4 minute read
CORPORATE FINANCE | 10
The full service
for The Beeswax Wrap Co.
A valuation, leading to an MBO with financing, an R&D tax relief claim, review of systems and processes, real-time management reporting and business advisory services helped our client achieve their goals.
Shaun Pegler Client Director
This female-led company has the environment all wrapped up in a creative and plastic-free product, of which they are extremely proud. Founder, Fran Beer, and her team started making beeswax wraps in their kitchens in early 2017 in a bid to cut as much plastic as possible from their lives. A few ruined irons later, and a lot of perfecting their secret wax blend, they created the Beeswax Wrap.
Our relationship with Fran started in 2020 when she engaged Ollie, Head of Corporate Finance, to carry out a valuation of her company. Based on the strength of the valuation we were asked to get involved in negotiations, restructuring and financing to allow the company to effect an MBO, all of which was done remotely during lockdown 1.0.
In order to achieve the transaction in the timescales that both parties were seeking, we had to obtain funding in very short order; this was achieved through our partnership with Capitalise. The successful completion of the MBO, initiated their desire for Randall & Payne to provide accountancy and business advisory services for Fran and her team.
Following the initial review of the accounts, it was established that the product development could qualify for R&D tax credits. James Geary, Corporate Tax Director and R&D expert agreed and worked with the company to put together a robust claim for the first two years of trading in the limited company, generating tax savings of over £20,000 for The Beeswax Wrap Co.
With a number of exciting preestablished and new product developments taking place, ongoing annual claims are expected which should become even more valuable and will help the business continue to grow. This is just one of the examples of how our full-service provision benefitted the client.
Our Accounts team initiated a full review of the accounting data and reports which highlighted the requirement to change certain systems and processes, including the need to put in place a stock management system in order that Xero reporting would become more valuable and margins better understood.
We have also put in place a quarterly reporting review process for VAT and we meet Fran (virtually!) once every quarter to run through the management reports to establish key targets and identify actions that will allow them to reach those targets. In our first quarterly meeting we identified what success means to Fran and we are taking actions, step-by-step, to help deliver her plan for success!
Contact Shaun Pegler for more information by emailing shaun.pegler@randall-payne.co.uk or call 01242 776000.
Planning for now and the future
Tax efficient investments
Investors have for many years been looking for better returns on their capital due to low interest rates, but in these unusual times have perhaps been cautious about how they do so.
As we start to emerge into a more ‘normal’ way of life you will become more confident in seeking new investment opportunities or reviewing your current investments, but there is often more to consider than just the income being generated by your capital. Certain types of investments have Capital Gains Tax (CGT) implications and also offer Inheritance Tax (IHT) relief.
Property
The residential property market is booming at the moment and experts are indicating that, although it may slow, the current trend will continue, notwithstanding the planned changes to Stamp Duty Land Tax in June and September of this year. With property prices increasing, the rental market is also doing well, offering investors with cash to spare a reasonable return. If you already have a property portfolio and are looking to increase it, now may be a good opportunity to consider the structure in which you do so.
� Forming a limited company could be a way of passing on wealth to the next generation to reduce IHT exposure and bring them into the business as shareholders or directors.
If you hold existing property (other than your main home), you may be considering cashing out and realising that gain. Effective from 6 April 2020, sales of residential property resulting in a chargeable gain must be reported to HMRC and the tax paid, within 30 days of completion, even if you currently file a tax return.
� If this then provides you with excess cash to spare then you may wish to consider investing in assets that can defer either the Capital Gains Tax due or qualify for IHT relief. Alternatively you may wish to pass on capital by way of gifts, a trust or a Family Investment
Company (FIC), which can also help to reduce your Inheritance Tax exposure and, in the case of a FIC, continue to provide you with an income.
Family Investment Companies (FICs)
A FIC is a UK resident company, the shareholders of which could include you, the next generation and also trusts, with varying degrees of rights and control. Value is transferred into the company from your estates, either by transferring cash or selling assets to the company,
