SC Jersey Accountants watch the npower headlines with interest
EBITA figures and accountancy practices are under scrutiny in the new tax year
It’s the beginning of the 2013-2014 financial year and it’s time for a clean slate for many involved with accountancy services in one way or another.
Many businesses use this marker as an opportunity to change and /or review their practices. As usual, tax payments have been uppermost in people’s minds and the latest upset to emerge in recent headlines has been the little matter of tax payments by the power company npower.
Protest groups have been lobbying the power company about what they see as non-payment of tax in the UK, whereas the company have said that unless tax relief is offered to energy companies then Britain will have to sing for any investment to improve the burgeoning demand for power. This is the backlash against criticism that a bill for non- payment of corporation tax is under public scrutiny.
The chief executive declared that not paying corporation tax was permissible as the company have invested heavily in energy infrastructure. Most SME’s wonder whether they might go down the same route in future. The Labour party, however, also commented that average tax payers are annoyed by profitable companies who appear to find loopholes to resist paying what is due. The protest group 38% was also busy organising a massive online petition as we write.
It is a tricky situation when many families are scrimping to cope with the hike in energy prices, when at first glance a company like npower’s profit between 2009 and 2001 was £766 million. The CEO of npower said that actually pre-tax profits were only £40 million and that the company were incredibly compliant’ with UK tax rules according to HMRC.
Accountancy becomes very complex at this level and SC Jersey knows that npower might have a £766 million operating result but this is calculated on their earnings pre interest, taxation and amortisation (EBITA). After these are all taken into account the EBIT figure is then £40 million.
Most people are not going to be looking at that kind of figure when they appoint accountants to provide accountancy services but whatever profit or loss your company posts, accurate accountancy figures are essential to be a) HMRC compliant and b) for you to know exactly what state of health your business is in. So however much profit and loss you are chalking up, with your own business, it is time to put one’s own tax affairs in order.
The availability of fast accountancy services has changed dramatically as technology continues to smooth the path, but the same meticulous attention to detail, accuracy and HMRC compliance is the cornerstone of SC Jerseys’ accountancy service.
So if you are looking for your very first accountant to see you through the first year of trading or are looking for a forward-looking, value for money accountant to take you through the next phase of your business expansion then click here.