How One Company Saved £9,000 in Tax with a Few Simple Steps HomeTax
Posted on 3rd October 2019 at 17:31
John & Elaine, the owner-managers of ABC Technical Solutions Ltd were referred by another client because they were unhappy with their existing accountant. They had been with him for 10 years. For the last 3 years they had been asked to accept and sign off their accounts a matter of days before the filing deadline to avoid a penalty. Their accountant had been given the books some 6 months earlier.
Fed up, they called us to arrange a meeting.
Prior to meeting them we knew the problem was not just to do with late filing. A quick check at Companies House revealed that Elaine was not a shareholder, so we suspected they were paying too much tax.
The First Meeting
After initial introductions our opening question was “when did you typically meet with your accountant – before or after the year end?” Their response that it was only after the year end accounts were completed did not surprise us at all. This is fairly typical amongst most traditional accountancy firms.
Their answer confirmed to us that they did no pre year-end tax planning.
They were paying too much tax and it had been going on for years.
Tax Planning and Tax Saved!
In the few days and weeks that followed, John & Elaine switched accountants and signed up with us. Elaine was allocated shares so she could benefit from both dividends and a more tax efficient salary. It was too late to save tax for that year as the referral came just after the 5th April.
We estimated they had paid £9,000 too much in tax that year. We now hold quarterly review meetings to help advise on performance and growth and of course, saving tax!
How we can help
It is impossible to save tax after the year end has passed. The tax planning meeting with your accountant is the best investment of time you can make, often paying for the accountancy fees many times over.
To arrange your tax planning meeting, contact a member of the Moulds and Co team on 01937 584188.
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