Going Concern: Directors Responsibilities!
While economic indicators suggest that we may have seen the worst of the recession, we are still in difficult economic times and the impact of the recession is still being felt in many areas.
Annual accounts can convey a positive message for some, but for others, accounts and the disclosures within them, paint a very different picture. Deterioration in trading and cash flow can often lead to working capital deficiencies and unhealthy balance sheet ratios.
Thoughts for Charity Trustees
The charities’ sector is one which is now “benefiting” from an increasing exposure to regulation. This is creating an environment where those involved with charities, which will include many Chamber members, need to be aware of their responsibilities and some of the associated pitfalls.
The Office of the Scottish Charity Regulator (“OSCR”) is the body which keeps the Scottish Charity Register and monitors compliance with the legislation. If there is any apparent misconduct OSCR will investigate and take action to protect charitable assets.- The Scottish Executive has announced that it will amend the legislation to remove restrictions on a charity’s ability to provide trustee indemnity insurance (“TII”). With new regulations and the associated risks, this may be worth considering.
- New trustees need to understand their roles and responsibilities from the outset and some form of induction process can be very beneficial. As a minimum, trustees should receive an induction pack containing the most recent financial information, most recent annual report and audited accounts, minutes of recent board meetings and a copy of the OSCR publication: Guidance for Charity Trustees.
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A Sting in the Tail for Entrepreneurs
The Emergency Budget appeared good news for business owners selling their trading companies despite the new 28% Capital Gains Tax rate. The lifetime limie for Entrepreneurs Relief (ER) was increased and gains on qualifying disposals up to £5M now attract the favourable 10% tax rate. However, there was also an unwelcome change to the taxation of Qualifying Corporate Bonds (QCBs) which applies to company share sales completed before and after 22 June. QCBs are a common feature of business sale/purchase transactions where part of the purchase price is satisfied in the future by redeemable loan notes. Capital gains arising on shares sold in exchange for QCBs are 'frozen' until the QCBs are redeemed.
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VAT - the year so far
VAT - the year so far....
While the VAT rate changes have grabbed the headlines, there have been perhaps more significant developments as HMRC have sought to harmonise tax provisions and tackle perceived avoidance. Just a few points are summarised in the following paragraphs....
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EETS Bulletin August 2010
Welcome to the August issue of the Anderson Anderson & Brown LLP Employer and Expatriate. Tax Solutions (EETS) bulletin. Covering a number of topical changes recently introduced, or in the pipeline we hope you find these articles and compliance calendar useful and informative.
EMPLOYER PROVIDED CARS – NEW ADVISORY FUEL RATES FROM 1 JUNE 2010
The advisory mileage rates for employer provided cars are relevant where employers:
- reimburse employees for business travel in a company car
- require employees to repay the cost of fuel used for private travel.
In addition, for fuel scale charge purposes providing that all private travel has been properly identified, HMRC will accept that there is no fuel benefit charge. Therefore, no Class 1A NICs liability arises where the employer uses the appropriate rate from the current table (or any higher rate) to work out the cost of fuel used for private travel.
Performance Reporting - Beyond The Bottom Line
Actively monitoring the performance of your business has never been more important. When times are good and cash is coming in, we tend to get on with the day job.
When times are tougher, many companies find themselves in unchartered territories and a more formal approach is required. More often than not, this is driven by external factors such as increasing scrutiny from banks and investors and/or mounting pressure from shareholders and staff looking for assurances. So how do you make the transition from working ‘in’ the business, to working ‘on’ the business?
Initiating a performance reporting project is a good place to start. This requires a commitment to sharing pertinent financial and non-financial information with some, if not all staff and other key stakeholders. Culturally, this can be difficult. The North Sea has a large concentration of ownermanaged businesses that have experienced rapid growth; these entrepreneurial businesses in particular have a tendency to hold financial information under lock and key. When they start to open up, the results can be staggering.
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Pursuing an Acquistion Strategy
The potential benefits of growth from successful acquisitions are considerable, however, acquisitions can be risky and consume excessive management time. Indeed, when a company is planning to make an acquisition, it can be a time consuming process and most organisations do not have the resource capability to fully research the marketplace for appropriate opportunities.
As a result, the companies that are looking to make acquisitions are often reactive to opportunities as they become aware of them in the marketplace. There is nothing wrong with taking this approach, and indeed we work with a number of clients on this basis, however if pursuing an acquisition strategy is a critical part of a company’s growth plans, then serious consideration should be given to a more proactive approach to identifying appropriate acquisition opportunities.
This would involve developing a focused acquisition strategy and then conducting a detailed review of the market to identify specific targets based on the company’s acquisition requirements.
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Facing Up To The Funding Challenge
The importance of securing and retaining appropriate funding, and matching a company’s debt structure to its business needs, has become increasingly important in the current financial climate. Being prepared for the volatility businesses are facing is paramount, especially as the markets are expected to remain uncertain in the near to medium term.
The current capital shortages that exist in the banking system have made it more difficult to obtain finance. The availability of cashflow lending has been significantly reduced, debt multiples offered by funders have decreased and the timetable for securing funding has been extended due to increased diligence requirements. The competitive environment amongst banks, so apparent in recent years, has clearly waned.
These issues pose significant challenges to the majority of businesses and highlight the need for maintaining a good relationship with current funders and for being prepared to deal with unforeseen circumstances, such as a reduction in trading activities.
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Outsourcing Services
Effective Payroll Management
Do you look forward to the ongoing task of preparing and processing your payroll? Are the following examples of the problem areas you regularly encounter?
* Incorrect timesheets or expenses
* Understanding statutory calculations
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Payroll Services
Employers increasingly have to balance a number of criteria in order to be compliant while meeting the needs and expectations of their workforce.
In the energy industry workers are located both in the UK and internationally. It is therefore important that payroll systems/processes adequately deal with UK and non UK issues and maintain compliance both at home and abroad.
The success or failure of any payroll system will ultimately be judged by employees as well as the taxing authorities. The ability to address new legislative requirements is vital with the potential of non-compliance becoming an increasingly expensive risk for companies.
It is also important to recognise that payroll is part of the wider reporting processes of the company. Links to general reporting and information systems must therefore provide what is required by the management team and the wider organisation.
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Outsourcing - Putting You And Your Business First
In the current economic downturn, this is a time when streamlining your back-office is more important than ever. A time for focusing on what you’re good at, your core business and strengthening customer relationships. Being customer-focused is being process focused and they are two sides of the same coin. Get the back office right and the rest will follow.
The Benefits to Your Business
Outsourcing allows you and your management team the time to concentrate on building your business, ensuring your admin team are utilised correctly and cost effectively allowing for improved business performance.
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Scottish Accountancy Awards 2010 The firm was judged to have the best ‘Team of the Year’ in their corporate finance division. The team was noted as being, ‘a cut above the rest with an impressive and consistent track record!’ Top Scottish Dealmaker 5th Year Running AAB have once again been named as top dealmakers in Scotland in 2009. This is the 5th consecutive year we've gained this prestigious title, topping the Scottish Business Insider tables for both deals initiated and deals completed. Anderson Anderson & Brown LLP are proud sponsors of The Robert Gordon University Best Final Year Student in Accounting and Finance BA (Hons). This year, the prize has been awarded to Sarah Ruddy from Aberdeen. Sarah, who won several prizes throughout her course, plays and teaches piano in her spare time and has already commenced her CA traineeship. |
Added Value
The Budget Booklet June 2010
A budget overview covering the key changes announced in the Chancellor’s speech.
Facts and figures for the key tax changes announced in the June Emergency Budget.
Additional Information
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Download the AAB Brochure
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