Any IFA who wishes to incorporate before the end of trail commission will find himself caught out by the removal of entrepreneurs relief on goodwill, Sue Moore has warned.

The technical manager, private client, tax faculty for the Institute of Chartered Accountants in England and Wales, said that with the end of trail commission, IFAs can no longer value their business based on recurring trail but must rely on the goodwill attached to their services for valuations.

However, goodwill is now taxable, under changes to the entrepreneurs relief announced by chancellor George Osborne in the Autumn Statement, which could have tax implications for advisers.

Ms Moore said that, for many years sole traders and partnerships have been able to incorporate their businesses, selling the value of the business, including goodwill, to the new corporate.

The gain is taxed at 10 per cent, the proceeds remain on loan to the company as a directors loan and it is then repaid with no further tax being payable.

This procedure was used when retirement relief was available, and then taper relief and more recently entrepreneurs relief.

With effect from 3 December 2014 any goodwill sold to a closed company connected with the seller will be taxed at 18 per cent or 28 per cent, depending on the personal circumstances of the vendor.

Ms Moore said: This will apply to any IFAs who still want to incorporate, because from 2016, when the sunset clause on trail comes to an end, they will no longer be able to incorporate tax-efficiently.

This could make it less attractive for advisers wishing to sell up and retire.

In the three-page Capital Gains Tax: Denying Entrepreneurs Relief for Disposals of Goodwill to Related Companies, published alongside the Autumn Statement documents, the government said: Goodwill is not one of the relevant business assets comprised in the qualifying business disposal.

Industry view

Brian Spence, managing partner at Harrison Spence, said IFAs should not be too worried by the changes. He added: It is very much a sellers market at the moment with some valuations being quite high for quality businesses, so this would offset any removal of the entrepreneurs relief on goodwill.

Status quo with taxation in Deer Lake for 2015

ASSOCIATED PRESS (File photo) A car drives past MTN telephone company advertisements sign in Lagos, Nigeria. AP Photo/Sunday Alamba

Dubai - Nigerias telecommunications operators face multiple taxes and fees at local, state and federal level, two of the countrys mobile operators told Reuters, with service disruptions related to tax claims costing the sector millions of dollars annually.

Mobile phone penetration nearly tripled between 2007 and 2012 and hit 96 percent at 2013-end.

The sector accounted for 7.8 percent of Nigerias economy in the nine months to September 2013, more than double its 2009 contribution of 3.7 percent, and such income has made it a soft target for tax collectors, said MTN Nigeria - a unit of South Africas MTN.

The Golden Goose effect has fuelled demands for larger social spending, taxes, MTN Nigeria said in a statement to Reuters.

Federal, state and local governments all have tax-raising powers, leading to multiple taxation of telecommunications companies, said MTN.

Operators have been seeking a one-stop shop to ease administration of taxes, MTN said, warning operators suffer arbitrary enforcement actions and service disruptions by parties working on behalf of tax-raising bodies.

The cost of disruption to our industry runs into millions of dollars annually, MTN added.

MTN Nigeria is the largest mobile operator with 58.4 million subscribers, giving it a 44 percent market share, according to the Nigeria Communications Commission (NCC).

Globacom has 27.6 million subscribers, Airtel Nigeria, part of Indias Bharti Airtel, 26.1 million and Etisalat Nigeria 19.9 million.

Etisalat Nigeria, an affiliate of Abu Dhabi-listed Etisalat , told Reuters it wants the federal government, through the NCC, to be the sole sector regulator.

It is common to have government agencies trying to impose duties and enforce regulatory functions similar to that of the NCC, said Etisalat Nigeria. There are levies and other charges that are demanded by government institutions which have all the characteristics of a tax.

The company declined to provide details on its tax payments, but warned current practices could hurt its margins.

In a 2012 speech, NCC official Okechukwu Itanyi warned spurious taxes and levies ... portend grave dangers for this sector.

He listed some of these taxes. On Airtel alone, these included Bauchi States 755 million naira ($4.2 million) for branding and advertising, Imo States 262.4 million naira pest control charge and Delta States 276 million naira ecological tariff.

Itanyi and Airtel declined to comment. Globalcom did not respond to requests for comment. - Reuters

The Truth in Taxation hearing outlined sources of general fund dollars. Also during the meeting, Katie Clarke led a presentation on human resources within the district, and the board approved moving forward with two Safe Routes to School grants.

David Skog, director of management services, outlined where general fund dollars in the 2014-15 budget came from. According to Skog's presentation, state aid accounted for 88.38 percent of funding. Federal aid attributed to 3.25 percent of funding, while a voter-approved levy supplied 6.15 percent of general fund dollars. The remaining 2.23 percent came from other sources.

Nine categories were outlined in Skog's report for how general fund money was expended in the 2014-15 budget. Nearly one-half of the budget (49.95 percent) was marked for regular instruction. Of the remaining 50.05 percent, 11.46 percent went to facility maintenance, 17.24 percent for exceptional instruction, 1.61 percent for vocational instruction, 6.3 percent for instructional support, 3.94 percent for pupil support, 4.48 percent for district support and 3.53 percent for district administration. Other expenses were noted at 1.48 percent.

Human resources

Clarke spoke to the board regarding the district's human resources and how they compar to other districts of comparable size. District 518 currently employs 511 full-time employees and has an enrollment of 3,006 students. The annual operating budget of the district is $39 million.

Clarke's report indicated that of the 10 rural districts used in comparison with ISD 518, seven had a human resources director. Worthington currently does not.

In terms of student enrollment, number of employees and annual budget, District 518 fell in the middle of the pack on most accounts. One area the district excelled in is the low percentage of administrative expenses. The combined district administration and building administration expenses for ISD 518 were only 5.47 percent. Comparatively, other districts in Clarke's presentation ranged from 6.57 to 9.04 percent.

Clarke shared that common themes in her findings included other districts having designated business and human resource departments as well as payroll personnel, along with a more systematic approach to human resources than now utilized by District 518.

Safe routes grant

The board unanimously passed a resolution to enter into a contract with the Minnesota Department of Transportation Safe Routes to School (SRTS) program. The grant, which did not require local matching, will allow Prairie Elementary, Worthington Middle School and Worthington High School to develop Safe Routes to School plans that increase safety and encourage more children to walk or bike to school.

At Prairie, the funds will be used for painting crosswalks. The school also intends to encourage two walk or ride a bicycle to school days once the project is completed with the help of volunteer crossing guards.

At Worthington Middle School and WHS, pedestrian crossing signs are planned for eight crosswalks that have been deemed most dangerous by the local SRTS committee. According to the group's grant request, the signs reading "STOP for pedestrians" would be placed on Clary Street, North Crailsheim Road, Marine Avenue, Church Avenue, Humiston Avenue and Nobles County 35, respectively.

At present, the SRTS plan for the district is not finalized and may be subject to change. The project will be completed by June 30, 2015.