As businesses look to control cost they should consider how tax management can improve cashflow, or give absolute savings. Also, they may wish to review the process and price efficiencies in dealing with their tax functions. We outline four key areas to consider.

We will be pleased to discuss in practical terms how you can gain benefits and implement the solutions to obtain savings. Our contacts details are located on our website www.tpctax.co.uk where you can also read more about topics such as VAT cash flow management, risk management and approaches to compliance.

We are dedicated to providing value effective solutions and projects are actively delivered by a team experienced in helping businesses in challenging times.

Compliance

Whether you deal with compliance in-house, using third parties or by a combination you may look to cost out the process in terms of staff hours spent and external spend.

By reviewing processes, information gathering and responsibilities you can seek to identify efficiencies. The process needs to relate to your reporting requirements, risks reviews and planning processes as well as meet tax return obligations.

Our experience shows many businesses can achieve substantial savings and actually improve deliverables at the same time.

Risk

There are signs that HMRC are getting tougher. The new penalty regime and powers, and the wish to protect the tax base all add force to this. Even loss making businesses can face direct tax costs, for example from mismatches or because penalties can now be charged where losses are adjusted.

New sources of risk emerge as processes and business develop, as well as from changes in tax law and practice.

Intelligent review and overhauls can mitigate the costs from protracted HMRC enquiries, tax adjustments and associated penalties. Relationship issues with HMRC, clearances of transactions, appropriate disclosures on returns and documentation of transfer pricing are some issues to consider.

Tax impact of commercial strategies

If you are putting in place measures to streamline business there will almost certainly be tax effects. For example, unexpected capital gains may arise with limitations of offset, or a useful tax deduction may not be obtainable on an economic loss. Planning ahead may reduce such tax costs.

Common streamlining examples likely to have significant tax implications are:

• closure in a territory and transfer of assets,
• group restructuring,
• disposal of property, lease surrender, empty premises,
• divestment of non-core business,
• liquidations,
• staff redundancies,
• refinancing.

Tax incentives and opportunities

In line with, or separate from, streamlining business you can consider tax measures for:

• cash flow management with tax-quarterly corporation tax, VAT etc,
• saving and reclaiming customs duties,
• claiming tax incentives (research and development, enhanced capital allowances etc),
• tax reclaims based on European law (cross border loss offset, tax exemption on foreign dividends),
• VAT claims and corporate tax deductions on bad debts,
• obtaining tax optimal loss offsets,
• reduction of withholding tax obligations,
• deductions for share plan costs and new strategies for using share plans.