- "In the last 20 years our business has changed considerably…and as the focus of our business has changed, Bird Luckin have moved with us."
Alex Tanner, George Tanner (Shalford) Ltd - "Bird Luckin has looked after us incredibly well for over 60 years, they are pro-active and innovational - meeting all our needs to help us achieve our aims."
Richard Stubbings, Cliffords Limited - "I can honestly say that Bird Luckin are the best firm of accountants and auditors I have ever dealt with - and I don't say that lightly!"
Colin Webb, Walthamstow Stadium - "It's important for us to know that we will always be able to contact the right people to give us the right advice and support."
Jane Bennett, Bennetts Funeral Directors - "Although we deal mainly with one Partner … we also know that if we need to contact someone else who is a specialist in another area, we can get the advice we need quickly and easily"
Jeremy Ruggles, J.S. Wright & Sons Ltd - "Bird Luckin got us to a stage which would have taken us months - if not years - to reach on our own, and they got us there in a matter of weeks"
Matthew Sullivan, SNC Ltd - "You can be a good accountant, but if you don't have an understanding of the industry it can be very difficult. "There are two or three people we have regular contact with at Bird Luckin who know our business well, and it makes a difference.""
Robert Church, W A Church (Bures) Ltd - "The work which Bird Luckin has done for Boddingtons over the past few months has helped shape our future direction for the better."
John Warner, Chief Executive, Boddingtons Ltd - "Bird Luckin has acted for us since our inception 10 years ago. They have a very 'can do' yet highly professional attitude - we are very appreciative of their support and advice over the years."
Marlon Fox, Outlook Property Ltd
Remuneration Planning
The constant changes to tax law result in the need to regularly reappraise the most efficient strategy in extracting profits from the business.
Typically owner-managed businesses will pay a basic salary and possibly some benefits, and - if they have had a good year - perhaps a dividend to shareholders. Planning profit extraction should begin with what is available to be paid out, which can be influenced by a number of factors:
- the amount required to be retained as working capital
- the level of the company's distributable reserves
- cash flow
- shareholders' personal tax and income requirements
- existing bonus or contractual arrangements.
The planning needs to consider the comparison between extracting profits via a bonus or a dividend, and must take into account the tax costs of both the company and the owner-manager. For the majority of owner-managed companies, dividends have proved to be a popular way of extracting surplus profits to mitigate exposure to NIC. This route can be tax efficient for both higher rate taxpayers, who would suffer an effective tax rate of 25% on the cash dividend, and for basic rate taxpayers, for whom no additional tax liability arises.
Peter Warren, Bird Luckin's Tax Director points out that from April 2010 where annual income exceeds £150,000 a top income tax rate of 50%, 42.5% for dividend income, will be applicable. This gives even more reason for those affected by the changes to explore the planning possibilities in good time.
The debate is also relevant to the remuneration of key members of the business and, alongside the 'bonus versus dividend' issue, should also consider flexible benefit packages etc for benefits in kind, pension provision, share ownership strategies and employee benefit trusts.
Our tax specialists explore all remuneration planning possibilities, and can offer advice on a range of issues including:
- how to achieve your objectives
- the 'tax cost' of taking advice
- alternative suggestions - the 'bigger' picture and comparing the tax cost
- summarising the consequences.
For further information, or for a FREE initial consultation, contact Jenny Cook on 0800 146870 or e-mail jennycook@bird-luckin.co.uk
