Monthly Archives: February 2016

Pre-Tax Year End – Things To Think About

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The tax year end is almost upon us, so the PM+M tax and wealth management teams have put together some useful tax, pension and investment tips for individuals.  Some of them are things you should be thinking about before 6 April some, such as pension contributions, need consideration before the Budget on 16 March.

Click on the buttons below to read through the help sheet and should you have any questions, please give us a call.

TAX PLANNING 1

TAX PLANNING 2

As regards the Budget on 16 March, we will be setting out a summary of the Chancellor’s announcements on our website.  We are also holding two free seminars on Thursday 17 March to explain the key points – breakfast in Blackburn and lunchtime in Burnley.  They are free to attend.  To book your place, please email seminars@pmm.co.uk 

Jane Parry – Managing Partner & Head of Tax

PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.

Funding – A Changing Landscape

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Many of us are aware that the funding landscape is changing. There are a now a wide number of funding options and providers. However, the landscape related article below demonstrates the propensity to raise funds even when the personal financial return is non-existent.

Click to read the full article

The people who have contributed to the crowdfunding platform will probably see no financial return on their investment, but the required funds were raised in a very short time. So what does this tell us about raising finance in the current economic climate?

Firstly, there are clearly funds available for investment. Secondly, the return on investment does not necessarily have to be in financial terms. The simplicity in being able to directly raise funds from a variety of investors, means that any proposition can be put forward, even buying a beach!

Crowdfunding continues to grow in popularity and opportunities like the one above will only add to this. Raising this level of funding for an opportunity that will deliver no obvious financial return to the investors means that those crazy projects with the potential to be profitable should not be dismissed. It may not be possible to raise funds through traditional routes for many opportunities but crowdfunding may provide the initial investment that is required.

Traditional funding options such as the banks and private equity funds will continue to have a large part to play in the finance requirements of businesses and individuals. However, when the opportunity is a bit too quirky or lacking the level of return required by commercial institutions, then why not think out of the box. It can’t do you any harm and it may mean that you end up with a small part of your very own private beach somewhere!

Tim Mills – Corporate Finance Partner

Pensions – Good News And Bad News

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Over the last few years the Chancellor George Osborne has created a pension revolution that has been welcomed with open arms.  He has introduced freedoms that allow pensions to be accessed easily or passed down the generations free of inheritance tax. Higher and additional rate taxpayers continue to receive tax relief on contributions at 40% and 45%.

So what next? From April 2016 new regulations will be introduced restricting the amount high earners can pay into pensions to £10,000. And there is speculation that George is looking to further restrict the current tax relief system by introducing a flat rate of tax relief, possibly 25%, rather than the current system of claiming tax relief at the marginal rate.

We don’t know what the Chancellor will say on Budget Day but the advice is clear. Higher rate taxpayers planning on making pension contributions should do so before 16th March to make sure they maximise their tax reliefs and planning opportunities. And if cash flow is an issue, think about switching some ISAs or speaking to your friendly bank manager – it’s too good an opportunity to miss.

For help planning your retirement contact Tony Brierley (tony.brierley@pmm.co.uk), Antony Keen (antony.keen@pmm.co.uk) or Richard Hesketh (richard.hesketh@pmm.co.uk) for further information.

PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.

It’s manufacturing, but not as we know it!

3D Widget Printing

I have written blogs and articles before on the advance of 3D printing and what it could mean for manufacturing in all kinds of sectors. The new Airbus A350 XWB (unveiled last year) has about 1,000 3D printed components. 3D printing is clearly no longer a novelty manufacturing process and it has the potential to transform the aerospace industry supply chain and cost structure, producing lighter parts faster with less waste. Currently, the components are mostly widgets and brackets, small routine parts rather than large structures. The size of the part is limited by the size of the printer so it is difficult to imagine a machine large enough to make an airframe, but wider applications seem to be a distinct short term possibility.

But clock the latest advances. Scientists in the US have been using 3D printing to create living body parts with sections of bone, muscle and cartilage all functioning normally when implanted into animals. Move over Dr Frankenstein!!

Seriously though, this technology has the potential to disrupt many industries and there is significant funding being made available in the sector. Rosebud Finance and the North West Fund have recently invested additional money in an East Lancashire business to finance its rapid growth. It seems the possibilities are only limited by the boundaries of imagination.

If you are thinking of investing in new technologies and need pointing in the direction of funding, then give one of the Corporate Finance team a call on 01254 679131 and ask to speak to Jim Akrill or Tim Mills or contact me directly at jim.akrill@pmm.co.uk.

Jim Akrill – Corporate Finance Partner

What Is Your Strategy For Clinical Negligence Services?

shutterstock_219074173It has been confirmed that the introduction of fixed recoverable costs in clinical negligence cases is still planned for 1 October 2016.  Whilst research shows that it has been more difficult for those on lower incomes to pursue claims, it is evident that there has been an increase from those on middle incomes.

There has been and will be much debate on this subject. My concern lies with how and indeed whether law firms are considering their strategy for delivering these legal services.

We have already seen a great shift in firms delivering personal injury legal services; downsizing, doors closing, focusing on other services, selling off books of WIP and of course those with deep pockets being able to purchase books of WIP and firms in their entirety.

If the limit comes in at £100,000 as planned, what does this mean for your caseload?  What percentage of your firm’s clinical negligence matters are below this threshold?  Do you actually hold this data?  For many, it could be as high as 80%, if not more. What does this mean for funding, staffing, space requirements to name just a few considerations?

Where we have seen PI firms succeed is where there is process and control with strong infrastructure.  Does your firm have this? If not, what is the plan?  Do you have working capital to throw at building the infrastructure in what is now a short timescale or are you prepared to take on additional external borrowing, if available, or inject additional partner capital? Cash is the answer here (as ever) if you want to succeed in the new world.

Success will also be built on readily available data on matters. The IT you have in place should be adequate to give you this information so that you can make quick strategic decisions. Economies of scale are going to produce the financial results you need for your firm to flourish and deliver the type of service you want to your clients.

Is now the time to get out of delivering clinical negligence services before the market is potentially swamped with firms trying to offload work that is draining their resources? Or are you ready to be a consolidator?

Yet again, we are about to watch significant change unfold in the profession and I wait with bated breath to see how firms react in the next few weeks – assuming they are proactive and not reactive.

Helen Clayton – Head of Corporate Services

Management Buy Outs – Are You Ready To Own The Business?

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I have advised on a wide variety of management buy outs.  They are without doubt an excellent opportunity for the current business owners to achieve an exit without the potential headaches of selling to an external buyer, whilst allowing a management team to become the owners of a business which they have helped to develop and grow. However, being part of an MBO team requires a certain mind set if it is to be a success.

The transition from employee to business owner is for many a leap that is taken with little hesitation, but for some it can prove difficult to make the necessary adjustments. There are a different set of pressures that come with owning a business to those of being an employee and for some, these can prove to be overwhelming.

It is essential to develop and support the management team prior to the buy-out process commencing. This can be provided by the vendors or external advisers and should provide the team with the fundamental skills they need to become successful owners, whilst giving comfort to the vendors that the management team include the right people who are ready for this new responsibility.

Being a business owner can bring great challenges but it can also provide great rewards. So when the possibility of an MBO arises, do not shy away or dismiss it, just take time consider all of the implications. Discussing the opportunity with third parties who have been involved in MBOs will ensure that both the management team and the vendors are prepared for what lies ahead.

Tim Mills – Corporate Finance Partner 

PM+M Update Landlords On Impending Tax Changes

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Jane Parry, PM+M Managing Partner, introducing Jonathan Cunningham

Attracting almost 30 buy-to-let landlords and rental property owners, PM+M’s latest Buy-To-Let Seminar was a roaring success. Lead by Jonathan Cunningham, PM+M buy-to-let tax specialist, the team guided attendees through the impending tax changes.

Changes to finance charge offsets, capital gains tax and stamp duty land tax were discussed, using worked examples to help landlords understand the figures and see first-hand how the changes could increase their tax bill. Discussions on how to best hold property ensued, with Jonathan discussing both the benefits and drawbacks of incorporating and transferring property over to a company.

If you are a buy-to-let landlord and were unable to make the seminar, the seminar content is available in our resource centre. Please click on the button below to access the content. We will be running an additional events following the Spring Budget. Updates and forthcoming events are regularly added to our website and promoted on our Twitter and LinkedIn feeds.

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Event feedback

Sorrell Holland of Physiofusion Limited: “Really good content and well explained. Thank you”

Mark Hadfield of Saving-You.com: “Very informative and very helpful”

Rebecca Purtill of Farnworth Rose: “Very useful and understandable seminar”

Stephen Greenwood of Farley’s Solicitors: “Excellent Presentation. Jonathan did a really good job making all the tax changes for buy-to-let investors clear.”

Investing In Uncertain Times – Six Strategies To Help You Sleep At Night

shutterstock_210031072We’ve had a rocky start to the year on the investment front. Following a lacklustre 2015 markets are volatile. Concerns abound from the fall in the oil price to uncertainties over China’s growth rate and the level of public debt. Add to this the political dimension with the US election and a referendum on Britain’s membership of the EU and we have a potent mix.

So what should the investor do? We don’t possess a crystal ball but do believe that the positive economic outlook existing at the beginning of the year hasn’t changed. Markets simply reflect the prevailing sentiment and what we do need is a regular shot of optimism.

Here are 6 strategies to adopt for the next few months.

1. Hold sufficient cash – Work out how much you need for your immediate and foreseeable needs and keep that emergency fund on one side – whatever rate the bank or building society is offering.

2. Remember investing is for the long term – We don’t know when the next fall in the markets will occur or how quickly they will recover again.  We believe Warren Buffett has it right. Pick investments you believe will perform well in the long term and hold them.

3. Make sure your asset allocation is right – We still think that equities will outperform bonds but the current situation perhaps calls for some caution. So hold less risk assets in early 2016 than in 2015.

4. Increase the cash holding within your portfolio a little – This ties in with strategy 3. Returns on cash are still very poor but they will protect you in the event of a fall in riskier assets. Volatile markets create opportunity so holding more cash than normal now may give you the ability to purchase other investments at a low point during the year.

5. Invest in assets that provide an income -  The capital value of your asset is not important in the short term if you are investing for the long haul but at least you can see an income stream. Many equity income funds have stood investors in good stead over the recent past. Commercial property also looks more attractive than in recent years and provides a rental yield.

6. Phase your new investments – Setting out a regular investment programme means that you will buy additional assets at varying prices during the year. If you happen to buy when markets are down you get more for your money! It’s known as £ cost averaging and can significantly improve your overall return.

Our team at PM+M Wealth Management are here to help you achieve your long term financial goals and provide peace of mind. Contact Tony Brierley (tony.brierley@pmm.co.uk), Antony Keen (antony.keen@pmm.co.uk) or Richard Hesketh (richard.hesketh@pmm.co.uk) for further information.

PM+M Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority.

Company Audit Thresholds Increase!

shutterstock_239428402We have known for some time now that any UK company with a year end on or after 31 December 2016 will be able to apply new size limits when preparing their accounts.

This week the government has decided that the statutory audit threshold will increase in line with the new limits. The new limits are set out below. In order to remain exempt from an audit, companies must stay below two out of the three limits for two consecutive years.

This means from next year approximately 7,000 more businesses will be exempt from the requirement to have a statutory audit. The government estimates that, out of these, 5,000 will potentially continue with having an audit for a number of reasons.

Reasons to continue with a voluntary audit include the fact that it gives comfort over the accounts to business owners as well as outside shareholders, banks and lenders, customers, suppliers and potentially prospective buyers of the company.

The new limits are:

  • Turnover: not greater than £10.2m (previously £6.4m)
  • Balance sheet total: £5.1m (increased from £3.26m)
  • Number of employees remains the same at 50

There is also an option to early adopt these for accounts presentation purposes, but that does not change the audit limits currently in place.

If your business will be affected by these changes or you are unsure, please call Chris Johnson (Corporate Services Director) on 01254 679131 to discuss the options available to you.

Dave The Dog

IMG_1704I have a dog, Dave. He has been part of the family since last summer when my wife and two sons convinced me that having a dog would be a good idea. Now, we have discovered that Dave likes a challenge, trying to escape from an increasingly more secure back garden. He does not give up just because we have increased the height of the fencing or reinforced the ground; he spends his time searching for potential weak spots we may have missed. Watching him carefully inspect the new perimeter in the garden made me think of the determination he has in trying to escape.

This ‘never give up’ attitude is also a key characteristic of many business owners. They all have a driving ambition to achieve certain goals and set new ones when these have been fulfilled. The issue many business owners have is setting the goals as part of an overall strategy. Individual owners often have nobody they can discuss matters with and even where there is a team discussing and agreeing strategy can be low on the ‘to do list’.

However, talking with team members or external parties is a key part of being able to bring individual plans, ideas and thoughts together in a strategy.  I would advise that spending time on business strategy is time well spent. You will find that most people are willing to listen and share their thoughts and advice, even if it is just providing feedback on your ‘crazy plans’.

I am currently advising a number of businesses that have long term goals but are unsure how to achieve them. The owners have engaged me to be part of regular meetings to map out the strategy for their businesses. This has proven to be very beneficial as it gives them fixed diary dates that are dedicated to focusing on developing opportunities that move them along the path of their long term plans.

You see if Dave could talk and asked me how to get out of the garden I could tell him that learning to climb a few feet up a tree would lead him to freedom. However, dogs can’t talk but business owners have no such excuse.

Tim Mills – Corporate Finance Partner