Company registration number 8615712 (England and Wales)
BOTT AND CO SOLICITORS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BOTT AND CO SOLICITORS LIMITED
COMPANY INFORMATION
Directors
G R Froggatt
D E Bott
P P Hinchliffe
Company number
8615712
Registered office
St Anns House
Parsonage Green
Wilmslow
Cheshire
United Kingdom
SK9 1HG
Auditor
Azets Audit Services
Alpha House
4 Greek Street
Stockport
United Kingdom
SK3 8AB
BOTT AND CO SOLICITORS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 23
BOTT AND CO SOLICITORS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

 

Full year turnover fell slightly as revenue from Personal Injury cases that predate the Civil Liability Act (CLA) fell away and were replaced by lower revenue from cases that post date the CLA.

 

The 2023 revenue should represent our low point as our post CLA cases are now being processed profitably and generating positive cash.

 

The one unresolved area following the introduction of The CLA remains, that being the valuation of multi-site injury claims where claimants have both tariff and non-tariff injuries that fall within the small claims track limit. Two cases have been granted leave to appeal to The Supreme Court which heard the matter on 20th Feb-24.

At the time of writing, the judgement has yet to be handed down.

Flight Delay continues to trade successfully having suffered during and immediately following the series of lock-downs. This area of the business provides very attractive returns for minimal ongoing investment with a very short payback period. We have therefore taken the decision to provide additional funding in order to optimise new claims including from targeted marketing partners.

We have been investing in Motor Finance misselling since 2019 and finally had a break-through decision on a case submitted to The Financial Ombudsman Service (FOS) back in 2022. It is this case that has generated so much recent public awareness with the specific claim details quoted on The Martin Lewis Money Show. Interest in this has increased significantly since and we are continuing to take on thousands of new claims via our website with additional volume coming in through an affiliate arrangement in place with a selected third party.

Following the FOS decision the Financial Conduct Authority (FCA) announced a pause of nine months on claims being dealt with by lenders so we are currently accruing claims and submitting letters of claim in the expectation that settlements are likely to begin towards the end of the year.

It is estimated that 25 million car finance arrangements have been miss-sold with up to 75% specific to the Discretionary Commission Agreements that have been ruled on by the FOS.

Our market leading expertise in processing high volume, low value legal claims with our bespoke IT systems and utilisation of AI make us perfectly placed to optimise opportunities such as this.

 

However we recognise that external funding is required in order to maximise an opportunity on this scale and are in the process of inviting discussions from interested parties.

In early 2023 share ownership was extended to a number of key staff who are experts in the various fields above which has tied them into the business for the long term.

Bott And Co continues to trade free of debt.

On behalf of the board

G R Froggatt
Director
7 March 2024
BOTT AND CO SOLICITORS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the provision of legal services.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid in the year amounting to £6,000.

 

A final dividend of £150,000 was declared and paid in March 2024 in respect of the year ended 31 December 2023.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

G R Froggatt
D E Bott
P P Hinchliffe
Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
G R Froggatt
Director
7 March 2024
BOTT AND CO SOLICITORS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

BOTT AND CO SOLICITORS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BOTT AND CO SOLICITORS LIMITED
- 4 -
Opinion

We have audited the financial statements of Bott and Co Solicitors Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

BOTT AND CO SOLICITORS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BOTT AND CO SOLICITORS LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

BOTT AND CO SOLICITORS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BOTT AND CO SOLICITORS LIMITED
- 6 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jonathan Ward
Senior Statutory Auditor
For and on behalf of Azets Audit Services
8 March 2024
Chartered Accountants
Statutory Auditor
Alpha House
4 Greek Street
Stockport
United Kingdom
SK3 8AB
BOTT AND CO SOLICITORS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
as restated
Notes
£
£
Turnover
3
9,328,409
9,555,117
Cost of sales
(6,068,580)
(6,924,533)
Gross profit
3,259,829
2,630,584
Administrative expenses
(1,780,451)
(1,761,215)
Operating profit
4
1,479,378
869,369
Interest receivable and similar income
7
31,839
10,467
Interest payable and similar expenses
8
(26,129)
(47,008)
Profit before taxation
1,485,088
832,828
Tax on profit
9
(328,232)
(183,037)
Profit for the financial year
1,156,856
649,791

The profit and loss account has been prepared on the basis that all operations are continuing operations.

BOTT AND CO SOLICITORS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
as restated
£
£
Profit for the year
1,156,856
649,791
Other comprehensive income
-
-
Total comprehensive income for the year
1,156,856
649,791
BOTT AND CO SOLICITORS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
12
100,694
174,107
Current assets
Debtors
13
4,833,571
5,458,103
Cash at bank and in hand
1,286,851
2,944,000
6,120,422
8,402,103
Creditors: amounts falling due within one year
14
(1,605,104)
(3,406,019)
Net current assets
4,515,318
4,996,084
Total assets less current liabilities
4,616,012
5,170,191
Creditors: amounts falling due after more than one year
15
-
0
(1,708,333)
Provisions for liabilities
Deferred tax liability
16
2,990
-
0
(2,990)
-
Net assets
4,613,022
3,461,858
Capital and reserves
Called up share capital
18
1,300
992
Capital redemption reserve
8
8
Profit and loss reserves
4,611,714
3,460,858
Total equity
4,613,022
3,461,858
The financial statements were approved by the board of directors and authorised for issue on 7 March 2024 and are signed on its behalf by:
G R Froggatt
Director
Company Registration No. 8615712
BOTT AND CO SOLICITORS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
992
8
2,811,067
2,812,067
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
649,791
649,791
Balance at 31 December 2022
992
8
3,460,858
3,461,858
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,156,856
1,156,856
Issue of share capital
18
308
-
-
308
Dividends
10
-
-
(6,000)
(6,000)
Balance at 31 December 2023
1,300
8
4,611,714
4,613,022
BOTT AND CO SOLICITORS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
21
845,165
(1,513,090)
Interest paid
(26,129)
(47,008)
Income taxes paid
(281,706)
(2,748)
Net cash inflow/(outflow) from operating activities
537,330
(1,562,846)
Investing activities
Purchase of tangible fixed assets
(12,285)
(184,301)
Interest received
31,839
10,467
Net cash generated from/(used in) investing activities
19,554
(173,834)
Financing activities
Proceeds from issue of shares
300
-
0
Repayment of bank loans
(2,208,333)
(291,667)
Dividends paid
(6,000)
-
0
Net cash used in financing activities
(2,214,033)
(291,667)
Net decrease in cash and cash equivalents
(1,657,149)
(2,028,347)
Cash and cash equivalents at beginning of year
2,944,000
4,972,347
Cash and cash equivalents at end of year
1,286,851
2,944,000
BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Bott and Co Solicitors Limited is a private company limited by shares incorporated in England and Wales. The registered office is St Anns House, Parsonage Green, Wilmslow, Cheshire, United Kingdom, SK9 1HG.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

In carrying out their assessment in respect of going concern, the directors have carried out a review of the company's financial position and cash flow forecast for a period of twelve months from the date of approval of these financial statements. The forecasts have been based on a comprehensive review of revenue, expenditure and cash flows, taking into account specific business risks and the uncertainties brought about by the current economic environment.

1.3
Turnover

The company charges its clients on a conditional (no win-no fee) basis. Revenue from the provision of these legal services is recognised once this condition has been met, usually upon liability admission, at which point an estimate of the fee earned to date is calculated.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of purchase price compared with the fair value of net assets acquired is capitalised and written off evenly over 5 years as in the opinion of the directors this represents the period over which the goodwill is effective. Goodwill is reviewed for impairment at the end of the first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

1.5
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:

Leasehold land and buildings
20-25% Straight line
Office equipment
10% / 33% Straight line
Computer equipment
33% Straight line

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.

BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of fixed assets

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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Cash and cash equivalents

Cash and cash equivalents 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.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Other financial assets

Other financial assets, including trade investments, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publically traded and whose fair values cannot be measured reliably are measured at cost less impairment.

 

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables' are measured at amortised cost using the effective interest method, less an impairment.

 

Interest is recognised by applying the effective interest rate, except for short term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.10
Taxation

The tax expense represents the sum of the tax expense and deferred tax expenses. Current assets are recognised when tax paid exceeds the tax payable.

 

Current and deferred tax is charged or credited to the profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income or equity.

Current tax

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously.

 

Current tax is based on taxable profit for the year. Taxable profit differs from total comprehensive income because it excludes items of income or expense that are taxable or deductible in other periods. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted b the reporting period.

Deferred tax

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 based on tax rates that have been enacted or substantively enacted by reporting date. Deferred tax is not discounted.

 

Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.

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.

1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Accrued revenue

The value of accrued revenue is derived on the basis of estimates and assumptions regarding the fair value of unbilled time recorded to matters at the year end.

 

The valuation process draws upon historical data on average fees received, average lifecycle of cases, average recovery rates and stages of lifecycle of cases ongoing at the year end for each service line.

Bad debt provision

The application of the bad debt provision to unpaid bills and disbursements involves an element of judgement in assessing the amount of the provision.

 

The provision process involves using historical data to calculate average failure rates for each particular case type before applying these rates to disbursements outstanding at the year end.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Fees receivable
9,328,409
9,555,117
2023
2022
£
£
Other revenue
Interest income
31,839
10,467
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
13,250
12,750
Depreciation of owned tangible fixed assets
85,698
167,387
Operating lease charges
186,869
179,012
BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Fee-earners
28
29
Managers
16
17
Administrative staff
70
81
Total
114
127

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,556,249
4,168,487
Social security costs
364,790
473,214
Pension costs
143,391
163,575
4,064,430
4,805,276
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
36,000
100,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
31,839
10,467
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
31,839
10,467
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
26,129
47,008
BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
315,621
94,206
Deferred tax
Origination and reversal of timing differences
12,611
88,831
Total tax charge
328,232
183,037

The corporation tax rate to 31 March 2023 was 19%. This increased to 25% as of 1 April 2023

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
1,485,088
832,828
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
349,293
158,237
Tax effect of expenses that are not deductible in determining taxable profit
1,781
2,695
Permanent capital allowances in excess of depreciation
15,541
(15,670)
Research and development tax credit
-
0
(8,034)
Other non-reversing timing differences
(26,708)
(62,641)
Deferred tax (credit)/charge
12,611
88,831
Tax effect of prior period adjustment
(24,286)
19,619
Taxation charge for the year
328,232
183,037
10
Dividends
2023
2022
£
£
Interim paid
6,000
-
0
BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
900,000
Amortisation and impairment
At 1 January 2023 and 31 December 2023
900,000
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
-
0
12
Tangible fixed assets
Leasehold land and buildings
Office equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2023
312,761
156,349
473,000
942,110
Additions
-
0
1,664
10,621
12,285
At 31 December 2023
312,761
158,013
483,621
954,395
Depreciation and impairment
At 1 January 2023
309,705
144,798
313,500
768,003
Depreciation charged in the year
3,056
9,824
72,818
85,698
At 31 December 2023
312,761
154,622
386,318
853,701
Carrying amount
At 31 December 2023
-
0
3,391
97,303
100,694
At 31 December 2022
3,056
11,551
159,500
174,107
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Unpaid share capital
8
-
0
Other debtors
4,546,586
4,776,033
Prepayments and accrued income
286,977
672,449
4,833,571
5,448,482
BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Debtors
(Continued)
- 20 -
2023
2022
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 16)
-
0
9,621
Total debtors
4,833,571
5,458,103
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
-
0
500,000
Trade creditors
59,765
129,629
Corporation tax
128,121
94,206
Other taxation and social security
430,390
394,494
Other creditors
442,727
1,712,619
Accruals and deferred income
544,101
575,071
1,605,104
3,406,019
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
-
0
1,708,333
16
Deferred taxation
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
8,480
-
-
(24,258)
Short term timing difference
(5,490)
-
-
33,879
2,990
-
-
9,621
2023
Movements in the year:
£
Asset at 1 January 2023
(9,621)
Charge to profit or loss
12,611
Liability at 31 December 2023
2,990
BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Deferred taxation
(Continued)
- 21 -

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
143,391
163,575

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and not fully paid
Ordinary shares of £1 each
900
900
900
900
A Ordinary shares of £1 each
400
92
400
92
1,300
992
1,300
992

The Ordinary shares rank pari passu on voting, dividend and other distribution rights.

 

The A Ordinary shares are non-redeemable, carry no voting rights and rank pari passu on a distribution of capital or otherwise and on a declaration of a dividend.

 

On 12 January 2023 the company allotted 308 £1 A Ordinary shares (8 were unpaid at the year end).

19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
91,500
91,500
Between two and five years
145,318
236,818
236,818
328,318
BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
20
Directors' transactions

Dividends totalling £6,000 (2022: £Nil) were paid in the year in respect of shares held by the company's directors.

Included within other creditors are amounts of £147,576 (2022: £570,786), £147,576 (2022: £570,786) and £147,576 (2022: £570,786) due to D Bott, G Froggatt and P Hinchliffe respectively, directors of the company.

21
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
1,156,856
649,791
Adjustments for:
Taxation charged
328,232
183,037
Finance costs
26,129
47,008
Investment income
(31,839)
(10,467)
Depreciation and impairment of tangible fixed assets
85,698
167,387
Movements in working capital:
Decrease/(increase) in debtors
614,919
(547,326)
Decrease in creditors
(1,334,830)
(2,002,520)
Cash generated from/(absorbed by) operations
845,165
(1,513,090)
22
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
2,944,000
(1,657,149)
1,286,851
Borrowings excluding overdrafts
(2,208,333)
2,208,333
-
735,667
551,184
1,286,851
23
Prior period adjustment

The restatement relates to an overstated other debtors balance in the prior period.

BOTT AND CO SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Prior period adjustment
(Continued)
- 23 -
Reconciliation of changes in equity
1 January
31 December
2022
2022
£
£
Adjustments to prior year
Profit and loss
-
(103,256)
Equity as previously reported
2,812,067
3,565,114
Equity as adjusted
2,812,067
3,461,858
Analysis of the effect upon equity
Profit and loss reserves
-
(103,256)
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Administrative expenses
(103,256)
Profit as previously reported
753,047
Profit as adjusted
649,791
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