Tax advice provided by Robinson Reed Layton Chartered Accountants and Chartered Tax Advisers has reportedly saved SMEs across Cornwall over £1 million.
Steve Maggs, tax partner commented: “The significant changes to the taxation of cash extraction from companies from 6 April 2016 have left a significant number of company shareholders with a large tax bill on a future winding up of their company.”
A rapid change in tax rules, consulted on in December 2015 and implemented on 6th April 2016, and highlighted by Business Cornwall on the 19th February, led to the Robinson Reed Layton Tax Team and partners contacting clients and small accounting firms across Cornwall, who they provide tax consultancy services to, to alert them to the changes.
The new changes affected distributions received on the winding up or liquidation of a company after 5 April 2016. The changes result in such distributions being subject to income tax (as opposed to capital gains tax which was historically the case) where there are assets representing accumulated profits, ( a common scenario) thus significantly increasing tax liabilities on a winding up.
Steve Maggs commented: “In order to ensure our clients maximised their financial benefit from the changes our tax team worked closely with the Partners to proactively advise all our clients to consider their options before the end of the tax year. We also contacted the small accounting firms across Cornwall to whom we provide tax consultancy services to alert them to the changes.
“As a result I’m delighted to report that we saved SME’s in Cornwall over £1 million by providing tax advice on solvent liquidations for both our own clients and clients of smaller accounting firms.”
“By having the in-house capacity and expertise to react quickly and efficiently to changes in tax law and take a proactive approach to ensure our clients benefit and don’t miss out, our strong tax team can provide some of the most outstanding tax advice in Cornwall.”