Company Registration No. 05852134 (England and Wales)
GOVERNMENT GRANT & TAX CONSULTANTS LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
PAGES FOR FILING WITH REGISTRAR
GOVERNMENT GRANT & TAX CONSULTANTS LTD
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 8
GOVERNMENT GRANT & TAX CONSULTANTS LTD
BALANCE SHEET
AS AT
30 SEPTEMBER 2019
30 September 2019
- 1 -
2019
2018
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
4
19,023
21,250
Tangible assets
5
20,585
24,997
39,608
46,247
Current assets
Stocks (work in progress)
6
1,752,859
960,956
Debtors
7
835,822
756,417
Cash at bank and in hand
685,431
162,353
3,274,112
1,879,726
Creditors: amounts falling due within one year
8
(1,411,596)
(1,032,764)
Net current assets
1,862,516
846,962
Total assets less current liabilities
1,902,124
893,209
Capital and reserves
Called up share capital
80
80
Capital redemption reserve
23
23
Profit and loss reserves
1,902,021
893,106
Total equity
1,902,124
893,209
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 28 May 2020 and are signed on its behalf by:
S J Philips
Director
Company Registration No. 05852134
GOVERNMENT GRANT & TAX CONSULTANTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2019
- 2 -
1
Accounting policies
Company information
Government Grant & Tax Consultants Ltd is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
2nd Floor Churchill House, 26-30 Upper Marlborough Road, St. Albans, Hertfordshire, England, AL1 3UU.
1.1
Accounting convention
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account rebates
and discounts.
Revenue from contracts for the provision of professional services is recognised
at the point of submission of the resultant claims to the tax authorities or the point at which it is probable that the claim will be made. It is at this stage the fair value of the transaction can be reliably measured.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably.
GOVERNMENT GRANT & TAX CONSULTANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
1
Accounting policies
(Continued)
- 3 -
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Development costs
50% on cost
The Company undertakes research and development activities in order to develop and continually improve third party software acquired.
Expenditure on research activities is recognised in the income statement as an expense as incurred.
Expenditure on development activities is capitalised if future economic benefits are probable and if the Company can measure reliably the expenditure attributable to the intangible asset during its development.
The expenditure capitalised includes the cost of subcontractors.
1.6
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
33% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.7
Stocks (work in progress)
Revenue from work in progress is recognised at the point of submission of the resultant claims to the tax authorities or the point at which it is probable the claim will be made. Full provision is made for losses on all contracts in the year in which they are first foreseen.
1.8
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
GOVERNMENT GRANT & TAX CONSULTANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
1
Accounting policies
(Continued)
- 4 -
1.9
Financial instruments
Trade and other debtors
Trade and other debtors are measured at transaction price less any impairment unless the arrangement constitutes a financing transaction in which case the transaction is measured at the present value of the future receipts discounted at the prevailing market rate of interest. Loans are initially measured at fair value and are subsequently measured at amortised cost using the effective interest method less any impairment.
Trade and other creditors
Trade and other creditors are measured at their transaction price unless the arrangement constitutes a financing transaction in which case the transaction is measured at present value of future payments discounted at prevailing market rate of interest. Other financial liabilities are initially measured at fair value net of their transaction costs. They are subsequently measured at amortised cost using the effective interest method.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
GOVERNMENT GRANT & TAX CONSULTANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
1
Accounting policies
(Continued)
- 5 -
1.13
Leases
Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
2
Prior year adjustment
In the prior year financial statements to 3
0
September
201
8
, the accounts have been restated to incorporate the impact of the
intercompany debtor not deemed recoverable
. The changes have resulted in
a decrease in profits by
£
4,058
,
492
, and a
corresponding decrease in intercompany receivables
.
During 2019 the full balance of the loan amounting to £4,934,000 has been formally waived leading to non-recurring costs as noted in note 4.
Reclassification
In the prior year financial statements to 30 September 2018, the accounts have been reclassified to recognise an accrual separately from work in progress, resulting in an increase in accruals and work in progress by £231,694 respectively.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Total
-
-
4
Intangible fixed assets
Goodwill
Development costs
Total
£
£
£
Cost
At 1 October 2018
23,648
42,500
66,148
Additions
-
24,950
24,950
At 30 September 2019
23,648
67,450
91,098
Amortisation and impairment
At 1 October 2018
23,648
21,250
44,898
Amortisation charged for the year
-
27,177
27,177
At 30 September 2019
23,648
48,427
72,075
Carrying amount
At 30 September 2019
-
19,023
19,023
At 30 September 2018
-
21,250
21,250
GOVERNMENT GRANT & TAX CONSULTANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
- 6 -
5
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 October 2018
56,762
Additions
13,567
At 30 September 2019
70,329
Depreciation and impairment
At 1 October 2018
31,765
Depreciation charged in the year
17,979
At 30 September 2019
49,744
Carrying amount
At 30 September 2019
20,585
At 30 September 2018
24,997
6
Stocks (work in progress)
2019
2018
£
£
Work in progress
1,752,859
960,956
7
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
410,038
271,252
Amounts owed by group undertakings
10,304
-
Other debtors
415,480
485,165
835,822
756,417
GOVERNMENT GRANT & TAX CONSULTANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
- 7 -
8
Creditors: amounts falling due within one year
2019
2018
£
£
Trade creditors
266,267
48,526
Corporation tax
187,309
13,256
Other taxation and social security
109,715
145,507
Other creditors
848,305
825,475
1,411,596
1,032,764
9
Audit report information
As the income statement has been omitted from the filing copy of the financial statements
,
the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Christopher Nisbet BA(Hons) ACA.
The auditor was Wilkins Kennedy Audit Services.
10
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases due within one year:
2019
2018
£
£
Within one year
97,422
50,502
Between two and five years
456,440
73,509
In over five years
533,725
-
1,087,587
124,011
GOVERNMENT GRANT & TAX CONSULTANTS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2019
- 8 -
11
Related party transactions
During the year, Government Grant and Tax Consultants Limited invoiced its parent company £
203,865
(2018 - £215,489). Its parent company invoiced Government Grant and Tax Consultants Limited £1,716,173 (2018 - £1,681,055). The amount receivable from the parent company was waived in the year, resulting in an intercompany
debtor waived
expense recognised of £8
7
5,
508
(2018 - £4,058,492). At the year end a
debtor balance of
£
10,304
(2018 – £nil) was outstanding.
During the year, Government Grant and Tax Consultants Limited was invoiced £41,750 (2018 - £41,285) from Anson Consulting LLP (an entity with a common director). At the year end a debtor balance of £nil (2018 - £2,750) was outstanding.
During the year, Government Grant and Tax Consultants Limited was invoiced £42,500 (2018 - £50,500) from Ramesses LLP (an entity with a common
shareholder
). At the year end an amount of £nil (2018 – £nil) was outstanding.
During the year, Government Grant and Tax Consultants Limited was invoiced £142,428 (2018 - £92,249) from Data Management Support Ltd (an entity with a common director). At the year end a creditor balance of £6,800 (2018 - £nil) was outstanding.
At the year-end an amount of £325,542 (2018 - £325,542) was owed from Experience International Limited, a company with a common director.
12
Parent company
The company's immediate parent is The Business Advisory Limited, incorporated in England and Wales.
13
Post balance sheet events
On 1 October 2019 the contracts for the employees who were previously employed by the parent company were transferred over to the company. Costs relating to these employees were previously recharged between the entities which ceased on the date of transfer.
On 9 March 2020, the management team of Government Grant and Tax Consultants Limited completed a management buyout (MBO) of the business to exit the original founders. The MBO was supported by the existing private equity sponsor, Foresight Group, and the growth capital team of Santander. In order to effect the MBO, a newco (Innovation Consulting Group Limited) was established which purchased shares in The Business Advisory Limited. The deal is a result of a period of strong growth and the business has exciting plans to expand further over the coming years.