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Carrington Blake Accountancy Monthly Newswire

Getting clients to pay you on time; You’ve done the work. You’ve invoiced the client 60 days ago. You are still waiting to get paid 30 days after payment was due. It’s time to chase for payment. It’s never easy chasing clients for payment. However, this is business and you are entitled to be paid for the work that you have done. Unless your firm is a bank, you are not in the business of providing credit for your clients. So what should you do? Manage expectations You should set out your invoicing and payment terms with your clients early on. If you are dealing with a new client, you should consider asking for 50% of the cost before you start doing work for them. Talking about these terms up front with your client will help to avoid any...

LIQUIDATING A COMPANY – IS IT A CAPITAL GAIN?

One of the anti-avoidance measures being introduced by the latest Finance Bill potentially changes the way that certain payments to shareholders will be taxed. This may result in payments following some company liquidations being taxed as dividends instead of capital gain. The Government is concerned that the new higher rates of income tax that have applied to dividends since 6 April 2016 may tempt some shareholder / directors to extract value built up within their companies in a capital form, rather than paying out the retained profits as dividends. This is because capital gains are generally taxed at a lower rate than income, possibly as low as 10% where entrepreneur’s relief is available. For example, a higher rate taxpaying shareholder receiving £100,000 on the liquidation of his company would pay £32,500 (32.5%) if the anti-avoidance applies, whereas...