Corporate Tax

Our Corporate Tax Services

Our Corporate Tax team provides tax compliance and advisory services in a proactive, timely and friendly manner.  We work closely with our clients, helping them navigate the ever changing complex tax landscapes, and providing proactive, effective solutions in the process.

Our clients operate across a wide range of sectors and we have the technical expertise and knowledge to help them through every stage of their business from commencement and expansion to planning a sale.

We have the benefit of being able to work with our colleagues in other services within the firm and that of the wider HLB network for any international matters, in order to provide a comprehensive overall service.

Our tax team’s enviable reputation is based on trust that has been fostered, in some cases, over a period of decades. It is our willingness to go that extra mile, to seek to put ourselves in our clients shoes and our in-depth understanding of the commercial aspects of their business that forms the foundation of our enduring client relationships.

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How we can help you

The corporate tax landscape is constantly evolving and unfortunately becoming more complex.  Our objective is to work with our clients to ensure that they meet all relevant filing requirements and deadlines in an efficient and timely manner.  By leveraging our knowledge of the ever changing tax legislation we proactively seek to identify applicable tax reliefs and mitigate our clients corporation tax liabilities wherever possible.

We also use the compliance process as a means of identifying suitable tax planning opportunities for the business and its owners.

We provide our clients with a full range of tax compliance and reporting services including:

  • Provisional calculations and tax reporting for accounting purposes
  • Timely communication of corporation tax liabilities to allow for forecasting
  • Preparation and submission of tax returns and computations

We also offer additional related compliance services including:

  • Pre-year end planning meetings to discuss opportunities to mitigate potential corporation tax liabilities
  • Corporation tax forecasting for cash flow forecasting purposes
  • Corporation tax forecasting for Quarterly Installment Payments purposes
  • Management of HMRC enquiries and compliance checks

Capital allowances are a highly effective way of reducing the profit on which tax is calculated.  However, many businesses do not claim all of the capital allowances or other tax reliefs to which they are entitled.

Capital allowances are available on the cost of buying plant, equipment, fixtures and fittings and acquiring, constructing, fitting out or refurbishing property. Categories of allowance include plant and machinery; integral features; remediation of contaminated land and commercial and industrial buildings allowance.

Our capital allowance specialists work closely with our clients to maximise the claims using our expertise in the application of tax legislation.

This relief is available for companies that incur R&D costs to improve its trading results; while the R&D has to be innovative, relief is available where science or technology is used to solve a scientific or technological problem in a commercial environment.  Many businesses do not realise the full extent and potential of R&D Tax credits available.

Our tax team has particular industry experience on R&D tax credit claims and our support and advice has delivered substantial tax reclaims for a growing number of clients.

Properly structured and implemented share schemes can significantly contribute to a performance of a company and increase shareholder value.  They are also an excellent means for a company to distinguish itself from the competition as an employer and assist in the attraction and retention of key employees.

Conversely, a poorly implemented incentive scheme can have the opposite effect.

The team at French Duncan has considerable experience in advising on all forms of equity incentives including:

  • Approved and tax efficient option plans such as Enterprise Management Incentive options (EMI), Share Incentive Plans or Company Share Option Plans
  • Unapproved option plans. These are quite common but there is no particular tax advantage to an unapproved plan
  • Direct share rewards, including growth shares, forfeitable shares or long term incentive plans
  • Cash bonuses linked to increasing share values, such as phantom share options
  • The complex rules concerning employment related securities and remuneration provided via third parties

The more effective share incentives are those which are closely linked to a company’s short and mid term objectives and business plan. 

EMI options are extremely flexible and options can be exercised, for example:

  • On the sale of a business or the company shares. This allows employees to share in the growth in the value of the company to which they have contributed without having to acquire any shares until the point of sale
  • Based on performance criteria which are pre set. Options can therefore only be exercised where, for example, a profit or turnover target is reached
  • Adopting multiple targets with options being exercisable on the attainment of each

EMI options are normally granted for no consideration, the employee only having to fund the purchase of shares at the point of exercise.

Generally, the value of a small minority shareholding is agreed with HMRC on a discounted basis at the point of grant of the option.  When the employee exercises his option, and pays the amount agreed with HMRC at the time of grant, there is no tax liability and the employee will only suffer capital gains tax when he sells his shares.

It is possible for employees to pay less than the value agreed with HMRC but there will be an income tax and possibly an NIC liability of the difference between the actual price paid and the market value at date of grant. 

On sale, capital gains tax could be at the 10% entrepreneurs relief rate provided that the period from the date of grant of the option to the sale of the share is at least one year.

Company share option plans are much more restrictive than EMI options but both can be targeted on specific employees rather than having to be open to the entire workforce. 

Share incentive plans have to be open to all of a company’s employees with limited exceptions.  They are however a means of incentivising the entire workforce with the number of shares being allocated to employees “on similar terms”.  This can be equally or based on relative salary levels or length of service. 

There is an advantage to an employee being able to acquire shares immediately, as he will be entitled to dividend payments by the company.  He will however have to pay for the shares or be subject to income tax if he pays a lesser amount, albeit that the value of the shares will be calculated on a discounted basis to reflect the value of a minority shareholding. 

HMRC do not disapprove of unapproved share schemes but approved arrangements offer significant tax advantages over an unapproved arrangement.

Selling your business with complete exemption from capital gains tax seems an unlikely scenario. This is however possible where you sell your shares to an employee ownership trust where statute provides that no capital gain arises.

The Government’s objective is to promote employee ownership. The main requirement is for the trust to acquire more than 50% of the shares.

Apart from complete capital gains tax exemption for the vendor, there is an income tax benefit to employees as they can each receive tax free bonuses of up to £3,600 per tax year from the company.

Many sales of private companies are, in part at least, financed by the company itself over a period of years. This is the financing model which will generally be adopted in a sale to an employee ownership trust. If the company has surplus cash at the date of sale then it can make a contribution of this to the trust and the trustees can use the funds received to pay to the vendor shareholders. The balance of consideration due to the vendors can remain outstanding with the vendors receiving payment over a number of years. Each year, the company can make further contributions to the trust which will utilise these funds to pay down the loan.

Case Study
Ray owns the entire issued share capital of a trading company and, at 55 is looking to succession and realising some value from the company. He has thought for a number of years that he would like to get his loyal employees involved in the company and perhaps offer them the opportunity of effecting a management buyout. Ray is not ready to retire yet but anticipates handing over some of the duties which he currently carries out to senior staff over the next five years or so and thereafter he will decide whether to retire completely.

The company has built up a significant amount of surplus cash from trading profits over the years.

Ray decides to consult with the company employees and following these discussions an employee ownership trust is set up. The company makes a substantial cash contribution to the trust which utilises these funds, together with funds borrowed from its bankers, to purchase a 51% shareholding in the company from Ray.

The qualifying conditions are met and Ray realises a significant capital gain on which he pays no capital gains tax.

In future years, the company makes further contributions to the trust from its profits after tax which the trust utilises in paying down the bank loan.

In five years, there is a lot of flexibility in what happens next. For example, both Ray and the trustees could sell their shareholdings to a trade purchaser.

Blog
Read our latest Employee Share Trust blog here.

We regularly provide advice to individuals and companies both acquiring and disposing of their shares and/ or businesses.

Tax due diligence investigations are a recommended element of any business acquisition and we regularly provide advice in relation to both share and business purchases.

Due diligence should be proportionate and as such we will work with you in ensuring that the engagement is correctly focused and delivered in an efficient and cost effective manner. We offer both a tax-only due diligence service or a combined finance and due-diligence service with our colleagues in Corporate Advisory.

Our team of corporate tax, employment tax and VAT specialists have a great deal of practical transactional experience, we are well qualified to provide a comprehensive, insightful and commercial diligence service.

Our due diligence will form the basis for any non-standard tax warranties that should be included in the business purchase agreement. We regularly work with our clients solicitors in the review of legal documentation to ensure that these agreements robustly protect our clients’ rights in relation to all tax matters.

Our team can also provide related tax advice in relation to corporate structuring, deal financing, transactional elections and capital allowances.

In respect of share or business sales, our advice is aimed at ensuring our clients minimise their tax liabilities and maximise their net proceeds within commercial parameters.

This typically involves considering the structure of the disposal, including such elements as shareholdings, available tax reliefs, pre-disposal restructuring steps and the timing and nature of proceeds receivable.

Our team have a great deal of experience in working with the solicitors of our clients in order to ensure that the disposal agreements reasonably mitigate any potential future claims from the purchasers.

Find out more about our Corporate Advisory team's Due Diligence and Purchase and Sale of Businesses services.

The Patent Box is an optional regime offering companies an effective 10% rate of corporation tax on income from the exploitation of patents.

Qualifying companies are those which own or licence patents granted by either the UK Intellectual Property Office, the European Patent Office or specified EEA countries. The company must also have undertaken the development of the patent or product incorporating it.

Our tax team understands the importance of this regime and the benefits it can offer. We can advise on how the Patent Box can achieve maximum tax savings for you and assist you in the process from application to corporation tax computation.

A tax investigation or HMRC enquiry into an individual's or company's affairs can be a very stressful and costly time for those involved.

Tax officials can open a variety of enquiries into a taxpayer’s affairs, ranging from general tax enquiries to in-depth fraud investigations.  We assist our clients in navigating the HMRC enquiry process, however simple or complex, ensuring that they feel comfortable that they are being best represented.  Typically we will manage this on their behalf, seeking to deal direct with HMRC and minimise disruption to our clients.

Our clients benefit from access to both a breadth and depth of tax technical knowledge and practical experience as a result of our multidisciplinary team containing experts in accounting, corporation tax, VAT, employment taxes, income tax, capital gains tax and inheritance tax.

We work closely with our clients to determine the key facts pertinent to the events under enquiry and help them to present their case clearly and concisely but with the utmost robustness.  We will continually be considering our clients communications in order to mitigate penalties as best possible.

Our experience includes successfully taking enquiries through the Alternative Dispute Resolution process to First Tier Tribunal, where agreement with the enquiring inspector is not possible.

It is not unusual for us to act on behalf other accountants where the incumbent advisor may be at an impasse with HMRC or may lack the depth of expertise we have on hand.

French Duncan offer a Tax Investigations Service, which will cover you for our fees that result from you or your business being investigated by HMRC. Find out more here.

Corporate structures are often restructured and/ or reorganised in order to help in achieving a commercial objective.  This may include reasons such as:

  • the protection of assets;
  • the separation or amalgamation of business activities;
  • alignment of business reporting lines; or
  • structuring in advance of a possible sale, acquisition or refinance etc.

There are many potential tax pitfalls when restructuring or reorganising a business however our team have both the technical knowledge and practical experience to advise on such matters and mitigate this risk, including liaising direct with HMRC to obtain advance assurance where advisable.  Typical transactions could include:

  • inserting a holding company;
  • transfers of companies and/ or trade and assets within a corporate group; or
  • transfers of companies and/ or trade and assets outwith a corporate group (demergers).

As a consequence of these transactions there are often financial considerations to take into account, such as connected party or impaired debts.  We have the expertise to advise on the related accounting and tax treatment of such debt in order to achieve the optimal commercial outcome.

We have many clients who are either UK based with international operations or non-UK based with UK operations.  Such clients require careful consideration of both their UK and international tax exposure and may ultimately benefit from advice in relation to the tax implications of their commercial activities.

We have experience of advising on:

  • The structure of international business arrangements and how double taxation may be mitigated;
  • Transfer pricing studies documenting the value of connected party transactions;
  • Determining the country of tax residency and the resultant tax consequences;
  • Interpretation and application of double taxation agreements and reliefs;
  • Taxation of UK and international permanent establishments;
  • Foreign branch tax exemptions;
  • Withholding tax requirements; and
  • Certificates of residency.

French Duncan are a member firm of the HLB global network of independent advisory and accounting firms, providing us with access to local tax expertise in more than 150 countries worldwide.


Case Studies & Testimonials

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Meet some our Corporate Tax specialists



Stephen  Thom

Stephen Thom
Partner & Head of Corporate Tax
s.thom@frenchduncan.co.uk
0141 221 2984

Stephen  Thom

Stephen Thom

Partner & Head of Corporate Tax

ACA

LinkedIn Logo


0141 221 2984

s.thom@frenchduncan.co.uk


Specialisms include...

Stephen is an experienced tax advisor who has worked in both practice and industry roles during his career. He started his career in London with BDO prior to working with Lloyds Banking Group for three years, where he specialised in providing tax advisory services. Stephen joined French Duncan as a tax director in 2015 from a mid-tier firm in Glasgow and became a Partner in May 2017.

He specialises in advising on a variety of corporation tax matters, including: share reorganisations; group restructuring advice; substantial shareholdings exemption; the taxation of loan relationships and international tax advice. Stephen has gained experience through advising a wide variety of clients, ranging from owner managed businesses to AIM and fully-listed enterprises.

He has developed a reputation for fully understanding the commercial objectives and strategies of businesses prior to providing tax advice, in the process ensuring that the tax outcome is always aligned to the wider business objectives.

Barry  Laurie

Barry Laurie
Partner
b.laurie@frenchduncan.co.uk
0131 225 6366

Barry  Laurie

Barry Laurie

Partner

BSc CA

LinkedIn Logo


0131 225 6366

b.laurie@frenchduncan.co.uk


Specialisms include...

Throughout his extensive career, Barry has worked for HMRC, Arthur Andersen, Coopers and Lybrand and McCabes. He has been a Tax Partner with French Duncan since its merger with McCabes in 2008.

Barry has a wealth of experience in all aspects of tax matters, from corporate to personal and has a particular specialism in maximising capital allowances for clients. Whilst Barry can advise any business on its tax matters, he has particular expertise in the hospitality and property sectors.

He can also advise on tax incentives for investment.

Barry prides himself on taking the initiative to understand his clients’ needs to deliver results.

He enjoys building strong relationships with his clients and continually seeks opportunities which he believes will be to their benefit.

Robert Barrie

Robert Barrie
Corporate Tax Director
r.barrie@frenchduncan.co.uk
0141 221 2984

Robert Barrie

Robert Barrie

Corporate Tax Director

BAcc(Hons) CA

LinkedIn Logo


0141 221 2984

r.barrie@frenchduncan.co.uk


Specialisms include...

Robert started his career at a top 15 accountancy firm, working in both personal and corporate tax, before qualifying as a chartered accountant in 2008.

Robert believes in proactive client engagement and delivering both commercial and tax efficient planning solutions.

In 2012 Robert joined a top 10 accountancy firm, specialising in the provision of business tax advice to SME’s, owner managed businesses and high net worth individuals.

Robert then joined French Duncan in 2014 and has helped to oversee the growth and development of our corporate tax department.

His current role includes advising on a range of projects including corporate restructuring, capital allowance planning, Research and Development claims, due diligence and international tax issues.

Robert also oversees the corporation tax compliance process for a number of our firms largest and most complex clients.

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