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Incorporation of accountancy practice

I hope tax returns season is going well. Mine is it could be a lot better.

I incorporated my practice on 1/04/2011. I am not experienced on this area of incorporating from a sole trader.

I would be grateful for advice on what I need to do to ensure I am being tax efficient.What steps do I need to take?

The response can be broad, I can read up on the detail.

I did a search on this but could not find a baby steps guide.

I am looking for advice not criticisms on my lack of knowledge and experience.

Thanks

Replies

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That made me smile. Especially that you did it on 1st April. Classic.

 

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Do you have 2020 tax tips and tools? There are some helpful resources on there.

If you need anymore details on whats included either look at the 2020 website or PM me.

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Colacct

Thanks for actually offering help. I will PM you.

Far better than a smile. Classic.

 

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Do whatever you like - its your money

Clean out the company bank account on a regular basis.  It is your money so you can spend it how you please.

Put all of your private expenditure through the company account. Saves transferring it first and no one will mind.

Buy a big expensive car and pay for it through the company. 

Find out what your mates down the pub do - after all they paid good money for that advice so it must be right.

And you can claim for all of your home running costs because you think about work when you are at home, plus the annual holiday as it is essential that you destress.  Plus of course all work clothes down to your underwear,

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taxhound

Thanks for sharing your experience and wisdom. Not helpful, but you did yor best.

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I'm not being funny...

... although it can be arranged if I'm given suitable notice, but if you need to ask this question, do you think you should really be let loose to practice on fee-paying clients?

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let loose to practice on fee-paying clients?

A big yes.

All do not judge.  Please give advice 0n question raised or move on. 

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and here I was

Thinking it was a wind up....

 

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no

A real question Taxhound. I think it was your attempt to show off your superior knowlege (what you think).

Your and others putdowns will not work.

 

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Apologies but....

I have to agree with the above.

My advice to the question is - if you do not know the answer for your own accountancy practice then you can/should not advise clients who are either Ltd or need to go Ltd.

To gain the experience, bring in an accountant who will do the work for a fee and train you at the same time.

It is a fairly simple question that should not be out of the realms of an accountant with his own practice.

Sorry if this is not what you want to hear.

 

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R&D Tax Credits

Now that you're a company, and since you seem to engage in so much accountancy R&D, if you spend more than £10,000 on it, you'll be able to claim R&D tax credits. :)

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Calm down

Just because someone doesn't have decades of experience in practice, it doesn't give people the freedom to poke fun at another Accountant.

Granted the fact that FirstTab incorporated his/her business yet doesn't know the tax consequences of doing so is a little strange but the knowledge can be gained.

Without spoon feeding FirstTab, how about a list of the areas that need to be looked into, any further questions requiring answering can then be a bit more specific.

I'll start off (in no particular order):

1) Goodwill

2) Salary/dividends

3) Ownership of car

4) Motor exps

5) Benefits

6) Pension arrangements

7) Use of home/rent

OK they are the easy ones, can anyone add further items.

 

 

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Big meal out of nothing

I read up on this and I also went through (discussed) it with another very helpful (not pig headed accountant). who PM me and we had a telephone discussion. Thankfully they are people around who do not put up their nose in the air and say are you the right person for practice? Useless.  

They really is nothing much to this. The know it alls made it sound what a disaster!

George Attazder that was useless piece of info. Why do you bother? Too much time on your hands sounds like to me.

The know it alls are in full force today. 

 

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bigdave1971

Thanks bigdave1971. Thankfully they are people who want to help, rather than just show off how good they are by their attempts to put others down. It just does not work with me.

 

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Have no wish to be rude or cause upset

But if this is a real question, posting it in the last week of Jan was perhaps not the best timing given how long ago you transferred to a company.

Anyway, I will shut up now.

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Apologies if I've upset your sensibilities...

... but if a client came to me and said I've just transferred my business to a limited company. Do you think it's a good idea? What are the advantages and disadvantages? How can I save some tax? I'd take out the revolver I keep in my desk draw and shoot them.

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You and others have caused upset

I am aware of the timimg. As you and others have seen I am far from perfect.

Agree timing is not the best. My circumtances means I am not losing out on anything.

George - Most of the time I ask very basic questions even when I know the answer. Not that I have to justify anything to you or others. Not only the questions I ask but also why I have a practice. No one is on a poistion to judge this. No one should judge this.

The reason I do this, I just want to see does the way I do things varies to others. Further, I would like discussion to start at a very base level.

In my case, they are some circumtances that I was not clear about, so I thought if I start from the very basic and then move on. This did not happen since your and others came with putdowns.

I am honest with clients, if I do not know the answers I say so and I say "I will come back to you". I do not make up things as I go along. They have been times, I have not known the basics,. I look into this and get back to clients. So far it has worked in my favour.

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missed the point

I think you have missed the point... not putting you down.  Clearly saying if you have to ask the question, how can you advise your clients. 

At some point all of us had to learn.  After that training and gaining experience we set up in practice. 

I use a VAT and Tax specialist for when i am not 100% sure of something techincal.

So i think you need to gain the experience before you advise clients, which is why i suggested bringing someone in.  If you do not have the experience you have to recognise limitations and turn work away or bring in the help required and learn.

Or maybe stick to sole traders.  I know accountants who purely do s/t and have a very good business.

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Fidodido

All I wanted was advice on question I put, not a lecture on how I should run my practice. If I want this I ask for this advice.

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be a bit more specific

@FT: it's just that the way you phrased the orginal question, it sounded like you knew next to nothing about the subject. Of course, you do know about the subject. Maybe if you narrowed the question down to the areas of uncertainty and let us know those, posters could focus in on those. Or you could say what you are already clear on, so people could see where you might have missed some areas.

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Red Leader

Even if I did not know the basics, people should either help or move on. Here it was full of put downs.

So what if a person does not know some of the basic stuff. It is up to the person and his/her clients. It is not for the forum to be the judge. It is just not right.

The specific questions would have come through later discussion.

 

 

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Here's some advice

FirstTab wrote:

Even if I did not know the basics, people should either help or move on. Here it was full of put downs.

So what if a person does not know some of the basic stuff. It is up to the person and his/her clients. It is not for the forum to be the judge. It is just not right.

If you don't know the basic stuff you don't know the advice to give and you don't even know what is relevant to provide to an expert. It would be better if you arranged a meeting with you, client and expert in attendance. In this way the client would get good advice and you would learn something about the subject. 

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You have posted spoof questions before (April Fools...), so with it being the busiest week of the year for many, I thought you were trying to lighten things up a bit.  No offence intended.

Judging by the thanks I received though, others found it very useful!

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taxhound

in that case i am sorry,

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You are all very naughty accountants

 

How rude of you all to suggest there are serious limitations on First Tab’s business model which is to get clients and then ask other accountants what to do. It is First Tab’s practice and I agree with his philosophy that he should be able to run his practice however he wants.

In fact he’s got an incredible niche which is unlikely to have other accountants piling in. He’s spotted that very few business people can find accountants that don’t seem to know anything about incorporation and tax efficiency. I have to accept that at initial consideration it would seem better to go to an accountant who knows about the advantages of incorporation and tax efficiency but we are obviously missing out on understanding the advantage of going to an accountant who doesn’t seem to have the knowledge to help a client but knows how to speed up the process and ensure there are ways to efficiently explain to an expert the relevant information which has been obtained from the client and then provide the client with the expert’s advice.

You people are too arrogant. You have all spent years being trained to have the knowledge and skills to provide a service that people need. Then you spent time improving your ability under supervision until partners and managers felt you were able to deal with clients with little or no supervision. You people have had it easy.

As I understand it, First Tab started his practice without working in a firm of accountants. That takes guts. How many of you would start advising clients without any experience? First Tab, I salute you!

Doesn’t everybody come on AccountingWeb to ask basic questions to which they already know the answer? I mean why would anybody want to ask a question that they don’t know the answer? I’ve never understood that type of person. It seems a complete waste of time to me.

I wish people would read the question before answering. If somebody asked whether it was better to pull a car up a hill or push it up a hill I bet some of you would suggest driving the car up the hill. No wonder First Tab insults you. You deserve being insulted if you are not going to answer his question.

 

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Peter

You should have a go at stand up.

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george

You know what they say about sarcasm!? My sarcasm I mean!

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I think the main issue here is not lack of knowledge

It's the timing.

We all have to start somewhere and I'm willing to bet that FT, with even his limited knowledge of the subject, knows more than some.

BUT - surely this question should have been asked on 25 January 2011.

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Don't get me started on "some"!

BKD wrote:

It's the timing.

We all have to start somewhere and I'm willing to bet that FT, with even his limited knowledge of the subject, knows more than some.

BUT - surely this question should have been asked on 25 January 2011.

"some" knows nothing at all!

I wouldn't recommend January in any year but it is certainly better to research the subject before acting than after acting. I'd say all accountants know that.

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Dates

petersaxton wrote:

I wouldn't recommend January in any year but it is certainly better to research the subject before acting than after acting. I'd say all accountants know that.

Spot on - January would always be far from ideal, but January 2011 far better than January 2012

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And now for a serious answer

Have you looked at the Tax Cafe Guides?

http://www.taxcafe.co.uk/incorporate.html

Could be helpful.

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Hang on, this was a serious post?

Many apologies, I thought it was a joke for light relief given the 1st April date and the SA deadlines.

 

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TaxCafe

You can start with this one:

Using a company to save tax

http://www.taxcafe.co.uk/incorporate.html

You can get pdf versions and they offer quantity discounts.

 

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Give him a break

Come on guys, leave the poor chap alone. He hasn't done anything malicious.

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hasn't he?

chatman wrote:

Come on guys, leave the poor chap alone. He hasn't done anything malicious.

You don't know that.

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@Peter

petersaxton wrote:

chatman wrote:

Come on guys, leave the poor chap alone. He hasn't done anything malicious.

You don't know that.

Fair point Peter; I should have said that his post provides no evidence of malicious behaviour on his part.

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No, not malicious

But, he does waste people's time. He asks a basic question, invites responses, gets responses given freely by generous contributors taking pity on him, then gets uppity and says he knew the answer already.

I'm all for him having a go at people who have a go at him (within reason), but in effect replying to contributors who have taken him at face value with what amounts to a slap in the face is, I would have thought, contrary to the spirit of the forum.

PS. Can anyone tell me what a self-assessment tax return is and what all the fuss is about 31st January?

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I bet you know the answer, too!

andy.partridge wrote:

PS. Can anyone tell me what a self-assessment tax return is and what all the fuss is about 31st January?

I would but I'm scared I'd be accused of showing off!

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Not saxton again!

It is so obvious that you are jealous of me. It is the same  rubbish! I just do not want to give you my time. I thought and was relived that you were no longer commenting on my threads. Unfornately you are back with the same rubbish.

You know by know if I saw I would cross the road. I want nothing to do with you. I hope your feelings are the same. Through your comments over a period of time, I really dislike you.

ireallyshouldknowthisbut - I am sorry about my earlier comment.

Partidge - why do you waste your time reading my threads. Just ignore and move on. Who are you to judge I waste people time. You can judge that I waste your time. You can speak for your self but not the forum as a whole. I am sure you will roll up your eyes again - good!

For those who not got on their high horse, thank you for your help.

I will move on now, before I am drawn further into never ending exchanges.

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@FirstTab

Did you value the goodwill and get agreement from HMRC? I just wondered if you had done anything at all regarding goodwill, as the cap gain should maybe have been declared on your 2010/11 return. You haven't much time left if you still need this for your SA!

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Mr/Ms Expert: what is goodwill?

ShirleyM wrote:

Did you value the goodwill and get agreement from HMRC? I just wondered if you had done anything at all regarding goodwill, as the cap gain should maybe have been declared on your 2010/11 return. You haven't much time left if you still need this for your SA!

He knows all this! Tell him something he doesn't know.

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Meet my "staff"; she's my expert

 

"I just do not want to give you my time."

If you did you'd have to get back to me after talking to your expert.

"You know by know if I saw I would cross the road."

I thought you cycled past my house. Don't cross the road else you'll be riding against the traffic. Go to a traffic expert - they will explain it to you.

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Goodwill

Thanks Shirley.

I have the figure for goodwill now. I have informed HMRC about this. I have not heard back from them. Though I only informed HMRC about 3 weeks ago.

I tried to call HMRC today- no luck. I will try again tomorrow.

 

 

 

 

 

 

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Have been reading the tread and ........

thought I would add my tuppencewurth.

Firstly, we all post on aweb when we are stuck/need help and I think I recently have posted a few questions more than I might otherwise as I have tapped into group knowledge rather than spend an hour researching - lazy - but has helped my SA deadlines!

I for one, tend to post ask on a few areas that I need clarification and in all cases (this month excepted) have done my research and got stuck - or held my hands up and stated I have no idea. If I can't get help on teh matter here I go to a local accountant who charges me for advice - fair enough - or as has often been teh vase passed over on the work as it is out of my league, made a note, learnt it for future and moved on.

@First Tab - your question is a valid one - ie asking for help, but I would urge that if you are unable to answer this question for yourself you do as others have suggested - sorry can't remember who or when - get a qualified/experienced accountant to work with you.

I would also advise that if you have got PI insurance in place you check what you are covered for as I recall that advising on areas you are not knowledgeable in is un-insured - I know I steer clear if I don't know.

For now it may seem like you are learning as you go along and I am sure you are but for the sake of yourself (and some others sanity on here as I can see frustrated accountants pulling their hair out) take professional advice rather than rely on us - after all we are often wrong.......... and your PI insurere won't accept "well on accounting web they said this" as reasonable excuse if teh proverbial hits the fan

This was meant to sound constructive ????

Happy January everybody!!

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Ding Dong

I disagree.

I am aware what my PI insurance will say. I also aware of my responsibilities.

My questions will still be basic. THIS WILL NOT CHANGE. To all - either answer or please move on.

If I want advice/lecture on how to run my practice, PI cover. I will ask.

Business is going extremelly well.

I will not be dicatated as to what I should ask.

How about responding to OP rather then questioning my competency and qualifications? Nothing to do with you.

 

 

 

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Fair enough -

was just trying to offer constructive advice, I know that when I was new to this game the constructive - and some times destructive - advice my old boss gave me has on the whole helped - (mental scars aside!)

Good luck!

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Ding Dong

That is very good advice. I hope FirstTab takes your advice.

Happy January to you, too!!

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All I want ed

was a dicussion on OP. I even mention this in my OP. Not how dare I ask this question. This comment is meant for all, not just you Ding Dong.

Some people just love to point out how good they are compared to anyone else. It says so much about them.

 

 

 

 

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Training courses

There's plenty of books and advice on the subject. It's just not in "baby steps" because accountants first learn the technical stuff and then how it interacts.

If anybody tried to give you useful "baby steps" advice they would have to write a very thick book! What level of detail do you want?:

Tax rates and allowances for sole trader

Tax rates for company

Capital gains tax

How a director/shareholder gets money out of a company efficiently

If you want bullet points such as the examples above they would be obvious to any accountant - I would suggest they should be obvious to you. If you need to ask about them then I would have thought that you would struggle in dealing with the more technical aspects.

Why don't you look for some courses to attend?

If you want to deal with basic questions there are some basic tax courses and then you can attend more detailed courses. I would have thought one course a month for a year should see a good improvement. Some courses are on CD so you could play them any time.

SWAT offer some.

http://www.swat.co.uk/HomePage.aspx

Your comments about people trying to make out how good they are is very wide of the mark. Nobody would be impressed by other people saying that you should know this stuff. We all know that an accountant should understand the basics and we are not impressed by knowing that an accountant does know the basics. People are commenting because they are genuinely worried for both you and your clients because you don't seem to know the basics. It isn't helped when people try to give you useful advice which would help you and all you can do is lash out with insults.

You should accept that most people on here are more knowledgeable and experienced than you and consider seriously the advice they offer.

 

 

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Worry abour me and my clients! What nonsense!

All - Please  do not worry about me and my clients. Only if you want, respond to my questions but not in the way saxton does- put down in the guise of helping. 

"You should accept that most people on here are more knowledgeable and experienced than you and consider seriously the advice they offer"

Your are no position to judge my or others competence. How dare you!

Don't tell me what I should consider or not consider. I am not your staff or your collegue. I really do not want any advice from you. I have no regard or any respect for you.

So please, please, please I just do not want anything from you. I have said this before so many times. You just do not stop.

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