In accordance with Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, the directors present the strategic report for the year ended 30 December 2023.
AMS Accountants Group Limited (the “Group”), has a strategy to become the best advisory firm to the Mid-Market within the UK, offering clients a comprehensive suite of professional services.
Within the year, the Group’s primary focus was to build a platform for sustainable organic and inorganic growth and the Group recruited several senior hires into the executive management team to support the growth journey.
Financial Performance
Market-leading Organic Growth
During the year ended 30 December 2023, the Group continued its growth journey with strong organic growth. Reported Turnover for the Group was £9.4m, versus £6.9m in the prior year. This significant growth was largely organic, with a year-on-year organic growth rate of 24%. The underlying growth was substantially higher, but due to the timing differences of engagements and hires, the majority of this growth was achieved in 2024.
The revenue and operating profits detailed in the accounts do not provide a consolidated picture representative of the entire business, by virtue of the minority interests in AMS Accountants Corporate Limited, Signature Tax Limited and MSA Law Limited, A corporate restructure of the wider Group is in progress and will be completed in due course to have a unified Group, trading under one brand.
Strong Margins
The Group has continued to maintain a strong gross profit margin, with an increase from 49% in FY22 to 58% in FY23. This margin efficiency has been achieved through successful integration and centralisation of the prior year acquisitions and several strategic initiatives throughout the group to maximise organic revenue generation off the existing fee earner cost-base. The Group has a target gross profit margin of 55% for future years.
M&A platform
The Group also invested in an M&A team to help originate and integrate the strategic acquisitions from the previous years. The Group made an additional strategic acquisition by acquiring Path Business Recovery Limited, a firm that specialises in Corporate Insolvency and Restructuring in addition to bringing on partner-level lateral hires from leading Insolvency practices to bolster future growth. In addition, the Group established a strong pipeline of M&A which was subsequently transacted on within 2024 (see details below).
Centralised services
The Group has strategically invested in the central services function and infrastructure throughout the year ended 30 December 2023, to provide the necessary platform for its ambitious future growth strategy ahead of the growth curve. As such, administrative expenses have increased by 95% year on year, with the increased margin efficiency realised, fully re-invested back into the Group. This investment has continued into FY24, with the cost-base supporting the wider Group (including associations, not reflected in these results), and expected to normalise by 30th December 2025, based on organic and inorganic growth achieved in FY24 and throughout FY25.
Accolades
The growth and development of the group was recognised in the achievement of ranking 65th place (up from 71st in the prior year) in the Accountancy Age 50+50 rankings, the fastest growing independent (non PE backed) full-service accountancy firm in the UK top 100.
The quality of the Group Turnover and Gross Contribution has been maintained based on low client churn on recurring and reoccurring fees (resulting from a high client satisfaction index) and the addition of higher-margin advisory services to the suite of services offered by the Group. This strong performance is underpinned by the clear investment thesis and the underlying operational model which monitors the Group’s value proposition against a number of key performance indicators (KPI’s), including:
Revenue and Contribution per Fee Earner and per Director/Partner
Extending the value proposition to clients with the addition of multiple service lines across our advisory divisions based on the demands of the clients from the Group
Efficient WIP Conversion for the lifecycle of the engagement through to cash, whilst maintaining the appropriate pricing and margin on engagements
Client Risk management through advanced selection procedures and client profiling.
Client satisfaction, undertaking detailed reviews after all engagements to maintain the Client Retention Levels
Staff Satisfaction, providing an excellent feedback structure and undertaking regular employee satisfaction surveys to become the employer of choice within the Mid-Market and to limit employee churn
The business constantly monitors its performance on KPIs against its peers in the accounting and advisory market as well as setting market-leading targets. The Group consistently scores in the top quartile.
Following on from the platform built in the year ended 30th December 2023, the Group has grown substantially in 2024. This has been achieved through market-leading organic growth, and an acceleration of the acquisitions (as the Group had the managerial bandwidth from the senior hires in 2023). The Group has also been able to build additional service lines, in line with the demands of the Group’s clients.
Most notably, the Group has completed the following acquisitions and established new Revenue streams within the year ended 30 December 2024:
Acquir-hire of Elect Capital Allowances Limited, a Capital Allowances and Quantity surveying firm, acquired on 26th March 2024, which allowed the Group to bolster it’s existing Tax Incentives & Reliefs service offering and retain the capital allowances work within the Group
Establishing AMS Debt Advisory Limited from 1st June 2024, a new service line for the Group with the recruitment of a senior lateral hire, to provide more advanced debt financing for the Group’s clients
Acquisition of Chadwick & Company (Manchester) Limited, a leading audit and accounting firm within the Greater Manchester Area, acquired on 5th July 2024. This acquisition allowed the Group to increase its audit and accounting capacity and also gain more market share within the Manchester region. As Chadwick’s was pre-dominantly a recurring accounting and audit business, there is substantial scope to cross-sell additional advisory services from the Group into the established client-base
Receiving FCA authorisation for AMS IB Limited, to establish a full-service insurance brokerage service offered to AMS clients from 1st October 2024 with the recruitment of a new Insurance team
Establishing AMS VAT Advisory, a VAT and Customs Advisory business that was established on 1st May 2024 with the recruitment of a new VAT team
Acquir-hire of Cranedale Tax Limited, a private client tax specialist acquired on 14th October 2024, expanding our private client and corporate tax service offering nationally
Acquir-hire of Harrison Salmon Associated Limited, an accountancy provider in Lancashire. The trade and assets were acquired on 28th January 2025, but the deal was substantially completed in 2024
In addition to the above, there is a strong pipeline of further acquisitions, three of which have signed heads of terms, expected to complete in Q2 FY25.
Up to 30 December 2023, the growth of the Group has been funded through working capital and by the shareholders. However, the significant acquisitions throughout the period post 30 December 2023 have been mostly funded through external borrowing by obtaining an acquisition facility from OakNorth Bank plc on 5th July 2024. This Debt facility also included an RCF, to support the Group’s organic growth, especially for lateral hires and acquir-hires.
To provide the appropriate platform to fuel the growth, the Group has continued to invest heavily in the central services function, through strategic senior hires and infrastructure improvements. This includes further investment in the Group’s business development team, as well as the recruitment of several growth partners into the business.
Furthermore, the Group Manchester HQ relocated to a new dedicated flagship building in the heart of Spinningfields (1 Hardman Street). The lease was signed on 5th July 2024, and will be the main hub for the North. Additional city centre offices were opened in Leeds, Birmingham and London acting as hubs for their respective regions.
David Clegg was appointed as Chief Revenue Officer to focus on organic growth and client relations. Ebrahim Sidat was appointed as Chief Operating Officer for the business. There were several advisory board members appointed in the year, and for governance, a Remuneration Committee as well as a Risk Committee was established within the year.
Approved by the Board of Directors and is signed on their behalf by D Clegg:
The directors present their annual report and financial statements for the year ended 30 December 2023.
The results for the year are set out on page 11.
Ordinary dividends were paid amounting to £180,000 to the shareholders of the group. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
The group is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. The group uses interest rate derivatives to manage the mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The auditor, Xeinadin Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of AMS Accountants Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for 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 group's and parent 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations we have considered the following:
The nature of the industry and sector, control environment and business performance including the company's remuneration policies and performance targets.
Results of the enquiries of management about their own identification and assessment of the risks of irregularities;
Any matters we have identified having obtained and reviewed the company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of income and the recoverability of other debtors made up of related party balances. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
obtaining the financial statements of the related parties that form the other debtors balance to ensure there are sufficient reserves to settle any outstanding debts;
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business; and
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,638,813 (2022 - £1,055,205 profit).
AMS Accountants Group Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 9 Portland Street, Floor 2, Manchester.
The group consists of AMS Accountants Group Ltd and all of its subsidiaries.
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.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company AMS Accountants Group Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities other than subsidiary undertakings, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in associates are carried in the group balance sheet at cost less any impairment in value. The carrying values of investments in associates include acquired goodwill.
If the group’s share of losses in a associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
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 trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include debtors 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. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, 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 publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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 payments 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.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
Subsidiary undertakings exempt from audit
Under Section 479a of the Companies Act 2006 available to subsidiary undertakings, the company provides a guarantee in respect of the below subsidiary undertakings claiming exemption from audit.
AMS Accountants (Mcr) Ltd (CRN: 09021051)
AMS Accountants Medical Ltd (CRN: 07662746)
AMS Accountants Central Limited (CRN: 09081291)
Signature Tax Innovations Limited (CRN: 10600176)
Clear Blue Water Limited (CRN: 08798971)
Signature Tax Investigations Limited (CRN:13437585)
The Independent Tax and Forensic Services LLP (CRN: OC381244)
AMS Accountants CF Midco Ltd (CRN: 14385439)
AMS Accountants CF Topco Ltd (CRN: 14404358)
Signature Corporate Finance Limited (CRN: 11898889)
AMS Accountants Midco Ltd (CRN: 13767244)
AMS Insolvency Midco Ltd (CRN: 14417941)
Path Business Recovery Ltd (CRN: 10149403)
Negative goodwill
Negative goodwill represents the excess of the cost of acquisition of a business under 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. Negative goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, negative 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.
In the application of the group’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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The useful economic life of intangible fixed assets has to be estimated by the directors to ensure an appropriate amortisation charge is recognised in the year. The value of assets ultimately depends on whether economic benefit can be derived from the asset. The directors undertake a periodic review of the assets to ensure the value of the assets is fairly stated within the financial statements.
The useful economic life of tangible fixed assets has to be estimated by the directors to ensure an appropriate depreciation charge is recognised in the year. The value of assets ultimately depends on the condition of the asset and whether economic benefit can be derived from the asset. The directors undertake a periodic review of the assets to ensure the value of the assets is fairly stated within the financial statements.
For the year ended 30 December 2023, the Group's revenue is disaggregated by class as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The directors did not receive remuneration in the form of salary during the current or previous period.
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:
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
Details of the company's subsidiaries at 30 December 2023 are as follows:
The investments in subsidiaries are all stated at cost.
On 13th September 2023, the Group acquired 67% of the issued share capital of Path Business Recovery Limited, a company specialising in insolvency and business recovery services. Path Business Recovery Limited helps businesses and individuals navigate financial difficulties through solutions such as voluntary liquidation, administration, and bankruptcy. The consideration for the acquisition was £60, with additional acquisition costs amounting to £10,000.
The fair value of the identifiable assets and liabilities of Path Business Recovery Limited at the acquisition date were as follows:
- Total Assets: £197,452
- Total Liabilities: £138,800
The acquisition resulted in negative goodwill of £48,592.
Details of associates at 30 December 2023 are as follows:
Investments in associates accounted for in accordance with the equity method, the group's share of the profit or loss is seperately disclosed.
Bank overdrafts and CBILS loan are secured by a fixed and floating charge over assets.
Other loans are secured by a fixed and floating charge over group assets.
Bounce back bank loans are unsecured, capital repayment with a fixed interest rate of 2.5% per annum repayable by May 2026.
CBILS bank loan is capital repayment with a floating interest rate of 3.19% over Bank of England Base rate. The loan is repayable by December 2026.
Other loans are capital repayment with a fixed interest rate of 3% per annum repayable by April 2030.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 2 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Retained earnings represent accumulated comprehensive income for the current year and prior years less dividends paid.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Following the reporting date, the Group has completed several acquisitions to enhance its strategic position and operational capabilities:
- Elect Capital Allowances Limited was acquired on 26th March 2024
- Cranedale Tax Limited was acquired on 14th October 2024
- Chadwick & Company (Manchester) Limited was acquired by AMS Accountants Corporate Limited (associate) on 5th July 2024
- Trade and assets of Harrison Salmon Associated Limited was acquired by AMS Accountants Corporate Limited (associate) on 28th January 2025
These acquisitions are expected to contribute positively to Group's growth and expansion strategy.
On 5th July 2024, the Group successfully refinanced its existing debt facilities. The new arrangement includes a Revolving Credit Facility (RCF), which is designed to support the Group's organic growth. This refinancing is expected to improve Group's liquidity and financial stability.
The refinancing arrangement was completed after the balance sheet date and therefore has not been reflected in the financial statements as at 30 December 2023. However, the directors believe that this event will have a positive impact on the Group's future financial performance and position.
The remuneration of key management personnel is as follows.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
The group has taken advantage of the exemptions under FRS 102 for related party transactions from disclosing transactions with other members of the group included within the consolidated financial statements.
Dividends totalling £180,000 (2022 - £180,000) were paid in the year in respect of shares held by the company's directors.
At the year end, a balance of £1,322,783 (2022: £1,067,699) was due to the directors.
The above balance is interest free with £322,783 repayable on demand. £1,000,000 (2022: £800,000) of the above balance is repayable after one year.
The financial statements for the year ended 31 December 2022 included accrued income that was identified post submission of the financial statements to be irrecoverable.
As a result, the comparative for accrued income asset has decreased by £375,632 and associated corporation tax liability has decreased by £71,370 at 31 December 2022.
The impact of this prior year adjustment decreased reserves by £304,262.
The financial statements of an associated undertaking for the year ended 31 December 2022 included income that was identified post submission of the financial statements to be irrecoverable.
As a result, the comparative for share of profits from associated undertakings has decreased by £145,850 at 31 December 2022.
The impact of this prior year adjustment decreased reserves by £145,850.
Administrative expenditure incurred in prior years has been re- profiled as cost of sales. There has not been a change in profit or equity as a result of these changes.