Bill 2017 and implementation from April 2018 onwards. The new tax will be paid by producers and importers of soft drinks that contain added sugar. It will be charged on volumes according to total sugar content, with exclusion for small manufacturers and producers of milk based drinks and pure fruit juices.

Comment:  The imposition of this new tax garnered many column inches in the press and will be generally pretty politically popular but the amount of revenue it will generate, (£ 520 million,) is pretty negligible in the grand scheme of things. Many other foods and beverages have even more sugar content than these soft drinks. We wouldn’t be surprised if there is an extension of this new ‘sin’ tax in future years.


What wasn’t said

Absolutely nothing was mentioned in the Budget Speech about business cash flow.  For too long small businesses have suffered because larger customers have not been paying them on time. We believe the Government should legislate on this topic.

About five years ago the then Coalition Government spoke about their determination to make our tax laws simpler. Sadly, words were all we got, because the average length of each of the annual Finance Acts introduced during the Coalition Government was 500 pages...  Although there have been some efficiencies introduced recently like the new on line digital tax accounts for taxpayers, yesterday’s announcement created no less than five different rates of capital gains tax! Our tax laws are still far too complicated.

Ultimately Mr Osborne, like the Chancellor of any economy, is very much at the mercy of global events. With the UK still paying more out in interest payments every year, (£46 billion), than our entire national annual defence budget his room for real manoeuvre remains very limited.    

That’s me done – off to buy a pint of full fat Coke now...

If you want to discuss any Budget related or tax related issues or would be interested in working with us on any of our client business growth or turnaround projects, please do drop us a line. We are now working closely with a number of investors so if you have clients or contacts that are looking to expand their businesses we would be very happy to speak to you.  


Trying to make sense of the Budget – 8th July 2015


‘We must consult our means rather than our wishes.’ - George Washington 

Another George hit the headlines yesterday with a wide-ranging, highly political Budget Speech. With his newly elected foot planted firmly on the throat of a struggling Opposition, Mr Osborne surprised many with the introduction of a National Living Wage which will see the poorest paid workers receive a pay rise of almost a third in the coming years. He went on to pledge that Britain would become ‘a higher wage, lower tax, lower welfare country’. The pledge is supported by Government commitments not to increase income tax, corporation tax or VAT during the life of the current Parliament.


However, the independent Office for Budget Responsibility identified £47 billion of tax increases in his speech!  

Set out below is a review of the major measures that we believe will be of most tax and commercial interest to our clients and key contacts.

Insurance Premium Tax (IPT) increases

IPT has increased from 6% to 9.5% with effect from November, an effective rise of almost 60%! In defence of this rise, Mr Osborne said that thanks to his colleagues’ efforts the overall cost of premiums has decreased as Government pressure has weeded out sharp practice in the insurance market. 
Comment: He would say that, wouldn’t he!  Motorists, home owners and businesses face sharp rises in premiums as the insurance companies will undoubtedly pass on this tax increase. IPT is a cash cow for the Government; it already raises £3 billion a year for the Treasury. Some businesses may decide to take on less cover as a consequence. Not great news.    

Dividend Taxation

Currently dividends carry a notional 10% credit for income tax purposes. A basic rate taxpayer does not suffer any further income tax. A higher rate taxpayer pays income tax at 32.5%, and an additional rate taxpayer pays income tax at 37.5% on the gross dividend. The 10% credit is then deducted from the tax liability, giving rise to effective tax rates of 25% and 30.56%
The Dividend Tax Credit will be abolished from April 2016 and a new Dividend Tax Allowance (DTA) of £5,000 a year for individuals will be introduced. The new rates of tax on dividend income above the allowance will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. The changes come in in April 2016.

Comment: What does this mean? Put simply, this is bad news for those many tens of thousands one-man businesses that have converted into limited companies to save tax. Say you are a 100% owner of a small business and take out all your income for the year via a dividend. You were able to receive £38,000 tax free. A similar dividend now would attract tax of £1,700. We do accept that the 1% cut in corporation tax also just announced would help the one-man band’s cash flow slightly. However, the dividend taxation change hardly offers an incentive to growing businesses to spread their wings by converting to a limited company.       

Buy to Let Landlord Tax relief restrictions

From 2017 tax relief on buy to let mortgage interest payments against rental income will be gradually withdrawn over a four year period and ultimately restricted to basic rate relief only. The 10% ‘wear and tear allowance’ on costs of maintaining a rental property will also be restricted.  There are estimated to be 1.4 million private landlords in the UK.  Commentators believe that as much as £2 billion in tax revenues can be raised as a result of this measure.

Comment: We assume that these changes were adopted to make the property playing field fairer for first time buyers and to cool down the buy to let market place  But won’t some landlords put up rents to compensate for the additional tax charges? What does this measure have to do with the lack of housing supply in our country?     

Rent a room relief

The rent-a-room provisions allow a home owner to receive income from letting out rooms free of income tax subject to limits. With effect from 6 April 2016, the limits will be increased from £4,250 to £7,500 each tax year.

Comment: Rent a room relief is a very useful measure for home owners wishing to let spare rooms to lodgers. The old limit had not been raised for 18 years and it is time it was changed. We anticipate a big increase in ‘amateur landlords’.

Increased HMRC powers

The Chancellor earmarked an extra £800 million for HMRC to ‘go after tax fraud, offshore trusts and the businesses of the hidden economy’.  He hopes to increase the number of prosecutions in this area to 100 a year by the end of the next Parliament.

Comment: In recent years although HMRC have cut staff numbers significantly, they have also introduced a powerful new computer system called Connect, (which cost £45m to build three years ago and is said to hold more data than the British Library).  Connect collates as much information as possible from third parties, such as banks, councils and other Government departments to assist HMRC in their tax collection procedures. Yesterday’s announcement is a clear, additional, sign that tax evaders will come under increasing scrutiny.

Investment allowance

From 1 January 2016, the Annual Investment Allowance, (AIA), will be set permanently at £200,000. The AIA is a significant incentive for businesses to invest in new plant and equipment and get full tax relief for the investment subject to the prescribed limits.

Comment: Businesses have until 31st December 2015 to take advantage of the temporary, much higher current limit of £500,000. Nothing was said in the last Budget about extending these limits, which was a surprise as it was a popular policy. It is good to see that a permanent, reasonably generous limit has now been introduced. This will help business to plan their investment strategies with greater certainty.

Inheritance tax changes

The inheritance tax threshold for couples will be increased from April 2017 and will eventually be raised to £1 million by 2020. This increased allowance has been introduced to protect the family home from inheritance tax.

Comment: Many families had fallen into the current IHT brackets (at 40%), as a result of increasing property values. This additional allowance is to be welcomed. However, please note that for estates worth in excess of £2 million the allowance is then tapered away. This was a very political decision which actually does not cost the Treasury much in lost tax revenues.      

Impact of National Living Wage

A new national living wage for over-25s of £7.20 an hour will be introduced from April 2016, which will rise to £9 per hour by 2020.    

Comment: Several sectors, such as hospitality, care, pubs, supermarkets and retailers face significant challenges as a result of this announcement. Will increased labour costs be immediately passed on the consumer? Will the average age of the low paid workforce decrease in the UK? Will the UK become, as is hoped, a ’fairer’ country? All reasonable questions we would hope, but not questions your correspondent can answer.     

What wasn’t said?  

Small businesses continue to be terribly hamstrung by the unwillingness of larger customers to pay bills on time. It would have been nice to have seen the Government offering some redress! 
Our tax laws continue to be massively complicated and this latest raft of Budget announcements won’t help. All the promises of a simpler tax code appear to have to come to nothing. At least, at the moment.
Finally, irrespective of which political party holds the reins of power, the Budget is a very British-centric event. No Chancellor would never admit - publically at least - that our prosperity is massively dependent on global events. And that is why the reality of yesterday’s speech was much closer to the words of the First U.S President George Washington above than we may all imagine.

If you want to discuss any Budget related or tax related issues or would be interested in working with us on any of our client business growth or turnaround projects, please do drop us a line. We are now working closely with a number of crowd funding platforms so if you have clients or contacts that are looking to expand their businesses we would be very happy to speak to you.  


March 2015 Budget Review

It’s now less than 50 days to the General Election and Wednesday’s Budget Speech was effectively the opening formal shot in the campaign. Nearly all the headline announcements were made with a view to gaining political advantage.
With all this political heat and light being expended this was a relatively quiet Budget from a tax perspective. Indeed, some of the announcements won’t actually come to pass if there is a change of Government.  However, even so this is a still a Finance Bill of 550 pages (!) so there is still plenty to reflect on in matters of tax and commercial interest to our clients and key contacts.

‘Death of the Tax Return’

Self assessment tax returns will be scrapped in favour of real-time online accounts by 2020. The intention of the new system is to allow taxpayers to have their own ‘on line account ‘with an overview of all their tax affairs, including PAYE and VAT, where relevant, in one place. Your online account will hold details of data already held by HMRC – such as your PAYE earnings and in filings by banks when you have earned bank interest. A taxpayer will then be able to pay tax at any point on line and to spread the cost by paying in instalments.

Comment:  On the face of it this looks like a boost. Few of Britain’s five million self-employed will mourn the passing of the annual tax return. The mad rush to dig out receipts for the 31st January deadline is an annual torture for many; it’s often not too pleasant for their accountants either!   But the idea that HMRC will simply be able to automate everything is just bonkers, and won’t really help anyone other than those with the most straightforward tax affairs.
And then there’s the quality of the pre populated information held by HMRC to consider, At present, over 25% of tax codes are incorrect. Without a mechanism for taxpayers to report their actual income and gains and to claim reliefs due, many taxpayers could end up paying more in tax than is due. Not that any Government would want that to happen...  
Finally, (although the Government has firmly stated that this is not their current intention), our view is that the changes leaves the way open for self-employed individuals to eventually be taxed at the same time as PAYE taxpayers rather than twice a year as per the current  regime. Slightly less administrative hassle and much more cash flow pressures for the self-employed in the future maybe?


Annual Investment Allowance Limits Not Extended

With effect from April 2014, the maximum annual investment allowance available to all businesses increased from £250,000 to £500,000. The increase was applicable only until 31 December 2015. However there was nothing in the Budget to extend these generous allowances.

Comment: This is the dog that didn’t bark. It was, and still is, a very significant short-term incentive for business to invest in new plant and machinery and other equipment in the workplace as all costs of equipment, subject to this limit, will be available for offset against a business’s tax bill. It looks like the window of opportunity here is closing fast. If any of you or your clients or contacts own business where capital equipment is critical please review your investment plans.

Tax evaders

Tax evaders and professionals who aid and abet them will face a raft of new sanctions including two new criminal offences and higher penalties.
The new regime, which targets those who hold offshore accounts, introduces the controversial strict liability offence, meaning it's no longer possible to plead ignorance in an attempt to avoid criminal prosecution. It will also be a criminal offence for companies to fail to prevent tax evasion or the facilitation of tax evasion on their watch. An increase in the financial penalties for evasion will link the penalty to the value of the asset kept in an offshore bank. Civil penalties for those who enable evasion will see them face the same penalty as the tax evader.

Comment: This announcement has been highlighted no doubt as a response to the HSBC Swiss Bank account tax non declaration fiasco.  All UK taxpayers with offshore activities and their advisers now need to be ultra cautious. As Danny Alexander, Chief Secretary to the Treasury said: ‘Tax evasion is a crime like any other. If people help a burglar, they are accomplices and criminals too. Now it will be the same for those that help tax evaders’.

Non-residents and Capital Gains Tax

This change was flagged up last year and has now been confirmed. Any UK tax non-residents will now be taxed on gains made from the sale of UK property. However, only the gain from 6th April 2015 is chargeable.

Comment: HMRC have been rubbing their hands together with reference to potential tax revenues from this source for some time; especially as many of the relevant properties are in property hot spots like the South East and tax arising is going to be relatively easy to collect. A significant number of British people working abroad will be affected by this change. The days of a tax free nest egg based on rising UK property prices are over. Individuals affected who are thinking of selling their properties might therefore be advised to get an independent valuation carried out in the next month or so.    

National Insurance Contributions (NIC) Class 2

The government intends to abolish Class 2 NICs sometime in the next parliament and reform Class 4 NICs to introduce a new benefit test. There will be consultation on the detail and timing of these reforms.

Comment: One less administrative headache for the self-employed saving them each £143 per year, but who’s to say Class 4 NI contributions might not be increased in its place?

The Big Picture

It can’t be denied that the overall economic situation for the UK is better than it was in 2010. It equally can’t be denied that we have many years of austerity to come and George Osborne is not going to concentrate on that in a Budget Speech so close to an election.

The reality is that irrespective of whether we have a Labour or a Conservative or a Coalition (of whatever hue) Government, we all remain at the mercy of global economic events. And with that cheery message we leave you...


Rules change to allow barristers to trade through limited companies

The Bar Standards Board have recently allowed barristers to trade their professional services through a limited company, subject to BSB authorisation.

This is going to prove to be a big change and is something barristers should consider as there are significant annual tax savings to be had in incorporating your practice if your annual profits exceed £50,000. 

Turning Circle Solutions can advise you on whether incorporation would be appropriate for your particular circumstances; we can also help you with the creation and ongoing administration of a limited company vehicle and additionally guide you through the BSB entity authorisation process.
We firmly believe that this is an important development in a fast changing environment for your profession; we are more than happy to have an initial free consultation with you on this topic at your convenience.

11th March 2015

A Bit of William Shakespeare

Turning Circle Solutions Newsletter – Autumn 2014 

General review

It's been a summer of huge national and international political significance and for once the trials and tribulations of the UK economy has been off the front pages of the newspapers.
Once you factor in a pre-election season of bribes, promises and general political moonshine we don't anticipate any meaty, major Government inspired business initiatives before May 2015.
However, the business world of course always keeps turning and in this newsletter we try to hopefully identify some current trends of commercial interest to our clients and key business contacts.

The Rise of the Self-Employed


Self-employment in the UK is at its highest level since records began.  There are a staggering 4.6 million people working for themselves in this country with 15% of the total workforce now in self employment, as opposed to 8.7% in 1975.
 People are most likely to be self-employed in London, (17.3%) with the lowest proportion of self-employed in the North-East, (10.8%), followed by Scotland, (11.5%)


 Comment:  We accept that not all of the newly self-employed are going to be 21st Century clones of Richard Branson, (a worrying thought in itself...) Many people become self-employed because there are often no alternatives available to them.
 We anticipate that HMRC will, in fact, collect less tax, at least in the short-term, owing to the self-employed having access to more generous tax breaks, both in terms of allowable deductions and tax payment terms. 
We also believe there will be downward pressure on margins, (especially in the service sector), because the continuing influence of the Internet enables highly effective self -employed individuals, often operating with negligible overheads, to seriously compete against bigger commercial rivals,
We also expect to see a decrease in demand for commercial property as so many successful businesses in so many business sectors no longer need to be locked into expensive business property commitments. We also wonder whether the banking and finance community are up to the task of funding all of these new start-ups, many of whom have the capacity to grow very quickly.
The rapid rise in the self-employed is going to be one of the key commercial issues over the next five years.  
One last statistic. Although the level of self employment in UK has risen dramatically it is still only just in line with the EU average now of 15%. And guess which EU member state has the highest level of self employment (at 32%)?



Cash Flow Problems Still Endemic Despite UK Economic Recovery

Recently released research indicates that despite the economic recovery many businesses are continuing to face cash flow problems. 
The number of businesses just paying the interest on their debts has jumped from 103,000 in 154,000 in the year just ended. These are not necessarily the ‘living dead’ surviving simply because of low interest rates but include businesses who are simply not managing growth properly. 
R3, (the trade body for the insolvency profession that carried out the research), go on to claim that late payments by suppliers and inadequate funding structures are causing these problems. 
Their research also states that 100,000 businesses say they would not be able to repay their debts if there was a small rise in interest rates, while 64,000 say they struggle to pay their debts when they fall due. This is 15% up from last year. 

Comment:  We have seen many businesses over the last six months who are struggling to fund their growth spurts. Often the struggle arises, sad to say, through lack of commercial awareness. There are plenty of alternative funding solutions out there for growing businesses. We may be able to help you and your clients!
Some businessmen still refuse to countenance offering personal guarantees to lenders when looking for finance. We often found this attitude to be surprising. If you are not prepared to back your own business when looking for finance, why should anyone else be interested?    
We do agree that the significant cash flow misery is caused by large suppliers using their muscle to often pay their debts way beyond acceptable terms. Stronger late payment legislation needs to be enacted!

Tax arrears recoveries from HMRC – a more subtle approach?

In our last newsletter we warned of upcoming legislation that will enable HMRC to directly access the bank accounts of taxpayers who owe more than £1,000 in tax arrears. Although the nuts and bolts of the legislation are still to be decided this has already raised a hornet’s nest of controversy.

As many commentators have rightfully said, under UK law if someone owes you money you just cannot help yourself to it. The permission of the court is required. No one, certainly, not the State has the right to be judge in its own cause.
It is therefore interesting to note that only last week HMRC introduced rules which now allow larger sums of tax arrears to now be collected from a employee taxpayers with tax arrears via the PAYE scheme, i.e. on a monthly instalment basis.  
The limit of tax arrears to be collected by this methodology has been increased from £3,000 to £17,000.

 Comment: Rather than raiding bank accounts for a one –off hit, this appears to be more subtle way of collecting tax arrears. Make no mistake HMRC are still on the warpath. They obviously believe that collecting tax via this method is cheaper than using external private debt collectors.  


Turning Circle: Summer 2014 Highlights

During the summer we acted in a wide variety of assignments, ranging from the sourcing of £2 million finance for a property developer to the negotiation of a number of successful SME tax time to pay arrangements, and tax planning reports for wealthy, non–domiciled individuals. Our tax business is growing nicely with a 30% increase in our client base since the turn of the year.


And Finally....


It’s just a personal view of course but we do sense that the tectonic plates of the UK business world are shifting.  A lot of nimble new operators are jumping into the funding market, the export market and the advice market, assisted undoubtedly by never-ending developments in I.T.  Yes, it is a time of global political uncertainty and yes, it’s never easy, but we’d like to think that 2014 is a perfect time for those with the drive and the vision to start and then grow their own businesses.   
And as William Shakespeare reminds us in ’Measure for Measure’
“Our doubts are traitors, and make us lose the good we oft might win, by fearing to attempt."


Turning Circle Solutions Limited is a firm of business turnaround and growth specialists and tax advisers.
If you have any clients or business acquaintances that you feel can benefit from our services or if you want to work with us on our various projects, please contact us.  We’d be delighted to hear from you. Our first client meeting is always free of charge.

1st October 2014

The Taxman


“Let me tell you how it will be
There's one for you, nineteen for me
‘Cos I'm the taxman, yeah, I'm the taxman”
The Beatles – ‘Taxman’ -1966


With the tax year-end having just passed we thought it might be worth having a look at a number of recent important Treasury inspired law changes and initiatives.
It is highly likely that these changes will eventually have a significant impact on relationships between defaulting taxpayers, their advisers and HM Revenue and Customs.  Good professional advice will be needed!  

HMRC- access to taxpayer bank accounts 

Under measures introduced in the recent Budget Speech, from 2015, HMRC investigators will be able to access the bank account of anyone who refuses to pay a tax bill of more than £1,000.  Legislation will be introduced through the Finance Bill 2015 to allow HMRC to recover funds directly from taxpayer bank accounts, subject to “rigorous” safeguards. The Government will also consult on the draft primary and secondary legislation, including the nature of safeguards, to prevent any resulting hardship.

Comment: The taxman can of course already seize taxpayers’ assets in satisfaction of tax debts under the distraint provisions but this change would be a quantum leap in their powers. Who decides what is the right amount to take out of a debtor’s bank account? What are the ‘hardship provisions’? If money is taken forcibly out of a debtor’s bank account, how is he expected to live? What will happen to consensual tax time to pay arrangements? This is a major development and we would expect there to be significant scrutiny of this proposal at the committee stage of the Finance Bill. 


Tax Avoidance Schemes

A number of large scale tax avoidance schemes are currently going through the UK courts. Vast amounts of tax are at stake. In many of these cases HMRC have been unhappy with the speed of progress in these cases and are keen to accelerate collection of tax revenues. It was therefore not surprising to hear in the recent Budget Speech that now, if HMRC win a test case in the courts against a single tax payer using a tax avoidance scheme then they will now have the power to ask all taxpayers who have used that scheme to pay up in advance of their own day in court.

Comment: Many thousands of tax payers will be affected by this development. Many of them may not be especially wealthy, (e.g. a lot of freelance IT contractors have signed up to mass-marketed tax schemes).  If you are waiting to hear about the efficacy of your particular scheme and another person in the same scheme has been taken to court by HMRC and lost their test case, you’re in trouble. You will be asked to pay the tax due up front and will only get it back if you win your own court battle! The burden of proof has been effectively reversed and you’re guilty until proven innocent. We predict a big increase in the taxpayers wanting to take advantage of innovative tax time to pay schemes in due course.

Real Time Initiative (RTI)  


RTI is the biggest overhaul to company payroll legislation since 1944.
It was introduced in 2013 as a system intended to make it easier for businesses in the UK to comply with PAYE reporting requirements.   In effect it was introduced to ensure that companies pay their PAYE obligations on time, every month. That in itself is a laudable aim. Under the old annual PAYE reporting system, tax underpayments were often being reported far too late which often led to sloppy cash flow forecasting , business failure and sometimes, eventually, job losses. 
However we are hearing regular reports of fundamental flaws in the new system. Sometimes HMRC debt managers are chasing companies for PAYE that they legitimately do not owe.   Sometimes, we are sure, companies, apprehensive of the immediate cash flow pressures being placed on them by the new system are making illegal payments to staff outside of the real time system.
In any event the system of penalties that was due to come in this April has been extended by another 12 months. This, in itself, is a tacit acceptance from HMRC that all is not well with RTI.

Comment: The time taken to bed down the real time system is undoubtedly causing administrative confusion and cash flow uncertainty to many in the UK SME community. We anticipate an increasing demand for the services of trusted professional advisers who are highly experienced in dealing with HMRC Debt Management departments to avoid the many short to medium –term pitfalls that have been created by this new system.


If you have clients are contacts who you believe may need help as a result of these developments we are here to help!    TMP Plc is a firm of innovative, highly experienced business recovery and growth specialists and insolvency practitioners . We look forward to hearing from you!


May 2014

General review

With all those New Year High Street failures, such as Jessups, HMV and Blockbuster, you’d be forgiven for thinking that we were on the cusp of some massive changes in the business turnaround arena.  Some commentators say that these casualties herald the end of zombie company Britain as banks start to shut the door on lousy businesses and concentrate on backing the winners.
We don’t agree.  We think these particular outfits failed because they couldn’t cope with on-line shopping and the push from consumers to get as much value for money as possible in these straitened times.  
 There are plenty of retailers out there with better, more realistic business models than the prominent failures mentioned above who are in fact doing OK. We do not foresee our High Streets in the future consisting solely of Greggs the Bakers, Poundland, various charity shops and tumbleweed!

 In the general economy we don’t see much of a drive at all from the banks to call their debts in and let companies officially fail; their balance sheets still aren’t strong enough to cope with these write-offs. Insolvency statistics are still low and insolvency practitioners all over the country are reporting poor workloads.
It’s no surprise to us that there seems to be a contradiction between our economy flat-lining while employment figures remain encouraging. Call this a simplistic view but that’s because too many employees are working for companies that will never make a profit while many of these employees are job-sharing anyway!

Conclusion; it’s not going to get much  better any time soon; struggling businesses need realistic, cost-effective business plans and realistic, cost-effective professional advisers to help them through this period.
Big HMRC reporting changes afoot – will there be a need for more informal business rescues?     
In the vast majority of the business turnaround projects we’ve been involved in, HMRC have either been the major, or at least a very significant client creditor.

With the abdication of many banks and asset funders from the UK SME lending market, cash-strapped businesses have become used to using HMRC as the bank of last resort.
We’re often called into advise where PAYE arrears have accumulated because businesses have failed to pay the right amount of monthly PAYE on account, submitted their annual returns in April and then negotiated a time to pay deal over the following 6/12/18 months with respect to the arrears that have mounted. You regularly see this behaviour in service companies where the main overhead is the payroll; we’ve often witnessed situations where businesses turning over say just £3-4 million a year accumulate crown arrears of many hundreds of thousands of pounds!  
Well, HMRC have recently decided that enough is enough.
Under a new system, called Real Time Information (RTI), employers must now send HMRC monthly details of how much each employee has been paid and how much tax has been deducted under the PAYE system.  The new scheme starts in two months time. 
And here’s the rub, in a recent survey 46% of small companies had ‘never heard of RTI’ while 81% said they were ‘totally unprepared’ to deal with the necessary changes. 
These figures are very concerning. There appears to be tremendous ignorance that the days of troubled companies being able to use the ‘Bank of HMRC’ have finished.


Conclusion: With the continuing non preferential creditor status of HMRC, tax collectors will be hot on the heels of defaulting companies far quicker than used to be the case.  We foresee HMRC being far more receptive to informal repayment arrangements which ensure they get all their unpaid tax debt back rather than insolvency driven arrangements where they are forced to join the queue with other creditors.
If you work with, or know of any businesses where PAYE arrears are accumulating feel call us to arrange a free, initial meeting with you and/or your clients. We are experienced, value for money advisers in this area.
Funding for business – any change?
Ask many SME owners these days whether the banks are offering any real assistance in rejuvenating their businesses and you will tend to get a resigned shrug of the shoulders in response.

This is despite such initiatives as the Government ‘Funding for Lending’ scheme which was launched six months or so ago and which aims to give up to £60 billion to banks and building societies. The deal was that banks get to borrow that money cheaply, as long as they lend it on to businesses and individuals.  In theory, that should then boost lending, and the economy.

Unhappily, there is no sign yet that this is happening in practice.
Figures from the Bank of England released in January shows that lending to businesses, in fact, has continued to fall. In the three months to November 2012, businesses borrowed £4 billion less than in the previous quarter.
"We're not seeing any significant feed-through to business lending," says Adam Marshall, policy director at the British Chambers of Commerce.
Marshall was also concerned that not all the banks and building societies are taking part in the scheme. HSBC, for example, says it has enough money of its own to lend out, so doesn't need to be involved.
"The government and the Bank of England should make a more aggressive effort to get lenders to take up funds, and promote the scheme," he adds.
Sometimes of course, these sorts of initiatives take time to feed through.  You can’t help but think though that some significant hesitation is being demonstrated by the clearing banks in fully embracing this scheme. Banks may have their own reasons for holding on to this money, but it cannot be good for British business!
Moving on the setting up of a new ‘Business Bank’ was announced by Business Secretary, Vince Cable, in September. It is designed to provide small and medium-sized businesses with an alternative source of finance. £1billion of taxpayers' money will be supported by private partners to provide £10 billion of lending capacity, Mr. Cable said. "The target market is medium-sized companies that want to borrow for longer than five years. We want to create a facility for companies to access what we call patient capital."

This new bank is slated to start in 2014 but precious little information has been released to date about operational matters. 
Conclusion:  Sad to report, we suspect real inertia from the clearing banks re the risk covenant of lending to smaller British businesses. Perhaps once a modicum of confidence returns to the market you will see UK’s large companies,( some of who are sitting on enormous cash reserves), leading the vanguard in directly investing in the development of smaller companies and start-ups.
We can but hope.  
Some good news      
One recent economic figure stands out like a sore thumb.

Back in 2010, one new business started every minute! And this rate has increased recently with the number of people in self-employment in mid 2012 standing at a cracking 4.17 million. And what was interesting is that 36% of these new businesses have been started by people over the age of 40.
Whether it is job dissatisfaction, economic necessity, or the collapse of ‘employment for life’ culture, more people are starting their own businesses than at any time since records began.
We find this encouraging. We also believe that the economic malaise we are still suffering demands that funders, professional advisers and the State must spend more time and resources in helping to build these new businesses.

Surely this must be better in the medium and long –term than propping up those thousands of zombie companies that, we repeat, will never make money again. As Henry Ford once said:
‘Failure is the opportunity to begin again more intelligently’.

Charles Darwin – Business Guru?

With no end in sight to the Euro Zone crisis, weak domestic demand and a continuing lack of liquidity, UK business owners continue to sail in very stormy waters.

Clearly, informal business turnaround projects, (where no direct insolvency procedure is being employed), are continuing to grow in popularity.  We are seeing evidence that bankers, HMRC and key suppliers are supporting companies who are prepared to ‘front up’ to trading and cash flow difficulties. This is with the caveat that they are contacted early and can therefore buy into a clear recovery strategy before their liabilities increase.
For example, we were recently pleasantly surprised by the reaction of a clearing bank owed in excess of £1 million by one of our troubled clients. The bank immediately approved the management’s recovery strategy, (which was ultimately to enter into a company voluntary arrangement (CVA)), without feeling the need to call for an extensive, independent business review. This decision saved time and money and importantly created a measure of confidence between board and bankers. 
Too often business recovery plans are subject to third party agendas. Sometimes, simple, honest, timely, direct, (but of course planned), communication with creditors without the need for masses of professional advisers saves the day. 
Some Statistics....

There were 4,115 liquidations in total in England and Wales in the second quarter of 2012, showing a decrease of 3.6% on the same quarter last year. These figures are not unexpected, in our view. There are many failing businesses out there that will never ever generate a profit again. They really should cease trading in a legal and effective way; unfortunately many struggle to even afford the liquidator’s fees. They are living in the twilight zone.
Additionally, there were 1,310 other corporate insolvencies, (that is administrations, receiverships and CVAS), in Q2 2012 representing an overall increase of 6.3% on the same period a year ago. These procedures are often, but not always, used as rescue tools for businesses.
Interestingly, the number of approved CVAs almost doubled to 352 quarter on quarter. Perhaps, again, this is an early sign that the banks, who, have in the past tended to dislike CVAs are recognising their value.
In our opinion, well planned CVAs with competent management in place offer fairness to all creditors and create a sensible turnaround platform for troubled companies.
Too many CVAs in the past have been proposed with useless management at the helm. In short, do not blame the ship, blame the captain!  
Adapt and survive.....
We believe some businesses are suffering unnecessarily because of global economic uncertainties, which are often, (let’s be honest), over-sensationalised by the media. This naturally tends to lead to a feeling of powerlessness.
Some businesses appear to be paralysed by what they perceive to be their future prospects; based on what happened to them in the past. 
From what we can glean there are still plenty of opportunities for SMES in all sectors to compete effectively against the big boys.
It’s just not about price. Service levels are so important these days and time and again the smaller, leaner company can out-perform the lumbering giants.  In addition, amazing technology is now available to small businesses at a fraction of the price of comparable products say ten years ago

We’re not sure whether Charles Darwin ever ran, or even advised an SME back in the 19th century but, no matter, we believe his words are instructive.

“It is not the strongest or the most intelligent who will survive but those who can best manage change.”

Turning Circle Solutions Limited are business turnaround specialists.
If you have any clients or business acquaintances that you feel can benefit from our services or if you want to work with us on our various turnaround projects, please contact us.  We’d be delighted to hear from you. Our first client meeting is always free of charge.


Drinking at the Last Chance Saloon...


The Diamond Jubilee is almost upon us. Following hot on its heels is Euro 2012 when we will no doubt all be drowning our sorrows - again. And then there’s the Olympics. So in a vain attempt to insert some good news into our current review at least the UK brewery, tourism and leisure sectors are probably going to have a profitable few months....

It is almost impossible to predict what the rest of the year has in store for the rest of the UK SME business community though. What we have noticed in the early part of 2012 is an increasing willingness for key stakeholders to participate in informal business turnaround projects, i.e. where no direct insolvency procedure, such as administration or liquidation has been utilised. After all the shocks of Fred the Shred and Lehmann Brothers it’s arguable that the banking community, (particularly the tax-payer owned element), are looking for all the decent publicity that they can get when dealing with troublesome clients and want to avoid all the stigma that formal insolvency creates... where possible.

This contention is backed up by some current statistics. Looking at personal insolvencies, there has been a decrease of 4.7% in individual insolvencies compared to the same period a year ago, and a major drop in the number of bankruptcies, which are down 27.2% on the year. This may well be because people are going into informal Debt Management Plans instead. According to a recent survey by the Association of Business Recovery Professionals (R3), 39% of UK individuals – that’s 18 million adults (!) - are very concerned about their current level of debt. 32% of the respondents thought their financial situation would worsen in the next six months.

Moving on, there are still thousands of 'zombie’ companies out there whose only chance of being saved depends on their CEO’s winning the Lottery. Many of them are being allowed to hang on by their bankers simply because they can just about afford to service their loans because interest rates are so low. Although in fact, there was a modest increase in corporate insolvencies in the first quarter of 2012 with an increase in liquidations of 0.2% on the previous quarter and 4.3% on the same period last year, it is still clear that insolvency numbers are historically very, very low compared to previous recessions.
Clients and contacts still bemoan the lack of business funding opportunities. Yes, Project Merlin had good intentions in terms of the clearing banks’ commitment to lend to small businesses, (£74.9 billion was apparently lent to small businesses in 2011 against an agreed target lend of £76 billion). But the reality is that there are many deserving SMEs with very good cases backed up with solid security which are not benefiting from Project Merlin. We have to ask, which businesses are getting this money? On the other hand, too often in our experience business plans supporting a funding application for expansion are simply not robust enough. It’s not just the banks’ fault. There are still alternative funding solutions available for growing businesses. The invoice discounting and factoring industry continues to be prominent. There are also interesting on-line funding propositions where willing private lenders can obtain good returns direct from grateful business borrowers. Although at the moment the amount of private capital available from these sources is currently pretty limited, we sense this is a space worth watching.

Turning Circle has continued to be closely involved in a wide range of business rescue projects that have preserved jobs. This year for example we have advised a family owned souvenir and publishing business hit in part by the difficulties in managing highly seasonal cash flow; a large tyre recycling plant struck by a huge fire; and a rapidly growing training business where informal debt repayment deals needed to be struck with both an aggressive landlord and HMRC. The owners and managers of these businesses have all had one thing in common; they are all talented and resourceful; we’ve done our bit to help but it’s clearly evident that no business can genuinely be turned round without that key ingredient – good management.

If you have any clients or business acquaintances that you feel can benefit from our services or if you want to work with us on our various turnaround projects, please do drop us a line. We’d be delighted to hear from you. Enjoy the summer!



Is there ANY light at the end of the tunnel?


It’s been six months since our last newsletter. We had hoped that this long lead-in period would give Turning Circle the opportunity to come up with something fresh, vibrant and radical to say about the state of the UK economy and the turnaround sector.
As far as the UK big picture is concerned, unfortunately not much has really changed since the spring. It has all been rather stagnant.
Zombie companies still abound in their thousands, (see ‘Night of the Living Dead article - March 2011’), propped up by hyper- low interest rates and clearing banks petrified of taking bad debt hits on their balance sheets. There are too many small businesses out there that will never again make a decent profit in their lifetimes. That cannot be any good for our country.
Meantime, the Coalition Government continues to attempt to steer a sensible course through an economic storm. Messrs Osborne, Cable et al have our sympathies as there is very little national governments can do in times of such massive global uncertainty; sadly, they and their colleagues look like they’re paddling a coracle through a hurricane.

However, there have been some specific developments of interest that we’d like to comment on:
• HM Revenue and Customs Time to Pay (TTP, effectively PAYE/VAT deferral schemes) have been of great help to the beleaguered SME sector since late 2008 in preserving business cash flow; especially since the banks drew their lending horns in. TTPs are still available to deserving cases but the amount of scrutiny now being applied to tax repayment deals by HMRC appears to be much more detailed.

As a case in point, recently, Turning Circle was successfully able to negotiate a 12 month time to pay arrangement for a client’s unpaid VAT bill. The company had never previously had a problem with unpaid VAT while the sum owing was just over £100,000, which represented three months arrears. In the past such TTP proposals could often be agreed via a ten minute phone call. This time, in order to have our proposals approved, we had to prepare a detailed cash flow forecast supported by sensible assumptions and then deal with no less than fifteen follow up queries.

Conclusion: TTP arrangements are no longer being dispensed like confetti; treat any TTP proposal like a bank loan or overdraft application.

• It would also seem to be the case that HMRC are now proceeding on a ‘two strikes and you’re out’ basis. If your business has taken advantage of TTP in the past then you will subsequently be expected to pay all your current crown liabilities on time. Seemingly, without exception.

So , consequently it’s not surprising to hear, if we take a day in isolation, (say 5th September), that of the 253 company winding up petitions being heard in the High Court that day, the vast majority were issued by HMRC.

• The above reality chimes somewhat with recent insolvency figures. Company liquidations are up by 4.4% year on year. (4,233 in the second quarter of 2011). We would suggest that this hike is due, in part, to the HMRC’s new ‘get tough’ approach as outlined above. Personal insolvencies also rose slightly from 30,145 in Q1 2011 to 30,513 in Q2 2011. We are not surprised to hear this as we are currently receiving an increase in enquiries from individuals who need to deal with the consequences of personal guarantees being called following the failure of their businesses.

• However, the above corporate statistics need to be tempered somewhat. Many thousands of companies can’t even afford the costs of liquidation; they have simply stopped trading.
It might be easy to conclude from all of the above plus the daily tales of woe emanating from the business pages that there is barely anything to be cheerful about. However, hopefully there could be a chink of light at the end of the tunnel.
We are beginning to see evidence of a fledgling turnaround finance culture; private investors are now showing signs of wanting to support cash strapped, yet viable businesses in the continuing absence of bank funding solutions. This obviously is to be welcomed as there are plenty of growing small businesses out there who could grow even faster if only they were provided with some liquidity!
Turning Circle continue to be closely involved in a wide range of business rescue projects that have preserved jobs , including more than 100 successful company voluntary arrangement proposals.
If you have any clients or business acquaintances that you feel can benefit from our services or if you want to work with us on our various turnaround projects, please do drop us a line.


Night of the Living Dead?


George Osborne will deliver his second Budget Speech on March 23rd. I’m sure that we will all be looking for Mr Osborne to set out a coherent growth plan for UK PLC which gets the economy moving. It’s clear that in order for this to happen, we must trade more, we must innovate more and we must invest more.

And here’s another thing.....it might be easier for us all to do this if those UK businesses that are no damn good were actually allowed to fail!

The total number of company insolvencies in the whole of 2010 was 20,954, down 17.6% compared to the whole of 2009. You might want to conclude that this statistic heralds a general bounce back for the UK economy and that George Osborne has a fine platform on which to build his growth strategy.

This writer begs to differ.

I believe that there are a large number of zombie businesses out there still notionally ‘trading’; the ‘living dead’ if you like. Businesses that can never hope to be profitable being propped up by a combination of:

HMRC ‘time to pay’ (TTP) schemes,

continued abnormally low interest rates,

and in some cases the vested interest of the clearing bank sector, desperate to improve their balance sheets and unwilling to make further bad debt provisions for these loss-making businesses.

I further believe that the number of UK corporate insolvencies will increase significantly from the middle of the year onwards for the following reasons:

• HMRC ‘TTP’ (effectively PAYE/VAT deferral), schemes have been of great importance to the cash flow management of the UK SME sector, especially with the absence of commercial lending facilities during that late 2008 period of real financial crisis. However the level of unpaid tax in Britain is now in excess of £ 40 billion and the Coalition’s budget deficit sums will simply not add up unless this TTP arrears figure comes down. Expect a continued significant tightening of TTP during 2011! Many companies will simply be unable to pay their tax bills on time. There is increasing evidence already of HMRC issuing many more winding up petitions to non-compliant businesses.

• The inflation rate continues to rise and an interest rate rise therefore must follow. I understand that the official UK inflation rate is now 4%. As I munched on my ‘new price’ 77 pence standard size Kit Kat yesterday evening on the train home and later applied for a third mortgage to fill up my car with petrol, all I can say is what’s the ‘real ‘ rate then ?? Being serious, an increase in the cost of money will have a profound negative impact on those ‘living’ dead’ who have become almost inured to the low costs of their business loans and overdrafts.

• As the clearing banks repair their balance sheets, and future bad debt provisions become far less of an issue, they will have far less hesitation in pushing the many business waifs and strays on their portfolios into an appropriate insolvency procedure.

As business turnaround specialists, Turning Circle want to support and assist those businesses that may have short –term problems but who, nonetheless, have realistic, profitable futures. There are thankfully many hundreds of thousands of these companies. However, there is nothing we or anyone else can do if our client is fundamentally and permanently loss-making. The ‘living dead’ cannot be brought back to life.

Let’s hope though that the upcoming Budget Speech helps those struggling UK businesses that can prosper to prosper. It will not be easy.

Finally, during the last quarter, Turning Circle have been involved in a number of business rescue projects that have preserved jobs , including successful company voluntary arrangement proposals. If you have any clients or business acquaintances that you feel can benefit from our services or if you want to work with us on our various turnaround projects, please do drop us a line.




Standing up for the Tax Man


Her Majesty’s Revenue and Customs are rightly getting it in the neck this week. The massive level of tax coding discrepancies just announced clearly identify that that faithful old tax warhorse, the PAYE system, simply can’t cope with 2010 UK employment patterns.


Even more embarrassingly, the HMRC’s top official, Dave Hartnett, initially resolutely failed to apologise to the taxpayer for this fiasco. Or as he often calls them, rather horribly, ‘the customer.’

This potential public relations disaster was only averted by a quickly placed boot up the backside of Mr. HMRC by the Chancellor and a same day retraction. Oh dear....

So why are we standing up for the tax man? Well, it’s clear to this writer that many, many, thousands of UK SMEs have been able to survive horrendous trading conditions thanks mainly to the HMRC ‘Time To Pay’ (‘TTP’) scheme. Originally introduced in November 2008 to allow businesses time to pay PAYE, corporation tax and VAT, TTP created a climate of eye boggling leniency, as far as unpaid tax was concerned, for UK businesses during the whole of 2009. Some companies were being given as much as three years to repay their tax liabilities. Simply unprecedented.

It’s not surprising that therefore that the level of unpaid taxes in UK shot up from £2 billion as at 30th June 2008 to £28 billion as at 30th June 2009.* And I guess all this economic forecasting we’ve been hearing about assumes that every penny of this unpaid tax is going to be collected.

This climate of tax repayment leniency simply could not continue in 2010 as the UK public sector deficit continued to mount and generous TTP schemes are now far harder to come by. This situation is hardly likely to improve as we move towards 2011 when we consider the level of public sector cuts now being actioned by the Coalition .

Nonetheless, in our opinion, if approached in the right manner, HMRC still continues to be a significantly more visible, supportive and practical ally to the millions of small businesses experiencing cash flow difficulties than, say, the banking sector. And for that we need to thank the tax man. They are not to be pilloried all the time.

If we were to distil a debt negotiation approach that finds favour with HMRC it would be this;

Always be polite; do not treat HMRC as the villain of the piece, the tax officers are 1) only doing their job and 2) human after all and quite enjoy being treated as such.

• Respond to tax demands and correspondence on a same day basis. HMRC hate being ignored.

• Be prepared to talk with openness and honesty about why your business is experiencing cash flow difficulties. You have to present a convincing case, so speak from the heart . But do your research first!; do not expect HMRC to agree a repayment deal if they are the only creditor being deferred while all your other suppliers are being paid on time!

• Explain how the debt to HMRC will be repaid and also produce a cash flow forecast to support your proposal. The proposal should effectively be treated as if it were a mini business plan.

• Include the first tax payment instalment with your proposal as a means of good faith.

• Faithfully note down whom are you speaking to and the time and date of any conversation end ensure that any TTP agreement is evidenced in writing. HMRC is rather large and unwieldy organisation; it is often the case that you need to speak to a number of tax officials to get a TTP agreed. Make sure you keep a trail of what was said and by whom.

• And if you can’t stick to the terms of a TTP then don’t hide, communicate the problem with HMRC at the earliest opportunity. They may be prepared to alter the terms of the existing arrangement.

We have been able to agree a number of sensible TTP arrangements for our clients in 2010 and if you have any clients or business acquaintances that want assistance in dealing with tax demands that can’t be met out of current cash flow resources, we’d be delighted to work with you in producing a workable repayment solution.

And if a TTP can’t be actioned then the next business recovery tool for your client is of course the Company Voluntary Arrangement. But that’s for another article.
*(And when I get hold of the current figures for 2010 unpaid tax, I’ll pass them onto you.)


Words of wisdom from Sir Isaac Newton….

Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: He lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.’



Where’s Cicero when you need him ?

Trying to make sense of the Budget – 25th March 2010


“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest we become bankrupt. People must again learn to work, instead of living on public assistance."


I don't know if you've seen this quote before but it's from Cicero and he wrote it in 55BC. Over 2,000 years later it's as true today as it was then. Only it was more likely to be heeded then.







Crystal ball gazing is for mugs.....


Is it really ten years ago that UK business faced the looming catastrophe of the deadly ‘Millennium Bug’? What a damp squib that turned out to be. Just five years ago the eight billion pound cost of London Olympics was decried by hordes of respected commentators as being something that this country would never be able to afford. Who would have thought in late 2004 that eight billion pounds out of the public purse would be considered to be a mere drop in the ocean compared to the stunning level of UK deficit in late 2009? Who could have foreseen eighteen months ago that 50% of our major clearing banks would effectively be under state ownership?