Bishop Fleming

SOUTH WEST BUSINESSES WILL PUT PRESSURE ON COMPANIES HOUSE AND “THE TAX-MAN”

Companies will be changing their tax-year and incorporations, say South West accountants for owner-managed businesses.

South West businesses should be creating extra work for Companies House and the Government‘s tax agencies, according to the region‘s accountancy firm focused on championing owner-managed businesses.

Tax and business experts at Bishop Fleming, which has the widest spread of offices throughout the South West, are urging company-owners to consider changing their financial year, and reviewing their incorporation arrangements to minimise their tax exposure in the current economic down-turn.

Andrew Browne, Bishop Fleming‘s senior tax partner, said: “The South West has one of the UK‘s highest concentrations of owner-managed businesses. Many of those non-incorporated businesses will be seeing reduced profits in the current climate. By changing to an accounting date later in the tax year, they can gain significant tax benefits.

“The option may then be open to change that date again, when times improve”, said Mr Browne.

At a time when late-payment is becoming a big issue for smaller businesses with a turnover below £1.35 million, there is also a benefit in opting for the ‘cash accounting‘ scheme for VAT, which removes the threat of having to pay VAT on invoices which are not yet paid, and gives automatic relief for bad debts.

“Another way of providing protection to business-owners from possible debts in these uncertain times is to form a Limited Liability Partnership (LLP), said Mr Browne.

“Companies may wish to consider disincorporating at this time, and while these initiatives will add to the workload of Companies House and the Government‘s tax department, they are among a range of crucial actions that South West business owners should be considering, to protect their companies from the worst effects of the economic downturn”, said Mr Browne.

END 15th September 2008

For further information please contact David Sturgess, Sturgess Van Damme, on 01275 349011 or email david@sturgessvandamme.co.uk