It’s clear from our reviews and testimonials, that our clients are happy with what we do, but what exactly is that?

What sort of things do we do for our clients, and, therefore, what might we be able to do for you?

Below are a few genuine case studies, using actual figures, to give an indication of the nature of the extent of the impact we can have.

It’s also possible that these may help to answer that most common of questions; “Do I need an Accountant to do my Tax / Accounts for me, or can I do it myself?

Unfortunately, they also confirm that it can be equally painful to employ the wrong Accountant to represent you, and deal with your Taxation affairs!

Self Employed Sole Trader Sub Contractor

AB was a self employed sub contractor, working in the Construction Industry, under the CIS taxation system. As a result, he was suffering deduction of tax at source, on his income received from the main contractor. Each year, the client went in to his local Tax Office, armed with a box of receipts, where he then spent the entire day. with an HMRC employee, completing his Self Assessment Return.

Small, Self Employed, One Person Business

MB came to us with a rather worrying tax situation.

He was a relatively small, one man band, business, however, he had, for the last two years, been paying £1,000 A MONTH standing order to HMRC, in order to cover his tax liability. We advised him to cease his sole trader business, and transfer to a new limited company, with immediate effect. We also completed his final year’s Accounts, in order to rationalise his taxation liability. The client, at the time, was working from home, and the previous Accountants had been working on outdated HMRC allowances for this, which, in itself, increased the risk of an HMRC compliance enquiry. In the first year, we were able to increase the amount claimed from £520 to over £2,800.

Larger Self Employed Business

WW was a larger business, run on a self employed basis, from home, with approximately 25 Employees. The client was originally recommended to us by her mortgage broker, as he felt that her taxation liability was totally disproportionate to her level of income. (She had asked him to arrange a mortgage for her, so that she could pay her £45,000 tax bill for that year).

Although the client was some 200 miles away from our offices, we attended the business premises, and performed a full review of the accounting records, for the current year, and three previous years, from commencement of trade, in order to establish the problem.

Our findings were threefold:

• The previous Accountants had submitted estimated Returns for the first two years, which had resulted in an HMRC compliance investigation.

• During the investigation, they had provided misleading information, which resulted in an HMRC determination, estimating £85,000 profit, when the actual result was closer to £25,000.

• It transpired that the main reason for the problem was that (due to low profit levels in the start up years) the client had substantially remortgaged one of her properties, in order to provide a series of cash injections in to the business. The Accountants had seen this money coming into the business bank account, and treated it as taxable income.

The clients had already prepared a draft tender, and were ready to submit this to their customer. Prior to doing so, they asked Alan to review the tender, and make any amendments he felt were appropriate, prior to final submission. A number of potential amendments were duly identified, and these were actioned by the client, prior to the finalisation of the tender.

Outcome

The clients submitted the tender, incorporating the amendments we had recommended. The tender was accepted by the customer, resulting in an additional profit for our clients, over and above that they would have earned on the original tender, of £128,000.

Of course, in this situation, the Revenue employee can only work with what they are given, and within reasonably tight time constraints. As a result, even though he had suffered tax in advance, under CIS, the client still came away with a tax bill of £1,487.

Following on from a recommendation, from an existing client of ours, who was also a fellow sub contractor, working with him, the sub contractor approached us to do his following year’s Accounts and Tax Return for him.

In the second year, coincidently, the business turnover was just £25 different from the previous year. In spite of this, because we were in a position to claim everything the client was entitled to, we were able to secure a refund of £842.

Outcome

The Client was £2,329 better off, tax wise, through using our services. We only charged him £250 for this, which he paid us out of his refund. In addition to this, the client saved a whole day of their time, previously spent sitting around the local Tax Office.

Due to the claiming of extra expenses, such as this, we were able to reduce the client’s overall tax liability for the year, however, the key saving, at the time, arose from the transferring of the business to a limited company. Self Assessment Tax is paid in advance, in 6 monthly installments. Corporation Tax is payable in arrears, thereby giving a potential tax payment holiday period.

Outcome

The client’s tax liability was reduced to some £4,500 per annum, and, as he had been paying so much, in advance, on Standing Order, he received a £6,000 refund, on closure of the self employed business. Our fees for this services? Less than 10% of the tax we saved him, and no more than the previous accountants had charged, who gave him the poor advice in the first place.

In spite of the above, the Accountants had the nerve to write to the client, advising her that they could not complete the year 3 Accounts, as there were a number of small items they couldn’t tie up.

Outcome

Following our initial visit, rather than requiring a mortgage for her £45,000 tax liability, the client received an immediate refund of a little over £15,000. This was followed, some two months later, by a further refund of £28,000.

Limited Company Consultancy Client

T Limited was a limited company client, specialising in small to medium size planning and infrastructure projects. Although an Accounts and Taxation client, already, the company employed Praxis Managing Director, Alan Young to assist them in the preparation of a tender for a National infrastructure project that was far larger than any that had previously undertaken.