Monthly Archives: July 2016

Engaging The Team

shutterstock_361191518I was recently at a social event with one of my clients when they asked me a question which was quite unusual.

They asked “How have you managed to get everyone on board with the firm’s values? I meet lots of people and they always have the same positive things to say about PM+M!”

This got me thinking as it wasn’t the usual question about audit, tax or profit improvement that I am used to receiving from clients.

It all stems back to the partners doing an exercise to identify the firms shared values, then broadening out to the team with feedback and input from the whole PM+M team. That helped us to identify and understand our culture and the focus really began on strengthening that culture.

This then fed into making sure we stay true to the culture by driving it forward, making decisions in accordance with it and by recruiting people who we think will fit into it.

The whole firm comes together annually and are asked to split up into groups, with each group being asked to think about how they feel to work at PM+M and what they would change. From this feedback it helps the firm to re-align the culture to what we originally set out to achieve.

We have always encouraged an open culture, where everyone has a say in the business. Engaging teams so that they can celebrate and enjoy our success has meant we have a group of people who all have fun being here; a team who are enthusiastic and are proud of what they are achieving for their careers and can play a part in shaping the future of the firm.

Communication is clearly very important in all our jobs and making sure we are great at this internally as well as externally makes a significant difference. An environment where people share stories of how they have learned something different or dealt with something new has developed individuals to be commercially minded business advisers, rather than just number crunchers.

Having a team who are engaged in the business builds confidence in the leadership. We know that anyone from the team can meet a client and provide a quality and personable service.

So, even though it was an unusual question I had no hesitation in answering it and I am confident everyone else here at PM+M wouldn’t either.

I read a quote recently which sums up the above:

“If you talk, you only repeat what you already know. If you listen, you may learn something new.”

I would encourage any business owner, if practical, to take your team offsite and actually listen to what they want from you. If you can align this with your business goals, you will develop a loyal and high performing team.

Chris Johnson – Corporate Services Partner

Legal Update

shutterstock_299616494There have been, and continue to be, a significant number of factors impacting the legal profession.  Whilst not all factors will have an impact on every firm a number will, and will do so at any one time, making the running of a law firm to be a continuous challenge.  Even for the growing and historically profitable firms, current and future regulatory changes, for example, could turn the good old days into more of a concern.

Partner and board meeting agendas should be focusing on these challenges, deciding on the actions, with responsibilities and timescales assigned.  If a law firm does not currently operate in a corporate vehicle, it does not necessarily need to incorporate but the partners need to start treating it as a corporate entity; it is a business after all.

With such significant change and more on the horizon, is the legal profession in unprecedented times?  Is it really the case that never before has there been so many stakeholders in a law firm?  I would argue not; however I do agree that stakeholders’ priorities and areas of focus may have changed.

Partners
Remuneration, partnership politics and succession are emotionally charged.  Every firm must have a partnership or shareholder agreement that is reviewed on a regular basis.

Clients
Clients have a strong influence on the growth and profitability of a firm, not to mention its cash flow.  Fee pressures and service demands continue to reduce margins.  A firm’s focus on who does what type of work is critical to ensuring a quality but efficient service. Technology should play a significant part in achieving this.  Further, quality not only applies to the legal advice given but the management of the case too.

Funders
Funders are wiser to the profession and the number of lines of lending that there can be into any one firm.

Funders want to understand the firm’s strategy, business model, financial forecasts, markets and succession plans to name but a few to assess the financial viability of providing funds. Whether the debt is serviceable is a key question together with is it core debt or a true working capital and therefore a fluctuating requirement.

Insurers
The insurers are key stakeholders in any type of personal injury firm, whether acting for defendants or claimants.  The SRA, another key stakeholder of course, is currently undertaking a review to assess the impact of recent legislation on the profession.

Insurers will be stakeholders in all firms due to the requirement to have professional indemnity insurance.  Current consultations to bring PI policies into line with the Insurance Act will raise the standard of disclosures being made to insurers; improper declarations are a breach of the Code of Conduct.

Solicitors Regulation Authority (SRA)
As the profession’s current regulator, the SRA continues to evolve in his practices, focus and areas of attention.  Regular access of the SRA website provides insight into these areas and provides guidance on managing risk – a significant consideration to all stakeholders.

Competitors
Understanding competitors’ ambitions is key in challenging a law firm’s own strategy to ensure that it can continue to differentiate itself, whether in services or markets, client or geography.  Fee pressures can drive down the market rate of fees being charged; being proactive in this area will secure clients providing the quality of service matches the initial proactivity.

Transactional activity continues to take place in the profession, which changes the competitive landscape.  Firms converting to an Alternative Business Structure is likely to be a result of the firm seeking to differentiate itself.

Employees
Retention of talent in a declining market is difficult in being able to satisfy their demands; retention in a growing market, which the legal profession continues to be, is also difficult where firms are able to make snap decisions, where cash flow allows, to recruit the talent for the present and the future success of a firm.

In conclusion, whilst this list is by no means exhaustive, a law firm’s strategy cannot ignore a stakeholder group.  It is not the case that the partners are the only stakeholders.  Law firm succession should be on all partner meeting agendas; every stakeholder will have an impact.

Helen Clayton – Head of Corporate Services

State Pensions Update

shutterstock_151661894The Department for Work and Pensions (DWP) is writing to over 100,000 people with bad news about their state pension.

The single-tier state pension was introduced in April 2016, but the way in which it was announced has drawn criticism. The lack of publicity surrounding the flat pension of £155 has prompted the House of Commons Work and Pensions Select Committee to state in a recent report that government communications were “contributing to confusion about the new system.”

The DWP has now announced that it will be sending letters to over 100,000 people telling them that they will not qualify for any state pension at all. This loss is the result of a change to the qualifying requirements for a state pension.

Under the previous system, an individual only had to have had one year’s National Insurance contributions/ credits to accrue a small entitlement to a state pension. Under the new single-tier system, there is no entitlement until ten years’ contributions/credits have been clocked up.

Pension legislation is continually evolving and very rarely does it lead to an upgrading of benefits. For example, if you were a member of a final salary pension scheme between 1978/79 and 1987/88 you could also be on the losing side because under old rules your guaranteed minimum pension (GMP) would have been inflation-proofed by the state, but this is no longer the case.

These two examples are a reminder of the importance of obtaining projection of your pension benefits and reviewing whether your current provision is likely to meet your retirement needs. You may wish to seek expert advice to avoid potentially costly pitfalls.

If you have any questions or worries about your pension, please get in touch with our wealth management team on 01254 679131 or email wealthmanagement@pmm.co.uk.

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

The Tax Implications Of Brexit

shutterstock_122108053Setting aside the initial shock of the Brexit vote and the ensuing political instability, which shows no sign of settling down any time soon, one key area for businesses and individuals as we progress towards our exit from the EU is understanding what the tax implications will be.

There has been talk of an emergency Budget as a change in leadership could entail a new Chancellor, who will have their own idea of what needs to be done in the wake of Brexit, but this is unlikely to happen until the Autumn. George Osborne has already highlighted corporation tax cuts down to 15% as a possible carrot to incentivise international firms to do business in the UK. The Autumn Statement this year may be an even more important event than usual.

One immediate impact may lie with the long-awaited ‘Making Tax Digital’ discussions, which have experienced practical difficulties and may well be put on hold until a new Cabinet is appointed. The current Finance Bill is already running behind schedule and in the current political climate it could mean that the Finance Act, due to be passed in October, may be delayed.

In the longer term, the changes could be wide ranging. At present, UK companies benefit from the ability to pay and receive dividends, royalties and interest tax efficiently between companies in different EU countries. It remains to be seen whether participation in this will be possible post Brexit. This plus the possible imposition of trade tariffs may have significant consequences for the UK’s attractiveness as a base for inward investment as a footstep into European markets.

The tax which could change most significantly is VAT. VAT is an EU wide tax governed by EU law. Post Brexit, the UK will have the flexibility to amend and develop its own VAT law, without the current EU constraints, which could be positive. On the downside, the current cross EU reporting and refund mechanisms may no longer be accessible, potentially creating more of a compliance burden for UK companies trading in Europe.

At present it is too early to start to plan with any certainty. It’s going to be a case of watch this space as events unfold over the next few months.

If you would like advice or are concerned about any aspects of your affairs, don’t hesitate to get in touch with our expert tax team on 01254 679131.

Networking, Not Not Working!

PM+M Business Professionals (on 2 wheels)

Tuesday, 5 July, saw the inaugural PM+M Business Professionals (on 2 wheels) bike ride round the Ribble Valley. Setting off from The Green Jersey in Clitheroe, six riders, representing law firms, accountants, wealth managers, banks, telecoms providers and more set out through Bashall Eaves, Cow Ark, Chipping, Longridge, Stonyhurst, Mitton and back to Clitheroe. The ride was then uploaded (obviously) and followed by a coffee and a recording of the final 5km of the day’s Tour de France stage. Responsible riding saw the riders two-abreast and changing ride-partners regularly in order that everyone had a chance to talk to each other. Subjects throughout the day included Brexit, mergers and acquisitions, employment law, the bike retail industry, currency volatility, investments and portfolio building, advances in telecommunications technology and cycling fashion (or lack of).

The ride was a resounding success and without doubt question professional connections were made or built upon. There is a clear appetite to repeat the exercise and to include those riders who sadly couldn’t make the debut ride, as well as further invitees.

The last word must go to one of our merry band, who uploaded the ride to Strava under the title ‘Networking, Not Not Working!

If you’re interested in attending the next PM+M Business Professionals (on 2 wheels) event, please get in touch with either Neil Welsh at neil.welsh@pmm.co.uk or Tony Brierley at tony.brierley@pmm.co.uk.

PM+M Wealth Management Ltd is authorised and regulated by the financial conduct authority.

Tax Planning The Do’s And Don’ts – What Can You Do To Minimise Your Tax Legitimately?

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Whilst tax is necessary to  keep the country running, everyone wants to make sure that they don’t pay too much.

The question is what is sensible tax planning to make sure that we are paying only the right amount and where does that end and unacceptable tax avoidance begin?

You may be wondering where to start and it can be difficult to identify what is a legitimate way of reducing the amount you pay without incurring the wrath of the tax authorities.

Our simple tax planning guide takes you through various areas of tax planning advice for both you and your business in a clear and easy to understand way.

As every situation is different, this guide is exactly that – a guide.  It should give you a good idea of what is possible and appropriate for you.  Then, if having read it you decide you want to do some planning, please speak to us so we can make sure it will work for you in the best way.

Our team will be delighted to help. They can be reached on 01254 679131 or at tax@pmm.co.uk.

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