We reviewed the background and noted there were a number of transactions which were marked in the accounts as consultancy fees, whereas in reality the payments were received by the director into his personal accounts. We recommended our mutual client should make a request to participate in the Contractual Disclosure Facility in order to secure immunity from prosecution.
We navigated our mutual client through the process, working closely with the referring accountant to establish the correct amount of tax that ought to have been paid. It was important for our client to resolve all historic issues in respect of multiple companies and personal tax issues as part of the process, which was achieved by way of contract settlement. We also negotiated the lowest possible penalty, suspension of penalties for the careless understatements and a time to pay arrangement.
Crowe designed an efficient ‘multiple-completion’ share buy-back, allowing for a tax-efficient exit for the retiring director shareholder.
The exit price was structured to be paid by the company over an affordable timescale. The tax team was involved early in the deal, providing significant input.
Despite initial resistance from HMRC, the transaction proceeded smoothly due to the robust design and the tax team’s expertise.
The transition allowed for a tax-efficient exit and ensured the company’s continued success.
Crowe expects to continue advising both families and the business as a new phase of development begins.