Turbulent financial times have caused cash flow difficulties for many professional firms. Our client, a ten-partner firm, was having difficulties maintaining an acceptable drawings policy.
As a result, we reviewed the case and it was clear that a change in accounting date would assist in deferring tax liabilities.
This change, coupled with optimisation of capital allowance claims, substantially improved cash flow and permitted an enhanced drawings schedule at no cost to the LLP.
We also took the opportunity to restructure the capital base of the firm. This allowed fixed share partners to access capital at favourable rates, tax efficiently, whilst satisfying current HMRC rules on partners’ remuneration status.