advisory circle - tax investigations & share incentive plans
DESCRIPTION
The first in a series of presentations for smaller accountantsTRANSCRIPT
Advisory circle “Powered by Mazars”
1 February 2012
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Agenda
• Welcome – Tim Ball – Business Restructuring Partner
• Tax Investigations – Gary Brothers – National Director
• Share Schemes – Amy Goold - Tax Director
• Close – Drinks and Canapés
Advisory circle “Powered by Mazars”
HMRC activities including investigations,enquiries and disputes
1 February 2012
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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 [email protected]
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Contractual Disclosure Facility
• Replaces Civil Investigation of Fraud procedure
• Effective from 31 January 2012
• Policy desire – to introduce a “significant criminal underpin”
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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”
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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
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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
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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
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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
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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
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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
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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
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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
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Contractual Disclosure Facility
• Interaction with
– Publishing details of deliberate defaulters
– Managing deliberate defaulters
Advisory circle “Powered by Mazars”
Share Schemes – tax efficient share schemes to incentivise employees
1 February 2012
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1818
• 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
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Agenda
Share schemes
Why options?
EMI
CSOP
Unapproved schemes
Other considerations
Why Mazars?
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Approved
Share schemes
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
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Why options?
Incentivise
Retention
Recruitment
Expected (industry norm)
Succession planning
Instead of payrise
Often a win/win situation!
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EMI
Value - £10
£1,000
Price paid
CGT
Exercise & Sale
Grant
Income tax
Unapproved
EMI
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EMI
Excluded trades
Qualifying company
First choice of share scheme
Small companies
Qualifying employee
£120,000 limit
Valuation pre grant
CT deduction
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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
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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
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Unapproved scheme
Split Interest Share Plan
Joint ownership
Employees low value on day 1Capital & income
rights split
Employee benefit trust
ValuationShares increase in
value
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Deferred shares Flowering shares Partition shares
Unapproved schemes
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
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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?)
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Why Mazars?
Why
Mazars?
Experience
Don’t have in-house resourceAllows 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
Clifton Down HouseBeaufort BuildingsClifton BS8 4AN
Tel : 0117 973 4481 Fax: 0117 974 5203
www.mazars.co.uk
Any questions?
0779 403 1527
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Thank you
• Drinks and Canapés