The property and construction sectors are often regarded as early indicators of the direction of travel for the broader economy, and can be both lucrative and volatile. Everything from interest rates and inflation to bad weather and budget statements can have an impact on confidence and performance of the industry. So for property and construction firms that want to thrive whatever the economic conditions, it’s essential to work with accountants and advisers who can provide reliable advice, expert guidance, and effective and actionable business solutions.
At Old Mill our specialist teams have worked closely with property and construction companies across the South West for many years. We work with businesses of all sizes – from sole traders and start-ups to family building firms, building and construction businesses, prime and sub-contractors, regional and national developers, and commercial and residential landlords and letting agents.
Depending on your aims and property aspirations, we can also advise on the right property ownership structure to provide maximum wealth for you. Whatever the size and shape of your business, we believe the key to delivering the best service is to build long-term relationships with clients, and gain an understanding of your business objectives as well as your personal aspirations. We can then work with you to achieve both.
You will be able to rely on the support and expertise of our staff across a wide range of accounting and business issues, including tax planning and compliance, Value-Added Tax (VAT), bookkeeping and payroll services. If you are looking to grow your business organically, we can work with you on financial planning and cash flow modelling to create short and long-term growth strategies. Alternatively, if your business growth is more likely to be driven by mergers and acquisitions, or you’re seeking investment to take your company to the next level, our corporate finance team is on hand to guide you through the process.
Our in-depth understanding of the property and construction sector also means that we can advise you on dealing with sector-specific challenges. We can administer all aspects of the Construction Industry Scheme (CIS) on your behalf – from registration, employment status and compliance to submitting monthly returns and dealing with HMRC. Our VAT team have an expert knowledge of the often-complex VAT treatment of issues such as new builds and conversion projects, and can find the most appropriate solution for your business. From advice on the implications of Inheritance Tax, to drawing up an exit strategy or succession plan, our experienced staff will work with you to secure the best outcome for you and your business. And when you do decide to take a step back and enjoy the rewards of years of hard work, we can help you to plan for long-term financial security.
Whatever your aims and aspirations – for yourself and your business – we look forward to helping you achieve them.
Stuart Grimster. Head of Property & Construction.
Each year corporate entities need to prepare and submit accounts to Companies House, under specific accounting standards. We will complete your annual accounts using the relevant standards for Property and Construction businesses, proactively using our detailed understanding of the industry to bring maximum benefit in terms of the position you report.
Alongside the accounting treatment, any type of business transaction will also have corporate tax consequences which need to be properly thought through. This might range from expanding your company, changing your business status or buying new property, to changing location, buying or selling assets, attracting new investors and shareholders, and closing your company down. We can work with you to develop a strategic plan that ensures you make best use of all the available tax reliefs, maximise profits and reduce your tax burden.
We have a strong and highly experienced audit team who can undertake external audit function for your business, providing assurance and credibility on financial statements, internal records and other reports. Well versed on auditing matters such as payment applications on construction contracts or appropriately reporting property owned, we can ensure that the information you report to the outside world is robust and reliable.
Capital allowances are, in the broadest sense, a form of tax-approved depreciation for the plant and equipment used in your business. They are, therefore, a highly effective way of reducing your business’s tax liability. With corporation tax rates due to rise to 25% from 1 April next year, a claim for capital allowances can provide funding for up to a quarter of your investment cost.
Whilst accountants will be familiar with the basic rules when it comes to plant and machinery used in the trade (such as computers, tractors, packing machinery etc), the rules and regulations are far more complicated and nuanced than many realise when it comes to commercial buildings and property.
Capital allowances can be claimed on fixtures within the property which are plant and machinery that are installed or fixed to a building such that, in law, it becomes part of the building.
Nearly every property contains a substantial number of fixtures such as lighting and heating systems.
However, no capital allowance claim can be made unless the expenditure has accurately been attributed to qualifying categories. There are often grey areas in relation to what qualifies, and many cases have been decided in the courts and tax tribunals over the last 135 years.
How can we help?
The tax team at Old Mill have members specialising in helping businesses maximise their capital allowances claims on commercial building projects. Over the past 18 months, we have helped clients save over £840,000 in tax via capital allowance claims.
The key to maximising such capital allowance claims is understanding how the fixtures are incorporated into the building and identifying the associated costs. We will work closely with you and your third-party contractors throughout the project to ensure that claims are maximised and processed through your tax return as soon as possible to achieve tax savings.
Contractors and subcontractors working in the construction sector must operate within the Construction Industry Scheme (CIS). At Old Mill we can assist both contractors and subcontractors in complying with the CIS legalisation and advise on registration, calculation and reclaiming of deductions.
We commonly see businesses trying to bend the CIS rules for their own benefit, and often wonder why they are doing that when a legitimate option is available that brings the same result. We use our expertise in this area to help guide businesses in the correct and beneficial application of these complicated rules, assisting with any queries you might have about your specific situation.
making an acquisition.
The types of funding available are almost as numerous as the reasons for needing it, ranging from high street banks, secondary lenders, asset finance specialists; through to crowdfunding, business angels and venture capital.
The funding selected should match the purpose, i.e. use a long-term facility for a long-life asset; a flexible facility for working capital; and so on.
Not every need can be funded with borrowing. A suitable risk profile for debt is demonstrable recurring cash flows to repay the debt. That clearly isn’t the case for a new or uncertain venture or development; this is an equity risk and needs an investor not a lender.
Perhaps counter-intuitively, it can be easier to raise large sums than small, because the market is more developed at the higher level and lenders / investors can spend the time and money to really interrogate the plan; something which isn’t viable on smaller amounts.
There is a relationship between risk and cost. A fully-secured loan with strong stable cash flows will attract a lower interest rate than unsecured riskier debt.
Sometimes, it will not be possible to find a lender or investor to raise funding, in which case your plans may need to change.
Our team invests time in building relationships with the main providers of finance in our markets so that we are able to have initial discussions to shape a deal into a workable proposition before progressing to application. There are too many funders for us to know everyone, so we also maintain relationships with online funding platforms and specialist broker.
Inheritance Tax (IHT) is the tax paid on assets (after allowances are deducted) when someone dies. It’s a growing concern for many, and while increasing allowances on property left by parents and grandparents have eased the tax burden slightly, in a worst case scenario it may mean that your family only receives 60%, after all available allowances, of the wealth you hope to leave as their inheritance.
But with expert advice and careful, long-term planning, IHT is also a tax that can be significantly reduced and, in some cases, mitigated completely.
Our specialist tax planning team will work with you to understand how you want to pass on your estate, and will help you to put in place measures and structures that ensure the wealth you have worked hard to accumulate will not be swallowed up by IHT.
IR35 applies where an individual engages with their ‘contractor’ through an intermediary (I.e. a company), such as their own limited company, but the circumstances of the engagement indicate that the individual is a deemed employee.
Since 6 April 2021, the government has placed the onus on medium and large-sized businesses to assess the status of their subcontractors themselves.
Where the contractor is small, the subcontractor must self-assess to determine if IR35 applies.
In either case, the tax implications and related penalties related to getting this wrong are significant and after a year’s ‘soft landing’ of the rules brought in in April 2021, we expect HMRC to begin to bring increased scrutiny to this.
Should they determine that IR35 does apply, the gross deemed earnings will be subject to PAYE and NICs.
We can advise on where IR35 applies and how
The Construction world moves fast. Keeping track of your business’s performance throughout the year can be key to cash-flow management and identifying trends in costs and pricing, allowing you to make timely and informed decisions. It is therefore key to getting your business to where you want it to be.
Up to date management information is also often a requirement of lenders when you are looking to obtain additional finance.
We can advise on use of software to produce budgets, cash flows or management accounts including relevant KPIs to help you keep your finger on the pulse. Battling against your own business and feeling out of control is no fun.
Always an area that is more complex than many think, and as a result can give rise to more SDLT being paid than should be the case.
We can assist you or your legal advisors with the calculation of your SDLT liability and reliefs available, including advising on mixed-use or multiple dwellings claims and how to best mitigate your tax exposure.
There are many property ownership options, including ownership by individuals, companies or pension schemes. We can advise on the tax and commercial consequences of structuring your property business in different ways, ensuring that the correct ownership structure is adopted depending on your overall aims.
We can also assist with changing how ownership is structured, including succession planning and exit strategies.
Old Mill’s specialist VAT team works with UK and international businesses on a wide range of VAT-related issues. As well as advising on VAT from registration through to managing your business across the entire supply chain, we will also liaise with other parties on your behalf to secure solutions.
Our bespoke advice on VAT issues includes a strong focus on land and property enquiries, and our team keeps up-to-date on the constantly changing landscape of VAT legislation – so that you don’t have to.
We will help you to plan for VAT before setting out on a new venture, buying or selling a property or simply undertaking those slightly more unusual transactions with a customer of supplier that might perhaps involve goods moving from one country to another.
“Stuart is my agony aunt! When we first met it was immediately apparent that he was trying to understand our business and our objectives. Old Mill have tested and challenged us to try other things which have paid off. I don’t regard them as traditional accountants in the old-fashioned sense, they are business advisers.”