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Charterhouse supports precedent-setting victory against HMRC
Accountancy firm Charterhouse LLP, with offices in Harrow and Beaconsfield, has recently defended its client Forde and McHugh in a victory against HMRC in the Supreme Court. The victory creates a ruling that will have a widespread impact on how company contributions to pension schemes are treated and is likely to have wider implications.
Charterhouse advised Forde and McHugh in the establishment of a pension scheme for the benefit of the director in 2002. The scheme is known as a Funded Unapproved Retirement Benefit Scheme or FURBS for short and is a commonly-used way for business owners to make provision for their retirement.
The company transferred cash and treasury stock worth £170,000 to the pension scheme, following which HMRC argued that National Insurance Contributions (NIC) were due in respect of these assets.
The amount of NIC involved in the case of Forde and McHugh was £20,000 and yet
challenging HMRC would have cost significantly more than the amount at stake.
Charterhouse, however, recognised that HMRC’s claim was wrong and committed to defend the client’s position. To do this, it identified other parties that were interested in the matter and, having done so, put together a fund to take the case forward. As it transpired, the challenge went all the way to the Supreme Court.
The matter was listed for appeal and was initially heard by the Upper Tribunal which decided in favour of Forde and McHugh. A subsequent Court of Appeal hearing took place in December 2011 and a decision was issued in May 2012 in favour of HMRC. The decision of the Court of Appeal was appealed to the Supreme Court and the hearing took place in January 2014.
On February 26, the Supreme Court handed down its decision in favour of Forde and McHugh and overturned the Court of Appeal Decision. The Supreme Court is the highest court in the UK and thus it marked the
Helping customers tackle VAT
More than £100 billion of government revenue came from VAT tax in 2013 – a 6% increase from the year before. Lisa Hagerty, who has joined chartered accountants Haines Watts as VAT manager, is all too aware of the difficulties this can bring businesses.
Hagerty, who is covering Haines Watts’ offices in the south, has 19 years’ experience, having previously worked at Chantrey Vellacott, HW Fisher and HM Customs & Excise, and can advise on all VAT matters.
She said: “As the Government increases its revenue from VAT, late payment from customers can make it tough for businesses to pay bills. Planning and taking expert
www.businessmag.co.uk
advice is crucial to sorting out VAT matters.”
In its recent survey ‘Growing a Business’, Haines Watts found that the biggest challenge which faces SME businesses is cashflow and access to funding, with a third (33%) of business owners reporting that this has been the case for the past three years. Meeting VAT payments is part of this problem.
Hagerty added: “Haines Watts is expanding its VAT services for the southern offices to assist with this and I’m looking forward to helping businesses tackle their VAT obligations efficiently and without too much pain.”
Details:
www.hwca.com
end of a rollercoaster ride for Charterhouse and its client.
The result has been eagerly awaited within the accountancy profession as the outcome may be relevant to other situations where HMRC is seeking National Insurance Contributions on money spent by companies for the benefit of their directors and employees.
The decision, in summary, means that NICs are not payable by companies in respect of the contributions made to a Funded Unapproved Retirement Benefit Scheme. Where companies have made payments on account in the past, these should now be repaid to the company (together with interest). Charterhouse is now helping numerous other clients affected by this decision to obtain significant repayments from HMRC.
A copy of the judgement is available for download on the Supreme Court website
www.supremecourt.uk/decided- cases/docs/UKSC_2012_0162_ Judgment.pdf
Details:
www.charter-house.net
Report: Positive outlook for OMBs
Business owners and managers are optimistic about hitting revenue and profit targets in 2014, according to chartered accountants and business advisers Chantrey Vellacott
The Reading-based firm’s first Owner Managed Business barometer report found that 78% of Owner Managed Businesses (OMBs) are very confident about hitting revenue targets, while 68% are confident about hitting profit targets for the full year.
In a further show of confidence in the economy, more than half of businesses (52%) expect their products or service offer
• Local law firm, Gardner Leader, has recruited Emma Ladd, associate solicitor, to join the corporate and commercial team. In the past four months Gardner Leader has acquired five new staff including four solicitors and a marketing manager, taking the team to 80. Ladd, who moved from West Sussex to Newbury to accept the job, brings 10 years’ experience as a corporate and commercial solicitor. She has represented companies of all sizes, including brands such as BMW, Cath Kidston and Nike, and specialises in a range of commercial law services including, commercial contract drafting and negotiation; the sale, purchase or structuring of businesses; partnership and shareholder agreements; and advising on areas related to competition law. Ladd is also one of only a 1,000 notaries in England and Wales and is currently the only notary permanently based in Newbury.
Movers and
to increase in 2014, with 51% also expecting to add to their headcounts this year.
In order to drive growth, two thirds of OMBs (66%) say they are relying on refreshing existing products and services, while 53% plan to launch new ones.
Encouragingly, 76% of OMBs revealed they expect to perform better in 2014 than last year, but there are however reasons to be cautious with 40% of businesses identifying difficulties sourcing skilled or experienced labour as the biggest challenge.
Maintaining market share (31%) and weak consumer demand (28%) are also anticipated as major hurdles.
Details:
www.cvdfk.com/sectors/ thinking-forward-in-2014/
THE BUSINESS MAGAZINE – THAMES VALLEY –APRIL 2014
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