Do you have associated companies?

Dudley accountants Lewis Smith & Co. are highlighting a new way by which the HMRC (HM Revenue and Customs) are becoming more aggressive in the way they deal with small and medium sized businesses.

The issue is the way the tax man treats the notion of “associated companies”. If separate companies are controlled by people HMRC believes are “associated” then the small company corporation tax threshold is reduced pro rata for each company. At one level this sounds fair enough, especially if you have ownership of different companies.

What HMRC are looking to do now, which isn’t quite so equitable, is to enforce a definition of what “associated” means that it previously turned a blind eye to. So now HMRC may associate companies if ownership includes a broad range of family members (including spouse, parents and children), business partners, trustees or even beneficiaries of an estate.

Craig Beale, taxation expert at Lewis Smith & Co. sees the situation like this.

“The degree to which HMRC can and will make changes to make this approach stick is only just emerging. As a scare tactic it may result in some companies agreeing with changes in their tax status that are simply unnecessary.

We are advising our clients to let us know if they think that there any family or business connections that could impact on their associated company status. Fore-warned is definitely fore-armed at the moment.”

If you need expert advice on taxation issues then contact Lewis Smith & Co. today for a free initial consultation.


Lewis Smith & Co. – Accountancy, taxation and business advice for companies in Kingswinford

2010 National Minimum Wage Changes

Click here for the latest changes

There have been changes to all of the statutory minimum wage levels which could affect you and your employees.

As from October 1st the statutory minimum to be paid to a worker is as follows:

  • Aged 16 – 17 £3.64 per hour
  • Aged 18 – 20 £4.92 per hour
  • Aged 21 and over £5.93 per hour

There is a new Apprentice minimum wage of £22.50 per hour. This new rate will apply to:

  • Apprentices under 19
  • Apprentices aged 19 and over, but in their first year apprenticeship.

If you need to discuss the implications of these changes to your business or employees call Lewis Smith & Co. on 01384 235549.

Lewis Smith & Co. – Accountants for Halesowen businesses

Rock ‘n’ Roll Accountancy Part 2

MaDads You may remember the stunning revelation in May that Lewis Smith & Co. director . Andrew Smith was a member of Stourbridge band “MaDads”

The news was leaked in advance of a major gig by the band at Stourbridge, UK’s “Party in the Park” festival.

We are pleased to announce that footage and photos from that appearance are now available so you can see Andrew at his virtuoso best.

Many people have asked Andrew if this is a permanent career change.

Andrew Smith was a member of Stourbridge band “Should the call come for MaDads to headline one of the big festivals; Download, Reading, Isle of Wight or Cradley, then obviously I would be off like a shot.” Says Andrew.

“But Rock ‘n’ Roll is a funny old game and you just never know when lady luck is going to strike. Until the time comes I will be concentrating on the topsy turvy world of year end accounts and VAT returns.”

The video below shows the band playing their crowd pleasing favourite “Tarka Daal” (Andrew is the one on the far right of the screen). For those of you with great fortitude and a limited taste in music, a further selection of Madads’ videos featuring Andrew are available on YouTube.


For rock ‘n’ roll accountancy call Lewis Smith & Co. today on 01384 235549.


Lewis Smith & Co. – Unexpectedly cool .accountants for Dudley, Wolverhampton and Stourbridge

Why set up a limited company?

The quickest and easiest way to start up in business is to become a sole trader. There is very little red tape, not too many financial regulations (although you still need to keep proper records and pay your taxes) and you can administer the business as you see fit.

At Lewis Smith & Co. we often get asked by sole traders whether they should take the next step and set up as a limited company. There always seems to be some reluctance because it sounds more complicated or expensive than the way they normally operate.

In fact there are some big advantages to taking up limited company status. This list of pointers will give you a better understanding of whether you should make the decision to become incorporated.

  • The most compelling reason to go limited is the opportunity to reduce your tax bill. As a sole trader or partner you could be paying income tax at the 40% rate. Shareholder directors can be remunerated through a combination of income and dividend payments based on company profit. The starting rate of Corporation Tax on profits is only 21%.
  • The ability to be paid through dividends also reduces overall National Insurance payments.
  • A limited company offers directors a more tax efficient way of making pension payments for themselves and employees.
  • There is more paperwork involved in running a limited company but most of it is quite routine. Your business accounts need to be more detailed, which means that using an accountant is probably a good idea, but you don’t need a full audit until your turnover reaches £5.6 million.
  • You only need to have one shareholder, who can also be a director, to start your company.
  • Sole traders have a personal responsibility for business debts. The directors of a limited company are not personally liable unless they trade when insolvent.
  • Creating a formal company gives you a legal and financial structure that makes it much easier to bring new people into the business (by appointing directors) or to take over other businesses
  • Your incorporated status raises your profile and adds to your credibility in the marketplace. Some organisations (particularly in the public sector) find it difficult to work with sole traders.
  • Lewis Smith & Co. can set up a limited company for you from as little as £250 + VAT, ready to trade.

If you are thinking about setting up a limited company then we can take you through what’s required and how you might benefit in a free, confidential discussion. Just give Lewis Smith & Co. a call on 01384 235549.

Lewis Smith & Co. – helping businesses in Dudley, Wolverhampton and Stourbridge to grow.

“Pay Less Tax” seminar a success

The Lewis Smith & Co. “Pay Less Tax” seminar on August 2nd attracted an excellent turn out. What company wouldn’t want to reduce its tax bill?

What seemed to interest the delegates the most was the range of options available. Directors of companies with at least £100,000 of profits (available in cash) could use a number of variations of an EBT (Employee Benefits Trust) to dramatically reduce Corporation Tax liabilities. There are also a number of ways that contracts can be set up to allow directors, contractors and employees to minimise tax and national insurance payments.

A different approach is required for every circumstance, of course, so the first step is to contact Lewis Smith & Co. by telephone on 01384 235549 or by email and arrange a confidential meeting. We can help you work out the best approach to reduce your tax liabilities.


Lewis Smith & Co. – Start-up business experts for Dudley and the Black Country

Beware the market research call from HMRC

You might find that you get a call directly from the HMRC ostensibly on the grounds of “market research” even though you have appointed an accountant as your agent.

If you do get one of these call be cautious about what you say. Under normal circumstances HMRC are required to make representations to your agent regarding your tax affairs or issue a formal notice stating their intention to undertake an enquiry.

These market research calls appear to be being used as unofficial “fishing expeditions” to uncover reasons for undertaking an inspection. An inspection is likely to result in a cost in your time and professional fees so it is to be avoided if possible.

Lewis Smith & Co. does offer professional fee protection insurance but in the first instance we’d just like to keep you out of trouble!

Lewis Smith & Co. – Audit services for Dudley businesses

Supporting the Friends of Alfie Johnson

Alfie Johnson is a special little boy. He suffered from oxygen starvation at birth that left him with severe brain damage.

The Friends of Alfie Johnson was established back in February 2009 to help provide Alfie with specialist equipment and services to help him get the most out of life. Now they raise money to support disabled children right across the Black Country and so far they have raised more than £20,000.

Lewis Smith & Co. were delighted to show our support to the Friends of Alfie Johnson by attending the Summer Ball 2010 at the Copthorne Hotel earlier this month. The evening including performances from a variety of entertainers and culminated in a charity auction. The event raised over £7,000 in total!

Take a look at some of the pictures from the evening on the “Friends of Alfie Johnson” website (the Lewis Smith & Co. team are well represented) or take the opportunity to donate to this deserving charity.
Lewis Smith & Co. – Supporting the community in Dudley and the Black Country

Pay Less Tax seminar – Tuesday 3rd August 2010

At Lewis Smith & Co. we strongly believe that it is our duty to help clients maximise their income and reduce their tax liabilities. That’s why we have organised a free seminar, in partnership with specialist tax advisors Peak Performance Accountants’ Group, to look at some of the exciting new tax planning tools that are currently available.

The seminar is focused on helping company directors with earnings of £70,000 or more to discover more effective ways of managing their remuneration. The strategies that will be outlined have the potential to save up to 12% of payroll cost whilst retaining 80% of earnings.

The event is being held at The Sir Henry Newbolt Suite, Copthorne Hotel, Merry Hill between 9.45am and 12 noon: refreshments and a light lunch will be provided. There will also be opportunities both to discuss individuals’ specific circumstances with the tax support team and to network with other attendees.

Call Andrew Smith or Craig Beale at Lewis Smith & Co. for more information and to confirm your booking on 01384 235549 or email