Category Archives: Chartered Accountants

Cloud accounting – the future of your business

Cloud seminar

On Thursday 25 May, the PM+M Run My Business Team were joined by Cloud Software providers Xero and ReceiptBank to deliver our first Cloud Accounting Seminar.

This first seminar was an introduction for our clients to our cloud team and the services we carry out.  The cloud team has one objective: to make life easier for our clients.

With the arrival of Making Tax Digital for Businesses (MTDfB) scheduled to start in 2018, the need for businesses to hold their records digitally has never been more important. The new rules will force all businesses to submit quarterly accounting information to HMRC in an electronic format.  Under current proposals, the first wave of sole trader and partnership businesses will come into the new regime in April 2018, with more joining in 2019 and all businesses and companies scheduled to be within the regime by April 2020.

Cloud accounting offers a platform for individuals and businesses to record transactions digitally to help with the MTDfB process but, more importantly, to benefit from being able to view business finances in real time for better decision making and save time by automating processing.

The dedicated cloud teamwork with several different Cloud Accounting Software packages and work with clients to implement and train on the systems but also to look at specific add-ons that will help to streamline the business.

At the seminar, Xero demonstrated some of its most useful features for automating processes such as the direct bank feeds, auto-matching and customised online invoicing.  The add-on ReceiptBank demonstrated their integration into Xero. This add-on allows users to scan or email purchase invoices into the software which then extracts all the key information and posts it into your accounts system “hands-free”. Both systems have apps which can be downloaded to mobile phones, tablets etc. making them completely mobile.

If you would like to discuss any Cloud Accounting requirements or find out about how Making Tax Digital will affect your business, please contact Jill Morris (jill.morris@pmm.co.uk)

Tax confusion due to Finance Bill changes

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The original Finance Bill 2017 published in March amounted to 762 pages and contained draft legislation on a whole range of tax changes which were due to take effect from 1 April this year for companies and 6 April this year for individuals.  However, the imminent general election has caused all that to change.

Vast swathes of legislation have been dropped from the Bill –  72 out of 135 clauses and 18 out of 29 schedules have been dropped.  The volume of the bill has effectively decreased by over 80%. This is to allow time for the Bill to be debated and passed before parliament shuts down in the run-up to the General Election.

This has caused confusion and uncertainty for many taxpayers who were expecting to be affected by tax changes taking effect from 1 or 6 April or who were hoping to use the new legislation to carry out tax planning transactions.

Some of the key pieces of legislation removed from the Bill were:

  • Making tax digital – the Government has reaffirmed its commitment to making tax digital but it is not known whether the intended start date of 1 April 2018 will be delayed.  This is an enormous project and uncertainty for taxpayers is increasing as we get nearer to 1 April 2018 with no clear idea of what the requirements of the new system will be.
  • Changes to corporate loss relief – new rules were due to take effect bringing increased flexibility for brought forward tax losses and restrictions on the use of losses for large companies.  It is not now clear when those rules will take effect and this is causing uncertainty for many companies as to their tax position.
  • Restrictions to corporate interest deductibility – due to commence on 1 April 2017 but now uncertain.
  • The relaxation of the Substantial Shareholdings Exemption which allows the tax-free sale of qualifying shareholdings by companies – a major widening of these rules was due to commence on 1 April 2017 and a number of groups of companies were planning to restructure their holdings utilising the new rules.
  • The reduction of the dividend allowance from £5,000 to £2,000 due in 2018/19 – as yet there is no indication that this will change.
  • The £1,000 tax-free allowance for property and sundry income which was due to come into effect on 6 April 2017.
  • First year allowances on electric vehicle charging points – due from 1 April 2017.

Assuming no major surprises in the election result, it is expected that the government will legislate at their earliest opportunity at the start of the new parliament.  However, it is unlikely that such legislation will be retrospective in respect of the proposals due to start on 1 April 2017 but this has not been confirmed.  In the meantime, our advice is to hold fire on any planning under the new rules and keep a close eye on developments.

For further advice on any of the above issues contact Claire Astley on Claire.astley@pmm.co.uk or Jonathan Cunningham on jonathan.cunningham@pmm.co.uk

Companies House

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Companies House is the vehicle through which businesses, accountants and other professional advisors file various information, which is then made publicly available.  It’s an organisation that deals with volume and there are various performance metrics in place.

Its most recent business plan encompasses objectives similar to those that you might expect to see in your own business:

  • Providing excellence in company registration and search
  • Helping companies to ensure their recorded information is current, complete and correct
  • Building a high-performance culture by adapting to and embracing change.

I’m not sure I’ve ever considered Companies House to be a business. It’s just been a place where certain documents must be filed, where I can access publicly available information and where I can do some research on businesses that I would like to work with.  The above certainly changes my view on this and the business plan certainly supports a move into current times.  We need an efficient delivery model that is easy to engage with and reduces the administrative burden, wherever possible, for businesses.

The introduction of the confirmation statement last year, which replaced the annual return, is one way in which filings have changed.  Online filing has evolved considerably in recent years, resulting in less paperwork and postage costs. The aim for 2017 is to achieve a take-up of 87% of digital filing services.  There is also a focus now on increasing the number of accounts to be filed digitally – the aim being 99% to be filed online.  This is a far cry from arranging a courier at the last minute to get down to Cardiff in order to meet a filing deadline. It will still need some planning to ensure deadlines are met (hopefully not at the last minute to save everyone the unnecessary stress) but hopefully the push towards digital will be a positive move for all users.

Pauline Rigby, a partner in Corporate and Restructuring at Forbes Solicitors, commented “Companies House has since 2014 been working on its strategy. At that time they prepared a 5 year plan. Very similar to other businesses, 3 years into that plan and Companies House have taken time to reflect on what they’ve achieved and how their strategy needs to be amended to move them further forwards to ensure that their strategy reflects wider changes in society. Online filing and accessibility has to be key as well as retaining a fluid strategy just like any other business.”

If you have any queries on changes in what should be filed and when and how, then please do get in touch with Anne Ramsden by email at anne.ramsden@pmm.co.uk or by calling 01254 679131.

Making Tax Digital (MTD) removed from Finance Bill 2017

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Following the Prime Minister’s announcement of a general election, legislation to implement the Making Tax Digital (‘MTD’) initiative has been removed from the Finance Bill 2017.  MTD is the plan for businesses to submit quarterly uploads of accounting information to HMRC, with the first wave of businesses due to be affected from 1 April 2018.

Although postponed for the short term, there has been no change to the MTD proposal, and it is likely that the initiative will return following the general election as part of the Government’s commitment to a fully digital tax system.

As a result of the deferment, it is not known whether HMRC will push back the implementation date of 1 April 2018 for unincorporated businesses with a turnover above £85,000.

We will continue to follow the progress of MTD and keep you up to date with any changes. As always if you have any queries please do not hesitate to contact one of our dedicated MTD advisers.

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 Importance Of Right To Work Checks

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A client recently faced a Home Office enquiry into the status of one of their non-EU employees. It was resolved (eventually) with a positive outcome for our client, however, the reality could have been very different. It brought to the surface the significant risk that the business may have needed to amend its strategy for growth in the UK market had it not been able to recruit the required expertise from outside the EU. Of course, the realities of the UK labour market post-Brexit could still impact on this.

All businesses should review their HR and employment policies and processes on a regular basis, especially where it relates to Sponsored Migrant Workers (SMW’s), and I discussed this with Jane Carroll, Partner at Solutions for HR, based in Bury.

Jane commented “Under UK immigration rules, it is a criminal offence to employ a person who is not entitled to work in the UK, therefore before employing any candidate it is essential that you ensure he or she has the right to work here. The easiest way to do so is to check all job applicants’ documents as part of your normal recruitment process – whether you believe candidates to be migrants or not. The necessary documents will depend on a candidate’s individual circumstances. You must ensure that the documents are valid.” Employers should not underestimate their obligations during the recruitment and on-boarding to the HMRC, and to effectively ‘police’ the movements of all SMW’s during their employment.

Jane continued to say that there is a useful online service which allows users to quickly check that the specific circumstances allows someone the right to work in the UK. This includes determining whether the vacancy could be filled by anyone in the EU. The site is anonymous and asks five simple questions to give an immediate answer. The test can be found at: https://www.gov.uk/legal-right-work-uk.

If someone you wish to employ is not permitted to work in the UK without restriction, they will need to apply to work under a points-based system and are likely to require a certificate of sponsorship from an employer. As such, to employ workers under the points-based system, you will need to register as a sponsor.

Jane warned that you can be sent to jail for up to five years and receive an unlimited fine if you know or should have known that you employed someone who doesn’t have the right to work in the UK.

The advice is to safeguard yourself and your business by carrying out the correct right to work checks on employment, but to also ensure robust HR administration processes to flag up visa expiry dates to ensure rights to work remain valid.

If you would like to revisit your processes or seek advice, please contact Helen Clayton at helen.clayton@pmm.co.uk or call 0161 641 8684.

Who Wants To Work Forever?!

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Hardly a month goes by without the Government releasing another report on pensions and the past few weeks have been no exception. Analysis by the Department of Work and Pensions has suggested that people under the age of 30 may not get a pension until age 70. A second report by John Cridland CBE for the Department for Work and Pensions has recommended that those under the age of 45 may have to work a year longer to age 68.

The root cause of the problem is that life expectancy seems to be ever increasing with the average retiring worker now spending twenty plus years in retirement. When the State Pension was first introduced in 1908, retirement age was set at 70. However, only one in four people reached that age and life expectancy was only 79.

So, how do you avoid working until you are 70? Of course, the answer is to save more! As a rough rule of thumb take the age you start your pension and halve it, and this is the percentage of your salary you should set aside each year until you retire.

The above is of course simple in theory but much more difficult in practice, as life, children and mortgages get in the way! It is always better to be saving something rather than nothing and the magic of compound growth should not be ignored. For example, if you save £100 per month for thirty years and with an average growth of 6%, you should have a retirement fund of £104,608.

For further information on pension planning contact Antony Keen, PM+M Wealth Management Director, by phone on 01254 604303 or by email at antony.keen@pmm.co.uk.

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

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