EBA Consulting Ltd

"Choice of attention - to pay attention to this and ignore that - is to the inner life what choice of action is to the outer. In both cases, a man is responsible for his choice and must accept the consequences, whatever they may be." W.H.Auden

Tel: 01554 890300

Tax Legislations Affects SME's

The SME market is becoming extremely concerned over apparent Inland Revenue tax changes resulting in individuals receiving demands for significant additional sums in tax. This has been applied to businesses jointly owned by a husband and wife teams.

The Revenue has been demanding tens of thousands of back tax which they say recipients have been avoiding.

The Revenue have been citing the settlements rules which in fact have been in place for many years. 

The rules are longstanding anti-avoidance legislation and in many ways are understandable.

Essentially, they stop you passing income to someone else in the family, or giving income or assets to someone else on the basis that you will have it back later, all in an effort to reduce the overall income tax bill.

Needless to say this is being hotly contested and questioned why the Revenue have suddenly decided to employ this rule now.

Specialist advice needs to be sort as soon as possible as the implications for accountants and owners are quite significant. Also review your situations as quickly as possible.

There are grounds to oppose the Revenue's claim. But we are in a complex area and people need to tread with care.

If you need assistance with this contact us now before it's too late

It is vital businesses, especially the SME sector gain access to key areas of assistance to help them in their development process.

Look at all the Options to Fund your Business

Many businesses open up a bank account to gain access to credit facilities such as an overdraft or a loan.

Although overdrafts were more popular as they are more flexible and do not carry the same onerous requirements such as the security requirements of a loan in general the banks are moving away from offering overdrafts to the SME sector.

Overdrafts have to be rearranged on a regular basis, probably every six to twelve months, and can be called in at any time. They are also more expensive if the limits are exceeded.

Overdrafts are more suited for day-to-day expenses incurred through running the business. It is not suitable for capital expenditure or to cover start-up costs for any length of time.

Overdrafts make up less than 30% of lending by banks. This is the lowest amount since 1992, when the figures were first collected.

A loan in many cases is more suitable for fixed borrowing such as asset purchase and remember the banks are not the only source of funding. There are grants available up to 50% of the capital cost as well as other sources of soft loans which may be easier to obtain than from the bank.

Also there are leasing arrangements to suit all market, personal and company conditions. So whether you have a rock solid balance sheet or a business which is struggling there is normally a solution  to get through the hard times.

Also there are other forms of funding which are better in many ways than an overdraft facility such as debt finance where factoring or invoice discounting will be more suitable.

If you need assistance with this contact us now before it's too late

Valuing your Business

A rough guide to valuing  your business is to make a comparison with a similar company on the stock market, look for ones in a similar market place providing similar services.

Find out the an appropriate price/earnings (p/e) ratio and use it to value your company. The p/e ratio is the multiple of profits after tax attributed to a company to establish its capital value.

If you are considering venture capital they will use this to establish their rate of return over a the period they intend to be shareholders.

Any investment or indeed outright purchase of a business would depend on several factors, such as the perceived risk, length of time the money will be tied up, how easily the investment will be realised and how many other organisations are interested in the deal.

Funding is always an issue when expanding or investing in a venture.

If you need assistance with this contact us now before it's too late