This is possibly the most readable direct tax book I have had the pleasure to review. Roger Jones writes as if he is in conversation with the reader using language that is free of tax and legal jargon. The result is an approachable text peppered with one-liners good enough to raise a wry smile even on a bad hair day.
The title: ‘Incorporating a business’ does not convey the depth and breadth of the book. It should really be called ‘Everything you need to know about advising a small business that wants to trade as a limited company, but forgot to ask’, although perhaps that is a bit long to fit on the cover.
Even if you have already incorporated every last one of your business clients this book contains useful advice for you to draw on. For example the chapter titled Legalities is essential reading for those of us who last studied law some decades ago, as it clearly summarises the bits of company law most relevant to a small company. I found the point by point discussion of the rules for paying dividends most useful, particularly the draft board minutes and the reference to a topical article published in Taxation.
In this second edition Roger has addressed the thorny issue of the settlements legislation as it affects family companies, (formerly s. 660A ICTA 1988, now in ss. 624–627 ITTOA 2005), exemplified by the Arctic Systems case (Jones v. Garnet). Roger’s analysis of the problem is one of the clearest I have come across. Although the (sic) his text was written before the release of the High Court judgment Roger’s solutions for avoiding similar Revenue attention are spookily close to current thinking.
The other new chapter for the second addition (?edition) is the ironically titled: ‘The Right Amount of Tax’ which explains how the non-corporate distribution (NCD) rate works. Here the author could have been caught out by a recent Revenue announcement changing the treatment of excess NCDs carried forward, but Roger’s crystal ball was working yet again as he set out three possibilities of the treatment in this uncertain area. So where new legislation takes us into uncharted territory Roger signposts the alternatives even if the correct route has not been identified.
Two other things I liked about this book are the concise bullet points summarising useful planning tips at the end of each chapter, and the checklist in Appendix 2. This checklist acts as summary to the rest of the book, bringing together all the possible action points with a cross reference back to the main text to allow you to reread the reasoning behind each recommendation.
I believe this is an indispensable book for the General Practitioner. If you have small company clients take this book away to read on the beach this summer. Your clients will thank you for it, even if your family doesn’t.
Taxation magazine, July 05.
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