Fair Tax Mark
Fair Tax Mark Statement of Friendly Soap Ltd (July 2021)
This statement of Fair Tax compliance was compiled in partnership with the Fair Tax Foundation and certifies that Friendly Soap Limited (“the Company”) meets the standards and requirements of the Fair Tax Foundations UK Small Business Standard.
The Company is committed to paying all the taxes that we owe in accordance with the spirit of all tax laws that apply to our operations. We believe that paying our taxes in this way is the clearest indication we can give of being responsible participants in society. We will fulfil our commitment to paying the appropriate taxes that we owe by seeking to pay the right amount of tax, in the right place, and at the right time. We aim to do this by ensuring that we report our tax affairs in ways that reflect the economic reality of the transactions that we undertake during the course of our trade.
We will not seek to use those options made available in tax law, or the allowances and reliefs that it provides, in ways that are contrary to the spirit of the law. Nor will we undertake specific transactions with the sole or main aim of securing tax advantages that would otherwise not be available to us based on the reality of the trade that we undertake. The company will never undertake transactions that would require notification to HM Revenue & Customs under the Disclosure of Tax Avoidance Schemes Regulations or participate in any arrangement to which it might be reasonably anticipated that the UK’s General Anti-Abuse Rule might apply.
We believe tax havens undermine the UK’s tax system. As a result, whilst we may trade with customers and suppliers genuinely located in places considered to be tax havens, we will not make use of those places to secure a tax advantage, and nor will we take advantage of the secrecy that many such jurisdictions provide for transactions recorded within them. Our accounts will be prepared in compliance with this policy and will seek to provide all the information that users, including HM Revenue & Customs, might need to properly appraise our tax position.
The Company is a private company limited by shares, originally established in 1996 for the purpose of creating and retailing natural soap products to the public from an ethical and environmentally friendly standpoint. The Company’s soaps and cosmetics that are retailed are vegan, cruelty-free, plastic-free and made by staff who are paid a living wage.
The Company is owned and controlled by its two directors: Geoffrey Kerouac; and Robin Costello, who each own 50% of the issued share capital and voting rights.
The Company’s registered address is: Unit 6C, Topland Country Business Park, Cragg Vale, Hebden Bridge, West Yorkshire, HX7 5RW – which is also our trading address.
The average net profit before tax over the last three accounting periods (2019 – 2021) was £440,578. The expected tax charge on these profits is £83,710 (19%). The actual average current tax charge for this period was £72,485 (16.5%). The reasons for the Company’s current tax charge being lower than what would be expected is explained below in the following current tax reconciliation and the accompanying footnotes:
Friendly Soap Limited – Average Current Tax Reconciliation
As at 31 March 2021, the Company had no deferred tax assets or liabilities; and over the last three accounting periods (2019-2021), there were no movements in deferred tax expensed or credited to the profit and loss account.
Related Party Transactions
For the period ended 31 March 2021, the total directors’ remuneration expense amounted to £60,834 (2020: £63,700). Directors’ remuneration consists of gross salary and pension contributions.
* Capital allowances in excess of depreciation – The accounting treatment of capital assets is usually different than the tax treatment allowable. This is because, in the accounts, an asset is depreciated over its useful economic life. Whereas capital allowances are set rules in tax law applied to the type of asset. The differences, however, between the depreciation rate in the accounts and capital allowances claimed in the corporation tax return – are only timing differences – as eventually, the accumulative depreciation and the capital allowances claimed will equal one another.
** Adjustments to prior periods – adjustments to tax charges in prior periods are quite common and can arise for a number of reasons. Sometimes the tax charge for the previous year was calculated for the accounts before the corporation tax return had been finalised and submitted to HMRC, due to the different deadlines for both the accounts and the tax return. This is then updated the year after to reflect any changes between the tax in the accounts and the actual tax charge that was submitted. Other times, either the reporting entity, or HMRC, may correct a mistake from the previous year(s) and then this is adjusted for in the current year tax charge.
Friendly Soap Limited (2021-22)