Advisory Circle - Tax investigations & Share incentive plans
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Advisory Circle - Tax investigations & Share incentive plans

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The first in a series of presentations for smaller accountants

The first in a series of presentations for smaller accountants

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  • 1. Advisory circle “ Powered by Mazars” 1 February 2012
  • 2. Agenda
    • Welcome – Tim Ball – Business Restructuring Partner
    • Tax Investigations – Gary Brothers – National Director
    • Share Schemes – Amy Goold - Tax Director
    • Close – Drinks and Canapés
  • 3. Advisory circle “ Powered by Mazars” HMRC activities including investigations, enquiries and disputes 1 February 2012
  • 4. Face to face
    • Gary Brothers
    • Gary has specialised in tax matters, particularly in handling HMRC activities including investigations,
    • enquiries and disputes for 9 years at Deloitte, RSM Tenon and now Mazars LLP.
    • Before that, Gary was a senior investigating Inspector of Taxes in HMRC for 16 years, including
    • it’s Specialists Units, including general enquiries, tax fraud and evasion and tax planning and avoidance.
    • His past and current clients have covered the full HMRC spectrum and he is renowned
    • for the “hands on” approach he takes to secure great results for his clients.
    • During his time in the profession he has also provided full litigation and Tribunal support and, particularly,
    • disclosures, onshore and offshore, dealt with on favourable terms many times.
    • Gary is a regular presenter to professional groups and associations.
    • Gary is now an avid tweeter, follow him @taxmangaz for up to date tax tweets.
    • Please feel free to contact Gary to discuss any matters without obligation on:
    • 0794 403 1487 or at gary.brothers@mazars.co.uk
  • 5. Contractual Disclosure Facility
    • Replaces Civil Investigation of Fraud procedure
    • Effective from 31 January 2012
    • Policy desire – to introduce a “significant criminal underpin”
  • 6. Contractual Disclosure Facility
    • “ In cases where a criminal investigation is not commenced, the Commissioners may decide to investigate using the Code of Practice 9 investigation of fraud procedure”
    • “ Under the investigation of fraud procedure, the recipient of Code of Practice 9 is given the opportunity to make a complete and accurate disclosure of all irregularities in their tax affairs”
  • 7. Contractual Disclosure Facility
    • Upon notification of COP9:
      • Must deicide – have I conducted a tax fraud?
      • Sign contract within 60 days
    • What is “fraud”?
      • Concealing or withholding relevant facts
      • Failing to disclose liability or duty
      • Misrepresenting tax affairs
      • Always involves intent
      • Always deliberate, never accidental
    • Based on HMRC information received
  • 8. Contractual Disclosure Facility
    • If deny or not co-operate
      • HMRC conduct investigation, possibly criminal
      • Obtain information from third parties
      • Take formal action for tax and interest
      • Charge significantly higher penalties
      • Commence legal action to secure assets
      • Require financial security against unpaid taxes and duties
  • 9. Contractual Disclosure Facility
    • CDF offers chance to disclose tax fraud
    • CDF must be taken within 60 days of offer
    • If accepted, HMRC will accept non-criminal solution
    • Requires full disclosure
  • 10. Contractual Disclosure Facility
    • HMRC CDF is right for a client who:
      • Has committed tax fraud
      • Wants to fully disclose those tax frauds
      • Will work with HMRC to put those affairs in order, including paying
      • Stop any continuing frauds
  • 11. Contractual Disclosure Facility
    • The process:
      • Must make valid outline disclosure within 60 days
      • Prepare disclosure report
      • If no fraud – deny irregularity within 60 days
      • Care needed on denials
      • If no co-operation – HMRC commence criminal or civil investigation
      • If fraud established – may pass to criminal team
  • 12. Contractual Disclosure Facility
    • HMRC will actively consider criminal investigation if:
      • Non co-operation
      • False denial
      • Acceptance letter sent but no outline denial
      • Making a false statement
      • Providing false documents
  • 13. Contractual Disclosure Facility
    • Outline disclosure:
      • Describe the fraud – what was done
      • Describe the fraud – how it was done
      • Describe the fraud – involvement of other people or entities
      • Describe the fraud – how benefit was enjoyed
      • Describe the fraud – periods involved
      • For each separate tax fraud
  • 14. Contractual Disclosure Facility
    • Once outline disclosure made, 2 options:
      • Straightforward cases
      • Dealt with on outline disclosure
      • Normal certification
      • Complex cases
      • Disclosure report, agreed with HMRC
      • Longer process, in depth review
      • Normal certification
  • 15. Contractual Disclosure Facility
    • Interaction with
      • Publishing details of deliberate defaulters
      • Managing deliberate defaulters
  • 16. www.mazars.co.uk Any questions? Gary.brothers @mazars.co.uk 0779 403 1487
  • 17. Advisory circle “ Powered by Mazars” Share Schemes – tax efficient share schemes to incentivise employees 1 February 2012
  • 18.
    • Recently joined Mazars as tax director in the Bristol office
    • Responsible for tax compliance and advisory across Bristol and the South West region
    • Specialism's include share schemes, transactions, corporate restructuring and other complex corporate tax planning
    • Focused on tax planning for owner managed businesses, assisting both the shareholders and the directors on tax planning across potentially conflicting responsibilities
    Amy Goold, Tax director
  • 19. Agenda
    • Share schemes
    • Why options?
    • EMI
    • CSOP
    • Unapproved schemes
    • Other considerations
    • Why Mazars?
  • 20. Share schemes Approved
    • Enterprise Management Incentive
    • Company Share Option Plan
    • Save As You Earn scheme
    Unapproved
    • Deferred shares
    • Flowering shares
    • Partition shares
    • Split Interest Share plan
    • Unapproved options
  • 21. Why options?
    • Incentivise
    • Retention
    • Recruitment
    • Expected (industry norm)
    • Succession planning
    • Instead of payrise
    • Often a win/win situation!
  • 22. EMI Value - £10 £1,000 Price paid CGT Exercise & Sale Grant Income tax Unapproved EMI
  • 23. EMI Excluded trades Qualifying company First choice of share scheme Small companies Qualifying employee £120,000 limit Valuation pre grant CT deduction
  • 24. EMI
    • Usually no entrepreneurs relief
    • Used to get taper relief & therefore 10%
    • Planning available to obtain ER
    • Works for minority shareholders as well
    • Works for a few shareholders
  • 25. CSOP No excluded trades Can’t exercise for 3 years Second choice No size limit Qualifying employee £30,000 limit Valuation pre grant CT deduction
  • 26. Unapproved scheme Split Interest Share Plan Joint ownership Employees low value on day 1 Capital & income rights split Employee benefit trust Valuation Shares increase in value
  • 27. Unapproved schemes Deferred shares Flowering shares Partition shares
    • Partly/nil paid
    • Deferred cost
    • Owner of the shares
    • Can pay dividends
    • New class of shares
    • Future value only
    • No tax on purchase
    • Ignores historical value
    • Shares relate to specific part of the business
    • Frequently used for companies with property
  • 28. Other considerations
    • FRS 20 accounting for option values
    • Dividends for owner managers (new class of shares?)
    • Share valuation
    • What happens to leavers?
    • Do you need a shareholders agreement?
    • Is it the right people (will a bonus scheme do?)
  • 29. Why Mazars? Why Mazars? Experience Don’t have in-house resource Allows you to offer a full service (so clients don’t go elsewhere) Non-poaching agreement Happy clients! Act direct for client or in the background
  • 30. Clifton Down House Beaufort Buildings Clifton BS8 4AN Tel : 0117 973 4481 Fax: 0117 974 5203 www.mazars.co.uk Any questions? a [email_address] 0779 403 1527
  • 31. Thank you
    • Drinks and Canapés