IFA, Tax Advisor or Accountant?

DreamweaverB

What in layman terms is the difference between an IFA, Tax Advisor and/or an Accountant?

I have a corporate tax accountant (tax advisor?) advising me on dealing with the proceeds of a business sale but am unsure where to start looking for advice on what to do next once I've received the funds.

missy_sarah

You can donate it to me if you like. Or you can put in about 7,200 in an isa to start off with..

Treading_Water

An IFA should be able to tell you the best place to invest any money or to borrow, a tax advisor will be useful if you have a large taxable income in advising you of the best (legal) means to minimise tax and an accountant should advise you with ongoing business affairs.
If you are the best ways to deal with the sale - I would say tax advisor, Invest use an IFA - or put it back into business maybe an accountant and tax advisor.

Pennywise

Use an accountant to help get the best "deal" on the sale, i.e. to make the business look as attractive as possible and negotiate on sale price, i.e. cash lump sum versus part cash/part shares versus all shares, also earn-outs, etc.

Your accountant should also be able to help with the tax benefits of different structures, but if the deal is particularly large or complicated, a specialist tax consultant may be wise.

Once you have the money, get an IFA to guide you as to how to invest it.

All three roles are intrinsically linked, so you'd be best getting your accountant and IFA to talk to eachother at the outset. As I've said, most decent accountants will also deal with the tax, so whether you need a specialist tax consultant is dependant upon the abilities of your accountant and the size/manner of the deal. It goes without saying to make sure that all three have the competence and experience in your type of business.

Just remember to engage and consult your accountant, IFA and tax consultant (if necessary) at the earliest possible stage - they won't be able to help as much if you've already done all the negotiations with the buyer or if the deal has already been signed. You want them right at the earliest stages so that they can help in the negotiation process. Most people don't do this and it severely limits what the professionals can do to help. For example, sometimes it is better to take a smaller amount of money in a different way - your tax bill is a lot lower so your "net, after tax" is higher, even though the "gross, before tax" is lower.

DreamweaverB

missy_sarah wrote: »

You can donate it to me if you like.

Lol :rotfl:

missy_sarah wrote: »

Or you can put in about 7,200 in an isa to start off with..

Yeah, ISA will be one of the first things on my list, it's what to do with the rest I need help on.

KieranB

Ask your accountant to refer you to an IFA. There is a very good chance that they have an IFA (or firm) that they pass all business to and also receive a cut of the comission.

Makes it easier on yor behalf if your accountant and IFA alreay know eachother.

DreamweaverB

Pennywise wrote: »

Once you have the money, get an IFA to guide you as to how to invest it.

Just remember to engage and consult your accountant, IFA and tax consultant (if necessary) at the earliest possible stage - they won't be able to help as much if you've already done all the negotiations with the buyer or if the deal has already been signed.

Thanks for the really good advice but I should have made it clearer that the deal is done and dusted - all that's left is for the funds to be transferred.

I totally agree on getting professionals involved at the negotiations stage. Before putting the business up for sale I was expecting 40% tax, the experts got it down to just 10%.

Thanks to you and Treading Water for the IFA explanation, looks like that's who I need to find next.

dunstonh

KieranB wrote: »

Ask your accountant to refer you to an IFA. There is a very good chance that they have an IFA (or firm) that they pass all business to and also receive a cut of the comission.

Makes it easier on yor behalf if your accountant and IFA alreay know eachother.

The theory is right but the reality is different. The largest accountancy firm in our region has an IFA arm and they are probably amongst the most expensive to use. I would shop around.