finance 19 Tax framework is murky


Nearly two-thirds of businesses feel that the current tax framework is so complex that they are not clear as to what constitutes legitimate tax planning or whether they will be accused of tax avoidance.


This is exacerbated by HMRC appearing, on occasions, to take an aggressive stance towards some commercially-driven business transactions, with many feeling they are being treated as guilty until proven innocent, according to research by accountants and business advisers BDO.


The research, supplemented by a YouGovStone survey of UK’s business decision makers, found that increasingly-complex tax rules have resulted in businesses prioritising tax affairs over focusing on growth. During the past five years, 65% of business leaders polled claimed that they had found dealing with HMRC more burdensome. While nearly nine in 10 (88%) believe that dealing with HMRC would be much easier if tax rules were simplified.


Furthermore, many businesses feel that the complex tax framework is exacerbated by a lack of commercial understanding by HMRC advisers. Nearly half (44%) of business leaders polled believe HMRC staff possess inadequate or poor commercial knowledge and understanding when dealing with their tax affairs.


UK businesses appreciate the need for HMRC to question transactions tax, but nearly two-thirds (62%) believe that HMRC should spend more of its time challenging or investigating artificial pre- packaged tax schemes designed


Outsourcing your payroll


– a cost-effective solution Payroll is something most businesses have at the heart of their operations and yet many businesses do not have the resources to deliver a comprehensive service


“An accurate and deadline-led payroll function is critical to any business and it is an increasingly- common trend to entrust it to experts,“ says HWB’s new payroll manager, James Alesbury.


Paul Duckworth


to avoid taxation, rather than justifiable tax planning.


Paul Duckworth, tax director at BDO in Southampton, said: “UK businesses often feel confused and accused by HMRC’s approach to challenging commercially-driven transactions. Current legislation is viewed as being unfriendly for both publicly-owned and entrepreneurial businesses, but a start has been made in reforming the tax code.


“These reforms need to be matched by a more selective and discriminating approach by HMRC, particularly when it becomes clear that their initial questions concern bonafide, commercially-driven events. If this is not addressed, we will see fewer businesses established in the UK, leading to the erosion of the tax base, thereby reducing the prospects for cuts in corporation tax and income tax rates in the medium term. Both HMRC and UK businesses will save time, resources and money if the current tax framework is both clarified and appropriately enforced.“


Consultancy’s turnover up 70%


A Southampton business consultancy, the Ramsey Hall Group, has bucked the economic doom and gloom by announcing record earnings for the past 12 months, having seen its turnover increase by 70% to £500,000.


The Group has expanded to offer a wide range of services including executive search, boardroom direction, leadership development, interim management and business psychology support in response


to requests from clients including BAE Systems, the National Composite Centre and Beagle Aircraft in Christchurch.


Matthew Davis, talent management practice leader, said: “The nature of this recession means businesses are looking for the very best strategic leadership. As such we are being asked to take on increasingly-complex challenges including boardroom recruitment and organisational restructuring.“


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – APRIL 2011


Alesbury, who was appointed by HWB to head up the payroll team after more than 10 years of processing and dealing with payroll matters for companies including B&Q, is an enthusiastic advocate of the outsourcing model.


“Outsourcing is an efficient, safe and cost-effective solution for many businesses as it negates the need to recruit in-house,“ he says. “It also provides peace of mind that this critical function can be performed on time, each week or month, without the worry of a member of staff being absent.


Clients who have outsourced their payroll are not just looking for reliability and reduced administration and paperwork, but also a team on hand with in-depth


knowledge of PAYE and NIC


“Essentially we are offering to take the stress and responsibility away.“


And it is a responsibility, with the price of even simple mistakes potentially extremely high.


Alesbury said: “Although people regard this as a basic business function, it can cause real problems if anything goes wrong. The worst case scenario is that there can be HMRC fines, employment tribunals and, of course, unhappy staff.“


Clients who have outsourced their payroll are not just looking for reliability and reduced administration and paperwork, but also a team on hand with in-depth knowledge of PAYE and NIC, who can resolve issues arising from holidays or sickness. The HWB team is also adept at coping with anything from HMRC queries, pensions, the


James Alesbury


Construction Industry Scheme, statutory deductions, year-end returns and a range of other technical issues.


With the launch of our improved HWB Payroll Solutions service we are introducing new systems that are eco-friendly, more efficient and cost effective by means of a texting service for communication and e-payslips. HWB currently processes payrolls on a weekly, monthly and quarterly basis for in excess of 200 clients.


“Some companies are concerned that outsourcing this function means they may lose control but this is not the case. In fact, not only do you have the same control as if you’d employed someone yourself, but you also have top level expertise and a reduction in the cost of processing the payroll.“


Details: James Alesbury 023-8046-1200 www.hwb-accountants.com


www.businessmag.co.uk


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