Member Since: 4th Nov 2009
20th May 2020
I agree with everyone who says reporting such a non-event is a ridiculous waste of time and the ownership of value (which is surely what ERS is all about) hasn't changed at all.
BUT Tax Dragon makes a good technical point.
What I would add is that, if your client might ever sell the company, I'd recommend going through the ERS return filing rigmarole, nonsensical as it is. I advised a vendor recently whose sale floundered on this very point. The buyer's advisers insisted there was an ERS issue - and anyone who's acted in a transaction knows what buyer's advisers can be like when they get their teeth into a discovery. Such merriment!
It was the biggest sticking point in the transaction. Happily, buyer and seller reached a common sense agreement between them and the deal was done. But I'd always advise belt and braces now - and hate having to accept it's simultaneously ridiculous and "good advice".
20th Feb 2020
I'm not convinced any moral dilemma is indicated by an inexperienced practitioner eliciting guidance on fees.
I didn't read the question as "these guys make loads, so I have an opportunity to do the same", more "these guys lack in-house expertise, I can provide that but the fee structure might be different to the selling of standard accountancy products". Nothing unethical about that.
I've never once thought about the minimum I need to earn to stay in business and it certainly wouldn't enter into my consideration of the fee I should charge. I earn what I earn from the work that I do - that's even less rocket science.
Wherever possible I agree my fees with my clients in advance. The hourly rate is simply a costing tool and only has real meaning when considered in the context of the value to the client.
In the OP's case, it appears he might act as an outsourced FD. It seems he'll be much more engaged in the real time growth (or not) of this business. That being so, I think it's perfectly "moral" and ethical to consider his fees for that role in the context of what a company of that size might pay to engage a full time FD, as well as his usual hourly rate, and arrive at a suitable retainer accordingly.
20th Feb 2020
Well I'm a tax adviser, not an accountant, so my clients pay for tax advice!
It's difficult to justify hourly rate fees for work that can largely be reduced to data accumulation and entry. That's a simplification and I can see you're adding tax advice to the basic process but what is it that your client values the most? They'll always be able to find someone who could do the tax return more cheaply but I expect you'd then point out to them that your fee includes the profit extraction advice. In other words, you're already getting your clients to pay for tax planning!
All I'm really saying is that I'd make it explicit that you're providing tax advice and completion of the tax return is just the final part of that.
18th Feb 2020
You'd charge for what is essentially form filling but not for tax planning!? Which is more valuable?
21st Nov 2019
Unintentional. Thanks for your help.
21st Nov 2019
1st Feb 2013
Is this free goodwill?
Different issue but how much of the goodwill is free (and thus transferable to the company) and how much is personal (residing in her, so not separately transferable to the company)?
Are you planning to put all of it on the return as goodwill sold to the company or is there an apportionment between free and personal goodwill?
If she has no staff, what prevents all of this being personal goodwill? She is the asset and the company has acquired that by means of her directorship/employment, not as a separate, saleable asset. Just playing devil's advocate but, if I was the Inspector, that would be my starting point.
7th Jan 2013
Now it's the patient's fault!
There are too many people calling themselves accountant and the public is ignorant.
I agree that ICAEW,ACCA,ICAS should pool their resources and really go about educating the public.
Anyone else feeling a bit sorry for this poor, befuddled and now, apparently, "ignorant" public?
This smacks of the cliched politicians' approach - everything would be alright if only "they" understood our message. Perhaps "they" just aren't that bothered as long as they think they've had a good job done.
All this navel-gazing suggests a lack of confidence. If you're that good then go out and show it, don't expect the letters behind your name to do it for you!
4th Jan 2013
Excellent point justsotax
I'm a CTA and don't do accounts, although I began as an auditor and have had plenty of ad hoc accounts experience, so I'm sure I could make a decent stab at it if I wanted/needed to.
I don't complain about chartered accountants doing tax work or assume I'll be better than them but it seems a bit rich for CAs to get precious about protecting their chartered status when they expect to be able to practice within the specialised territory of a separately chartered profession.
It doesn't bother me, although there's a whiff of hypocrisy about those that complain. I wonder how they would react to CTAs doing accounts work? I prefer to endorse the philosophical approach of a former tax partner whenever we lost a significant client or had a proposal rejected - there's enough for everyone.
26th Nov 2012
Thanks - I wish I had been!
Thanks for the confirmation Steve.
As you say, a transfer of 27% would mitigate the stamp duty cost. However, the shareholdings in B are 51% husband, 1% wife (+ the 48% owned by company A). Perhaps a gift of 12.5% to wife now might make sense as they seem unlikely to proceed with the reorganisation at the moment. At least the shareholdings would then be more favourable if they were to go ahead in the future. Whether the husband would be happy to give up control of B is another matter.