Reply to: Partnership and Accountants

[northernladuk]

I guess you missed this:

Hmm indeed I did.

[WordIsBond]

Doesn't the fact you can't find an accountant that wants to touch this speak volumes?

I guess you missed this:

The sausage factories maybe, but this is bread and butter for most full service firms.

[northernladuk]

Doesn't the fact you can't find an accountant that wants to touch this speak volumes?

[mdvn]

Thank you all for your comments , WordIsBond excellent advice, thank you very much!

Jessica, was surprised as well, my current accountant, to his credit, was happy to answer quite a lot of questions that provided a lot of insight in what you describe as pre engagement activity but did say that his platform could not support that structure.

Many thanks

[Alan @ BroomeAffinity]

I reckon most accountants could handle this. Not sure i’d fancy it though. Lots of headaches I’d guess.

[WordIsBond]

OP, since Jessica turned up, and sounds like she might willing to take this on, she's one of the people I'd be contacting if I had to make a change. Clearly knows her stuff and her answers show she has actually read what people are saying (a skill sometimes lacking on these forums).

[Jessica@WhiteFieldTax]

That is fine, I understand, thank you very much for your feedback/advice. Thanks to all the other posters as well for their input and opinion!

I have to say we are struggling to find an accountant given that most in the market seem to tailor their services to the typical contractor model as you mention.

If Darren who has posted as well or any other accountants are willing to offer their services please do get in touch by PM.

Thank you very much

The sausage factories maybe, but this is bread and butter for most full service firms. I'm surprised you are experiencing difficulties. The main problem seems to be that sometimes people want a lot of pre engagement advice that is difficult to charge for - that can be off putting.

[Jessica@WhiteFieldTax]

I'm afraid not. We have done in the past, and more often than not got burned!

I remember some contractors coming together who were pissed I wouldn't take a whole day out of my diary to travel and attend a beauty parade

[WordIsBond]

If no one gets in touch I'd recommend just finding a local chartered accountant, rather than a specialist contractor accountant. Our business structure is out of the ordinary as far as contractors are concerned and that's what we did. If I ever have to change accountants there are some people I've encountered on here that I'd contact, but whether they'd want to take us on or not I don't know. They obviously specialise in one thing and are very good at it, but you are outside that.

I'd ask local professional businesses for accountant recommendations, I'd look for someone who has a partner rather than a one man band (what if he gets ill or dies or goes on holiday for a month?), and I'd ask some questions.

In your case, I'd ask if he sees any problem with what you are proposing relative to the MSC legislation. That will tell you if he can talk intelligently about it. I'd ask him if he gets involved in advising on IR35 compliance. On a scale of 1-10, what's his view on risk in regard to expenses / HMRC / etc. If he's more cautious than you, is he willing to work to your parameters having given his advice / warnings? If he's less cautious than you, will he work to your parameters rather than his even if he thinks you are leaving money on the table? And so on.

These kinds of questions may not have right / wrong answers, but they will tell you a lot about the accountant and whether or not he is a good fit for you.

[mdvn]

That is fine, I understand, thank you very much for your feedback/advice. Thanks to all the other posters as well for their input and opinion!

I have to say we are struggling to find an accountant given that most in the market seem to tailor their services to the typical contractor model as you mention.

If Darren who has posted as well or any other accountants are willing to offer their services please do get in touch by PM.

Thank you very much

[Maslins]

Maslins, would your accountancy firm be able to support that kind of model/structure? If yes, perhaps I could discuss with my partners and contact you directly.

I'm afraid not. We have done in the past, and more often than not got burned!

I'm sure you'll find some accountancy firms that do, might be outside the normal freelancer/contractor model most accounts who frequent this site offer. It's less predictable in terms of work required...partly on the basis it may be weeks, months, or years before people fall out!

[Darren at Fox-Bartfield]

Companies

In theory, should work ok but as many say it's the relationships that turn it sour.

Having said that, come across a couple of arrangements like this over the years, all but one worked well, primarily because the arrangements were strictly adhered to by all but as soon as someone gets other ideas, quickly falls apart.

[northernladuk]

I'm sure many of these situations that failed also had tight agreements about everything. Doesn't mean much when everything goes south and people fall out big time. You appear to be going in with your eyes at least half open and are aware which is better then most.

[mdvn]

Hi all,

Thanks for your replies.

On the business/relationships side I understand why this could potentially be a recipe for disaster with the potential issues mentioned hence why we are looking to agree beforehand a tight shareholders agreement mainly around the areas of splitting profits/effort put into the company/exit strategy.

On the accounting/legal side I am not sure how the MSC legislation would be applicable to us, probably I don't understand the legislation very well but it looks to me as a vehicle to avoid tax by using a separate service provider as owner whereas the contractors are the shareholders, in this instance the suggestion is for our 3 companies to be the owners of the new company and we wouldn't have a service provider.

Our aim is to create a small consulting company which would take projects from clients, some of the work would be carried by us and some would need to be outsourced to other companies, same as with any other consulting company I guess, based on that what would be the best structure without falling foul of any legislation?

What Maslins suggests as franked investment income is what we had in mind with company A billing the client and then the 3 individual companies billing A for the amount of work done from each respective company, any additional profits from company A which will primarily be from outsourcing work would be split equally via dividends to the 3 companies.

Maslins, would your accountancy firm be able to support that kind of model/structure? If yes, perhaps I could discuss with my partners and contact you directly.

Many thanks

[ladymuck]

The reason these things tend to turn sour isn't to my mind a tax one, it's down to multiple people working together, with different work ethics/attitudes/goals.

Absolutely ditto this