Any current vacancies are listed below, however we welcome applications from enthusiastic, motivated individuals in all areas of our business at all times.

ACCOUNTS/TAX  ASSISTANTS – RETFORD

We are looking for accounts and tax professionals, with a practice background, looking for a new challenge to join our RETFORD team.

You will be at least AAT/ATT qualified and have a minimum of 3 years recent practice experience.

Solid experience in accounts preparation, tax (business and personal)
computations, VAT and bookkeeping services for a variety of business types is sought.

If you think that you fit the bill then please email your CV and covering letter (detailing your current salary) to John Richmond (HR Manager) at john.richmond@wrightvigar.co.uk

Closing date: Ongoing February 2012

In simple terms, a Shareholder Agreement is a document that every company with more than one shareholder should have. It contains the basis on which the shareholders agree to operate the company, and in general terms provides the basis of a legal agreement between them. Some of the points set out below will also apply to partnerships.

A Shareholder Agreement is there to ensure that decisions are taken by consensus and discussion rather than unilaterally, or in whatever way has been agreed. It will provide clarity and certainty as to what can or cannot be done, reducing grounds for conflict, and most importantly provides a framework for dispute resolution, exit strategy and resolution of shareholdings in circumstances such as divorce or death of other shareholders. All these factors can cause costly difficulties if the shareholders do not make sufficient provision.

Key Points:
- agrees the basis for important decision-making
- defines a procedure for the resolution of disputes
- confirms the powers of the shareholders in the company individually or in concert
- prevents situations where changes in one shareholder’s personal circumstances can have an effect on the company or other shareholders within the company
- sets out the limits and procedures for how the company is to be operated
- provides a framework for exit strategies for the shareholders
- safeguards each shareholder’s financial interest in the company, and the interests of the shareholder’s family in the event of the death of a shareholder

Why have a Shareholder Agreement?

Whilst it does not replace the Articles of Association, and there is no legal requirement to have one, a Shareholder Agreement provides a level of protection for the parties involved in the ownership of the company against the actions of the other shareholders, whether minority, majority or equal shareholders.

Shareholders typically rely on common sense to resolve matters; they may well be married, family members or long-term friends. In either situation, anything that can be done to reduce the possibility of conflict is a good thing, and, whilst these matters are usually very far from the thoughts of business partners starting out in new venture, just like a marriage, things do not always work out as expected. A formal agreement prevents an impasse if things go wrong in the future.

While there is a lot to consider when starting a new company, it is prudent to take a longer-term view for the future. The mere formation of a company is relatively simple to achieve and allows a business to start trading. It does not, however, define responsibilities and more particularly the limits of responsibilities of the shareholders.

A Shareholder Agreement will remove and resolve some common potentially damaging issues such as:
- What happens if shareholders fall out?
- What happens if a majority shareholder dies or is divorced?
- Can you sell your shares to anyone?
- Are shareholders subject to any financial limits?
- What dividends will be paid and when?

Next steps

A Shareholder Agreement is not just applicable to new limited companies; if you do not have an agreement for an established company, it is not too late to take corrective action that may just save a lot of unnecessary cost and grief in the future. It is important to get the correct agreement that suits your circumstance. If you would like help with this, please talk to us.

Click here to view the February 2012 edition of Tax Tips
Click here to view the January 2012 edition of Tax Tips
Click here to view the December 2011 edition of Tax Tips
Click here to view the November 2011 edition of Tax Tips
Click here to view the October 2011 edition of Tax Tips

Surplus cash held within a company is not easily going to earn much of a return, and is going to have to work hard just to keep pace with inflation.  Alternatively, it could be used to make pension contributions of up to £50,000 (see note 1 and 2) per year per director/employee (see note 3) without any additional tax charge.  Indeed, from the company’s perspective, the pension contributions are fully deductible against corporation tax, providing that they have been physically paid before the company year end.

For example, a £100,000 pension contribution would save £20,000 of corporation tax at the small profits rate (taxable profits up to £300,000), £26,000 at the main rate (taxable profits greater than £1,500,000), or £27,500 at the marginal rate (taxable profits between £300,000 and £1,500,000).

The pension contributions have to be paid into a Self Invested Personal Pension (SIPP) rather than to more mainstream large pension companies.  SIPPs tend to be made available by specialist pension fund providers.  The SIPP will have an administrator to oversee things (see note 4).

 As SIPPs are less common, there are not the economies of scale associated with some other pension products.  Typical costs for the set-up of a SIPP are around £500, and then you can expect to pay at least £500 in administration fees.  These costs will obviously vary depending upon the size and complexity of the scheme.

If you already have pension funds available, particularly if they are small, unloved pots, then these can also be transferred into your SIPP.  Many people have small amounts in their pension funds and have been reluctant to pay any more into them because of the poor publicity surrounding pension funds generally, or because of the poor returns that are still being achieved.  SIPsS are, on the other hand, just what they say: pension funds where you control the investments, albeit with professional guidance.

If the value within the SIPP pot is sufficient to buy the property outright then this is the ideal solution.  However, the SIPP itself can borrow up to 50% of its fund value as a commercial mortgage which many, if not all, providers are willing to fund.  So, for example, if the value of the property to be purchased is £300,000 then you would need at least £200,000 (remember there will be professional fees as well as SDLT (see note 5) and VAT (see note 6)) in the pension fund in order to complete the acquisition.

If you are planning ahead for a purchase in the future then you may consider investing in a simple stakeholder or personal pension fund where there are no set-up costs, low fees and no exit penalties for transferring funds.  If the acquisition is likely to be within 5 years or so then any investment should be as low risk as possible.

If you already own the property personally, or possibly the company already owns the property, then the SIPP can still buy it from you.  This is a fantastic way to release cash for either you or the company.  There will potentially be capital gains tax due on the sale to the SIPP, and this should be carefully considered when deciding if you wish to proceed.  As the transaction is between connected persons, it must be done at market value, otherwise the District Valuer and HM Revenue & Customs will become interested in potential tax avoidance.  With property values at a relatively low value at the moment, this might be an ideal opportunity for such a transfer so as to minimise the potential tax due.

Alternatively, if you own a property but do not have surplus cash then it is still possible to transfer the property to the scheme as an “in-specie” contribution. This could be done in one go, or in stages, depending upon the value of the property and the limitations on contributions that can be paid, as previously covered.

So, for example, if the property is worth £300,000 then you could transfer £200,000 in for the first year, and then £50,000 in for the next 2 years.  Each time a transfer is made, the property would have to be revalued, and the relevant percentage of the property transferred.  This might mean that it takes longer to complete the transaction than the 3 years above as the property might have increased in value in the meantime. You would need a solicitor for each transfer, and would also require a new lease agreement showing the changing percentages of ownership between you and the SIPP.

Once the property is inside the SIPP then a market rent (see note 7, 8 and 9) should be charged by the SIPP to the company.  So by acquiring the property you are not saving on rental payments, but at least the rentals payable are effectively to you. This rental payment is tax deductible in the company, and the contributions received can be used to either cover any mortgage payments due, or alternatively to build up funds within your pension pot.

Costs of ownership of the property can be offset against the rental income received, but any profits made by the pension scheme are not subject to tax anyway.  If the property is sold in the future then no capital gains tax is payable.  Also the value of the SIPP is deemed to be outside of your estate, and so is not subject to inheritance tax.

If the pension scheme owns the property, it will not be able to be used as security for any company borrowings, but equally it will not usually be available to creditors if the worst should happen.

On the down side, as with all pensions, there are limits on what you can do with the SIPP.  After reaching 55, and cash permitting, a 25% tax-free lump sum can be drawn.  However, the remainder of the fund must be used to provide an income for you, and is not available for you as a lump sum.

If you die before you draw either the 25% lump sum or an income from the SIPP then the fund can either be transferred in its entirety to your spouse with no further tax to pay, or your spouse can continue to draw an income from it for the rest of their life.  If you have already taken your lump sum, or started to draw an income, or on the death of the surviving spouse then the value of the SIPP can be passed on, but subject to a 55% tax charge.

In summary, you can use tax deductible payments from your company to fund a SIPP, which then buys your own premises, and then the tax deductible rental that your company pays  goes to further  fund your own pension.  You, therefore, have control over the pension payments, you know who both the tenant and landlord are, and consequently you are in total control of your own pension arrangements.  On the one hand you are putting all your eggs in one basket, but with the ever increasing pension age, and the potential for less support from the State in the future, this is a golden opportunity to take control of one part of your own destiny.

Notes

1. By careful use of the pension input period (which is the anniversary of when the SIPP is set up), 2 lots of £50,000 could be made in the first year. 
2. Additionally, unused contributions from the 3 previous years can be used, such that a £200,000 contribution is actually permissible, per director/employee.
3. The pension contributions cannot be paid to a shareholder who is not an employee.
4. Alternatively, if there are several directors, it might make sense to establish a Small Self-Administration Scheme (SSAS).  Rather than several SIPPs, one SSAS could be set up thereby saving costs.  A SSAS has the added advantage of being able to loan money back to the company, but has disadvantages in terms of all directors having to be trustees and all decisions having to be unanimous.
5. Stamp Duty Land Tax (SDLT) is payable on commercial property purchases at 1% on £150,000 to £250,000, 3% up to £500,000 and 4% thereafter.  If there is VAT on the purchase price then SDLT is on the gross amount.
6. Many properties are subject to VAT, and it is important to establish if this is the case from the outset.  It is possible for the SIPP to register for VAT, and thus to reclaim the VAT paid at the time of purchase.  However, if this is done then VAT must be charged on the rent paid to the SIPP, and VAT returns submitted to HM Revenue & Customs.  This is neutral if your company is VAT registered, but could be an additional cost if not.
7. A formal lease must be entered into at the time of the purchase and the rental will need to be independently assessed by a suitably qualified valuer.  The lease should normally be a full repairing and insuring lease. 
8. The length of the lease should be less than 7 years, or have a net present value (set by an HM Revenue & Customs formula) of less than £150,000, otherwise SDLT will be due at 1%.
9. The administrator will need to see various site surveys to confirm that the site is free from contamination and asbestos, as well as various other regulatory requirements about the suitability of the property.

Click here to view the January 2012 edition of Catalyst
Click here to view the November 2011 edition of Catalyst
Click here to view the October 2011 edition of Catalyst
Click here to view the August 2011 edition of Catalyst
Click here to view the July 2011 edition of Catalyst
Click here to view the June 2011 edition of Catalyst

In order to determine the appropriate rate of VAT, each situation needs to be considered on its own merits. Key questions that should be considered are:
- Is the property commercial or residential?
- Is the property listed?
- Has the owner “opted to tax” the property?

This article focuses on the key areas of VAT legislation in relation to supplies of and relating to both residential and commercial properties.

Residential Property
Residential buildings are termed as “dwellings” in VAT legislation. To qualify as a “building designed as a dwelling or a number of dwellings”, a building must satisfy the following conditions:
- each dwelling must consist of self-contained living accommodation
- there must be no direct internal access between the dwellings
- planning consent must have been granted for each dwelling
- the planning consent, and any covenants, must not prohibit separate use of the dwelling
(VATA 1998, Sch 8, Grp 5)

Construction
During the course of construction of a dwelling, both the main contractor and sub-contractors can zero-rate certain services and goods. HM Revenue & Customs provide guidance on these items within Notice 708 Buildings and Construction. The services of architects, surveyors and others acting as consultants or in a supervisory capacity are excluded from zero-rating and are standard-rated.

New
The property is deemed to be new on completion of construction and until the first supply. The first sale of a freehold or grant of a long lease (over 21 years) by a person constructing a non-commercial building is zero-rated enabling them to recover input VAT relating to the building without charging VAT on the sale or lease.

Future Disposals
Future disposals of a property will be exempt from VAT.

Repairs/Improvements
Costs relating to subsequent works on a dwelling will be charged subject to the standard rate of VAT.

Commercial Property
There is no definition of a commercial building; basically a building that does not fall within the definition of non-commercial is commercial.

Construction
The standard rate of VAT applies to all supplies of goods and services in the course of construction, or any building work in connection with commercial buildings.

New
Commercial buildings are classified as new until they are 3 years old. During this period, the sale of the freehold is standard-rated as is the sale of an uncompleted building.

Future Disposals
Once the building is over 3 years old, disposals of future supplies, including disposal or rental, are by default exempt from VAT. However, exempt supplies can be turned into standard-rated supplies by an option to tax. If a person has opted to tax a property, the subsequent disposal will be subject to the standard rate of VAT.

Option to Tax
The option only applies to commercial properties. Once an option has been made it can only be revoked within the first 6 months or after years. The option is made on the property by a person; therefore all supplies of that property by the opter are standard-rated.

Repairs/Improvements
The standard rate of VAT applies to all supplies of goods and services in the course of alteration or refurbishment.

If you are unclear which rate to apply, you can write to HM Revenue & Customs for a ruling. A ruling can be requested for a particular transaction that has occurred or will occur in the near future. In order to rely on the ruling, you must present all the facts.

Due to the minefield of legislation in this area, it is common place where there is doubt for the standard rate of VAT to be applied to an invoice. This treatment is incorrect and the only recourse for a customer is to go back to the supplier for a credit note.

Click here to view Insight – Spring 2012
Click here to view Insight - Autumn 2011
Click here to view Insight - Summer 2011
Click here to view Insight - Spring 2011

15 teams entered and approximately £1,500 was raised.

The winning team entered by Michael Cornish.

Runners up – M G Music Services. 

Third place – Newark Glass Company.

Fourth place – Langleys including John Marshall who won Nearest the Pin on the 3rd hole.

Fifth place – Williams EDI.

Sixth place – Nat West entered by David Greenough.

Burton & Dyson entered by Steven Hardy.

Ebalta UK Limited.

Handelsbanken entered by David Thompson.

HSBC entered by Andrew Lovely.

Illett Clarke, Alistair Holmes and Richard Vigar including Caven Hardwick who won Nearest the Pin on the 7th hole.

Lloyds TSB entered by David Jockel.

Nat West entered by Dave Fisher who won Nearest the Pin on the 12th hole.

SAS Hardware including Jodie Peacock who won the Longest Drive on the 18th hole.

Toybox (Europe) Limited including Mark Hern who won Nearest the Pin on the 17th hole.