Category Archives: Client News

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.

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PM+M Helps East Lancs Box Co. Limited Secure Six Figure Lancashire Growth Fund Grant

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L-R: Andrew Cowking (PM+M), David Ingham, Peter Ingham, Amy Ingham & Neil Harrison

Andrew Cowking and the PM+M team have helped East Lancashire Box Co. secure a £120,000 grant from the Lancashire Growth Fund which will see the creation of 12 new jobs.

East Lancashire Box Co. was established in 1981 and is headquartered in Rishton near Blackburn. It manufactures bespoke cardboard box packaging and products. It offers a complete service, from initial concepts to the final product and handles all elements of design, print and production. The company’s product range is visible on the shelves of all the major supermarkets both within the UK and overseas.

The grant will be used to purchase new equipment including a state-of-the-art printer and a die cutter. The aim is to create a colour printing facility under one roof in 16,000 sq ft of new production space at the Junction 7 Business Park in Clayton-Le-Moors with the capacity to meet current and expected demand. The 12 new jobs will include apprenticeship and production positions.

Andrew Cowking – partner at PM+M – handled the forecasts for the grant application whilst Neil Harrison of The Harrison Partnership coordinated all elements of the grant application process, which was completed in just over 3 weeks from starting the application to the making of the offer.

Peter Ingham – director of East Lancashire Box Co. – said: This is a significant investment for the company and is an exciting milestone in our history. The grant will help to support our growth plans and will ensure that we are able to develop our offering and provide a bespoke service to all our customers – from small businesses to multinationals.

Andrew Cowking added: “East Lancashire Box Co. is a forward thinking family-owned business and one of the region’s most entrepreneurial companies. We were delighted to help them secure the grant and we look forward to seeing how it aids their expansion over the coming years.”


Buy-to-let – the new rules are coming

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If you cast your mind back to the 2015 summer budget, you may remember the significant changes that will impact all landlords. The implementation date of these changes is drawing ever closer and it will eat into landlords’ profits and, in some cases, may wipe them out completely.

With the slashed tax relief and added stamp duty, you may feel that someone has got it in for buy-to-let landlords. The question is what can you do about it?

What does the loss of tax relief mean?

This is one of the biggest changes to buy-to-let and now means that people buying to let residential property will no longer be able to claim tax relief on their mortgage interest payments at their marginal rate of tax. Before the changes this meant that basic rate taxpayers would get 20% tax relief, but those at a higher rate would receive 40% or 45% in tax relief.

What’s changing?

The changes mean that the tax relief will be a flat rate of 20%. Basic rate taxpayers, in most cases, will not see any changes, but those on higher incomes will find themselves losing much more in mortgage interest payments.   Also, more landlords may find themselves unexpectedly moving up into the higher rate tax bracket because of the way the new rules work.

To provide some perspective, here’s an example:

A landlord with a £150,000 buy-to-let mortgage on a property worth £200,000, with a monthly rent of £800, would currently have a net profit after tax of around £2,160 a year. With the lower tax relief, the net after-tax profit would be reduced £960.

Overall, the higher the interest you pay, the more you will feel the changes.

However, the full impact of the new rules is not felt immediately, as these changes will be gradually phased in from 6 April 2017, with transitional rules in place until April 2020. During the transition, the amount of interest directly deductible from rents will reduce and the proportion deducted as a fixed 20% credit will increase. This means in the transitional period landlords will be able to claim:

Tax year Interest deductible from profits Interest at fixed basic rate credit
2017/18 75% 25%
2018/19 50% 50%
2019/20 25% 75%

Income tax on property gains!

New rules announced last year, designed to target non-resident companies and individuals from escaping UK tax on profits made from the sale of UK properties, could inadvertently impact UK landlords. The new rules seek to charge the profits on selling UK property to UK income tax rather than CGT when the ownership of the property is more in the nature of a trade than a fixed investment.

When the changes were announced, there was widespread concern that UK landlords could be affected.

HMRC have now addressed this by releasing a 64-page guidance document to help clarify how they will seek to operate the rules.  In the guidance, they state that the new rules will not apply to businesses which buy properties in order to generate rental income, even if these businesses also enjoy an uplift in market value of the property. So the average UK buy-to-let landlord should not be subject to income tax on the gains he makes when he sells properties which were acquired for letting.

Whilst this is good news, it is only HMRC guidance and not law. For those particularly concerned about this new legislation, the position can be clarified with HMRC under their non-statutory clearance application process.

The PM+M tax team will be hosting seminars in Blackburn, Burnley and Bury to provide answers and insights into what buy-to-let landlords can do to protect their position.

For more information or to book a place, please click the button below or call 01254 679131.

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Inheritance Tax And The New Residence Nil Rate Band

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Much of my time is spent advising clients on inheritance tax, both the current liability on their estates, and what can be done to address it. It’s an emotive subject, with many clients feeling aggrieved that the wealth they have created over their lifetime is being taxed again on death.

In response to this, the former Chancellor, George Osborne introduced additional measures to potentially reduce the tax take for the treasury, and allow people to pass on more of their money to their families on death.

On death, if you leave assets to anyone other than your spouse, inheritance tax is paid at a rate of 40% on any assets you hold above the nil rate band; this currently stands at £325,000 each (£650,000 for couples).

It has long been the objective of the Conservative Party, to increase the point at which inheritance tax becomes payable by couples to above £1 million. The simplest way to address this would have been to increase the nil rate band to £500,000 each. However, for political and financial reasons this was not the solution George Osborne devised.

An additional nil rate band was created of up to £175,000 each, relating to the family home.  This will be phased in over 4 years from 6 April 2017, starting at £100,000 each and increasing by £25,000 per year over 3 years. This is in addition to the existing nil rate band. Thus, if you as a couple have a home worth £350,000, you may eventually be able to pass on a joint estate of £1 million without being subject to inheritance tax.

This all sounds good news but it should be noted that not everyone will qualify.  Here are a few key points:

  • If your estate is worth more than £2m your entitlement to the residence nil rate band starts to disappear;
  • The rules stipulate that homes must be passed on to direct descendants, by which it means children and grandchildren;
  • I’ve had to inform clients who are leaving all their assets to nephews and nieces that they won’t get this additional relief;
  • Step-children and adopted children are counted in the definition as children so that is welcome;
  • If leaving the property into a trust, it must be one that creates a fixed entitlement to the property to a direct descendant, it can’t be wholly discretionary;
  • If one spouse doesn’t use their residence nil rate band, it can be passed on to the other spouse to use on the second death in the same way as the ‘normal’ nil rate band;
  • It can only be claimed against one property so two properties totalling £350,000 may require you to claim this relief against the higher value property only; and
  • There are also a myriad of rules relating to downsizing, which will probably require further revision by the Government to ensure they work in the way intended.

Inheritance tax is an area where many people will require advice. If you wish to receive advice on the Residence Nil Rate Band or any other inheritance tax matter, please get in touch.

Written by Richard Hesketh
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Richard Hesketh 
Client Manager
Email: richard.hesketh@pmm.co.uk
Direct: 01254 604340

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Jane Parry 
Managing Partner & Head of Tax
Email: jane.parry@pmm.co.uk 
Direct: 01254 604329

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

Trumping the market!

shutterstock_353116961The vote is in and Donald Trump has been voted President, words perhaps few people expected to read this morning and a deja vu feeling of Brexit!

Whilst investors and markets would undoubtedly have preferred the more stable influence of Hilary Clinton, Trump as President might not be a disaster. It is worth noting that the power of the President’s Office is limited by the Constitution, through the chambers of Congress and the Supreme Court. The Federal Reserve also remains independent.

So what does Trump mean for investors?  Initially, as we saw with Brexit, markets are likely to be volatile and we have already seen falls in the Asian markets overnight; the FTSE is currently down 1.2%. During volatile markets, and especially when you may be showing some short-term losses on investments, it is tempting to sell and wait for the markets to improve before reinvesting.

It is perhaps useful to look at market patterns and history before making the decision to sell.  According to Fidelity International, an investor who invested in the FTSE All Share Index for the last fifteen years, but missed the best ten days would have achieved an annualised return of 1.46%, against 5.69% by those investors that remained invested. Missing the best forty days reduced your annualised return to -5.62!

Often the largest returns are achieved shortly after these falls, so the message is simple. Provided you have a clear investment strategy and review process in place, you should hold your nerve and investments, and over the medium and longer term you will be rewarded.

Like a game of Top Trumps, if you hold the quality cards you win over the longer term.

For a review of your pension and investments, please contact Antony Keen by emailing antony.keen@pmm.co.uk or by calling 01254 679131.

PM+M Christmas Present Appeal 2016

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We know – Bonfire night hasn’t even been and gone yet but it’s hard not to notice that Christmas decorations are starting to pop up in shops and on the high street already! So we thought, why not launch our annual Christmas present appeal a little earlier this year? Let’s make it our biggest one yet!

This year, the PM+M team are collecting gifts for Blackburn, Burnley and Bury Children’s Services. As our team is growing, it’s only fitting that our appeal should grow too so that more children can benefit from the incredible generosity the appeal receives.

If you are able to spare a little time and money, we know your donations will be greatly appreciated. For some children, this could be the only gift they receive this Christmas. Gifts can be for children of any age or gender and we have included a few guidelines below:

  • Gifts should be to the value of around £10
  • Gifts must be new
  • Please either deliver gifts wrapped or unwrapped
  • If wrapped, gifts should be clearly marked with gender and age range
  • Gifts should not contain confectionery or alcohol

Gifts can be dropped off at our any of our offices between 8:30am and 5pm before Friday 9 December.

The PM+M team would like to take this opportunity to thank you for your kindness and generosity and we do hope that as many of you as possible will join us in supporting such a worthy cause.

A reminder of our addresses is below but should you require any further information, please get in touch with our Marketing team on 01254 679131.

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The Apprenticeship Levy

shutterstock_305418650The new apprenticeship levy will have its challenges but have you considered the benefits of this new legislation when it comes into effect in April 2017?

The Government have already made their mark by abolishing the employers’ National Insurance Contribution (NIC) for apprentices under the age of 25 back in April 2016. This new levy is part of their commitment to increase the quality and quantity of apprenticeships available in England  in order to reach their goal of 3 million by 2020.

The Levy will be payable on payroll bills of over £3 million per year at 0.5%. This will affect many businesses, who perhaps haven’t even considered apprenticeships for some time.

All employers will receive an allowance of £15,000 to be offset against the payment of the levy.  This levy “pot” is then to be used on apprenticeship training and assessments from an approved provider only.

The Government will top up levy contributions by 10%.

The payments for apprentices studying English and Maths will be paid direct to the providers and not taken from the levy payments.

This is essentially another tax. However, businesses can benefit from this by utilising the levy to upskill existing team members. There is a huge employment demand upon us with nearly 21,000 people due to retire in the next few years.

Don’t waste this opportunity – look into your options now and prepare.

If you’re not sure whether the levy will affect you and want advice on this or other payroll matters, please contact Julie Mason at julie.mason@pmm.co.uk or call 01254 679131.

 

Tax-free childcare scheduled to launch in 2017

shutterstock_334181882It’s good news for parents! Under the new Government scheme, they will be able to set up an online account with HMRC to pay childcare with a registered provider, tax-free.

The Government will top up the account by 20% up to a total of £10,000. The maximum payment will be capped at £2,000 per child up to the age of 12 and £4,000 for children with disabilities up to the age of 17.

To be eligible for the scheme, each parent needs to be in employment and earning a minimum of £115 per week each and a maximum of £100,000.00 individually.

There’s no minimum monthly payment requirement and the parents can make withdrawals if they wish. Payments can be made from their tax-free childcare accounts to their chosen provider’s bank account via BACS. All regulated and approved childcare providers will receive an invitation to register for the online service.

Any childcare providers who are not regulated and wish to benefit from the scheme will have to register with a regulator with their unique 10-digit tax reference number and this can often take up to 12 weeks.

For more information on the tax-free childcare scheme, please contact Julie Mason at julie.mason@pmm.co.uk or call 01254 679131.

PM+M Shortlisted for Accountancy Age Best Employer Award

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Back in May of this year, PM+M were nominated for the Best Employer Award run by Accountancy Age, one of the industry’s leading online publications. The process to complete the application was lengthy and Kath Rigbye, our HR and Talent Manager worked tirelessly alongside Jane Parry, Managing Partner + Head of Tax, to provide the wealth of information required in order for Accountancy Age to process and judge our entry.

And it wasn’t just the senior management team who contributed. The entire PM+M team were required to fill in an anonymous survey and the results were fantastic! Topics covered were leadership of the firm, our culture and communication, role satisfaction, the working environment at PM+M, training and development and pay and benefits.

In September, we found out we were shortlisted and can now proudly say we are one of the top 10 accountancy firms to work for in the country! This is testament to the work we do as a team (for each other and for our clients!), the effort we all put into making PM+M a great place to work and the people we have working in the firm across our three offices in Blackburn, Burnley and Bury, who all help cultivate a fun, energetic and dynamic working environment providing great service to our clients.

We’ll have to wait until November to find out where we’re placed on the leader board but in the in the meantime, if you’re looking for a new challenge and are interested in joining a top 10 firm, we have a number of vacancies available on our website. Alternatively, please call Kath Rigbye on 01254 679131 who will be more than happy to talk you through our current and upcoming opportunities.

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A Day of Hit and Miss

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Thursday 22 September saw the return of the Napthens Clay Shoot, raising money for Blackburn Youth Zone. The event was held at the impressive Coniston Hotel Country Estate and Spa where the fantastic weather highlighted the stunning North Yorkshire countryside.

Teams of four were welcomed at the Estate’s Shooting Lodge for coffee and bacon rolls on arrival, before being matched with a professional instructor and sent on their way to shoot 35 clay pigeons from a series of shooting posts. These were varied to provide a range of difficulty and to replicate the behaviour of pheasant, grouse or rabbit. Whilst it is fair to say that the real thing need not have been too concerned about their safety in our presence, this wasn’t the case for some of the four-man teams. PM+M was represented by Tim Mills and your truly, with my guests for the day being Jon Palich of Handelsbanken Burnley, Graham Campbell of Moose Media and Mike Duviau of Go-Velo.

Thanks to the expert tutelage of instructor Allan we were quickly showing signs of improvement. Two of our party had shot before but two (me included) were entirely new to the experience. Of the 35 clays that were presented to each shooter we managed 16,16, 14 and 9 ‘hits’. I’d like to think that there was an eco-conscious decision being made to allow the re-use of some clays or for their breeding population to be preserved.

Upon completion of the shoot, our band of four re-joined our fellow guests at the Hotel for a fine lunch and to share stories of the clay(s) that got away. I offer the option of singular or plural for the reason that Stephen Ford of RBS managed to shoot 34 of his possible 35 to take the Sharp-Shooter award. The other award available on the day was for Best in Show (Best Dressed) and I have to confess that the suggestion in advance of the day of Jamie Allison of Napthens being convinced he had this in the bag I had to explore the dark recesses of my wardrobe to offer him some competition. The fact that he was from the organising company and that I had strategically added a Blackburn Youth Zone coloured orange tie to my outfit meant that I snatched the prize from his eager hands.

The raffle and auction that followed helped to raise over £7,000 for BYZ with some especially generous prizes on offer and some equally generous bids from the room. Co-sponsors  Bowker BMW, Together Money and Wardfield Sporting Goods please take a bow.

A great day was had by all, with guests entertained and professional connections built or maintained. I look forward to defending one title and aiming (pun intended) for a second next year. I think there could be some practice planned, after all PM+M honour is at stake!

Neil Welsh – PM+M Wealth Management