Making Tax Digital (MTD) Update

shutterstock_508146895Following the spring budget, the chancellor has announced that MTD for unincorporated businesses and landlords with an annual turnover between £10,000 and £85,000 will now take effect from April 2019 as opposed to the original implementation date of April 2018. This delay will no doubt be a welcome postponement for smaller businesses.

Unincorporated businesses and landlords who have turnover exceeding £85,000 will need to submit quarterly returns digitally to HM Revenue & Customs from April 2018. There is no change to the scheduled start date of April 2020 for limited companies.

If you have any questions on how MTD will affect you, please do not hesitate to contact one of our dedicated MTD team.

Andrew Cowking - New Website
Andrew Cowking
Partner
Email: andrew.cowking@pmm.co.uk 
Telephone: 01254 679131

Julie Walsh - New website
Julie Walsh 
Tax Manager
Email: julie.walsh@pmm.co.uk
Telephone: 01254 679131

Jill Morris - New Website
Jill Morris
Run My Business Director
Email: jill.morris@pmm.co.uk 
Telephone: 01254 679131

Lucy O Gorman - New wesbite
Lucy O’Gorman
Run My Business Manager
Email: lucy.ogorman@pmm.co.uk
Telephone: 01254 679131

 

 

 

 

 

The Chancellor makes a U-turn on National Insurance Tax Rise

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Plans to increase National Insurance (NI) levels for self-employed people announced in the Budget last week have been dropped.

A pledge to not increase NI was made in a manifesto back in 2015. The Chancellor broke that pledge last week during the Budget but, after the announcements last week, Philip Hammond has had a change of heart by announcing “There will be no increases in…rates in this Parliament.”

What does this mean?

This is great news in the short term but this almost certainly won’t be the end of the story.

This leaves a rather curious situation entering the build up to the Autumn Budget. There’s obviously no way of predicting what the Chancellor will have in store for us, but the Treasury may be facing a new problem – the increase in NI rate was due to raise over £2bn by 2022. We can expect some changes in the Autumn as it was heavily briefed that the rise in NI was a way to pay for social care and business rate support spending commitments.

It’s worth noting that there’s no backtrack on dividend allowance reduction.

On your marks, get set, LEGO!

Last week was a busy one at PM+M! On top of the Spring Budget (you can find our commentary here), the team attended the UK Praxity Conference in Coventry, the Red Rose Awards and took part in a regional event as part of National Apprenticeship Week. Kath Rigbye (HR + Talent Manager), Neil Welsh (Financial Adviser) and Faye Hughes (Marketing + Business Development Manager) upped sticks and headed to Darwen Aldridge Community Academy for the day to take part in the HIVE Skills Showcase.

Over 800 pupils from across Blackburn with Darwen attended the showcase to meet businesses who are committed to helping young people secure a bright future. During the showcase, the PM+M team engaged with students and gave them an insight on what they can expect from a career in financial services. The team also gave a sneak preview of some of the tasks they would be expected to take part in as part of our apprenticeship assessment day. It wasn’t just the students that got involved, however. Neil and Faye’s competitive sides came out – and they weren’t happy being beaten by pupils from QEGS!


The event marked the launch of our annual School Leaver Programme which offers 4 apprenticeships to school leavers aged 16-18. All our vacancies are now live on the PM+M website. Applications must be submitted by Friday 24th March and successful candidates will be invited to attend our assessment day on Thursday 20th April.

“My apprenticeship has been very interactive. I have learnt to use multiple skill sets in my daily tasks and work alongside a range of motivating and inspiring colleagues. PM+M is an uplifting work environment that has allowed me to harness new skills and engage with the wider workforce as part of my training role. I feel more responsible and my understanding of the finance industry has improved massively. I am lucky to have stepped foot into an exciting career path in a bright and integrated team.” – Bahiya Hussain (Wealth Management Apprentice studying for the CII Certificate in Financial Services)

SCHOOL LEAVER BUTTON

Spring Budget 2017 – What’s New?

Spring Budget 2017

The chancellor’s opening statement about productivity still being too low, families feeling squeezed, the need to make Britain ready for its ‘global future’ outside the EU and having an economy that ‘works for everyone’ was all pretty standard stuff which no-one would really disagree with or be surprised by. That tone ran through a Budget that was clearly designed to reassure the markets as we approach the triggering of Article 50.

The announced changes in the tax regime were all expected including the upcoming changes in Corporation Tax. His comments on Business Rates gave clarity but it wasn’t a surprise that they won’t be abolished. However, his unveiling of three measures to help those affected (no business losing small business rate relief will see its bill increase next year by more than £50 a month; 90% of local pubs will have a £1,000 discount on their business rates bill; and a £300m fund for local councils to offer discretionary relief for hard-hit cases will be launched) is good news.

There was also an emphasis on tax avoidance with various steps being introduced including tackling the abuse of foreign pension schemes; the introduction of VAT on roaming telecoms services; and the implementation of new financial penalties for professionals who enable a tax avoidance arrangement that is later defeated by HMRC.

In a bid to lessen the attractiveness of incorporation for self employed people, he also confirmed that he will reduce the tax-free dividend allowance for all shareholders from £5,000 to £2,000 with effect from April 2018.  This will affect all investors, not just those who own their own companies.  I expect that this is not the last we will see of such measures, with a report considering the wider implications of different working practices due in the summer.  There is also consultation launched today on the tax treatment of various employee benefits and expenses.

A very welcome piece of news for smaller self employed businesses is the deferral of the Making Tax Digital requirement for online submission of quarterly accounting information by a year from 2018 to 2019 for those businesses with a turnover below the VAT threshold.  Larger sole traders and partnerships will still need to get to grips with the new system in April 2018 and will need to start planning now, but the smallest businesses and landlords now have a year’s grace.

There was good news for the science and innovation sectors with some of the £23bn of investment he announced in the Autumn being allocated. This included £300m for research talent; £16m for a 5G mobile technology hub; and £200m for fibre broadband. We don’t know how the North West will directly benefit but it’s got to be welcomed.  The £90m of extra transport infrastructure funding for the North also sounds like good news.

We work with many manufacturing businesses who I know will welcome the introduction of T-Levels as there is a consensus that young people often lack the skills that are needed in the workplace.  Those manufacturing businesses will also be heartened to hear of the reduction of the administrative burden surrounding R&D tax credits announced today.

In summary, this Budget was a bit of a non-event. There were no real surprises or shocks, which was to be expected, as the government will not want to rock the Brexit boat.  However, we might see some significant change in the way that employed and self employed people are taxed over the next few years, stemming from some of the consultations and reports launched today.

BUDGET BUTTON

Tax Year End Planning For Individuals

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The tax year end is fast approaching, so the PM+M tax team have put together some useful tips for individuals who need some guidance with their tax planning.

Tax planning can be complicated but the PM+M team are here to help. To download our individual tax planning helpsheet, click on the button below. Should you have any questions, please do not hesitate to call a member of the tax or wealth management teams on 01254 679131.

HELPSHEET

Are you aware of the new statements required under the Modern Slavery Act 2015?

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Having received the regular newsletter from HRC Law, it occurred to me that I wasn’t aware of this new requirement and wondered whether our clients and friends of PM+M were also unaware. As finance professionals, your PM+M team cannot advise you on the law but we should raise the issue and build awareness.

Jane Wilkinson, a solicitor at HRC advised that if your organisation supplies goods or services and carries on (part of) a business in the UK it will have to publish an annual slavery and human trafficking statement (the Statement) for each financial year ending on or after 31 March 2016, if its global turnover exceeds the £36 million threshold.  This threshold includes the turnover of subsidiary undertakings too, so it’s not as huge a number as it first sounds.

The Statement must disclose what steps the organisation has taken to ensure that human trafficking is not taking place in any of its supply chains or its business; or state that it has taken no such steps (with the latter approach being a potential PR disaster!).  Home Office Guidance outlines what should be included in the Statement and HRC Law can provide further support and guidance.

Even if you’re below the turnover threshold, it’s probable that (some of) your customers and suppliers will be caught by the requirement to produce and publish a Statement.  As you will form part of their supply chain, they’ll be looking to you for assurances about your practices, procedures and supply chains.  Thinking about this and preparing accordingly could help you to outshine your competitors and stay ahead of the game.

So, from PM+M’s point of view, this isn’t a case of this won’t ever impact our clients – it very well could and it very likely already is.

Helen Clayton – Corporate Services Partner 

PM+M Shortlisted for Red Rose Award – Employer of the Year

Yesterday, Jane Parry (Managing Partner) and Helen Clayton (Head of Corporate Services) headed to Blackburn Rovers Football Club to fly the flag for PM+M at the Red Rose Awards interviews. PM+M will be vying for the Employer of the Year award and even being shortlisted is a huge achievement.

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During the interview, Jane and Helen talked with the panel about how PM+M has evolved over recent years and how the firm truly believes in bringing out the best in its people.  Our values underpin everything that we do and we believe in investing in people throughout their careers. Quality, Achievement and Fun relate to all interactions at PM+M, whether that be with clients, team or members of the wider community. Winning the award would be an honour, given the calibre of businesses shortlisted this year. But whether we win or not, the team will continue to ensure that PM+M is a fantastic place to work, achieve and grow.

Speaking about life at PM+M, Neil Welsh (PM+M’s newest financial adviser) said: “Having joined PM+M almost a year ago I can endorse fully the values which see them nominated for a Red Rose Award. Not only have I been made to feel very welcome, the culture and dynamic within the team is both energising and liberating. More recently, following the loss of my father (and the resultant absence that was required to deal with hospital/hospice visiting, funeral and other family commitments) the support given across the breadth of the firm gave me strength at a very difficult time. The genuine and heartfelt words of comfort and reassurance from the partners downwards that the team were there to help reduced some of the mental and emotional strain. Moreover, upon my return to work the actions within the team of helping me prioritise, taking work off me and getting me back to operational speed is testament to a great team of people and firm.”

Now we just have to wait until March 9 to find out if we’ve won. Watch this space!

If you’d like to know more about life and PM+M, or would like to check out our latest vacancies, visit www.pmm.co.uk/careers.

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Looking forward to ATED

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If you own residential property in a company and its worth more than £500,000, then you may need to comply with the Annual Tax on Enveloped Dwellings (ATED) rules.

The rules require an annual tax return to be submitted by 30 April covering the forthcoming year.  The ATED charge for the forthcoming year must also be paid on that date.

Who needs to file an ATED return?

ATED returns must be filed and an ATED charge paid every year by non-natural owners of residential properties located in the UK, where the property is worth more than £500,000, and one of the reliefs or exemptions has not been claimed for the property.

A non-natural person can be defined as one of the following:

-       Any company wherever it is registered;
-       A partnership where one or more of the partners is a company;
-       A collective investment scheme.

There are exemptions from the charge, for example for properties which are commercially let, but there is still a requirement to submit the annual ATED return and claim the exemption, even if you have nothing to pay.

The rates

The new rates have recently been revealed for the chargeable year beginning 1 April 2017. The charge for the period will need to be paid by 30 April 2017.

Property value £ 2016/17 £ 2017/18 £
500,001 – 1,000,000 3,500 3,500
1,000,001 – 2,000,000 7,000 7,050
2,000,001 – 5,000,000 23,350 23,550
5,000,001 – 10,000,000 54,450 54,950
10,000,001 – 20,000,000 109,050 110,100
Over 20,000,000 218,200 220,350

The valuation band is determined by the properties’ market value as at 1 April 2012. If the owner acquired the property since that date, the value to use is the open market value at the date of acquisition.

If the property falls within 10% of a valuation band, the owner can apply to HMRC for a pre-return banding check. These checks can take at least 30 days to process, so it is best to apply as soon as possible.

For more information on ATED or if you’re worried about the above rates, please get in touch with our tax team by emailing tax@pmm.co.uk or by calling 01254 679131.

 

Salary Sacrifice Changes From April 2017

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New rules are coming in on 6 April 2017 for certain benefits in kind where they are provided by salary sacrifice.

If you provide benefits to your employees in exchange for salary sacrifice or have a flexible benefits package where your employee can choose a benefit or cash, or where you provide benefits but offer your employee a cash alternative then you need to know about these changes.

Benefits impacted are those which are currently taxable, like cars and white goods, and those currently tax exempt, like mobile phones and workplace parking.

You don’t need to do anything if your employees are only sacrificing salary for:

  • Pensions or pensions advice,
  • childcare vouchers,
  • workplace nurseries,
  • directly employer contracted childcare,
  • cycle to work or
  • ultra-low emission company cars (emissions of or under 75 g CO2 / km).

The new rules start on 6 April 2017. Salary sacrifice contracts entered on or before 5 April 2017 will be protected up until the contract hits a trigger point. From 6 April 2017, the normal trigger point is when the salary sacrifice contract renews, auto-renews, starts, ends or is modified or changed. At this point you must use the new rules. This should align with your normal contractual arrangements.

If an employee starts a contract on or after 6 April 2017, then you will need to immediately use the new rules for that employee. This will apply to any new recruits who adopt the arrangements.

For a better understanding of what is changing and what you need to do next, please click the button below to view our help sheet.

HELPSHEET

PM+M Helps East Lancs Box Co. Limited Secure Six Figure Lancashire Growth Fund Grant

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L-R: Andrew Cowking (PM+M), David Ingham, Peter Ingham, Amy Ingham & Neil Harrison

Andrew Cowking and the PM+M team have helped East Lancashire Box Co. secure a £120,000 grant from the Lancashire Growth Fund which will see the creation of 12 new jobs.

East Lancashire Box Co. was established in 1981 and is headquartered in Rishton near Blackburn. It manufactures bespoke cardboard box packaging and products. It offers a complete service, from initial concepts to the final product and handles all elements of design, print and production. The company’s product range is visible on the shelves of all the major supermarkets both within the UK and overseas.

The grant will be used to purchase new equipment including a state-of-the-art printer and a die cutter. The aim is to create a colour printing facility under one roof in 16,000 sq ft of new production space at the Junction 7 Business Park in Clayton-Le-Moors with the capacity to meet current and expected demand. The 12 new jobs will include apprenticeship and production positions.

Andrew Cowking – partner at PM+M – handled the forecasts for the grant application whilst Neil Harrison of The Harrison Partnership coordinated all elements of the grant application process, which was completed in just over 3 weeks from starting the application to the making of the offer.

Peter Ingham – director of East Lancashire Box Co. – said: This is a significant investment for the company and is an exciting milestone in our history. The grant will help to support our growth plans and will ensure that we are able to develop our offering and provide a bespoke service to all our customers – from small businesses to multinationals.

Andrew Cowking added: “East Lancashire Box Co. is a forward thinking family-owned business and one of the region’s most entrepreneurial companies. We were delighted to help them secure the grant and we look forward to seeing how it aids their expansion over the coming years.”