Silver Sheds Properties
Silver Sheds is a Property Investment Firm in Manchester. From vagueness to clarity: Rescuing a client from potential HMRC noncompliance, resulting fines and penalties and planning tax like never before
About Us
At Reflex Accounting Ltd, a leading accountancy and tax consultancy firm based in Birmingham, we specialise in identification and rectification of complex accounting errors in records, ensuring UK-based businesses are fully compliant and tax-efficient.
This case study demonstrates our competency and commitment to putting the financial well being of our client at top most priority inline with our core values and is one of our many routine endeavors.
The Client Property Investment Firm (Manchester)
Our client is a Manchester-based Buy-to-Let (BTL) investment company with a turnover of £105k. As a hands-on property investor, the director relied on accurate financial data to make crucial investment decisions but had lost confidence in the numbers provided by their previous accountant.
The Challenge Property Investment Firm (Manchester)
The client approached us with a deep suspicion that their finances were in disarray. Our forensic review uncovered a series of critical errors and negligence that were distorting their true financial position and impacting profitability
Inaccurate Records
With due aid of window dressing and wrong application of accounting principles, assets of client were factiously overstated in value by £1.7 million.
Surplus tax on Director Salary
Director was being paid a gross salary of £50,000 creating unnecessary NI and Insurance benefit charge for company and PAYE(Pay As You Earn) implication for director.
Unfiled Claims for Corporation tax
The tax year 2023 Corporation Tax return (CT600) had never claimed losses occurred against tax charge for Year-end 22 exposing client to HMRC penalties for unpaid Corporation tax.
Unmanaged Director’s Loan
The director loan account balance exceeded £10,000 at year end triggering S455(Companies Act 2006) Charge implications for company and creating a Interest charge at commercial rate(2.25%/annum) to director or if chose not to P11D charge for company.
No tax Planning
Declaring wealth to director as salary, being taxed under non-saving income (After personal allowance) in personal return (SATR) at higher rates (20%, 40%,45%) in contrary to declaring dividends which are tax at lower rates (8.75%, 33.5%, 39.35%), also carrying Nil-rate-band (for first £500 of dividends) irrespective of their income level.
VAT Refunds Not claimed
Failure to change postal code by previous accountant led to mis-placement of VAT refund cheques, leaving client at loss.
Our Solution
We signed the client to our monthly cloud accounting package and began a meticulous process of correction and compliance
Forensic Financial Review
We conducted a line-by-line investigation of the trial balance and reconciled the submitted accounts with their accounting software to identify each and every discrepancy.
Rectifying Core Errors
We capitalised incorrectly expensed deposits, corrected the fixed asset register and reclassified operating leases to the P&L to reveal the company’s true profit.
Cleaning and Automating
We cleared the backlog of 1,400+ duplicate transactions and fully reconciled the bank feed for the first time and setting up efficient processes to prevent future issues
Strategic Tax Filing
We computed and filed the overdue CT600 return ahead of the deadline and avoided late penalties. We identified and claimed 100% First Year Allowance (FYA) on a new electric vehicle and rectified the DLA to avoid the S455 tax charge.
Filed Form-427 with HMRC to claim missing rebates for Quarters of YE-24 and YE-23.
The Results
Our intervention delivered immediate financial savings and long-term peace of mind:
Immediate Tax Savings
Generated through a successful £5,300 FYA claim and by avoiding a £4,700 S455 tax charge.
10+ Hours Monthly Saved
Automated bookkeeping and clean records freed up over 10 hours of the director’s time each month that allowing them to focus on strategic growth.
100% HMRC Compliance
Filed all outstanding returns accurately and on time and made the company fully compliant and eliminating the risk of penalties.
Unprecedented Financial Clarity
For the first time, the client had a clear and accurate picture of their profitability, cash flow and company value, empowering them to confidently plan further investments.
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