Tax Advice for Small Businesses

For many small business owners, one of the largest overheads is their tax bill; however, many small businesses are paying more than they need too.
How often have you argued over whose shout it is at the bar; or that the check out person at your supermarket has short-changed you? Yet staggeringly, countless small business owners aren’t willing to set aside any time to understand how to slash their tax bill.
Time and time again, we see many people pay too much tax because of little information and fear of HMRC.
Tax laws changes regularly and all business owners should engage an accountant/tax specialist. Many small business owners try to organise their own tax returns and believe that they could save expert accounting & tax advisors fees, a good tax accountant/tax specialist will save you money.
Remember that you may be paying more tax than you need to!
For a free initial discussion contact the team at Henderson Morgan who can guide you through the complex web of tax regulations advisor@henderson-morgan.com.

What can threaten your assets?

We concentrate on acquiring assets, without thinking about protecting this wealth or it can be passed on to the next generation. The threat to your assets comes from taxation, litigation, creditors, claimant, business failure, family or matrimonial problems, poor annuity rates destroying your pension fund, or some other problem. Whichever is the case do not sit back and take control of your assets today.

Inheritance tax (also known as IHT) is a significant worry for a growing number of people, and a subject for frequently passionate debate. As house prices have risen the number of people affected by IHT has grown, making it a widely held concern. IHT is a tax that is levied not on your earnings, as is the case for income tax, but on the value of an individual's assets upon their death. IHT is levied on the estate of the deceased in other words all of the assets under the ownership of the deceased.
Inheritance Tax is charged at 40% on the value of anyone's estate above the nil rate band threshold which for the 2009/2010 tax year stands at £325,000. The Inheritance tax new rules, which take effect from the 9th October 2007, changed the tax legislation to allow married couples or civil partners to transfer the element of Inheritance Tax free allowance unused on the first death to their spouse when they die. Accordingly married couples and those in civil partnerships now receive a combined tax free allowance of £650,000. The ownership of exempt property is the simplest way to protect the assets from the reach of creditors. Each state has its own laws defining exempt and non-exempt property. Certain property may be entirely exempt while the exemption for other property may be limited to a certain dollar amount. Exempt property include: Primary residence in some states- the homestead exemption, Household furniture and furnishings, clothing and jewellery, tools of a trade or business. Life insurance benefits may also be exempt property.

Many families want to make sure that errant spouses have no claims on family assets and they do not wish to rely on the divorce and separation laws to achieve this. Divorce is always unpleasant and regrettably sometimes it is impossible to avoid but the sense of injustice that can arise from a court ordering a reallocation of assets can be devastating. Marital property involves all income and assets acquired by either spouse during the marriage, even if an asset is in one spouse's name. At the time of divorce, this marital property is subject of contention between the separating couple. However, there are certain types of non-marital property which may not be divided at the time of divorce. These properties include property owned before marriage, your inheritance, and gifts.

Asset protection planning is sometimes known as pre-litigation or pre-judgment planning. Once a judgment has been rendered, the judgment is said to go into collections whereby the creditor attempts to enforce the judgment against the assets of the debtor. During the collections process, it is possible that the creditor undertakes extensive research and discovers the debtor’s assets. If the creditor comes up with the disclosure of debtor’s assets, it is compulsory for the debtor to respond to those disclosure requests. If the debtor chooses not to respond, it is considered to be the contempt of court.

The laws of bankruptcy control what is possible in these situations. Planning so to protect family assets from being claimed by creditors should the family business run into problems at some point in the future. The protection of assets is something that should be considered from the start rather than simply when there is a real risk of the family business running into problems.

The UK is becoming more and more interested in litigation and in seeking financial redress and compensation for the smallest perceived sleight or mistake. There is a distinctive blame culture that started out in America and which is now developing internationally it means that in this day and age, if something goes wrong someone, somewhere is to blame and that person must pay. Unsurprisingly, those with the most to lose are the best targets to aim for because they are in a position to pay out big and they make suing them worthwhile which is why protecting oneself and ones assets from an onslaught of litigation before the event is absolutely crucial.

Long term care costs in the UK is a growing concern for many as we live longer and many clients think that they can gift assets to their children in order to avoid having to pay for expensive long-term care. We can set up a structure which will protect your assets. However, this must be done long enough before the elderly person enters care to have any chance of success.

Asset protection strategies are not put into place to hide property from your government, avoiding taxation or illegally eluding creditors. Asset protection planning does not involve tax evasion as applicable taxes will need to be paid. It is important to properly report your taxable income. The legitimacy of your protection could be jeopardised if there is improper or illusive reporting, which will effect its protection should you need it.
The team at Henderson Morgan have many years of experience of helping our clients protect their assets. The more in advice your plan the more effective asset protection strategy that can be produced, contact us today for your free initial consultation with one of our team.

Do you need a merchant account for your business?

The ability to accept credit / Debit cards is the key to running a successful business. This is no secret, without being able to accept payment by credit / Debit cards your customers will become frustrated with the inconvienience of making payments and they may end up shopping else where. The first step for your business to be able to accept credit / Debit cards is gaining an Merchant Account.
Most banks and financial institutions provide Merchant Accounts, though they can often be very difficult to obtain depending upon your business and/or no history of processing credit / Debit Cards.
Henderson Morgan may be able to provide you and your business with credit / Debit card processing tools.
Many business are classified as high risk, such as gambling and adult industry if you are involved in businesses such as this you will be declined by most banks. You may also be declined if you work in the travel or advanced booking industrys or deal in products with long term commitments such as magazines subscription services, pharmacies, online supplements and any other international business.
Henderson Morgan provides a range of e-payment systems and also have the ability to provide an offshore account for our clients, many who have been unable to get merchant accounts with their previous banks. Our products have low set up fees and competitive transaction rates. If you would like to start processing Credit / Debit cards or you would like to open an offshore account please do not hesitate to contact Henderson Morgan are staff are well trained and able to give advice on all your banking needs.
Please contact our E-Payments Team to discuss your individual needs so we can create an e-commerce package and offshore account that is right for your business.

Why incorporate offshore?

The definition of an offshore company is a company which rarely conducts business in its country of incorporation and one which is incorporated in a country where taxation is lower and reporting restrictions are more flexible than the country in which you reside.
Other common names for this type of company are ‘non-resident company’ or ‘IBC’.
IBC stands for ‘International Business Company’ or ‘International Business Corporation’
There are many features and benefits associated with the establishment of a non-resident company, and different individuals and organisations have their own specific reasons for incorporating in this way.

However, five main benefits are,

1) Reduced Taxation Liability - Offshore companies can be established in low or no tax jurisdictions.
If you do not derive a profit from the country in which the company is incorporated you may be able to reduce your taxation burden significantly.
In fact, some businesses can be structured in such a way that that any profits generated are realised in ways that minimise or negate overall taxation liability.

2) Simplicity of Operation - apart from certain types of business - like financial services companies and banks for example which are internationally regulated - certain jurisdictions make it very simple and highly attractive for all other types of company to operate.
It does depend a lot on the jurisdiction you favour, but you’ll find that when it comes to business reporting, account auditing, filing of financial records etc., the restrictions are likely to be far less than you would experience if you incorporated ‘onshore’, or ‘back home’.

3) Fewer Reporting Requirements - not only are the restrictions actually far less restrictive, you’ll generally find that the extent to which company information is required to be reported is generally far lower in most offshore jurisdictions as well.

4) General Asset protection - it’s possible to manage assets and business transactions in such a way that assets are shielded from any form of liability.

5) Greater Degrees of Anonymity - by conducting business through the offshore company and carrying out all transactions in the name of the private company, the name of the underlying principal of the company can be kept out of certain key documentation.

While there are many companies offering complete company formation services there are few that provide customers with the professional support they need to find the company structure that is right for their individual and business needs. The Wealth management team at Henderson Morgan, with over 20 years of experience can provide a comprehensive wealth management service to clients wishing to form an IBC. Please contact us at advisor@henderson-morgan.com for a free initial consultation.

What is an offshore Trust

An offshore trust is created when assets are transferred to a trustee. The trustee becomes the legal owner and is responsible for managing the assets and distributing them to the beneficiaries of the trust, which could include the person or corporation which transferred the assets to the trustees, in accordance with the terms of the trust deed.

The following assets can be held by an offshore trust
Shares and stocks in both quoted and unquoted companies.
Investment portfolios.
Real and intellectual property.
Bank deposits.
Life assurance policies issued on the life of the Settlor.
Most other types of asset
There are many advantages to offshore trusts,
Privacy many trust deeds are not publicly registered.
Wealth protection.
Tailored to specific family requirements.
Recognised in all common law jurisdictions.
Increasing recognition in important civil law jurisdictions.
An important tool in international income, capital gains and estate tax planning.
Used by corporations for employee benefit plans, retirement and stock option schemes, insurance plans and special financing arrangements.

Talk to our team at Henderson Morgan, advisor@henderson-morgan.com for a free consultation to see if an offshore trust is right for you, your family and business.

Why have your own corporate branded credit card?

Henderson Morgan is an active participant in the emerging worldwide prepaid card and the traditional debit card marketplaces. Through our distribution agreements with card processing companies and issuing banks, we offer various opportunities to corporations that wish to manage their own prepaid card programmes.
We also offer the possibility to financial intermediaries to provide cards to their clients in conjunction with the other services they provide. They allow the clients of the intermediary to gain physical access to their funds without the need to make an international transfer.
Our pre-paid and debit cards are a natural fit for people involved in international trade, seeking to streamline processes for payments to employees, consultants, agents or managers that are travelling regularly on company business.

Our card solutions are designed to meet diverse payment needs quickly and efficiently.

Companies are changing the way in which they do business. They need to eliminate cumbersome processes and overheads costs whilst demanding greater convenience, flexibility and security.

We can provide assistance in designing a card program that fits your needs. For example:


•Dividend, Incentive, Forex payouts, Employers, Contract Agencies
•Membership based affiliation applications i.e. Credit Unions, Banks with an existing account holder base
•Loan, Benefit Payout Applications i.e. payday, micro loans operations
•Insurance payout program, Pension payout program
•Commission payout applications Network Marketing Organizations, Affiliate payout
•Travel, Remittance Card Programs
•Gas stations, Telecommunications, cellular phones companies, cable TV companies, department stores, supermarkets
•Gaming and gambling industry: casino sites, online poker rooms, sports betting websites, waging websites, etc.
• Corporate expenses
• Employee bonuses
• Interest payments
• Payroll
• General purpose reloadable cards
• Loyalty and reward programs
• Unlimited cards for high net worth individuals
• Dividend, Incentive, Forex payouts, Employers, Contract Agencies
• Loan, Benefit Payout Applications i.e. payday, micro loans operations
• Commission payout applications, Network Marketing Organisations, Affiliate payout
• Membership based affiliation applications i.e. Credit Unions, Banks with an existing account holder base
• Loan, Benefit Payout Applications i.e. payday, micro loans operations
• Insurance payout program, Pension payout program
• Travel, Remittance Card Programs
• Gas / petrol stations, Telecommunications, cellular / mobile phone companies, cable & satellite TV companies, department stores, supermarkets
• Gaming and gambling industries: casino sites, online poker rooms, sports betting websites, waging websites, etc...

A Brief Guide to Asset Protection

1. Do Something Now. It is harder to protect yourself after a liability has been incurred, long term planning is the key to asset protection.
2. Liability Insurance is your first line of defense, buy every £ you can afford whilst assuming that it won’t work so you have a back up plan;
3. Use Incorporation as a liability firewalls. Always divide and segregate your personal & business assets (and liabilities) as much as possible. “
4. Don’t assume that incorporation will afford you complete protection. If you own it, run it, control it, it can be argued that it is still YOU;
5. Get professional legal & accounting help to organise your assets and make sure you maintain the legal formalities of these entities like tax returns, meeting minutes and separate bank accounts or they won’t help at all;
6. Get your vehicles out of the name of your business. Many people do this for the deduction. If you or your spouse injures someone with your car you have created a “bridge” to your business and all it owns. Take a vehicle allowance instead;
7. If you have employees get professional employment manuals, policies and dispute resolution agreements in place. A small investment will cover your business and family for years. You are five times likely to be sued by an employee than anyone else;
8. Be nice to everyone as a rule. During difficult economic times people are much more likely to take legal action, whether justified or not. Your bedside manner will play a role in their emotional decision to sue you;
9. Don’t keep too many eggs in one basket. Don’t use a single limited company, for instance, to own separate assets like 3 different rental income properties with high equity. An injury or exposure at one property or business places the owner, the company and its assets potentially at risk;
10. Own Nothing, Control Everything. You don’t need to keep assets in your own name to use, control and enjoy them. Make use of trusts, corporate shells and the law to transfer title to assets away from you.
Henderson Morgan’s Wealth Management team has over 20 years of experience of working with clients to protect their assets and grow their wealth please contact us at advisor@henderson-morgan.com for a free initial consultation.