Services Industries
A services business sells time and expertise, so it carries almost no stock and almost all of its cost in people. Tax is withheld from its invoices before payment lands, which means the business funds its own tax bill out of working capital and waits to recover it.
The rate that applies is not uniform either — professional services, IT services and general services are each treated differently, and each doubles for anyone off the active taxpayers' list. Our work is making sure the right rate is applied, evidenced and recovered.
The work
What actually lands on our desk
01
The right withholding rate, per service
General services, professional services, IT and IT-enabled services and advertising each carry their own rate. Getting the classification right is where most of the money is.
02
Certificates chased while they exist
Tax deducted at source is only recoverable with the certificate. We collect them through the year instead of hunting them the week a return is due.
03
Payroll as the main cost base
Salaries, contractor payments and employee withholding handled together, because in a services firm payroll is the accounts.
04
Revenue recognised as earned
Retainers, milestones and work in progress recognised across the periods they belong to, so a good month is not simply a month someone happened to pay in.
What goes wrong
The three we see most.
None of these are exotic. They are the ordinary gaps that sit quietly for years and then surface all at once, usually in a notice.
Services classified under the general rate when a specific lower rate applied
Withholding certificates never collected, so deducted tax is never recovered
Work in progress and unbilled revenue left out of the management accounts
If you recognized one of these while reading, that is the conversation to start with. Say so directly.
Where to start
The lines that carry most of this work
Talk to someone who knows Services Industries.
Describe how your business actually runs. We'll tell you where the exposure is before you engage us.