Despite being a relatively new form of business entity, Limited Liability Partnerships (“LLP”) are becoming increasingly popular and many professional firms are now choosing to move away from their traditional partnership structure and to restructure their business operation as an LLP.

An LLP is a corporate entity with its own legal personality separate from that of its members, providing the benefits of limited liability for its members alongside the flexibility and tax treatment applicable to traditional partnerships.

Converting to an LLP involves transferring every asset, liability, contract and business process of the firm from one entity to another. It therefore requires firms to establish a clear understanding of their existing operations. Going through this “due diligence” process often highlights issues which management are not always fully aware of and as a result the conversion process also encourages a reassessment of existing procedures.

When making the decision to convert to an LLP, firms need to weigh up the medium to long term benefits against the short term costs of conversion. Apart from your legal costs, accounting costs and all the other marketing costs associated with the rebranding of the firm, your most significant “cost” is likely to be the internal time cost you invest in the project. All firms inevitably want to minimise the disruption to both clients and staff, and so it is vitally important that the amount of internal time required to coordinate the conversion process must be taken into account in your project plan.

Wilder Coe decided to convert to an LLP in 2010. As part of the planning for our conversion, and to ensure the transition went as smoothly as possible with minimal disruption to clients and staff time, we prepared a comprehensive checklist of all the practical issues we needed to consider at the outset. This was then fine-tuned as we moved through the process, and has resulted in the blueprint that we now use with and provide to clients.

We have found this checklist to be an invaluable tool when advising our existing clients about the numerous issues that need to be considered when converting to a Limited Liability Partnership. Of course, not all the issues referred to in our checklist will apply in every circumstance and it is possible our checklist may not cover all of the issues relevant to your firm, but it will definitely provide you with a very solid  foundation upon which to build. Professional advice should always be sought when making a major change like this.

To find out more about how Wilder Coe LLP can help you, please contact accountants London.

To arrange a meeting where you will be provided with Wilder Coe’s own time saving, nine part LLP conversion checklist and we can discuss all the specific issues relevant to your firm converting to an LLP, please contact either:

- Queen’s Diamond Jubilee could also provide welcome boost

The economy has shrunk by a further 0.2%, according to Government figures, and there continues to be talk of another recession. However, the forthcoming London 2012 Olympics – now just a matter of months away – could help give the British economy a much-needed boost.

The London Olympics are expected to draw thousands of visitors intoLondon, many of whom will have travelled from overseas. This means more money will be spent in shops, restaurants and hotels, not to mention on services such as public transport. This will not just be restricted toLondoneither, with some events at this year’s Olympics taking place in other parts of the country.

Billions of pounds have already been spent regenerating vast swathes ofEast Londonin preparation for the Olympics. This includes theWestfieldStratfordCityshopping complex, which opened in September 2011 and has already proven hugely successful.

A report published by Visa last year predicted that theUKeconomy would be boosted by £750 million of spending during the London Olympics and the Paralympics, with thousands of foreign visitors accounting for around £709 million of that figure during their stay.

Some economists believe that the combination of the London Olympics and the Queen’s Diamond Jubilee this year could have the effect of creating a feel-good factor among Britons. This, in turn, could boost domestic spending.

The construction of the 2012 Olympic venues has also proven to be hugely successful, providing high profile work for manyUKconstruction companies who had been struggling for contracts during the recession. Their handiwork will, of course, be on display for foreign visitors to see which could lead to lucrative overseas contracts if the right people are impressed.

Many businesses, particularly smaller ones, will need to ensure that productivity does not fall significantly as a result of employees taking time off during the London Olympics or the Queen’s Diamond Jubilee, as well as likely transport delays when the 2012 games are taking place.

Of course, it will be some time before the true impact of the London Olympics on the economy is seen but the fact remains that this is the single biggest event Britain has hosted since the 1948 Olympics, bringing with it a significant number of business opportunities.

To find out more about how Wilder Coe LLP can help you, please contact accountants London.

An online trader has been jailed for attempting to evade more than £420,000 of VAT, ahead of the launch of an HM Revenue & Customs (HMRC) campaign targeting people who use e-marketplaces to buy and sell goods and who fail to pay tax owed.

Gregory Allnutt, aged 40, from south-east London, was sentenced to 20 months imprisonment at Southwark Crown Court on 29 November after an investigation by HMRC. He had pleaded guilty to 12 counts of fraud.

Allnutt’s home was raided by HMRC officers in June 2011. Evidence uncovered proved that from 1 September 2007, he used a VAT registration number to obtain zero rated goods from suppliers within the EU and then sold them on through another online company, failing to declare and pay the tax to HMRC.

Mhairi Urquhart, senior lawyer in the Crown Prosecution Service’s Central Fraud Group, said: “Gregory Allnutt knew he was liable to pay VAT when he set up as a retailer of nutritional products.

“He soon worked out that he could make a lot more money selling electrical goods through eBay, and despite knowing that he was still liable to pay VAT when he did this, he instead pocketed £429,337 that was due to HMRC.

In early 2012, HMRC will be launching a campaign targeting people using e-marketplaces to buy and sell goods as a trade or business and who fail to pay the tax owed and has already begun gathering information needed to identify individuals and companies involved in this type of trade.

LINK: HMRC guidance on selling online

To find out more about how Wilder Coe LLP can help you, please contact accountants London.

Time is ticking away for the first retailers to be affected by a ban on tobacco displays to ensure their premises are compliant with the law.

From 6 April 2012, large shops – those with a floor area of more than 280 square metres – will no longer be able to display tobacco products to the public except, for example, when staff are serving customers or when they are carrying out stock control or cleaning. The ban will be extended to all other shops from April 2015.

Customers will still be able to buy cigarettes in the usual way but the government is ending tobacco displays with the aim of supporting adults who are trying to stop smoking and protecting young people from becoming smokers. It is estimated that more than 300,000 children under the age of 16 try smoking every year.

Deborah Arnott, chief executive of ASH (Action on Smoking and Health) said that retailers should not fear the impact of the new rules, adding: “The evidence from Ireland when the legislation was implemented there was that committed smokers still knew where to buy cigarettes and didn’t need to see the displays to decide what they wanted to buy.”

LINK: Business Link guidance

To find out more about how Wilder Coe LLP can help you, please contact accountants London.

Social media is likely to be one of the biggest workplace issues in 2012, the head of employment relations service Acas has warned.

Highlighting key challenges for employers in the coming year, Acas chairman Ed Sweeney said: “The rise of social media in recent years has been truly phenomenal. Facebook has more than 500 million users sharing more than 30 billion pieces of content each month.

“Social media throws up a number of issues for employees and employers in relatively uncharted territory for many.

“For instance should employers limit workforce access to social media sites at work? Can they regulate employee’s behaviour on sites outside of work if postings are work-related? And what types of behaviour should result in disciplinary action?

“Social media was the most popular new guidance we launched this year – employers know that it’s an area they need to tackle.”

He said employers needed to learn how to make the best use of social media websites as a marketing tool while effectively managing any misuse which can damage a business’s reputation.

In August 2010, a study by www.MyJobGroup.co.uk, a network of more than 300 jobsites across the UK, estimated that misuse of the internet and social media by employees cost the UK economy up to £14 billion a year. The same study found that more than 55 per cent of employees questioned admitted to accessing social networking sites such as Facebook at work.

Mr Sweeney said another key challenge for employers in 2012 was likely to be maintaining workforce morale and commitment when their organisation and Britain’s economy were struggling.

He also highlighted the likelihood that bosses and staff would want to resolve disagreements quickly and the impact of older workers retiring later as significant workplace issues in the coming year.

LINK: Acas social networking guidance

To find out more about how Wilder Coe LLP can help you, please contact accountants London.

Website owners must try harder to comply with the new cookies law, according to the Information Commissioner’s Office (ICO).

The comments came as the ICO published an update on progress on website compliance with the new rules on 13 December, along with updated guidance.

The Privacy and Electronic Communications Regulations, which came into force in the UK on 26 May 2011, means that UK businesses and organisations running websites in the UK must gain consent from visitors to their sites to store cookies on users’ computers.

A cookie is a small file that a website puts on a user’s computer so that it can remember something, for example the user’s preferences, at a later time. The majority of businesses and organisations in the UK currently use cookies for a wide variety of reasons – from analysing consumer browsing habits to remembering a user’s payment details when buying products online.

Information Commissioner Christopher Graham said: “Many people running websites will still be thinking that implementing the law is an impossible task. But they now need to get to work.

“Over the last few months we’ve been speaking to and working with businesses and organisations that are getting on with it and setting the standard. My message to others is – if they can do it, why can’t you?”
He added that businesses that were not compliant but were “trying to get there” would not face “a wave of knee-jerk formal enforcement actions” when a 12-month grace period ended on 26 May 2012.

LINK: ICO guidance

To find out more about how Wilder Coe LLP can help you, please contact accountants London.

Businesses will be banned from levying “excessively high” surcharges on all forms of payment before the end of this year, under government plans.

Firms will be able to add a small charge to cover their actual costs for using any particular form of payment but following Office of Fair Trading (OFT) recommendations, the government announced on 23 December that it plans to:

• ban excessive surcharges on all forms of payment
• extend the ban across most retail sectors
• consult on implementing the EU Consumer Rights Directive, with the goal of banning above-cost surcharges on any form of payment (e.g. surcharges that exceed the costs the business incurs on a card payment) before the end of 2012, rather than mid-2014 as would be required under the European rules.

The government will publish a consultation in the new year setting out its next steps.

Consumer Minister Edward Davey said: “We want to make sure that consumers paying by card do not have to pay the excessively high surcharges being imposed on them by some airlines and other businesses. That is why we will consult on early implementation of the Consumer Rights Directive provision to protect consumers from excessively high credit and debit card charges.”

The government move came after consumer rights group Which? made a super-complaint to the OFT in March 2011 about payment card surcharges in the passenger transport sector.

In its response, published in June 2011, the OFT found considerable evidence of companies using “drip pricing” practices for surcharges online – adding payment charges to the total price only after consumers have filled in a number of web pages during their purchase.

It concluded that surcharging for using a credit or debit card was potentially misleading to consumers when it came as a surprise and called for the government to ban surcharges on debit cards.

LINK: Which? press release

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The government has outlined its plans for charging fees to take cases to employment tribunals, designed to cut a multi-million pound bill for the taxpayer and ease pressure on businesses.

Justice Minister Jonathan Djanogly launched a consultation on 14 December on two sets of proposals to ensure that people contribute financially for using the employment tribunal system, which is currently entirely publicly funded. There were 218,100 claims to tribunals in 2010-11, costing the taxpayer £84 million.

The proposals are also designed to help businesses by discouraging unmerited and unnecessary claims and encouraging early settlement of claims.

Mr Djanogly said: “Our proposed fees will encourage businesses and workers to settle problems earlier, through non-tribunal routes like conciliation or mediation and we want to give businesses – particularly small businesses – the confidence to create new jobs without fear of being dragged into unnecessary actions.”

He added: “We believe that people should pay a fair amount towards the cost of their case. Fee waivers will be available for people on low incomes to protect access to justice.”

The government will also continue to fund the cost of employment rights service Acas, which helps people in employment disputes to reach agreement without the need for legal proceedings and is free to users.

The two options put forward in the consultation are:

• an initial fee of between £150-£250 for a claimant to begin a claim, with an additional fee of between £250-£1,250 if the claim goes to a hearing, with no limit to the maximum award; or
• a single fee of between £200-£600, with a £30,000 limit on the maximum award and the option of an additional fee of £1,750 for those who seek awards above this amount.

In both options the tribunal would be given the power to order the unsuccessful party to reimburse fees paid by the successful party.

The consultation will close in March 2012, with a view to introduce the fees not before 2013-14.

LINK: Introducing fees in employment tribunals and Employment Appeal Tribunal

To find out more about how Wilder Coe LLP can help you, please contact accountants London.

HM Revenue & Customs (HMRC) is to carry out a review of its Business Record Checks project, designed to tackle poor record-keeping by small and medium-sized enterprises.

In September 2011, HMRC said it planned to complete up to 12,000 checks by the end of the current financial year with 20,000 provisionally planned for 2012-13. Following pilot schemes in eight areas earlier in the year, HMRC found that 44 per cent of businesses visited had issues with record-keeping and around 12 per cent had seriously inadequate records.

But on 22 December, the Chartered Institute of Taxation (CIOT) reported that HMRC had started a detailed review of the Business Records Check (BRC) project, in which the CIOT, along with other professional and representative bodies, has been invited to take part.

An HMRC statement said: “The purpose of the review is to consider the overall aims of BRCs, examine whether the current approach is the best way of achieving the policy objectives and identify what changes are needed to ensure that the objectives are achieved.

“In the meantime HMRC will continue with a limited number of BRC pilots and the results of them will be evaluated as part of the review. HMRC expect to report initial findings in early 2012.

“Given the concerns over possible penalties, HMRC would like to take this opportunity to reassure taxpayers and agents that HMRC will not (except in extreme cases such as where a taxpayer has no records or has destroyed them) be seeking to use the record-keeping penalty provision during the pilots. No such cases have been identified so far.”

HMRC had previously said that in the longer term it planned to issue penalties of up to £3,000 for serous inadequacies in record-keeping. It launched the BRC project over concerns that poor record-keeping made it more difficult for businesses to pay the right amount of tax at the right time, as well to keep track of their trading position and profitability and to make key decisions.

LINK: HMRC guidance on keeping records

To find out more about how Wilder Coe LLP can help you, please contact accountants London.