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Fawcetts Accountants in Salisbury

We act for a wide variety of individuals, businesses and charitable organisations across Southern England and beyond, providing audit, accountancy, taxation, financial and associated business support services.

Our team also has particular expertise in a range of specialist sectors, including charities, independent schools, agricultural and rural affairs, equestrian businesses and the construction industry.

We deliver a highly professional, partner led service, individually tailored to meet our clients’ needs, to suit their budgets and the way they prefer to work.

 
Our friendly and professional team provide the perfect level of support for business start-ups right through to large corporations, Contact us for expert advice.

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HMRC issues guidance on ‘swaps’ tax

HM Revenue & Customs (HMRC) has issued guidance on how redress payments made to businesses that have been mis-sold interest rate hedging products should be accounted for on tax returns.

The complex products, including swaps, caps and collars, were typically sold by banks to small and medium-sized enterprises (SMEs) alongside business loans as a way to reduce the risk of exposure to interest rate fluctuations.

But with many SMEs facing substantial exit fees or non-competitive rates to remain in the products – to the point where the costs associated with the products may have threatened business viability – 11 banks agreed in 2012 to compensate businesses mis-sold products including swaps, caps and collars.

They have identified customers who may have been affected and have been inviting them to have their products and arrangements independently reviewed.

According to the latest figures from the Financial Conduct Authority (FCA), 19,000 customers had been invited to undergo a review up to the end of June 2014. More than 7,500 customers have so far accepted redress offers from the banks, which to date have paid out £1.2 billion.

In its new guidance, issued on 25 July, HMRC said: “The full redress payment is generally taxable for individuals, companies and partnerships. This is because you will have claimed tax relief for the payments as an allowable business deduction. So the payment should be treated as business income and you should reflect it in the business accounts.”

As well as more detailed guidance on how payments should be accounted for in tax returns, HMRC said: “There are certain circumstances where the tax treatment of the payment will be different and you may want to seek advice. For example:

  • your business has stopped trading
  • the product was for a non-business loan
  • the product was a hedging product and its fair value was recognised in your accounts.

“If this applies then the payment is not taxable as income. It could be subject to either capital gains tax for individuals or corporation tax on chargeable gains for companies.”

Link: The HMRC guidance

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  • "Fawcetts take a very professional approach via every point of contact. The management team would not hesitate to recommend the services of the Fawcetts team to any business regardless of size and industry"

    G Blamire - Salisbury
  • "Through personal experience i have experienced that the size and scale of a business is immaterial to Fawcetts - the commitment is always the same and they really make you feel as though you and your business matters. "

    Lou Whiting - Salisbury
  • "James has always gone beyond the traditional approach of just accounting for what we have already done and continues to help us develop our company in testing times."

    Steve Rawlins - Gosport
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    Brian Keane - Stockbridge
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    Claire Riches - New Forest
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    Sue S. Devizes
  • "They are a modern and forward thinking company who love working with small businesses and start-ups; helping them grow online by offering relevant services along with pro-active advice."

    Jack McConnell - Bath
  • "James has been a huge help to me as I look to incorporate Creativemint, talking me through all the options, offering advice and helping me to feel relaxed and happy about the transition and services I will need."

    Miles Murray - Salisbury
  • "Nick has been a great help year on year providing my business with efficient services and ever useful and practical advice."

    Mrs Zanne St John Marchmont
  • "We have found Nick to have an exceptional ability to grasp the issues we have as a law firm operating internationally. He helped us to manage our set-up and has guided us as we grow, and is considered to be one of our most trusted advisors."

    Andy Leppard - Somerset
  • "We would have no hesitation in recommending Fawcetts for any accounting requirements and we look forward to many more years working together with them. "

    Jeremy Chalke - Salisbury
  • "I chose Fawcetts due to their excellent reputation. Whilst there are a number miles between my work base and my accountant; distance has never been as issue as they are always very responsive."

    Julian Bennett - Bournemouth