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CAPITAL ALLOWANCES

Capital allowances are allowances given by the government to offset tax payable when a business purchases an asset that is “Capital” in nature. These will typically be assets that you use in the business, that are held long term to assist the business in generating profits, such as plant and machinery and vehicles.

There is also scope to make claims for relief on the integral features contained within business premises, which may not previously have been claimed. We work with a specialist firm of surveyors to identify available allowances and ensure relief is claimed at the earliest opportunity.

CASE STUDY

We reviewed the accounts of a business client who had recently installed a significantly valuable piece of equipment. Through careful analysis of the accounts, we were able to identify building works connected with the installation of the asset and we were able to reduce taxable business profits by claiming capital allowances.

CASE STUDY

We acted with our specialist surveyor associates to claim allowances on a large GP surgery building.  Through a site survey and analysis of historical accounting we were able to identify £750,000 of previously unidentified claims that will eventually result in a tax saving for the partners of £135,000. 

BUSINESS SALE AND PURCHASE

We advise on all pertinent tax issues in buying or selling a business. The tax rules on what qualifies for reliefs and what doesn’t are constantly changing and planning is vital in ensuring tax efficiency over the life cycle of business ownership.

Selling a business or company is also fraught with pitfalls and difficulties and we are frequently engaged to navigate sellers through the process of the business sale to ensure the legal terms that are being agreed do not have any negative connotations for the sellers. We also advise on the likely available reliefs on disposal of the business and how to claim them successfully.

Finally, most business sales involve a process of due diligence and disclosure, which gives both parties to the transaction the opportunity to delve into the detailed financial and legal history of the business. We have experience with making adequate disclosure and reviewing the information disclosed to achieve a good outcome on purchase or sale.

Our aim is to complete the detailed work involved, whilst diluting and conveying to you what the pertinent issues are and ensuring you are aware of, and engaged in, the decisions around taxation on purchase or sale.

CASE STUDY

We were approached by a small business owner to assist him in the sale of his letting agency. We were able to renegotiate the values of the component parts of the business, saving the seller thousands of pounds in income tax charges that would have arisen on the sale.  We were also able to identify terms in the contract that were perfectly acceptable in a legal context, but that would have created some taxation issues for the seller. Using our input, the seller was able to agree an outcome that was both legally acceptable and tax efficient.

CASE STUDY

We acted in the multimillion pound sale of a limited company and the associated trading premises. We were able to identify assets that had restrictions on the availability of ‘Entrepreneurs Relief’ that would have resulted in an 18% increase in tax payable. Following our recommendations, the sellers were able to renegotiate the deal and make a six figure tax saving.  We also identified potential sticking points in the deal and worked to ensure all parties understood the issues in hand.

GROUP RESTRUCTURING

Often, after a period of successful operation, a company or group of companies may need to alter the structure of the overall business operation.

There will usually be a variety of ways in which the outcome can be achieved legally, but only careful planning will ensure that any tax reliefs potentially available can be claimed. Getting it wrong can be unexpected and expensive.

CASE STUDY

After a number of years of successful trading, two directors in a company decided to part ways, because they could not agree on the future course of the business. This business held trading assets of a significant value, which the directors planned to transfer to new companies, controlled by them individually.

Careful planning led to us getting approval from HMRC to undertake a tax free capital reduction demerger, which resulted in a tax saving in excess of £200,000.

CASE STUDY

A company with a successful trading history decided to undertake a new and risky venture.  In order to ring-fence existing assets from the risk of  the new venture, we formed a holding company and obtained HMRC approval to exchange the shares held in the original trading company for further shares in the new holding company. We managed to agree with HMRC that there would be no capital gains tax payable, even though the shareholders were disposing shares of a significant value.  Using the available corporation tax reliefs, we were then able to separate the assets and transfer them to the new holding company without creating any tax charges.

Please get in touch if you would like more information or to arrange a call back.

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