Professional Firms Case Studies

We’ve built up considerable insight helping property clients over the years. Here are a number of recent examples of how we have helped clients:

Tax Efficient remuneration structure

We designed a tax efficient remuneration structure for a top 10 firm of architects. Our client was growing in size rapidly so it was important that our solution was flexible and took into account the needs of incoming partners as well as those more senior members of the practice who were closer to retirement. Following our advice our client was able to minimise the tax paid on funds retained within the business for working capital purposes and retiring partners were able to take advantage of entrepreneurs relief paying 10% tax on the capital they withdrew from the practice.

Valuation of shareholding

We were approached by two young directors of a firm of chartered surveyors. The business was established and the two directors had been offered equity in the company. A valuation had been prepared by the company accountants of the shareholding, and this was the price that they had been asked to pay for their shares. We were asked to review the valuation from the potential shareholder’s perspective and comment on the methodology and assumptions made. There were three main areas that we focussed on when reviewing the valuation; the future maintainable earnings of the business, the minority discount applied to a minority shareholding, and the applicable price earnings ratio – particularly in view of the depressed property market. Our findings arrived at a significantly reduced valuation for the shares being offered and enabled the directors to negotiate an improved deal when acquiring their shares in the company.

Conversion of a limited company to an LLP

Many professional firms are still structured as a limited company. This structure can cause problems when considering the remuneration and reward of new fee earners. We have advised on the conversion of firms to LLP status, which gives protection of a limited liability status allied with the flexibility of a partnership for the admission of new members, and reduces the national insurance liability of the firm and individual partners.

Review of compliance with regulations

During the preparation of accounts for a surveying firm, which including gaining a full understanding of the business, we identified that the company was required to undertake and document the systems in place for acceptance of payments by credit card. This change in the regulations had been missed by the directors and we were able to complete the necessary work in a timely and cost efficient manner to ensure that the company was fully compliant with the legislation.