Category Archives: Goddards Accountants

Press Release – Cloud-Based Real Time Accounts Can Save Your Business

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12th January 2017
DEREK W1
Goddards Accountants Prove That Cloud-Based Real Time Accounts Can Save Your Business

In a recent interview with Goddards Accountants, Shane Lukas, from AVN – an association of forward-thinking accountants, discovered how Derek Williamson from Goddards Accountants could help to save businesses through his real time accounts strategy and planning for the future.
Goddards accountants are advocates of cloud-based software solutions that help to give businesses a better control over their accounts as well as helping accountants to work in the present and plan for the future. By having access to real-time accounts, Derek Williamson was able to help one client from an imminent cash flow crisis, by discussing the client’s current state of accounts with the client’s bank manager. This discussion and use of forward-planning by Derek Williamson meant that the bank manager was able to provide a much-needed overdraft.
The overdraft that Derek Williamson was able to secure for his client would not have been made possible without having a forward-thing approach to accounts and the use of cloud-based software that allows instant sharing of data and interaction. The bank manager even admitted that had the client come to him just six weeks later; he would have refused his overdraft request.
Goddards Accountants are AVN accountants, which means they are expected to go the extra mile for their customers. Derek Williamson believes his business does this by asking insightful questions to help their clients prepare and plan well for the future. Goddard Accountants are proactive in their approach and utilise the latest software so that they can deliver a better service for their clients. In fact, their forward-thinking and future planning approach has led to Goddard’s Accountants being specially selected to feature in The Business Owner’s Guide to the UK’s Best Accountancy Practices. This book showcases the best accountancy practices that help businesses to become successful and more enjoyable to run.
To find out more about how Goddards Accountants can help you, call them now on 020 8941 2187.

Goddards Accountants work with clients in “Real Time” in order to assist clients in maximising their profits.
The Business Owner’s Guide to the UK’s Best Accountancy Practices
Publisher: Added Value Solutions
Publication Date: 30/09/2016
ISBN-13: 9780955100772
For further information contact: Derek Williamson; derek@gandco.co.uk, phone 020 8941 2187

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Divorce – What has been hidden can often be revealed

By | Forensic Accountancy | No Comments

In divorce proceedings it is often the case that one party claims that the other has hidden assets and has failed to declare them on the Form E financial statement. It is in such cases that the expertise of the forensic accountant comes into play.

Forensic accounting is the specialist practice area used to investigate details on financial issues, which can then be used in negotiations or in court. In family cases that regularly valuing business assets and calculating capital gains liabilities or how much income a business generates so that the figures can be used in financial statements.

In addition forensic accounting is used to find ‘hidden’ assets.

The types of assets most commonly hidden are cash, bonds, mutual funds, the cash value of insurance policies and variable annuities, stocks, travellers’ cheques, savings bonds and bearer municipal bonds. Converting cash into assets such as art, jewellery, antiques, vehicles and collectibles is often used by one party in the divorce.

In their attempts to conceal assets, partners may often involve relatives or acquaintances who may or may not be aware that they are party to the concealment. Repayment of non-existent debts to friends or relatives is often used as a smokescreen – as may also expenses for gifts, travel, rent or college tuition.

Where one party owns a business they may use it as a vehicle to conceal assets, by paying salaries to fictitious people or skimming cash from the business – or even undervaluing stocks and writing off as bad debts valid debts collected in cash.

Trying to find such assets or prove unreported income is often one of the most difficult jobs during the divorce process. Being aware of the ways individuals move assets into the hands of their partners or behind false documents, and of the techniques needed to find those hidden assets, can result in their discovery.

If one of the partners to the divorce does not have documents to prove the whereabouts of their assets, however, identifying even ‘easy to find’ assets can prove costly. In those cases one has to ask if the cost of the investigation is worth the potential value of the assets which are assumed, at that point, to be hidden. Remember, they may not actually exist.

However, through diligent and effective preparation it is possible to discover assets no disclosed or acknowledged by the other party.

In a recent case we were advised by the wife of some public company shares she ‘thought’ her husband had owned. We were able to ascertain which shares they were, when they were sold and the fact that sales proceeds were not banked in the UK. As a result, we ultimately found over £6m in hidden assets.

We have also used self-assessment tax returns and company CT600 corporation tax returns to investigate hidden assets and reported our concerns about under-declaration to HMRC. Their subsequent investigations have proved very useful in finding these assets. In our experience, the use of forensic accountants has always proved of benefit when searching for hidden assets in divorce proceedings.

Forensic Accountants: the CSIs of Finance

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What does a forensic accountant do?

As forensic accountants we deploy accounting, auditing and investigative skills when conducting an investigation. Equally critical is our ability to respond immediately and to communicate financial information clearly and concisely in a courtroom setting. Forensic accountants are trained to look beyond the numbers and deal with the business reality of the situation.

A forensic accountant is often retained to analyse, interpret, summarise and present complex financial and business related issues in a manner which is both understandable and properly supported.

Forensic accountants can be engaged in public practice or employed by insurance companies, banks, police forces, government agencies and many other organisations. They can be involved in:

• Investigation and analysis of financial evidence

• Development of computerised applications to assist in the analysis and presentation of financial evidence

• Communication of their findings in the form of reports, exhibits and collections of documents

• Assisting in legal proceedings – including testifying in court as an expert witness and preparing visual aids to support trial evidence.

In order to perform those services a forensic accountant must be familiar with legal concepts and procedures. In addition, the forensic accountant must be able to identify substance over form when dealing with an issue.

What should a legal professional consider when retaining a forensic accountant?

The issues to be considered include the experience and qualifications of the forensic accountant. They should also be retained as early as possible in order to obtain the maximum benefit. The assistance a forensic accountant can provide early in the process can be significant in reducing the overall cost and maximizing the benefit. If retained early, they can assist with the ‘examination for discovery’, identifying additional areas of damages, assisting with settlement negotiations and providing a preliminary assessment of the quantum of damages.

If the forensic accountant is being engaged as an expert witness, then they should be given access to all of the relevant documentation. If restrictions are imposed upon the scope of the investigation, there may be an impact upon the acceptance of the findings.

In situations where counsel is involved, the forensic accountant should be retained by counsel, so the privilege that exists between client and counsel will be extended to the work produced by the forensic accountant.

What are the main areas of litigation involving the work of the forensic accountant? 

Criminal investigations and fraud: A forensic accountant may be retained by local police forces, or by organisations such as the Law Society, in relation to criminal investigations. Their report is prepared with the objective of presenting evidence in a professional and concise manner.

Connected to that area are investigations into business or employee fraud. Business investigations can involve funds tracing, asset identification and recovery, forensic intelligence gathering and due diligence reviews.

Employee fraud investigation often involves procedures to determine the existence, nature and extent of fraud and may concern the identification of a perpetrator. These investigations often entail interviews with personnel who had access to the funds and a detailed review of the documentary evidence.

Employee dishonesty or infidelity can also figure in the investigation of insurance claims, which may also cover business interruption and property losses.

Insurance claims and business losses: Insurance policies differ significantly regarding their policy conditions, so these assignments involve a detailed review of the policy, to investigate cover and the method of calculating the loss. A forensic accountant can be asked to assist from either an insured or insurer’s perspective in the settlement of the case.

Other examples of assignments involving business losses include contract disputes, construction claims, expropriations, product liability claims, trademark and patent infringements and losses stemming from breach of non-competition agreements.

They may also arise from shareholder or partnership disputes. These assignments often involve a detailed analysis of numerous years’ accounting records to quantify the issues in dispute. For example, a common issue that arises is the compensation and benefits to be received by each of the disputing shareholders or partners.

Where claims of professional negligence are involved, the investigations are often approached from two different but complementary perspectives. These are the technical investigation – has a breach of generally accepted accounting practice or auditing standards or other standards of practice occurred – followed by the quantification of loss.

If the professional in question is an accountant, then we are often involved with both perspectives. If the matter involves some other professional the forensic accountant will normally be retained to perform only a loss quantification.

Personal injury and matrimonial claims: A forensic accountant is often asked to quantify the economic losses arising from a motor vehicle accident. They therefore need to be familiar with the legislation in place pertaining to motor vehicle accidents. Cases of medical malpractice and wrongful dismissal also involve similar issues in the calculation of the resulting economic damages.

Matrimonial disputes from a forensic accounting point of view often involve the tracing, locating and evaluation of assets. The assets to be evaluated and valued may be businesses, property or other assets.

Financial matters for the terminally ill

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Terminally IllLiving with or caring for a person who is terminally ill can put a strain on finances.

Firstly, is the ill person in receipt of a salary or benefits from their employers? If not, have they or their representative notified the benefits office? Also talk to citizens advice bureau, as the DWP (Department of Working Pensions) are not the only Government Department paying out for terminally ill people. If the application for support has been turned down; claim again, or challenge the decision. Goddards handle some 50+ cases every year and in 75% of the cases DWP get it wrong.

Also look at the “Social Care” entitlements. These are managed by the local council, under the newly implemented “Care Act 2014”. Unfortunately local councils still do not fully understand the act and their legal obligations under the Act. Again, if refused help, appeal.

If one is terminally ill; the benefit cap doesn’t apply.

Again one may be eligible for council tax support (or Council Tax Reduction).

In addition the people who are caring for the terminally ill person may be entitled to benefits and support from social services.

And finally, bereaved family members may be able to get financial support from the government through a bereavement payment, bereavement allowance or widowed parents allowance.

The best support for all these areas is “Marie Curie” whose website covers all these problems and their solutions.

Automatic enrollment

Automatic Enrolment by Bryce Paling

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Many small employers remain unaware of their automatic enrolment pension obligations.

Automatic enrolment started in 2012 and is now halfway through a process which obliges every employer to automatically place their employees into a workplace pension scheme. But despite its success so far, there are concerns that the biggest challenges are yet to come.

More than five million workers have so far joined the scheme. But that figure doesn’t tell the whole story – as these are from the largest companies, only 3% of employers have so far automatically-enrolled their staff.

The huge majority of employers are still to go through the process. Between now and 2018, over three million more workers will be enrolled by smaller employers.2 Ros Altmann, the government’s pensions minister, has warned, “It will be a much tougher ask to make auto-enrolment work for everyone.”

“Qualifying” Registered Pension Scheme…, not just a Registered Pension Scheme!

The starting point is that nearly all UK ‘jobholders’ including someone who would otherwise be self-employed with an employer who are not already members of a Qualifying Scheme are eligible and must be auto enrolled.

·         The employer can choose not to enrol workers if they are under the age of 22 or over State Pension Age.

·         Individuals below the age of 22 or between State Pension Age and 74 can ask to be admitted, in which case the employer must contribute if the individual’s earnings are £5,824pa or more. (2015/16)

·         If a worker earning less than this asks to join, the employer is not obliged to contribute.

·         The employer may also exclude workers earning less than an earnings trigger in each pay reference period.

·         Depending on the structure of pay reference periods, the earnings trigger will be £192 if workers are paid weekly, £833 monthly and £10,000 annually for 2015/16.

The worry stems from concerns that many ‘micro employers’ are unaware of their pension contribution obligations. Whilst similar to an employer’s responsibility to deal with National Insurance and Income Tax, many smaller employers remain confused as to their automatic enrolment duties.

If you employ anyone, even just one person and pay them at least £192 a week or £833 a month, you will need to comply with automatic enrolment rules. Failure to follow the rules could lead to a £400 fine; and continued failure to comply has already resulted in daily fines of between £50 and £10,000 depending on the severity of the breach.

There is a real danger of many people leaving it until the last minute before taking action micro employers should start preparing for automatic-enrolment now and be seeking professional advice in good time if they are unsure of their new responsibilities.

Penalties and Fines

The Pension Regulator will have the ability to impose penalties and fines if an employer does not comply with their staging date and ongoing duties. These include:

·         A fixed penalty of £400 where an employer fails to respond to a warning notice. A warning may be given (for instance) where an employer is accused of offering inducements to encourage members to opt out or leave the scheme.

·         An escalating penalty of £50 to £10,000 per day (depending on the size of the employer) for example where an employer fails to pay contributions to the scheme on time (i.e. by the 19th of the following month).

·         A fixed penalty of £1,000 to £5,000 for prohibited recruitment conduct, for example where an employer screens job applicants for their intention to join the scheme.

Automatic enrolment is here to stay for the foreseeable future but rather than a bureaucratic pain, once the system has been set up, focus can return to issues like profitability, efficiencies, customer relationships, economics, existing markets, new markets, cash flow, financial goals, and of course the Christmas party!

To receive a complimentary guide covering wealth management, retirement planning or Inheritance Tax planning, contact Bryce Paling on 01403 824192 or email bryce.paling@sjp.co.uk

 

– Bryce S Paling MBA DipPFS

  Director of BP Wealth Management Ltd