More case studies!

Hello again, dear reader.  Here’s another week’s activity for your reading pleasure:-

Case 1

A new client wants to reorganise a collection of companies, some of which are constituted in a formal group structure, and some of which are not.  The desire is for the group companies to deal with all trading activities, but with certain contracts and intellectual property being held outside of the group in a clean, new company so as to protect these assets from the risks of trading.  All that should be possible; a share exchange and a “hive-up” will be required to get the assets into a new company and a licensing agreement will be needed in respect of the group’s exploitation of the contracts.  Will HMRC object to the proposals?  I do not think so, but as there is a formal clearance application procedure, we will tell HMRC what is proposed and get their advance clearance confirming that no tax charges will arise.  The clearance application is drafted and sent to the client for approval.  Everything should be sorted out by the client’s imposed “D-Day”, which is good.

Case 2

A long standing client is experiencing severe cash-flow difficulties.  They are asset-rich but cash-poor and need urgent help.  The bank are persuaded (eventually) to provide more loan finance, but they want ever increasing security, fees and interest charges – no surprise there!  The client is urged to reduce costs immediately and needs help in producing up to date and accurate cash-flow projections, which we provide.  We also commit to providing some emergency accounting back-up, so that they will be warned of future cash crises rather sooner than would otherwise be the case.  A work-in-progress, but with goodwill all round, hard work and suitable cost-cutting, I think the client will be able to recover strongly.  Its product is good; its financial management needs to be made equally good.

Case 3

A dash to north London to meet a large haulage-orientated client.  The results are good and we discuss many matters particularly regarding the structuring, and VAT implications, of certain property investments.  Using a limited liability partnership has attractions, so that’s the way we’ll go.  On a different matter, the client is interested to know of the tax-free subsistence etc allowances that HMRC allow to be paid to long-distance lorry drivers.  A dispensation will be applied for and appropriate tax-free payments will commence.

Case 4

A client undertook an interesting project, being the restoration and renovation of a classic sailing boat, which would originally have been used for carrying cargo.  A tricky question emerges; will a sale of the vessel qualify for the zero-rate of VAT or will VAT have to be charged?  The answer: it depends!  The issue is whether the vessel was designed or has been adapted “for recreation or pleasure”.  It certainly wasn’t designed for that purpose, but it seems irrefutable that, when it is once again “ship-shape and Bristol fashion”, its real use will be as a non-cargo carrying, very large, sailing boat.  There seem only to be two options: either go to a suitable Tax Counsel and get his/her formal opinion; or approach HMRC and seek to agree the matter with them (who will almost certainly say it’s liable for VAT).  The client opts for the latter approach and a letter to the VAT-man is drafted.  I think I know what the answer will be…

Case 5

Not a “case” at all, but we manage to get tickets for the Test Match and so head for the Oval with four clients.  A very pleasant time is had making introductions, chatting and watching some quite entertaining cricket action.  There will be work to do the following day, though.

Case 6

Another “non-case”.  The annual tax update course for the firm’s partners and managers need organising.  The hotel has already been booked; all we need now is a technical itinerary, and a guest speaker to handle a legal slot that I want to include.  A friendly corporate lawyer agrees to give us a couple of hours of his extremely valuable time so we’re up and running.  The agenda for a day of discussing the tax changes foisted upon us by the new (and the old) Government, and the evergreen tax issues, pitfalls and planning ideas for “family companies” is finalised.  I now just need to write the material!

The weekend arrives; I look forward to watching our unbeatable England cricketers cruise to victory against Pakistan.

And so to bed…

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