Author Archives: pmm-blog

Introducing new Xero Expenses

Expense claims are a part of running any business, from fuel to office supplies and everything in between. However, a what should be simple task of reimbursing employees can quickly turn into a laborious, paper work nightmare.

Well, not anymore. Recently Xero launched their new Xero Expenses to tackle several issues within Xero. The new function will run along aside the existing and gives accountants, bookkeepers and small businesses all the tools needed to process expense claim simply and efficiently.

What’s new?

  • Faster expense capture – Reduces the need to keep paper receipts, a quick picture taken on a smart phone can be automatically scanned in.
  • Push notifications – To keep businesses, employees and advisors up to date with claims from anywhere.
  • More flexible user permissions –  Giving complete control of who can view, submit, and approve an expense claim for or on behalf of someone else.
  • Simple and intuitive workflows – Making it easy to monitor, review and approve any unpaid expenses.
  • Greater insights and powerful analytics – Helping businesses to understand their spending habits and patterns with a detailed and real-time understanding.

If you have been using classic expense claims in the six months prior 10 July 2018, you can continue using it for the foreseeable future. However, you’ll also be able to try out Xero Expenses for free until 28 September 2018.

For any further information, help or advice with Xero, please do not hesitate to contact us on 01254 679131 or email cloudaccounting@pmm.co.uk.

House of Fraser: The same old story

The owner of Sports Direct has agreed to buy House of Fraser for £90 million when not so many years ago it was acquired by a Chinese group for about £480 million. We all know that retail is a challenging place to be right now, but there are parallels to be drawn with other industries. How is value created and maintained?

Four key conclusions are being put forward in the financial press.

The internet

If you don’t evolve, you get left behind. House of Fraser was investing in digital technology but at a fraction of the rate of and later than its main competitors. It isn’t a lot different in a manufacturing environment. If you don’t invest in new plant and equipment that works more quickly or to greater precision, you risk losing customers who will seek out a better solution.

No USP

What was House of Fraser all about? Lots of swallowed up defunct brands and stores dominated by third party concession owners. No reason to say, “I have to visit House of Fraser because…..”. What is your business known for? Where is it world class and what is holding it back?

Too many stores

It’s all very well investing in expansion, but those assets do need to be sweated to generate a healthy return. They need to be utilised optimally. There is no point having a factory full of state of the art assets if half of them are only working at a fraction of their potential.

Management troubles

Usually the root cause of everything…

The question is, what has a high-profile retail failure got to do with the owner-managed business around the corner? The answer: the same things drive value.

Invest appropriately. This doesn’t mean being at the bleeding edge, but you can’t keep relying on assets 20 years out of date.

Understand what your customers want, what you are good at and how that can create lasting value. What needs to be changed?

Make sure you are efficient. Efficient businesses make more money which puts them at an advantage over inefficient ones.

Invest in your management team so they are running things on a day to day basis. This leaves you much more space for working on the business and not in it.

If you are considering the value of your business, get in touch today on 01254 679131 or via email at jim.akrill@pmm.co.uk. We can help you understand where you are now, where you want to be, and how you can get there.

Contractor loan schemes – HMRC offers settlement opportunity

 

 

Have you ever used a contractor loan scheme or alternative arrangement to be paid more tax efficiently than your salary?

If you have then you are probably now in receipt of correspondence from HMRC, offering you the chance to pay the tax and national insurance that you should have paid on the loans you have received.

This could be a substantial amount, however, the main thing we are telling people is not to panic – there are things you can do.

If you have a loan outstanding and you have the funds to repay it, then we advise that you do so before March 2019. You will still have to notify HMRC of the arrangement but the tax charge that arises on that date will not apply.

If you cannot repay the loan, then you need to understand what your potential exposure to tax and National Insurance will be. We can help you with that and arrange for a settlement contract to be agreed with HMRC.

Once the formalities are concluded, you can arrange to pay the amount you owe over a longer period of time and, depending on your circumstances, this could be five years or more.

So, if you think you may be affected by this and need some help to settle the matter, please get in touch with Julie Walsh (julie.walsh@pmm.co.uk or 01254 604312) as soon as possible.

Inheritance tax hits record high

Inheritance tax planning is something that many of us don’t want to think about. Facing your own mortality isn’t easy and can involve some difficult decisions, particularly in complex and extended families.

Recent statistics released by the government have revealed that over the last financial year, inheritance tax receipts reached their highest-ever level (totalling £5.2bn in 2017/18), a value that has increased by a staggering 8% (£388m) since the 2016/17 financial year.

There can be significant benefits from doing some basic tax planning at the right time, providing reassurance that your affairs are in order and your family aren’t going to face a huge tax bill. We always tell our clients to keep it simple. There are some elaborate schemes out there, but they usually bring lots of complexity and can reduce future flexibility. More often than not, some sensible advance planning can achieve substantial benefits without the complexity.

The right tax planning can help you steer clear of large inheritance tax bills and make sure that you avoid adding to this tax take, allowing you to achieve more from your money and secure your family’s future. The key to inheritance tax efficiency is to think about it early and be open with your family. Having conversations now can avoid problems later and pave the way for some effective tax planning.

To find out more about how we can help you plan efficiently to reduce future tax liabilities, please feel free to contact either Jane Parry (jane.parry@pmm.co.uk) or Wendy Anderson (wendy.anderson@pmm.co.uk).

Full article and latest statistics available here

HMRC cracks down on second home sales

 

 

 

 

 

 

HMRC is writing to over 1,500 people who have sold a second home or buy-to-let property in the 2015-16 tax year but not declared a profit on which capital gains tax would potentially be liable. The letters, of which the wording is still being finalised, will ask recipients to explain why they have not paid the tax that HMRC’s computer models indicate they owe.

Chas Roy-Chowdhury of the ACCA said the HMRC initiative should serve as a “wake-up call” to existing and former landlords or owners of second homes, some of whom may not realise they owe tax.

If you believe this is something that may affect you, disclosing your knowledge before HMRC contact you to charge a penalty fee will be in your favour.

We can help you make a full disclosure to HMRC and guide you through the process to settlement and negotiation of the penalty.

If you would like to discuss this further, please contact  Julie Walsh on 01254 679131 or via email at julie.walsh@pmm.co.uk.

Is your business ready for Making Tax Digital?

Making Tax Digital (‘MTD’) for VAT is the first phase in what is intended to make the UK tax system more streamlined and will bring about major changes to affected businesses.

As part of the new legislation, businesses that are VAT registered and trading over the VAT registration limit on 1 April 2019 will be required to keep their accounting records digitally and submit their VAT return to HMRC through MTD compatible software. This means businesses will no longer be able to submit manually through the HMRC gateway.

It is vital that all affected businesses are aware of their obligations relating to these changes and the processes which need to be put in place to make them compliant.

We are urging all UK business owners to consider their options now to ensure that they are compliant in time for the deadline of 1 April 2019. PM+M have already helped numerous clients prepare for MTD and will continue to support businesses as they start the process to comply with HMRC’s new rules.

We would be more than happy to answer any questions you have about MTD and advise you on the best route to take for your business. Please feel free to:

  • Read our helpsheet
     
  • Attend one of our FREE Making Tax Digital seminars to find out more about the implications of MTD:

Tuesday 4 September
PM+M, Greenbank Technology Park, Challenge Way, Blackburn, BB1 5QB (register your place here)

Tuesday 11 September
East Lancashire Chamber of Commerce, Red Rose Court, Clayton Business Park, Accrington, Lancashire, BB5 5JR (register your place here)

  • Call into one of our FREE MTD drop-ins – with no appointment necessary, call into our offices from 9am – 5pm on one of the below dates for a free consultation with a specialist MTD consultant who will talk you through your next steps and provide guidance on which software to use and how / when to implement this into your business:

Wednesday 18 July
PM+M, Greenbank Technology Park, Challenge Way, Blackburn, BB1 5QB (register your place here)

Thursday 9 August
PM+M, 9A Finsley Gate, Burnley, BB11 2HA (register your place here)

Friday 17 August
PM+M, Waterfold House, Waterfold Business Park, Bury, BL9 7BR (register your place here)

  • Get in touch with us for a consultation on how to prepare for MTD, which will be followed by software set up and training – we would welcome the opportunity to sit down with you to discuss your options in more details. Once you have chosen your preferred cloud software package, we will then provide you with setup assistance, alongside ongoing support whenever you need it. We will also train you and your team on the best ways to use whichever system you have decided to use.

For any further information, help or advice with your Making Tax Digital requirements, please do not hesitate to contact us on 01254 679131 or email MTD@pmm.co.uk

Neil Welsh wins Business Enabler of the Year

We are pleased to announce that on Thursday 21 June 2018, Neil Welsh (Financial Adviser at PM+M Wealth Management) was awarded Business Enabler of the Year at the Downtown in Business Lancashire Business Awards 2018.

The 10th annual awards ceremony was held at Stanley House Hotel & Spa, and celebrated the achievements of the county’s leading business professionals in their respective roles and industries.

Winning the award for Business Enabler of the Year is an incredible achievement for Neil and recognises his commitment to business development at PM+M, alongside facilitating introductory conversations between his clients, contacts and extended network of professionals.

Regular activities co-ordinated by Neil in relation to business enablement are regular table hosting at various Business Network lunch events, and his monthly PM+M Two-Wheeled Professionals Cycle-Networking group.

Following receipt of his award, Neil commented: “I would like to say a huge thank you to all those who voted for me, alongside the many friends, colleagues, contacts and connections who have offered their kind words and congratulations.

“The timing of my win is helpful. My role within PM+M is evolving and whilst I still have client-facing and client-servicing function, I also now have an increased business development remit. What better way to validate this aspect of what I do than by being recognised for it at the start of the journey.”

Frank McKenna, CEO of Downtown in Business commented: “The Lancashire Business Awards are always a great night, and this year was no exception. We had an exceptional group of winners, which was fitting as the awards were being hosted for the tenth year, and I believe the 2018 nominations demonstrated the strength and resilience of the country’s business community.”

Informative and Entertaining – who would have thought you’d hear that when talking pensions?

On 6 June 2018, over 40 delegates gathered at Turf Moor, not to greet the imminent arrival of European Football at Burnley FC for the first time in 55 years, but for the arrival of Sir Steve Webb, former Minister for Pensions and now Director of Policy for Royal London, to listen to him deliver a highly anticipated ‘Tour of the Pensions Landscape’ as guest speaker at our wealth management seminar.

It is probably fair to say that pensions aren’t known for being exciting, but that view was quickly dismissed by the passionate and witty discussion of Steve. Having spent 18 years as an MP, Steve’s public-speaking abilities are second to none and his presentation at Turf Moor yesterday certainly didn’t disappoint. Steering away from the standard PowerPoint presentation, Steve took a freshly-upholstered chair from Burnley FC’s newly refurbished Chairman’s Lounge, literally turned it upside down and used the four legs as the four pillars of his discussion, giving insight into state pensions, workplace pensions, pension freedoms and the tax treatment of pensions, describing the latter as the broken leg of the chair.

Discussion and debate took place around the merits of making voluntary national insurance payments for those unlikely to receive a full state pension and increasing workplace pension contributions to ensure employees can afford to retire. When he got to explanations around pension freedoms and tax there were notes aplenty being taken, interspersed by fits of laughter as Steve ensured there was never a dull moment – it was a masterclass of content and delivery.

Should you wish to discuss your own pension and retirement issues, please don’t hesitate to get in touch with a member of our team. PM+M wealth management works collaboratively with our tax team and can navigate you from the beginning to the end of your pension journey, considering everything from investment choice to tax-relief, and Lifetime Allowance to Tapered Annual Allowance and estate planning. Our specialists can help you to plan, understand your options and ultimately help you achieve more from whatever route you take. For a confidential, no obligation discussion, please contact us 01254 679131 or via email at wealthmanagement@pmm.co.uk.

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

What’s in a number?

Our corporate finance Partner, Jim, takes a look at valuation differences across the market, and what these mean for owner-managed businesses.

I am often asked my opinion on what a business might be worth, so it always pays to be up to date with the latest deal data for me to justify the multiple I am using in a valuation. The latest private company price index tells me that the mean EV/EBITDA (Enterprise Value to Earnings before Tax, Interest, Depreciation and Amortisation) multiple paid by trade buyers during the first quarter of 2018 was 10.3 times, a multiple which hasn’t varied much for the last two years.

However, this is an average figure and we have no idea what the spread of the range is, whether there are any material distorting transactions included or what sectors the businesses sold were in. And in addition to this, the mean Enterprise Value of all the transactions analysed was £89 million, implying that the businesses included in these statistics were considerably larger than the majority of those I deal with in the owner-managed sector. Maybe 10.3 is not such a reliable comparator after all.

Luckily, there are other published data sources more focused on lower priced deals. This year, the SME valuation index (published annually each November) gave a median EV/EBITDA multiple of 4.2, which should take out the effect of a very high or low transaction. However, the spread is 3.9 to 8.5 and there is no sector split. So, is the right answer for your business 4.2, 5 or 6? There’s a big difference.

Of course, the only real answer is what a buyer is willing to pay, and they will often have quite a different view about what your business is worth. Having said that, if you are thinking about selling then the best thing to do is to consider your business’ current value and how you can increase it. It may not be an overnight fix, so make sure you start thinking now and speak to someone who knows what buyers want.

A final word of advice: a smooth sales patter might tell you that your business is highly desirable and worth a lot more than you thought. If something sounds too good to be true it often is, so get a second opinion before deciding what to do next.

We can provide you with an initial, accurate valuation, pinpoint where you want to be, and deliver a strategy that helps you get there. Get in touch today for a no cost, no obligation discussion on 01254 679131 or jim.akrill@pmm.co.uk.

Gender pay gap: a comparison

By 4 April 2018, all UK firms with over 250 employees were required to publish details of their gender pay gap.

Although we don’t fit this description and so were not legally required to submit a report, we decided to conduct our own analysis to help us understand our own pay gap patterns and identify ways in which we could make changes for the better.

We are pleased to report that PM+M has a mean gender pay gap of only 2.9 per cent, comparable to the top 20 accountancy practices in the UK which average a 16.8 per cent gap. When looking at the median gender pay gap, PM+M posted a -14.6 per cent gap, which compares to a 12.1 per cent national average and a Lancashire average of 7.6 per cent.

Our minimal pay gap is reflective of our strong belief in a diverse workplace, inclusive culture and flexibility for our people, and we are really proud to be so far ahead of our peers in this area.

With PM+M having a female managing partner and four of our thirteen partners being female, we truly understand the importance of gender diversity in the workplace and equal opportunities for all. Our focus on gender equality as a priority area confirms our commitment to closing the gender pay gap altogether to ensure that diversity and inclusion is maintained at PM+M in the years to come.