Help with Tax / Profit advice

smallzoo

Very briefly, I have been running a limited company dealing with software development for over 20 years. there is only myself and my wife as director/secretary and 50% each shareholder. I roughly turnover £60-70k per year. In the past I have come under the IR35 banner but over the last few years I have been working for many different companies and the contract work has only been short bursts.

Ok now for the problem. I have an accountant who seems ok but NEVER suggests how I might run my business more effectively. I keep on being told by other people I can claim far more business expenses and that I should really run a company car rather than older used cars which generally cost me a lot to maintain ( last year I had a nissan patrol which cost me nearly £1500 just in repair costs ).

I need help in deciding how to improve my business profit. Should i really hire a tax expert rather than an accountant or does anyone have other ideas ?

I am based in cheshire but can you help in any way at all

Pennywise

Who are these "other people"? Are they qualified accountants or just bar-stool amateurs? Have you considered that your affairs may already be "tax optimised" therefore nothing new for your accountant to tell you? For a start, unless you were thinking of a very low CO2 car or a Toyota Prius or the like, it's very unlikely that you'd be better off with a company car rather than a personally owned one due to the penal car and fuel benefit in kind scale charges. For the average person running a small business, as long as they are claiming all the running costs of the business, i.e. travel, insurance, professional fees, mobile phone, stationery, and a bit for use of home a office, then there's little else if you want to stay legal. Of course, there are plenty of options if you want to live on the wild side of tax evasion, and of course, plenty of options where you buy into tax avoidance schemes such as pensions, film investments, EIS, VCT, etc., but you have to pay more to save some tax, so not for the faint hearted. Don't believe all you hear from amateurs - half will be talking buzzcocks and the other half will think they're claiming, but their accountant will be adjusting in the tax comps.

chrismac1

On the other hand, if you can go 20 years and never make a single suggestion for business improvement then in my book you're a pretty lousy accountant. Other then micro-businesses I can honestly say there is not a single client I go as much as year without making a suggestion for improving sales, cutting costs, changing strategy or reducing taxes, and I am confident the OP can find a practice or two like that in Cheshire. In fact I am just finishing an excellent book "The UK's best accountancy practices" by Steve Pipe in which there are several Cheshire practices which sound like exactly the sort of people the OP should be talking to.

At the very least if you were my client - given that you've been in business 20 years - we'd be talking about possible exit strategies. I've helped several clients do a much better job on this than their previous accountants were doing. So my easy tip in the "one hour free consultation" is that if this topic doesn't come up unprompted then you've wasted an hour, move on to the next guy.