As in the UK economy in general, construction activities have involved a major part of the McCabe Ford Williams client base since the Firm was established in 1936. Whether engaged by building companies, developers, material sub contractors or investors our experience in the construction sector provides clients with the confidence and the knowledge to realise their development plans whilst benefiting from sound financial and tax advice.
Property & Construction
We have built up considerable expertise in property and construction matters, having acted for family businesses since 1936. Most businesses will have to make decisions on property matters at some stage of their evolution; whether signing a lease for business premises, or acquiring a freehold interest in a commercial building.
Additionally, family investments now typically involve property, as an asset class, to hedge against the vagaries of traditional portfolio investments. We act for landlords owning rental properties, whether it is one property or indeed portfolios involving more than twenty individual properties.
Holding these assets in a tax efficient way and making full use of the tax reliefs and allowances available is an important aspect of ownership and this is where our tax planning measures can help.
Making sure that income, in the form of rents, is received in the most tax advantageous way is also important.
The holding of a property in the longer term, will also require thought, to consider the impact of capital gains tax and inheritance tax so that property can be passed to the next generation in the most beneficial way.
Certain types of property holdings have special rules and reliefs attaching to them, whether they are farm assets, furnished holiday lettings, or student accommodation to name just a few.
Similarly, the purchase of a used commercial building or the construction of a new building will involve careful planning regarding the availability of capital allowances used to shelter future profits or rents, where tax legislation has changed markedly over recent years.
McCabe Ford Williams also has much expertise in residential and commercial property management, involving amongst other things the preparation of annual service charge accounts and production of formal (company) accounts for management companies.
We work with property professionals on a regular basis, to meet the particular needs of our clients. This can include working and liaising with surveyors, valuers, banks, architects and solicitors.
Our links with these professionals can be invaluable and enables us to provide our clients with introductions to experts who can assist them with their plans.
Our services include:
- How to hold property to maximise reliefs
- How to structure property finance to maximise interest relief
- Advice on buying or sale of property
- Limited Company, LLP or joint or single ownership considerations
- Tax compliance and planning, in particular for stamp duty land tax, inheritance tax, VAT, income tax and capital gains tax
- Advice on taxation of rental income for landlords and investors
- VAT compliance and the option to tax rental income
- Recovery of VAT on commercial and office buildings
- Advice on the availability, calculation and use of capital allowances
- Accounting services including book-keeping and the preparation of accounts
- Project evaluation and cash flows
- Raising finance for property acquisitions and developments
- Tax return preparation for both corporate and individual clients
- Advice on service charges
- Advice on furnished holiday lettings and the specialist legislation affecting them
- Owning property through a pension scheme
We have advised upon residential developments involving multiple homes, major property extensions or alterations, conversions, commercial developments (involving retail premises, offices or industrial units) and other construction activities involving various related services and supplies. For any major development or project it is beneficial to consult us at an early stage for a financial and tax review where we are usually able to highlight aspects of the plans to achieve tax efficiencies and/or extra project returns (profit improvement).
Once the project costing and/or cash flow have been completed, the financial requirements will become evident and this is where MFW are able to assist in securing the right sources of finance. MFW can also help in the provision of management information (profit and loss accounts) and cash flow data to provide external lenders with up to date project information to inform their decisions.
Any construction plans must involve an early appraisal of how VAT will impact and the knock on effects on pricing and other issues. VAT is applied on construction activities at various rates, either zero per cent, the standard rate or at reduced VAT rates (e.g. for empty buildings or energy saving materials). Can the input VAT be recovered? Will my business have to charge VAT on the individual sales?
Making a profit on the overall development is essential but how will it be taxed and can the overall profit be received in a tax efficient way? The development vehicle is clearly important and may involve a business operating as a sole-trader, partnership, limited liability partnership (LLP) or a private limited company. The taxation aspects of each possibility are different and early advice from MFW can really help or even make the difference between profit or loss. Profits can be liable to income tax and national insurance or alternatively to capital gains tax (the impact of bank or loan interest can be an important factor here). Will the development activity be taxed as a trade or as an investment activity?
The impact of the Construction Industry Scheme (CIS) on construction services is also likely to be relevant and important. This may dictate how individuals and businesses involved in the construction suffer tax and places additional requirements upon the main contractor or developer. The legislation involved is not straightforward and other employment type decisions (sub-contractors or employees) may be impacted. Developments can also involve pension schemes, usually in relation to commercial properties.
So consulting MFW at an early stage of your plans is advisable whether buying land for construction, introducing land already held or for developing land and selling it on as a whole or in various units/plots.
Our services include:
- Advice upon construction activities and their financing.
- Profit planning.
- Cash flows and project finance.
- How to maximise available tax reliefs.
- VAT planning and VAT advice.
- Advice upon the Construction Industry Scheme (CIS).
- Advice upon the acquisition or sale of land or property.
- Accounting services including book-keeping and the preparation of accounts.
- Raising finance for property developments.
- Tax return preparation and compliance.
- Advice upon the operations of sole traders, partnerships, LLPs or limited companies.
- Advice to contractors and sub- contractors.
- Advice upon income tax or capital gains tax matters.