DUFTON KELLNER AWARDED 'PROBIZ BEST TAX MEMBER 2008'

Last Thursday 25 September 2008, in front of 400 accountants at a packed conference in Heathrow, Wirral-based accountants Dufton Kellner were presented with the award of 'PROBIZ Best Tax Member 2008'. PROBIZ is a national network of accountancy firms, and provides those firms with access to leading edge tax planning strategies.

Presenting the award to Stuart Kellner, Feisal Nahaboo, Managing Director of PROBIZ commented ‘In these unprecedented economic times, it’s more important than ever for all businesses to carefully manage their costs. And tax is a cost like any other – with the right advice, it is possible to significantly reduce the tax a business pays, entirely within the letter of the law. And tax saved is cash available for investment back into the business, helping to ensure its survival and hopefully enabling it to grow, to the benefit of those employed by that business, its suppliers, the local economy and ultimately the country as a whole.

In selecting Dufton Kellner to receive the PROBIZ Best Tax Firm of the Year 2008 award, we were particularly impressed with the proactive way in which the firm has helped its clients to manage their tax costs. Dufton Kellner has achieved great success at tax planning by educating its clients and contacts on the opportunities available, and guiding them through the process. The number of referrals the firm has generated speaks volumes about how satisfied its clients are with the PROBIZ tax solutions and with the help they’ve received from Dufton Kellner. I’m delighted to present the firm with this well-deserved award.’

Stuart Kellner, Managing Director of Dufton Kellner, added ‘In these uncertain times, we believe that our clients should be given the choice of what do do with their hard-earned money. It seems that quite a few prefer to retain their profits within their businesses, helping to secure jobs, investment and the future prosperity of the firm, rather than contribute to the ever-widening hole that is the Treasury.

For more information please call Stuart Kellner on 0151 342 6405.

CGT RELIEF CONFIRMED FOR BUSINESS OWNERS, OR IS IT?

Local accountants Dufton Kellner Ltd offer advice to business owners who may be affected by the concession confirmed in the Budget on the 12 March.

In his first budget Alistair Darling confirmed the so-called Entrepreneurs’ relief, which reduces the effective rate of capital gains tax on the sale of qualifying business assets to 10%. As the standard rate of CGT chargeable from 6 April 2008 is 18%, and as indexation relief and taper relief will be withdrawn on the 6 April 2008, this is a significant concession.

However, as with all tax legislation, the devil is in the detail. When is the relief not available?

Accountants Dufton Kellner Ltd comment:

“In response to robust representations made by employer and business groups, the changes to capital gains tax that will apply from 6 April 2008 will now include a measure of relief for business owners disposing of qualifying assets after this date.

The relief will allow up to £1m of appropriate lifetime disposals after the 5 April 2008, to be taxed at an effective rate of 10%.

Whilst this is a welcomed concession there are a number of circumstances when the new relief will not be available. For instance:

• The sale of business assets without a sale of the business.
• The cessation of trade.

This could affect farmers selling off parcels of land. It would also be an issue where a property used by the owner’s personal trading company is sold either to the company or to a third party without the sale of the shares.”

On the face of it Entrepreneurs’ relief is a welcome change in the new capital gains tax regime that will apply after 5 April. Business owners would be wise to check out their CGT position, before contracts are exchanged. At risk is a possible increase in your capital gains tax bill from 10% to 18%.

Stuart Kellner of Dufton Kellner Ltd can be contacted for more advice on any of the above issues. Call their local office 0151 342 6405.

SMALL BUSINESSES BOOSTED BY THE BUDGET

Wirral based accountancy firm Dufton Kellner is encouraging small business owners to pay close attention to this year’s budget, as a large proportion of the changes are pertinent to them.

In his speech, Chancellor Alistair Darling announced proposals to make compliance with legislation easier for small and medium sized enterprises, including a £12.5m contribution to a capital fund for businesses run by women.

The abolition of taper relief and indexation relief and the introduction of a flat rate capital gains tax of 18% that was announced last year were met with the widespread opinion that SMEs would be the hardest hit.  In response, Mr Darling announced the proposed Entrepreneur’s Relief; a lifetime allowance of £1million to be taxed at the lower 10% rate.  In the budget he confirmed that these plans would go ahead in April 2008.  The individual annual exemption rate is also increased to £9,600.

He also announced further measures beneficial to businesses, including access to the Small Firms Loan Guarantee Scheme for all firms, rather than those older than five years.  There is also to be a 20% increase in available funding.

Mr Darling announced that measures would be taken to encourage more SMEs to benefit from public sector contracts. An independent review would take place, with the aim of achieving a 30 per cent target within the next five years.

Family owned businesses have been given a temporary reprieve from the Chancellor’s planned Family Business Tax (“income shifting”), which he announced in the Budget will be delayed until 2009 to allow for consultation.

Stuart Kellner comments: “SMEs looked set to suffer from many of the changes in this year’s budget, especially in terms of CGT, but the government’s introduction of some new initiatives to encourage entrepreneurship and enterprise is actually a positive move for the sector.”

DUFTON KELLNER ANNOUNCES MEMBERSHIP OF THE CORPORATE FINANCE NETWORK

Wirral based accountancy firm Dufton Kellner has been awarded membership of The Corporate Finance Network, a national network of accountancy firms committed to providing clients with excellence in business and corporate finance services. In particular, The Corporate Finance Network member firms provide the specific expertise that is required for deals under £3m in value. Dufton Kellner has been selected by The Corporate Finance Network as its exclusive representative to cover Wirral, Liverpool and North Cheshire.

Stuart Kellner of Dufton Kellner comments: "Over the past few years we have focused on providing clients with an all-encompassing approach to their business planning which has included the provision of corporate finance solutions. We have seen a significant flow of new enquiries from clients and contacts in relation to business acquisitions and disposals, and other more commercially focused transactions. Membership of The Corporate Finance Network will help us develop a centre of excellence in providing finance solutions and allow us access to expertise normally the preserve of the Big 4 accounting firms.

“We think it is crucial for business people contemplating such transactions to be aware that not all accountants have this expertise. This new accreditation will give Dufton Kellner a significant edge over advisers with limited corporate finance experience.”

Our team is also supported by the Executive Team at The Corporate Finance Network who have over 50 years’ combined experience of advising owner managed businesses in areas such as buying a company, due diligence investigations, exit planning, selling a company, fundraising and business planning.”

Kirsty McGregor, Chairman of The Corporate Finance Network explains why she chose Dufton Kellner. “We will only appoint firms who have a forward thinking approach, and a potential to grow this particular service area. Our firms will become known for being the expert in their region, for obtaining the most appropriate finance for businesses, and for buying and selling companies with a transaction value less than £3m. There are few firms out there who can advise SME clients in this highly specialised arena, offering a very practical approach with an appropriate fee structure for the owner managed business, and we are delighted to welcome Dufton Kellner to The Corporate Finance Network as our latest member. The growing interest shown in the network clearly illustrates that it can become a major resource for the SME sector.”

Stuart Kellner concludes: "We are absolutely delighted to be launching this enhanced service. We’re looking forward to integrating new standards and continuing to develop good working relationships with both clients and fellow professionals in the region. Dufton Kellner is ideally placed to take advantage of the growth in the local marketplace, and can provide a high quality and specialised alternative to the national and regional firms. I can see a very bright future ahead of us.”

For more information please call Stuart Kellner on 0151 342 6405.

COULD YOU UP THE ANTE WHEN IT COMES TO TAX EFFICIENCY?

Wirral accountants Dufton Kellner are asking local individuals to review their tax affairs to ensure they keep as much of what they earn as possible. With concerns over the state of the economy during 2008 being widely reported, and pressure on household and business finance building via the credit crunch and soaring utility bills, now is a good time to ensure you’re not donating more to the Treasury’s coffers than you absolutely have to.

For the owners of small businesses, there are two very significant changes to the tax system due imminently. After losing the Arctic Systems case, in which a husband and wife were deemed to have ‘shifted income’ between them, and were subsequently handed a tax bill for £42,000, the Government is planning to change the law to prevent this happening in future. Whilst all that’s been published so far is confusing guidance, and we’ll have to wait to see the legislation to assess who’ll be hit hardest, it is clear that any change won’t take effect until the 2008/09 tax year. So if you own a stake in a husband and wife business, it may well be in your interests to issue dividends between the spouses before 5 April 2008. Doing this right could save you over £6,000.

The other big change due to take effect from 6 April 2008 is the reform of the Capital Gains Tax regime, including the abolition of what’s known as taper relief. Simply put, the tax due on profits on the sale of a business will almost double from April, whilst tax due on other assets, such as second homes or share investments, will fall substantially. As the numbers involved in such sales can be very large, it will certainly pay to do the sums and work out whether you’d be better off disposing before or after 6 April 2008. For someone selling a stake in a small business for a profit of £100,000, there is likely to be an increase in the tax charge of at least £10,000 by delaying the sale until April.

For individuals, Stuart Kellner of Dufton Kellner explains that good year-end financial planning remains essential if you’re to lower your tax cost. “Try to ensure that income-producing assets, such as listed company shares and deposit accounts, are held either in ISAs (Individual Savings Accounts) or by the spouse that payers the lower rate of tax. For example, it makes little sense for savings to suffer tax at 40% when transferring them to a spouse paying tax at the basic rate could halve the tax charge.

It’s also well worth considering pension contributions. They remain the most tax-efficient form of saving, with higher rate tax payers able to invest £100 for a cost of only £60. It’s hard to imagine any other investment opportunity that gives such a return. Pensions suffer from the being perceived as dull, but when I hear this I always ask how exciting will be a retirement in poverty. Many people accept that retirement provision provided by the state is never going to be sufficient, so each of us has a duty to take this critical area of financial planning very seriously.”

Stuart adds: “The UK Government is clamping down on tax avoidance, but there are ways of reducing tax bills without refusing to comply with legislation. Tax is a complex area of finance, and so there will always be several ways of approaching the issue.”

For more information please call Stuart Kellner on 0151 342 6405.

GIVE TAX STATUS A SECOND THOUGHT

Wirral based accountants Dufton Kellner are warning businesses to carefully consider the tax status of those they engage. Whether someone is classed as employed or self-employed for tax purposes is determined by reference to case law, rather than to statute, which makes this area notoriously unclear. But it’s also hugely important, as getting the status of a worker wrong can land you with a huge tax bill.

An individual who is free to choose when, where and how he works, with the right to hire other people to work in his place, is likely to be classified as self-employed. On the other hand, an individual who is contractually bound to work a set number of hours for a set amount of pay, and who is answerable to someone who is accountable for the business could be classified as being employed by that business.

The responsibility for ascertaining the correct tax status, however, belongs to the engager of an individual, instead of the individual themselves. While the established criteria provide some guidance for ascertaining whether an individual is self-employed, the onus is on the engager to make sure they know for certain.

Stuart Kellner of Dufton Kellner explains: “HMRC are likely to back-date any income tax, National Insurance Contributions and interest charges for the entire period in dispute and expect the engager to make good the missing funds. So although the prospect of not having to pay Employer’s National Insurance Contributions, sick pay and holiday pay, for example, may seem appealing at first, the financial risks involved in simply taking an individual’s word on their tax status should not be underestimated.”

For more information please call Stuart Kellner on 0151 342 6405.