Monthly Archives: December 2013

Diane Eatough – Retirement

Diane-EatoughAfter more than 23 years with PM+M, Diane Eatough retires this month.

Diane joined PM+M in 1990 and has spent many years looking after our agricultural, small business and trust and estate clients.

It doesn’t sound as if she is going to be taking things easy in retirement though, as we understand that, as well as having lots of plans to spend time with her grandchildren, she already has commitments to make various bridesmaid dresses and table decorations.  Given that she asked for a top of the range food mixer for her retirement present, we are also hoping that she might be dropping by with some lovely baked goodies.

Anyone who is currently a client of Diane’s should have been introduced to the person stepping into her shoes as regards their financial affairs.  If that hasn’t happened to you and you’re not sure who to speak to, just give us a call.

We hope you will join us in wishing Diane all the very best for a long and happy retirement.

Autumn Statement 2013 – Detailed Summary

The 2013 Autumn Statement was more of an economic statement than its predecessors. In part this was because, for once, the Chancellor was able to say that his spring Budget forecasts had been too pessimistic.

Politics was also an important factor in the statement, with the next election now just 18 months (and two Budgets) away. Overall, the Chancellor’s actions will not alter the government’s tax take, although achieving that balance requires over £1.5bn to be raised in 2014/15 from the proposed new measures against avoidance, fraud, error and debt.

PM+M have produced a detailed summary of George Osborne’s Autumn Statement which can be found here.

Autumn Statement 2013 – Key Points

Earlier today the Chancellor delivered the 2013 Autumn Statement here’s a summary of what we think were Mr Osborne’s most important points.

In terms of measures to help business, the Chancellor:

  • confirmed that he will continue with his plan to reduce the main rate of corporation tax to 20% by 2015
  • business rate increases to be capped at 2% in 2014
  • extended the doubling of the Small Business Rates Relief scheme to April 2015
  • provided business rates discounts of £1,000 per annum for two years for small retail businesses and introduced a temporary reoccupation relief for empty retail premises
  • didn’t say anything about the £250,000 Annual Investment Allowance which is due to end on 31 December 2014
  • froze fuel duties for the remainder of this parliament
  • introduced an exemption from employers’ NIC for young people aged under 21 and announced a reform of apprenticeship funding
  • brought in the previously heralded incentives to encourage the sale of businesses to genuine employee share ownership structures and allow tax free bonus payments from such entities of up to £3,600 per annum
  • announced that, following consultation over the summer into the way that loans to participators from close companies are taxed, he does not intend to make any immediate changes in this area.
  • introduced anti avoidance legislation with immediate effect to counter the tax benefits of having corporate members of partnerships and LLP’s
  • introduced some specific measures to counter certain contrived tax avoidance arrangements

 As regards personal tax:

  • the £10,000 personal allowance comes into effect in April 2014 as planned
  • married couples will be able to tarnsfer £1,000 of their personal allowance from April 2015, but only if neither is a higher rate tax payer
  • the state pension age is set to increase to 68 from the mid 2030’s and then 69 from the late 2040’s
  • the planned reduction in pension contribution annual limits from £50,000 to £40,000 and the lifetime limit reduction to £1.25m will take effect in April 2014 as planned
  • introduced a UK capital gains tax charge on the sale of UK residential property by non residents with effect from April 2015, in respect of increases in value after that date
  • tinkered with Principal Private Residence relief to reduce the exempt final period of ownership from 3 years to 18 months, thus slightly reducing the tax benefits from flipping residences
  • introduced a new Class 3A voluntary NIC contribution for pensioners wishing to top up their state pension entitlement
  • there were no changes to capital gains tax entrepreneurs’ relief or to inheritance tax
  • the introduction of the new Universal credit system will continue as planned

Other measures:

  • the proposed trust simplification measures that have been consulted on over the summer will be introduced in part in 2015, but further consultation is to take place on certain aspects
  • the heralded amendments to the Community Amateur Sports Club rules will take effect from April 2014

Jane Parry, Tax Partner.

Dont fall into the GAAP!

You may or may not have heard about the biggest change in accounting standards for over 20 years.

From 1 January 2015 UK Generally Accepted Accounting Principles (GAAP) will be changed to adopt three new Financial Reporting Standards, of which FRS 102 will be the most important.

The changes are mandatory for accounting periods beginning on or after 1 January 2015 and will impact all medium-sized and large companies.

Whilst 2015 remains a distance away, the changes mean that companies will need to reinstate their balance sheets as early as January 2014, so early as January 1st 2014, so early consideration of the changes is vital.

The impact of the required changes could be:

  • The accounting treatment of certain items will alter, such as goodwill and deferred tax, leading to posssible reductions in distributable reserves potentially affecting companies’ abilities to declare dividends.
  • Valuations of goodwill could dramatically diminish as potential reductions in useful estimates are probable.  Changes such as these could lead to a decline in reported profits. 
  • Alterations to certain accounting treatments could lead to a drop in reported operating profits and potentially net assets, adversely impacting covenant calculations.
  • Re-valued assets which currently do not incur any deferred taxation, will be treated differently and aditional liabilities recognised.

Pension schemes, subsidiary companies and charities could also be affected.  We recommend that you speak to us now to determine how these changes will affect you; the earlier you start preparing for these changes the better equipped you will be.

We can guide you through this transition step-by-step to ensure your business is fully prepared for the impending challenges.

Chris Johnson, Corporate Services Team.