Where is your financial services business missing out?

Lateral thinking to increase efficiency and boost profits

@HWFisherUK

IntroductionAn uncertain economy. An increasingly stringent regulatory climate. Multiple markets and jurisdictions to navigate. Financial services businesses must contend with several conflicting pressures within an ever-changing environment.

The industry rewards those who continually adapt and penalises the rest. Yet it’s easy to lose sight of the bigger picture while trying to keep on top of all your obligations. Compliance and the ‘day job’ can easily distract you from pursuing growth; sapping your resources and eating away at profits.

New business and sound investments are the lifeblood of your firm. But streamlining workflows, identifying tax efficiencies and enhancing your accounting will truly optimise your profitability.

Whether you’ve been running your own business for a while, or are just starting out, in this short guide you will discover the strategic decisions and minor adjustments that can help to lower overheads, improve processes and ensure your organisation is fully aligned for growth.

Executive summary

This paper will enable you to:

• Access expert insights into the unique challenges of running a financial services business

• Determine the optimal structures and processes to maximise your profits

• Uncover key tax efficiencies and essential accountancy tips

• Understand the route to FCA approval• Learn how to ensure compliance in a rapidly

evolving legal landscape• Discover all the key pieces of regulation to plan

for now• Get to grips with the essentials and lay the

groundwork for expansion.

Who should read this paper?

This paper is specially created for anyone operating, or thinking about starting up a boutique financial services business.

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How do you maintain agility and pursue opportunity while observing process and regulation? Anyone working in the financial services sector will be all too familiar with this complex balancing act. It’s not for the faint hearted. And if you’ve been running your own financial business together with financial projections for some time, or if you’re just starting out, you’ll understand the need for a robust business plan backed up by incisive and diligent accounting. Whatever your specialism, the goal is always the same; minimise risk while maximising revenue and profitability.

Why is it so important to make the right decisions around company structure, processes and external support?If you’re just starting out, it pays to get it right first time. But finance never stands still. Experienced operators know it’s worth regularly taking stock of processes and structure to ensure you’re maximising the return on your dedication, hard work and capital.

Are you set up for success?• Choosing the optimal structure for your

business protects your interests and limits your exposure to risk

• Astute accounting and compliance keeps the regulators happy, keeps the business running efficiently and gives clients confidence

• Ensuring you have robust processes in place helps achieve and maintain your FCA obligations.

Finding the time to focus on the future

There’s a lot to manage so external support can prove invaluable. Similarly, there are many nuances to maximising your and your company’s tax efficiency so it’s worth getting expert advice – leaving you to concentrate on what you do best.

Section 1. Why is running a financial services business different to any other?

Most people are aware of their general tax obligations, the difficulty is staying on top of everything while being as efficient as possible. It can be tough for startups getting to grips with all the requirements and then keeping track of them. Even established businesses can struggle.

There is a lot of red tape to navigate; myriad rules and ever shorter filing deadlines that can be easily missed.

Take a long term view. It’s important to take advice upfront rather than take a chance until you receive the inevitable sternly worded letter from HM Revenue & Customs (HMRC). An error can result in HMRC imposing a minimum of 15% tax-geared penalties across the board; the last thing you need when trying to grow your business.

Section 2. Efficiencies and opportunities.

Raising money tax efficiently

Most financial firms are excluded from growth focused schemes such as the Enterprise Investment Scheme (EIS) and Social Enterprise Investment Scheme (SEIS).

However, ‘Investors’ tax relief’ allows an investor to purchase shares in an unlisted trading company, hold them for three years, then sell them and only pay 10% capital gains tax.

This helps to make your business more attractive to investors – they won’t be eligible for EIS, but they can get an attractive capital gains rate.

If your business is eligible, it’s also worth investigating the Social Investment Tax Relief (SITR); a fund offering inducements for investors in social enterprises.

Calculating VAT

This can be quite complex for some businesses. There are multiple rates of VAT, including standard, exempt, and out of scope services.

Determine the correct nature of your services and to whom you are providing them (including if your customers are based within or outside the EU). This will enable you to establish which rate of VAT applies, determining how much you must pay and how much you may reclaim.

Quick guide to your tax obligations

Cash extraction

When it comes to paying staff, most businesses have traditionally leaned towards dividends over salary.

Dividends are less tax efficient than they once were, but that’s not to say they are no longer preferable1. However, the particularities can be quite challenging so plan ahead and get help where you need it.

Although not necessarily tax advantageous, there are other financially beneficial things worth investigating.

Share incentives, for instance, can be a great way to motivate employees. While HMRC approved schemes are often not available to financial services companies, other forms of share incentives; unapproved options, phantom share schemes, can be very effective tools for retaining and motivating staff.

The thin line between avoidance and evasion

Every business wants to be as tax efficient as possible. But there’s a thin line between avoidance and evasion.

Just where the line is remains a hotly contested point but the spotlight is firmly on all businesses. Firms should avoid attracting the attention of the regulators (and press) by entering into battles they cannot win. It’s important to stay within the letter and the spirit of the law. Look beyond the black and white of the legal text and consider the wider implications. Is this planning or abusive?

Be innovative. But don’t get too creative. The Government is quick to target tax avoidance and new laws are apt to disrupt any adventurous structures you’ve established.

Remember: tax compliance is essential to become FCA registered (see Section 3)

1 As of April 2016 dividends are less tax efficient than

previously. The technicalities can be particularly challenging so it’s a

good idea to plan ahead and get help where required.

Which structure will you choose?

Determining whether to trade through an LLP or a limited company is not straightforward, but making the correct choice can result in substantial tax savings and cash flow benefits.

Evaluate wisely. Seek expert advice on the appropriate structure2 for your business to both minimise tax liabilities and ensure that the structure complements your commercial objectives.

Research and development credits

The Government provides significant tax benefits to cover research and development. If your company is taking a risk innovating, improving or developing a process, product or service, then it can qualify for R&D tax credits. For instance, if you are developing financial software, up to 33.35% of your company’s R&D spend can be recouped, under certain circumstances.

Changes to P11D benefits

HMRC introduced significant changes to employment tax rules on 6 April 2016. Employers no longer have to apply for P11D dispensations, but must still ensure that all expenses are justifiably incurred by employees in the performance of their duties. Employers may now opt to process benefits in kind through the payroll and there were also changes to salary sacrifice arrangements, preventing employees from receiving non-taxable expense reimbursements instead of taxable salary.

Benefits are continually changing (when not disappearing altogether). There is expectation that P11D benefits will be completely removed so it’s important to ensure you’re well informed and ready to implement the necessary adaptations ahead of time.

Did you know? Tax and accounting rules plus key efficiencies you may not be aware of:

Limited Liability Partnership (LLP) vs Limited Company

LLPs are treated as being transparent for tax purposes. After being introduced in 2000, they became a popular choice for investment businesses seeking to enjoy limited liability whilst also removing the ‘double layer’ of tax encountered when operating a business through a limited company (i.e. paying corporation tax on profits only for the shareholders to pay income tax on post-tax profits paid as dividends).

Until recently, LLP members were automatically classed as self-employed, thus exempting the LLP and its members from National Insurance contributions. However, as of 6 April 2014, some LLP members who would have been taxed as self-employed are now taxed as if they are employees. HMRC is committed to tackling disguised employment – but it is still possible for some LLP members to retain self-employed status. Senior partners can avoid being classed as employees due to their ‘significant influence’ over the LLP. Alternatively, members can regularly monitor and adjust capital invested to ensure their contribution to the LLP is at least equal to 25% of any profit entitlement.

In addition to the above, HMRC will accept for businesses registered with the Financial Conduct Authority (FCA) that individuals who are also FCA registered as CF3 (Chief Executive function) and CF8 (apportionment and oversight function) in relation to the LLP, will be likely to have significant influence over that LLP’s activities.

Limited companies

As income tax rates have increased over recent years, corporation tax rates have steadily decreased. There is now such a difference between income tax and corporation tax rates that it may be more beneficial to operate through a limited company than an LLP in some instances.

Alternatively, it may be possible to obtain the benefits of both an LLP and a limited company through the use of a service company which provides employees and other services to the LLP in return for an arm’s length fee.

2 For more complex entities in a group with an FCA

regulated entity, other structures may be important.

Pension arrangements

Small self-administered pension schemes (SSAS) provide retirement benefits for company directors and senior staff, but they can be open to all employees and even family members. The schemes are typically limited to 12 members. Employers and members receive tax relief on contributions made, subject to certain conditions.

Crucially, SSAS give employers great flexibility on where they invest the scheme’s assets.

For instance, you can purchase your own trading premises and lease them back to the business. You can even lend money back to the business or purchase the business’s shares. A SSAS can also borrow money for investment purposes – such as raising a mortgage to purchase the company’s premises. The mortgage payments can then be covered by the rental income the company pays the SSAS.

Also, when assessing your options, don’t forget that all employers must consider pension autoenrolment.

Issues to consider when working with contractors

Are they engaging as self-employed? If so, you are responsible for payroll taxes in the event of any problem.

Are they engaging via their own limited company? In these cases the tax obligation falls on that company. This is normally the preferable option – but be wary of anything that could be classed as disguised employment. Should they be treated as an employee? You will be liable for National Insurance Contributions (NIC) and payroll. This is a complex issue that is far from resolved, with the tax rules differing from the employment law tests.

Personal tax – are you maximising your net income?

Can you get returns as capital returns subject to 20% tax? It almost goes without saying that you should seek to minimise your income tax, with an upper rate of 45%, wherever it is compliant to do so.

Are you taking dividends over salary where possible to save on NIC? This used to be conventional wisdom, but as discussed earlier, HMRC is clamping down with changes from April 2016 effectively reducing these benefits.

Do you have optimal pensions arrangements? Personal pensions are capped at £10K contributions for those earning over £210K – offering limited appeal for high-net worth individuals – but it’s certainly worth investigating SSAS pensions (see above).

FRS 102

FRS 102 is a new financial reporting standard for annual accounts. Mandatory for most UK entities, it aims to align UK reporting with International Financial Reporting Standards (IFRS). The standard applies to accounting periods commencing on or after 1 January 2015 – so its impact is already being felt.

Straightforward businesses – those without complex financial instruments or investment properties, for example, are not affected by the new accountancy standard – but it significantly changes the way they compile and present their accounts.

FRS 102 requires more extensive policy disclosures and has implications for several activities, including leasing property, holiday pay accruals, long term loans to a company, business combinations, and revenue recognition.

The whole transition is a golden opportunity to review your accounting practices, especially when it comes to success and performance fees. There is judgement to be exercised here, so it’s worth getting professional advice in this area.

Outsourcing vs insourcing – the compelling argument for resourcing on demand

When setting up any business the natural inclination is to keep costs to the bare minimum. If there’s anything you can do yourself, you’ll do it.

Insourcing presents the opportunity to lower costs – at the expense of time and diverting resources from business development.

There are a lot of accounting obligations to keep track of. Some, like VAT, PAYE, holiday pay and sick pay, bookkeeping and HMRC submissions, apply to all businesses. There are also specific requirements for FCA registered businesses (see section 3).

However, employing an in-house accountant is a fixed cost that may well be overkill, especially in the early stages of your business.

Outsourcing enables you to:

• Streamline your business• Have greater flexibility• Focus time on your core

service offering• Upscale seamlessly as

you grow• Get rid of compliance

headaches (never miss a deadline for submission!)

• Ensure you’re always up to date with the latest legislation

• Access an experienced team that understands the unique requirements of your firm

• Maximise your revenue with expert advice and financial planning to reduce overheads.

Take care if your FCA firm has client money or is safeguarding accounts as this would be considered material outsourcing by the FCA and comes with additional obligations.

Benefits of choosing a specialist vs. generalist

• There are many accountancy providers out there with apparently similar services

• The trick is to find one that really knows the industry and how to help your business handle the unique challenges of the financial services sector

• Specialists understand the unpredictable nature of the financial services industry and will work in partnership with you, from start-up and beyond.

Accounting services that cover the financial services sector are different to standard services; make sure you provider has experience and track record in this area as any error will be deemed by the FCA to be your fault.

Streamlining internal business processes

The exact requirements will depend on your business, but year end reports typically include:

Corporation Tax Return (CT600) • Filed with: HMRC• Purpose: sharing your company’s income minus tax allowances and expenses. Your profits will be

used to calculate how much Corporation Tax your company owes

Filleted accounts (previously Abbreviated Accounts)• Filed with: Companies House• Purpose: disclosing details of cash held in the company, assets, debtors and creditors etc. in

accordance with the Companies Act 2006. It’s worth bearing in mind that FCA compliant businesses must usually file full accounts regardless of size (see Section 3). Note that the majority of FCA regulated firms must provide audited accounts to the FCA in a very short time frame post year-end.

Remember to:• Get your expenses in order – legitimate business expenses reduce profits which in turn reduce

Corporation Tax• Chase overdue invoices – hunt down outstanding payments to maximise your cashflow• Collate all your paperwork – ensure you have records for everything to back up your accounts

Don’t forget:• VAT Returns – one of the quarterly returns will typically coincide with year-end so make

sure it’s not overlooked• Annual Return – has been abolished; you will simply need to inform of any key changes and make a

basic declaration at the end of the year• People with Significant Control – as of 6 April 2016 you must disclose all those classed as People

with Significant Control• Financial planning – shortly before year-end or as you start a new year are the ideal times to consider

financial and tax planning, to ensure you’re operating as efficiently as possible.

Year end reporting – the essentials

Regulation is one of the biggest challenges facing financial services organisations. Whether you’re just starting out, or an experienced operator, the ever-shifting legal landscape can be daunting.

All UK financial businesses are subject to Financial Conduct Authority (FCA) regulation and there are further special requirements for those seeking registration or authorisation. And that’s just existing legislation – there’s plenty more on the horizon.

Even the most talented entrepreneurs can find their ingenuity tested. This is a good thing. Compliance is often more than necessary; it’s an indicator of a sound business model.

HW Fisher & Company works closely with MPAC, one of the UK’s leading corporate compliance regulatory firms, to guide clients through their regulatory obligations and remove barriers to entry. Nick Andrews, Executive Chairman and founder of MPAC, offers his expert insight here to help you achieve FCA registration or simply keep up to date with the most important legislation.

Registering for FCA membership – tips to accelerate your approval

Registering or obtaining authorisation from the FCA opens access to valuable markets and a different level of customer and it is also binary – if you or your firm carries on regulated activities, you must be appropriately regulated; if you are not, it’s a criminal offence.

But with higher reward comes higher risk – this is why the organisation typically requires extensive due diligence and pre-qualification to be undertaken before your application is approved. This will provide you with the answer as to whether your proposed activity needs to be regulated or not, how the service will be offered to clients, what it will cost in terms of regulated capital and the systems and controls necessary to be able to operate. After that, the application to the FCA can be submitted.

There are no shortcuts to this. If you do not consider your obligations, your application will be politely referred to the back of the queue and then not be approved at all. This is not a good start for an ongoing relationship with the regulator.

Use an APCC member

Now businesses that want to streamline the process can engage the services of a member of the Association of Professional Compliance Consultants (APCC). The APCC is a respected advisor to businesses regulated by the

FCA; seeking advice from a member indicates your firm is serious about attaining compliance. As with accountancy firms (above), if your chosen provider hasn’t worked on this type of application before, it will be of little benefit time wise in getting the application assembled, submitted and approved by the FCA.

Acquire the right experience

One of the most common hurdles faced by applicants is lack of management experience. That’s why the most effective business leaders know their limitations. If your vision is fixed on the horizon, make sure you don’t stumble over the details.

Great ideas are not enough. FCA applicants must demonstrate relevant training credentials and experience of operating in the financial services sector. This can prove difficult for even the most promising venture. Your revolutionary fintech product or hedge fund will count for nothing unless your gifted developers and sales team are also joined by a safe pair of hands to convince the regulators. It is also worth bearing in mind, that the general requirement is to have a minimum of two directors/partners/members as the governing body who meet this experience and competence criteria.

Fortunately, youthful entrepreneurs can marry innovation with maturity by selecting an experienced partner to provide essential knowledge of the regulatory environments in which your business operates. This will leave you free to creatively explore opportunities while being assured of compliance.

Know your capital requirements

All regulated firms have different minimum capital requirements, based on a set of calculations ranging from simplistic to labyrinthine. While the specifics may be convoluted, the guiding principle is simple: what do you want to do and where?

Are you projecting realistic returns? The regulators will need to see the viability of your business within a specific timeframe (and you may be interested for your own sanity). Ensure you’re confident how much capital is required to achieve your aims; not too little, not too much. Compliance requires sufficiency. Your margins demand efficiency.

Aside from the end goal of bigger and better clients, the process of applying for FCA authorisation can be a valuable exercise in itself. Subject your plans to scrutiny from an insightful third-party and you stand to tighten up your business model, reduce unnecessary overheads and hopefully increase profitability.

Section 3. FCA obligations

Accounting obligations as an FCA regulated entity

Reporting

All regulated firms, with limited exceptions, must submit quarterly or annual financial information (in FCA specified format) and statutory annual accounts (as submitted to Companies House). With limited exceptions the accounts may have to be audited. Submissions to the FCA are normally sent via Gabriel, the FCA’s online system for collecting and storing regulatory data from firms, and in certain cases, via COREP.

It is your responsibility to appoint an appropriately qualified auditor and to ensure that they provide reports in line with the FCA’s requirements (including any client money, asset or safeguarding reports as required). The client money, asset or safeguarding report should provide a reasonable assurance on the client money and/or custody assets held by your firm and under new requirements also consider the honesty and integrity of all the staff involved in this specific area within the firm.

If you claim not to have held client money or custody assets (or are not authorised to hold client money or custody assets) the auditor should provide a limited assurance report.

Most firms will also be obliged to undertake:

• Annual controllers reporting• Market data reporting• Product sales data reporting• Remuneration data reporting• Reporting complaints• Transaction reporting (where applicable).

Capital requirements permissions

Maintaining at all times the requisite level of capital to meet the capital adequacy requirements is very important. Your firm will also need to comply with the Capital Requirements Regulation (CRR) which sets how much capital your firm must hold.

It is one of the two principal parts in the Capital Requirements Directive (CRD) IV, which is transposed into the FCA’s Handbook.

The Market Abuse Regulation

The Market Abuse Regulation (MAR) took effect on 3 July. It gives powers to tackle insider trading and market manipulation in a variety of financial markets.

Compliance deadline: 3 July 2016.

The European Union Fourth Anti-Money Laundering Directive

The most far-reaching anti-money laundering legislation in Europe for some years – emphasising ultimate beneficial ownership and customer due diligence, and introducing an enhanced risk-based approach and requiring all politically exposed persons to be identified and monitored.

Compliance deadline: January 2017

General Data Protection Rules

The European Council’s General Data Protection Regulation (GDPR) is intended to ensure robust data protection for EU residents and to simplify the regulatory environment for international business.

Compliance deadline: 25 May 2018

PSD2

PSD2 is designed to create a safer, more secure and efficient European payments market that protects customers and levels the playing field for service providers.

Compliance deadline: 13th January 2018

MiFID II and MiFIR

The second Directive on Markets in Financial Instruments Directive (MiFID II) – which replaces the original directive (MiFID) – and the Regulation on Markets in Financial Instruments (MiFIR) have been developed in response to the financial crisis to make financial markets more efficient, resilient and transparent. Both Directives require firms to consider their whole business strategy and can be business changers to those affected.

Compliance deadline: Early 2018

Regulation update – the key changes to plan for nowLegislation is always guaranteed to keep things interesting for the financial services industry. Some of the changes – such as MiFID II and the General Data Protection Rules – could have a significant impact on your business strategy and should not be underestimated. Likewise, the complexities of passporting post-Brexit are also key.

Although the details can be complex, the overarching strategy to achieve compliance is simple. Review the legislation, the regulators rules and guidelines, determine how it will affect your operations and formulate a plan. The more heads the better.

Here are the main changes already taking effect and dropping into the sector within the next two years:

This is only a summary and there are many other pieces of legislation of which you should be aware. Some are not driven by the UK regulator but originate from overseas (e.g. US tax and regulatory requirements). However, so long as you devote the right resources to the task, attaining compliance need not hinder you from achieving your goals. The key to this is to ensure that your compliance structure is thought through in time and managed efficiently. Compliance should not hinder business, rather it should be proactive tool to help deliver your strategy.

July2016

Jan2017

Early2018

Jan2018

May2018

Disruptive technologyNew technology is making the financial world ever more complex. The payments world continues to evolve and distributed ledgers are already changing how we think about and store data.

While this throws up compliance challenges, it also has the potential to dramatically reduce your cost base. Get the balance right by getting the right advice.

If a particular system has the potential to significantly cut overheads, who will you give the technology review to? Typically businesses choose the person who has the most direct experience of the task at hand. While the head of department is best placed to assess the effectiveness of the new system, their vested interest in heads to manage virtually guarantees it won’t be implemented.

You can’t put the genie back in the bottle. If your firm won’t adopt the technology, your competitors will, lowering their cost base and enabling them to undercut your model. Adapt while ensuring compliance works for you, not the other way around.

UK vs overseasMany firms struggle to stay on top of the latest developments, but regulators have an even harder time. If they are too slow or get it wrong there is the constant temptation for financial businesses to move more of their activities overseas.

While taking advantage of new technology and new markets, be wary of operating beyond the reach of the regulators. Consider online payments: where is the transaction actually happening? Who will I sue if it all goes wrong? Where is my clients’ money and is it protected? This is where the financial services industry needs the help of regulators and politicians to ensure legal recourse is not lost in the cloud.

ConclusionThe regulatory world is constantly shifting. Financial firms should not underestimate the upheavals ahead or the cost of compliance. But wherever there is change there is opportunity. Gain an edge on the competition by pre-empting and adjusting more quickly, giving existing customers confidence and finding new ones. Doing it properly means that the regulator will not be investigating you and consuming significant management time and costs or worse, suspension of your business while their questions are answered.

Consider:1. What do I already know and

what do I need to know?

2. How are my competitors operating and what can I improve upon?

3. Who will I ask to challenge my thinking and provide the missing pieces?

4. What will my strategy look like and how will I implement it?

5. Have I left enough time to plan my strategy and implement the regulatory processes?

Pre-set up considerations: what’s the best structure for your business?

Sole trader and partnerships aren’t really options for financial businesses due to the issue of personal liability. It’s really a choice of whether to incorporate a limited liability company (Ltd) or a limited liability partnership (LLP)

As previously discussed, there are advantages to both depending on your business objectives.

Both structures lend credibility to your firm and make it easier to borrow money and limit your exposure to financial risk. Limited companies pay corporation tax on their profits and their company directors are taxed as employees in the same way as other people who work for the company, but as shareholders they can also take out dividends. However, after corporation tax you will also have to pay income tax on your dividends.

LLPs offer the limited liability available to limited company shareholders combined with the tax regime and flexibility available to partnerships. The number of partners is not limited but at least two have to be ‘designated members’ responsible for filing annual accounts and dealing with other formalities.

As in an ordinary partnership, the members’ share of profit is taxed as income – each member has to register with HMRC as self-employed. LLPs also have to register at Companies House and there should be a members’ agreement stating what share of the profit each member should receive.

LLPs are a popular choice for businesses in the financial services sector and allow for your firm to grow by attracting other professionals.

Use flexible structures to improve cashflow

As previously discussed, it is possible for both companies and LLPs to exist within business structures to improve cash flow.

All businesses are obliged to keep sufficient working capital to pay essential outgoings, including salaries, rents etc. Within LLPs, all profits are taxed at the partners’ marginal rate (usually 42 or 47%, including National Insurance). It can be more efficient to keep this capital within a company, where it would be subject to just 20% tax (17% as of April 2020).

This structure is for cash flow only, as the money would be taxed either way at the higher rate when taken out. Take advice to avoid falling foul of anti-avoidance legislation.

Debt vs equity – getting the balance right

How will your firm finance its operations? The mixture of long-term debt and equity you use will directly affect the risk profile and value of the business.

You must decide how much money should be borrowed and how cheaply you can obtain it. How much of your cash flow will go to creditors and how much will go to shareholders? Each business is different. More aggressive debt-equity ratios are great for rapid growth but may limit your earnings and will still need to be serviced if there are changes, such as falls in income or interest rate increases.

Note that an FCA regulated firm requires pre approval by the regulator of new shareholders over and above certain thresholds. Likewise, subordinated debt in a regulated firm needs FCA approval for it to be treated as capital.

Make sure you’re covered.

Take out adequate policies to cover you in the event of ill health or legal action. As well as the policies required by law or regulation you may consider:

Directors and officers insurance – protects you against being sued. Remember that fines levied by the regulator on both a firm and its personnel cannot be insured against; another reason to make sure your compliance is properly structured and managed.

Keyman insurance – makes provisions for the incapacitation or death of a member of staff of central importance to the business.

Section 4. Just starting out?

Accounting obligations to rememberTake charge yourself or appoint a trusted provider to deal with the following:

• Year end accounts – filed at Companies House (and FCA)

• Year end tax obligations – for both LLPs and limited companies

• Bookkeeping – monthly record keeping and ensuring you’re on top of ingoings and outgoings (including VAT)

• Payroll – ensure your staff (and you) get paid

• Auditing – external confirmation of assets, liabilities, income and expenses, and ensuring profits and losses are fairly stated

• Company secretarial obligations – informing of changes in directors, share capital etc.

• Personal tax affairs – meeting your obligations and optimising your income

See Section 3 for your FCA accounting obligations.

Which functions are critical – and which can you outsource until you’re ready to expand?Whether you’re Ltd or LLP, don’t be surprised by the level of administration.

Once you are trading, there’s a lot of bookkeeping. You will be required to submit statutory accounts and a tax return to HMRC each year (more if you’re FCA registered), as well as handling payroll and making monthly or quarterly payments of employees’ income tax (PAYE) and NICs. And don’t forget all the VAT payments of varying complexity every quarter.

There aren’t really any ‘optional’ obligations. Cash flow, accounting and compliance are critical to the long term success of your business.

But you always have the option to outsource the majority of tasks that distract you from growth.

Are you missing a trick?Get a free 30 minute no-obligation session with a HW Fisher financial services specialist and discover practical recommendations to enhance efficiency and maximise profits.

Find out more here

1. Could you reduce your fixed overheads by outsourcing core functions? Does such outsourcing need FCA approval?

2. Are you maximising every tax break open to you, personally, and to your business?

3. Could you streamline and improve your reporting procedures to reduce time and increase transparency? Can you manage your outsourcing partner?

4. Are your processes fully aligned for growth?

5. Are you prepared for forthcoming regulatory updates?

6. Are you working with the right accountancy partner? One who understands the pressures unique to financial services organisations? Who can offer a holistic service covering any, or all of your financial obligations? Are their services provided with complete integrity and discretion to ensure the long-term success and reputation of your business?

Section 5. Growth and efficiency checklist

Testimonials“Having been a client for our last four audits which include Client Money audits for the FCA, we have been very impressed with the engagement and responsiveness of HWF. In particular, the audit staff sent onsite have been of very high quality and fully understood the business including some relatively complex financial derivative trades.”

Tim Gledhill, chief executive officer, Heronden

“HW Fisher have always taken a genuine interest in our business and we appreciate that. The team work hard with minimum disruption to our day-to-day workings and it is a pleasure doing business with them. They always take a professional and pragmatic approach to our audit, act with the utmost integrity, and add real value to our bottom line.”

Andrea Carnegie-Smith, Essex Woodlands

Nauzer Siganporia

Partner – Head of Financial Services & Audit, HW Fisher & Company

Nauzer Siganporia has been with the firm for 28 years. Prior to joining HW Fisher & Company, Nauzer trained and qualified with PWC.

Nauzer is Head of Financial Services and an audit partner, acting for a wide range of clients, including financial services and professional practices. He has built up considerable experience with a variety of FCA regulated business over the past 20 years, including fund managers,

currency managers, corporate financiers and brokers.

He is chairman of the firm’s technical committee, whose role is to keep the firm updated on new developments in audit and accountancy. Through this role, he has acquired significant experience of accounting and auditing standards. He is also a counselling partner for trainees, nurturing the firm’s new talent.

Jamie Morrison

Partner – Private Client Team, HW Fisher & Company

Jamie Morrison is a partner in HW Fisher’s Private Client Team advising high-net worth individuals, entrepreneurs and family offices.

He advises UK-based clients with domicile/residence issues, transactional issues, as well as assisting them with property structuring and capital taxes planning.

Jamie travels to the Middle East and Far East to look after clients who seek to invest into the UK and advises on property and business structuring.

Jamie also advises a number of clients in the sports and media sectors as well as senior executives of FTSE/NYSE listed companies.

Jamie heads up the Real Estate Group and also leads the firm’s wills and probate practice. A Chartered Tax Adviser, he is also licensed by the ICAEW to undertake probate work.

Toby Ryland

Partner – Corporate Tax, HW Fisher & Company

Toby specialises in corporate tax advisory work including mergers and acquisitions, due diligence, tax efficient structuring and consulting advice such as on R&D tax reliefs and the Enterprise Investment Scheme. Much of his work involves international tax advice both for inbound and outbound businesses.

He is an experienced corporate tax partner and has worked with a wide range of businesses in many different sectors including financial services, property and retail. Toby considers his key strengths to be in taking a commercial approach to tax advice and delivering often complex technical advice in plain English. He is a regular commentator on tax matters in the press.

Nick Andrews

Executive chairman and founder of MPAC

Nick has had a distinguished 35 year career in the financial sector that has included being on the board of a large multi-disciplined broker/dealer and also becoming a key member of the original team which brought Exchange Traded Funds to London. Having spent the last twenty years in various senior credit and compliance roles, Nick founded MPAC 15 years ago and has grown it to become one of the preeminent providers of compliance services in London. Nick

presently serves on various oversight committees including a seat on the Board of Directors for the UK subsidiary of one of the largest banks in America.

About the authors

HW Fisher & Company is a commercially astute organisation with a personal, partner-led service aimed at entrepreneurial small, medium enterprises (SMEs), large corporates and high-net worth individuals.

Our clients come from many different backgrounds and are active in all branches of commerce and industry. Our reputation is grounded in quality, delivering premium advisory services efficiently and cost-effectively.

Our fee income ranks us as a mid-tier top 25 UK chartered accountancy firm.

Founded in 1933, the practice comprises 30 partners and approximately 260 staff supplying a range of services spanning audit, corporate taxation, private client services, VAT, business recovery and forensic accounting, together with a range of sector groups offering specialist industry knowledge.

HW Fisher & Company also incorporates a number of associate companies with technical skills in matters such as corporate finance, and mergers and acquisitions.

London OfficeAcre House11-15 William RoadLondonNW1 3ERT +44 (0)20 7388 7000F +44 (0)20 7380 4900E info@hwfisher.co.uk

Watford OfficeAcre House3-5 Hyde RoadWatford, HertfordshireWD17 4WPT +44 (0)1923 698 340F +44 (0)1923 698 341E info@hwfisher.co.uk

@HWFisherUK

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HW Fisher & Company