Did you know that having an excellent credit routine practice is an integral part of securing one's financial future? It's why building a credit score is a high starting point, and one mustn't ignore it. One of the most excellent ways to make credit is by using credit cards to build credit. It can be a challenging process if you aren't up for the task. However, don't beat yourself up as you can implement excellent credit card management practices. In turn, you get to have a brighter financial future by having a stellar credit history. Here's a step by step guideline on how to build credit with a credit card in corporate finance.

1. Pay All Your Credit Card Bills in Full and On Time

Diligent credit management practice involves you making a timely monthly payment. It's a procedure that might pass you by if you aren't too cautious. However, if you want to skip getting a headache, you need to make autopay your close buddy. Thus, you can get to pay all your bills in due time. It ultimately contributes to your credit score improving. The secret to paying timely payment with no much hassle is spending a budget that's within your limit. Therefore, you won’t have to keep carrying a balance into the next month, which might incur a higher interest charge.

2. Your Needs

Before you think of getting a credit card, you need to take time and ask yourself the vital questions. You ought to know why you are signing up for a particular card. Do you want to build credit? Or do you want the fantastic rewards that come with credit cards? Finding the ideal credit card will enable you to make the most out of it. It's a chance you ensure that you meet your needs each time you get to swipe the credit card. As you open these credit cards, you ought to know about the soft and hard inquiries. It’ll enable you to tread lightly to ensure your credit score doesn't hang on the balance.

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3. Regular Purchases

It's quite unfortunate that most individuals have credit cards that have their credit cards lying idle and unused. However, it leads to one having a pause in credit score growth. If you need your credit history to continue improving, you need to continue making purchases using your credit card. As you use your credit card, you get to make timely payments. Thus, your credit card issuer will keep making monthly reports to the credit bureaus.

4. Don’t Get Too Many Credit Cards

With the numerous captivating rewards from several credit cards, it's easy to sign up and get as many credit cards as possible. There's entirely nothing wrong with getting more than one credit card. However, the trouble comes when you have more credit cards than you can handle. You might get tempted to spend more, and that's not good, and it might harm your credit score.

Mindful credit card usage is quite crucial in achieving your financial independence dream. It's a seamless process that enables you to learn how to use credit cards to build credit. It's because one learns to become financially conscious, determined, and precise on each penny that gets spent.

Finance Monthly speaks to James Butler – experienced practitioner, business adviser to SMEs and Consulting Partner at GBW – an Irish company that wants to make sure that a choice exists for those smaller businesses that require a more hands-on approach than that offered by the larger firms.

What are the key services that GBW offers to clients?

We are a mid-tier firm of accountants and business advisers with varying specialties and backgrounds. Our services range from assisting with Audit, Assurance, Taxation and Accounting, through to Business Advisory and Corporate Recovery. Our cross-border service offering, business approach and sector expertise is primarily designed to support Small and Medium-Sized Enterprises, or organisations of equivalent scale, with existing or planned international operations.

GBW is an independent member of TGS – a global accountancy and legal network of independent firms specialising in the provision of accounting, audit, tax, business advisory and commercial legal services.

Tell us more about TGS?

Not all networks that are part of the group are the same. TGS member firms are all independently owned and share an entrepreneurial approach to their own and clients’ businesses. We have a shared commitment to the highest levels of technical expertise and professional standards. Our clients enjoy a rapid access to quality assured in country experts across the world, via a single point of contact.

We recognise that every client is unique and our cost-effective solutions are tailored to our clients’ unique requirements. Whether they require a full suite of accounting and business solutions or a one-off specialist service, TGS Global can provide precisely what our clients require, no more and no less.

You have extensive experience in Insolvency & Corporate Restructuring, and have acted as liquidator in both creditor and member voluntary liquidations. What does your role within GBW entail?

In my role within GBW, I deal with banks and financial institutions in all areas concerning distressed property and non-performing loans. I’ve also been involved in debt management and refinancing for both companies and individuals.

Additionally, I am also an experienced practitioner in taxation and business advice for businesses in the area of the licensed trade, professional services and medical practitioners.

GBW’s Services:

Audit and Accounting

We aim to help our clients see the audit process as a benefit to their business, not just a cost.

Taxation

Our taxation department has expertise in all categories of taxation, both our corporate to personal clients.

Business Advisory Services

All businesses require planning – form start-ups to mature businesses. Our business advisory experts can assist with the planning and execution.

Accounting

Our Accounts department provides all types of assistance, whether be in-house or out sourced, we have the expertise.

Corporate Finance

If you are selling, buying or merging a business. If you are making an investment or raising finance – we can help with the decision making process.

Forensic and Litigation Support

In today’s changeable economic environment, business disputes are becoming more frequent and litigation is on the increase. At GBW, we draw on the firm’s wide expertise of our accounting professionals to advise our clients in claims assessment and provide independent expert accounting witness services.

Recovery and Restructuring

We are leaders in the provision of insolvency and restructuring services. Our team comprises of insolvency experts, forensic specialists and support staff who work together to provide a comprehensive and complete solution to any restructuring or insolvency project.

Website: http://gbw.ie

Catriona Coady provides tax and financial planning services to a wide variety of clients within Goodbody Stockbrokers. Her client base includes several HNW individuals and her role involves assisting those clients with their domestic and overseas tax affairs and addressing their tax planning needs. This tax technical expertise is on hand to assist with the financial planning and investment process.

Goodbody, part of the Fexco Group, is Ireland's longest established stockbroking firm with roots dating back to 1877. As well as being one of the leading institutional brokers and corporate finance houses, it is one of the largest wealth management firms in Ireland. Here Catriona tells us more about the company and her role.

What is your previous experience and how do you draw on this in your current role in Goodbody?

Prior to joining Goodbody I worked for a Big 4 firm. I started out my training with PwC and up to two years ago had spent a number of years working for EY. Although I was trained to understand all tax heads, my specialism has always been tax for HNW individuals and the specific tax issues affecting individuals working across multiple jurisdictions.

In my current role, my experience has proved invaluable to clients wishing to understand the tax implications of their financial plans and goals. This covers a wide range of issues which tax impacts such as clients’ succession plans, business exit plans, tax issues for entrepreneurs and cross border tax planning. It is an important service as it assists clients with understanding the tax implications of their financial plans and to enable clients to determine where further advice may be needed.

The tax implications of specific investments is also an area that I assist clients with. For example, not dissimilar to the UK, Ireland has a tax regime for investments in non-Irish funds which can be complex. The input I provide into the tax implications of investments helps clients to design their portfolios with tax efficiencies in mind while also aiming to achieve their desired investment return.

As a Private Client Tax & Pension Specialist, what are the typical challenges that clients approach you with?  What are the most common day-to-day challenges that you are faced with?

Clients typically approach me initially with perhaps one or two specific investment objectives, but after discussing their personal circumstances in more detail, it becomes very clear that they have several more financial goals that they require assistance with or wish to achieve. These can range from wishing to retire early, involving detailed cashflow planning and target retirement funding to asset protection via trusts and family partnerships and suitable investments for those not domiciled in Ireland.

Pulling clients goals and objectives together into a clearly defined plan, which identifies overall net worth, detailed cashflow analysis, attitude to risk, overall asset allocation and a strategy for achieving their goals is an invaluable exercise and one that provides a guided path through the financial and investment process. While the initial challenges are in driving awareness of the full extent of our service offering and gathering the information required to compile a financial plan, the end product is a comprehensive document containing all the salient information related to the client’s financial plans and goals. This is a document that can be consulted and updated on an ongoing basis.

In your opinion, are there financial planning and investment issues relevant to both Irish and UK tax resident clients?

Given our close proximity there are numerous issues relevant to both Irish & UK tax resident clients. While not exhaustive, the following are examples of the issues that can arise:

Dual tax residence status

Many clients have dual tax residence status, meaning they are both Irish and UK tax residents. For example, Irish nationals can spend the working week living and working in the UK while also returning to Ireland every weekend and while doing so, accumulating wealth along the way. Navigating the two tax systems can be difficult, but with the right assistance and advice, it is possible to develop a financial plan which takes account of the tax regime of both jurisdictions. In several ways Ireland’s tax regime is similar to the UK - for example we have a tax regime for non-domiciled individuals for Income Tax and Capital Gains Tax (CGT). We also have similar rebasing rules for CGT purposes on certain events e.g. death. While expected to be improved, Ireland has a favourable CGT regime for entrepreneurs and an Enterprise & investment Scheme.

UK & Irish pension assets

Many clients have both Irish and UK private pensions, which can be defined benefit and/or defined contribution. They are also likely to have built up entitlements to both Irish and UK State Pension. The issues relevant to defined benefit pensions in the UK are just as much of an issue in Ireland with clients being offered enhanced transfer values (ETVs) in respect of their defined benefit entitlements. The decision whether to accept this offer is one that requires careful consideration and is an area in which we provide detailed planning and advice to clients.

There are also decisions for clients to make around whether to transfer a UK pension fund to Ireland or vice versa.

Estate Taxes

Cross-border estate taxes also play a large part in the advice provided to clients. This is because many hold assets in both jurisdictions and may be unaware that estate taxes can arise in both countries. As this is often overlooked, it is important to review a client’s asset base to determine the extent of the estate tax liability in both Ireland and the UK. Where taxes may be due in both countries, the Estate Tax Treaty should be consulted to determine whether any exemption or credit is available to mitigate the double tax charge.

When you first joined Goodbody, what were your goals in driving change within the company?

When I first joined, there was a definite need amongst the client base to have their financial plans and goals structured and delivered in a coordinated manner. This led to driving change in how we provide this service to clients. Clients respond very well to having a fully developed plan in relation to their evolving financial plans and to having a trusted advisor who is with them every step of the way in achieving their financial goals.

How would you evaluate your role and its impact over the last two years?

My role has deepened the tax expertise within Goodbody and as a result the service offering that we provide.

Seeing the benefit of the service to clients and colleagues is also very rewarding.

What do you hope to accomplish in the future?

I would like to continue to enhance the client experience at Goodbody. Many clients accumulate wealth in a variety of different ways and very often do not have access to or obtain fully rounded advice. It would be my desire for clients to have a single provider experience in relation to meeting their personal financial and investment needs.

“I think in times of significant global economic change it is vital for clients to closely monitor their financial plans and goals and to work closely with their financial advisor. It is also important to have an advisor that can provide an investment and tax offering to ensure that both are appropriately aligned.”

Website: https://www.goodbody.ie/

Aware of the coverage of transfer pricing in the media in recent years, Finance Monthly interviews Ruth Steedman, Managing Director at FTI Consulting, who has specialised in transfer pricing for over 20 years. Ruth works with multinationals to determine and implement transfer pricing solutions.  At FTI Consulting, Ruth leads a team of over 10 dedicated transfer pricing advisors, working alongside tax, economics, strategic communications and corporate finance professionals.

We have heard a lot about BEPS in a transfer pricing (“TP”) context. What do finance managers need to be aware of in relation to BEPS and TP guidance?

As part of the BEPS project, the OECD has introduced extensive new guidance for TP and international tax – much of this is already reflected in UK law. In particular, there is a focus on understanding where risks are controlled and borne within groups and remunerating group companies accordingly. Another key theme is the requirement to have sufficient economic substance, for which there is a parallel with the UK’s Diverted Profits Tax that was introduced in 2015.

Economic substance is not a clearly defined term - it perhaps suffices to say that it is no longer sufficient for risk to be borne on paper. Rather, the reality of decision making and control needs to align with intercompany contractual arrangements.

In addition, there are specific recommendations resulting from the BEPS project (under Action 4) that will impact multinational companies with intercompany borrowing. Also, companies having activity overseas should be aware of the changes to the definition of permanent establishment (“PE”) under Action 7. And, of course, there is the introduction of country-by-country (“CbC “) reporting, which is a huge development.

What is the significance of CbC reporting?

CbC reporting requires multinational groups with consolidated revenue of Euros 750 million or more to report various financial information (including revenue, profit, headcount, tax paid) on a country-by-country basis to tax authorities. In the UK this requirement is already effective for financial years starting on or after 1 January 2016.

An electronic exchange will be set up to allow tax authorities in different countries to easily exchange CbC reports, thereby potentially making the CbC data for a multinational available to the tax authority in every country where it operates. Qualifying companies are grappling with assembling the necessary information and considering how that information may be interpreted by tax authorities. Significantly, there is wide expectation that the introduction of CbC reporting will lead to an increase in TP audits around the world, which typically take a lot of time and resources to manage.

Multinationals with revenue below Euros 750 million should not be complacent as the threshold for CbC reporting is expected to come down. Smaller groups that are required to prepare transfer pricing documentation for UK purposes should consider whether to prepare TP documentation in the Master File/Local File format prescribed by the OECD.

Could you tell us more about BEPs Action 4 and what is happening in the UK?

The UK will adopt the OECD’s recommendations under Action 4 with effect from 1 April 2017 to cap the amount of relief for net interest expense. Specifically, a fixed ratio rule will be introduced limiting the tax deductions available for net interest expense to 30% of UK earnings (EBITDA). A consultation is in progress which will determine the detail of the new rules and there remains huge uncertainty for business in relation to the impact of these changes. Undoubtedly, the ETR of a lot of companies will be affected and we are already seeing moves by a number of groups to undertake a wholesale transfer pricing/supply chain restructuring.

As a thought leader in this segment, how are you keeping abreast of technical developments and interpreting new requirements?

The team at FTI Consulting has contributed to the OECD’s public consultation on new TP guidance and recently spoke at the OECD on the attribution of profit to PEs and proposed guidance for the application of the Profit Split method. As well as drawing on former HMRC experience and supply chain specialists within the team, we also have a team of experienced economists and valuation experts with whom we develop economic analyses to satisfy the increasingly complex requirements of the OECD.

Given all the recent changes in TP, what practical recommendations do you have for companies?

Our advice is in two parts: now is the time to undertake a substance and risk review and assess alignment of TP policies with the new OECD guidance for TP. Secondly, we recommend companies prepare their CbC report and Master File/Local Files as soon as possible and ensure that there is consistency between the various reports.

Is there anything else you would like to add?

We are clearly moving to an environment of greater transparency in relation to tax and TP. There are moves in the European Parliament to make the publication of CbC reports compulsory and in the UK large companies are now required to publish a tax strategy online. As of mid-September, the UK Treasury has the power to pass new regulations to require the inclusion of a company’s CbC report in their published tax strategy. It remains to be seen whether the UK Treasury enforces these powers, but in the interim companies are advised to prepare their CbC report and tax strategy.