This week we are offering you a sneak peak at one of our many success stories with a client case study. You can find out just how paying us will ultimately save you money!
A limited company who were in the process of closing their business down with a significant balance in the bank account remaining for distribution. The company were still trading profitably.
Our client believed that they should declare a large additional dividend to allow access to the balance of their bank account after the final HM Revenue and Customs charge had been settled. They had included the initial calculation in their draft accounts.
On receipt of the clients’ accounts we identified that dividends were not tax efficient for either the company or the directors’ personal tax situations. Using HMRC specific redundancy payment rules, the employment contracts of the two directors were terminated and redundancy payments replaced part of the final dividend, which reduced the taxable profit by 50% and in turn the final corporation tax bill was reduced by the same percentage.
Additionally, these redundancy payments would be tax free to the two directors, saving them a higher rate tax liability.
They saved how much?
By accepting our professional advice our client saved over £5,000!
As part of our company ethos of “Hand Held Accounting” we also provided a comprehensive timetable for the necessary practical steps to finalise their obligations to HM Revenue & Customs and Companies House and close their business.
The company was dissolved successfully 3 months after the final accounts we filed at Companies House.
At First Call Financials we provide comprehensive accounting and tax solutions to small and medium businesses, whether you have a Limited Company or you are a Sole Trader, we can help save your business money and help you work more efficiently. Give us a call on 0117 379 0810 today and talk to our fantastic team, and we could save you money too!
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Categorised in: First Call Financials News
This post was written by Fran Tyler