What Is a Close Company?

November 13, 2014 Leave a comment

For the purposes of UK Taxation a close company is broadly defined as being one controlled, directly or indirectly, by five or fewer “participators” or by any number of directors who are participators.

HM Revenue & Customs (HMRC) defines a participator as a person who has a share or “interest” in a company. A participator is usually a shareholder or director but the term also includes any “associate” – for example, spouse or civil partner, business partner, relative, trustee, or a loan creditor. A participator’s interest in a company can be in its shares or in the income of the company.

The majority of UK-based, private limited companies are close companies. They employ relatively few people and have a small

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The Night I Told a Cabinet Minister to Look for a New Job

November 12, 2014 Leave a comment

I was in London on business last week and on Wednesday evening, and after a long day of meetings I arrived to late to eat at my hotel so I decided to have a meal in a small Indian Restaurant not far from the House of Commons.

As is common in many such establishments the tables are close together. When I had settled down and ordered my meal I looked around and noticed that the grey-haired man sitting across from me at the next table, looked familiar but I couldn’t quite place him.

Then it clicked. It was Des Browne, Member of Parliament for Kilmarnock and Loudoun. A man with two cabinet jobs: Secretary of State for Defence and Secretary of State for Scotland.

It is comforting to think that at a time when we are being told that

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Interns are Entitled to the Minimum Wage

September 12, 2014 Leave a comment

Recently there has been a lot of negative comment in the press regarding the use of interns in the City of London and elsewhere.

Generally, an internship consists of an exchange of services for experience between the intern and an organisation. Interns can use an internship to determine if they have an interest in a particular career, create a network of contacts or gain worthwhile experience to put on their CV and whilst some interns find permanent, paid employment with the organisations for which they worked this is not guaranteed.

Used correctly an internship can be beneficial to both parties but all too often internees find that they get little or no real experience and are used as a form of cheap labour, particularly as many of

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Corporation Tax Should Be Abolished

If an individual engages in a business (as a sole trader) and makes a profit, that is taxed. If two or more individuals engage in business (as a partnership or limited liability partnership) and make a profit the partnership does not pay tax but the profits flow through to the individuals who pay tax on their share of that profit.

If an individual or a number of individuals engage in a business as a Corporation (e.g. a limited company) and make a profit, that profit is subjected to tax. In the UK that tax is called Corporation Tax. In other countries it may be called company or corporate income tax”.

In law companies are have a legal personality separate from that of their owners. That’s one of the reasons why the owners are not responsible for the debts of the company (though if they manage it badly directors can be held liable). So it seems logical to treat a company in the same way as an individual and tax the profits it makes.

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VAT Invoicing Requirements and Fines if You Don’t Comply

As from 1st of October 2007 there were changes made to what information you need to include on a VAT invoice. If you don’t comply then HM Revenue and Customs can hit you with pretty massive fines.

Although fines are unlikely to be levied for non compliance in the first year, business owners cannot be complacent. If you don’t check that your invoices comply with the new regulations next time you get a VAT inspection you are likely to be hammered for a large penalty. Now is the time to check things out.

Who does this affect?

The new regulations apply to tall VAT registered traders and it is probable that most businesses will already comply. Those most likely to be affected are:

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Cadbury Kraft Shows Takeover Rules Need to Change

Following the unseemly debacle surrounding Kraft’€™s takeover of Cadbury (and some of us remember similar issues many years ago in the Guinness/Distillers takeover) the Takeover Panel have launched a review into certain aspects of the regulations concerning takeovers and have invited comments. Here are mine.

Any changes to the Takeover Code must ensure that the UK remains a leading destination for foreign investment and as a leading location for corporate HQs and operations.

It would be undesirable for takeover policy to be perceived as a pretext for protectionism, as part of an industrial strategy, or as the outcome of a political lobbying process. There is a clear danger that the introduction of a new public interest test for

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Grow Your Business With a Joint Venture (JV)

Everyone knows that starting a business is risky but once over that stage most entrepreneurs look to the next challenge -€“ growing the business. In many ways this is much more of a risk as if you get it wrong – and the line between success and failure can be a very fine one – €“ then you will lose your existing business (and income).
In fact this is the time when things can go seriously wrong unless you take the time to stand back, take a long cold look at where the business is, consider where you want it to be in 12, 24 or 36+ months time, and work out how you are going to get there.
The most common reasons for failure include:

  • Poor planning
  • Poor management
  • Lack of knowledge (of the new market, territory or

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