Category Archives: Hints and Tips

More Phishing Emails – A Growing Problem

shutterstock_223094779We’ve previously blogged about an increase in the number of phishing emails targeting individuals and businesses in and around the North West.

The new scam poses as an email from one of your contacts and requests a money transfer of around £5,000. In some cases emails have been sent to a company’s finance team, appearing to be from a colleague. A general rule of thumb is that all emails requesting any personal information or money transfers should be cautiously investigated and verified before any action is taken.

For more information on identifying  phishing scams or to report a scam, we advise you to contact Action Fraud on 0300 1232040.

Private Education – Is It Affordable?

Private Education BlogIt’s no secret that the cost of private education tends to rise much faster than inflation in the longer term. In 2015, private school fees have risen by 3.5%, the lowest rate since 1994 according to the Independent Schools Council (ICS) 2015 Annual Census. However, despite rising costs, record numbers of pupils attend private schools.

Despite the common misconception that private education is just for Britain’s wealthy, there are some affordable ways parents can meet the cost of their children’s education.

The costs and bursaries/scholarships

Fee levels vary significantly by region from just over £3,000 per term for a typical day school in Wales to more than £5,000 per term in London. Many schools offer bursaries and/or scholarships to help less affluent families afford private education. Families whose disposable income is largely taken up by school fees are given the most support and many institutions actively canvas for these types of applicants. According to the ISC, over a third of pupils in private education now receive some form of financial assistance.

Start saving early

Work out the numbers for your preferred option and assess how much you need to save on a monthly basis. It helps to keep a budget. Starting to save, from the moment your child is born, could give you around 10 years to build up funds. Make sure that your investment strategy is sound. Proper investment can yield much better returns than the bank or building society in the early years, but don’t take too many risks when you need to draw down on the savings you have accumulated. If you are responsible for a child under the age of 16 you can make use of child benefits, and tax-free advantages of ISAs. But watch out! Junior ISAs can’t be withdrawn until the child is 18, so could only be used to fund university education.

State schooling until they move to secondary school

Starting a child’s private education later could save money – for a child entering school this year and leaving in 2028, sending a child to private school from age 11 could save you up to £100,000.

Both parents working

Having combined salaries with your partner can help you manage the costs of your child’s private education. This may increase the appeal of sending your child to boarding school. Whilst this is a more expensive option, it allows parents to continue to work without having to compromise family time during term time.

Help from the grandparents

Many grandparents are starting to get more involved in supporting their family and contributing towards their grandchildren’s education. Gifts of capital and out of income can be a successful way of reducing any inheritance tax liability whilst providing for future generations. Trusts might also be a useful way of reducing tax liabilities overall.

In summary, remember the three basics of financial planning. Make the most of all the tax breaks available to you, manage your investment strategy carefully and most importantly – plan ahead and start early. For more information on planning for your child’s future, get in touch with our Wealth Management team by telephone on 01254 679131 or by email at

Inheritance Tax and Business Property Relief

Inheritance Tax & BPRA common objective for many of our clients is to pass on money to their families on their death. With house prices having escalated significantly, a greater number of estates have become subject to inheritance tax, reducing the amount their loved ones receive.

In response, the Chancellor has created an additional nil rate band relating to the family home which will be phased in over the next few years. Potentially for a couple with a home worth £500,000, they may be able to pass on a joint estate of £1 million not subject to inheritance tax. It should be noted that this only relates to homes passed on to direct descendants; it also doesn’t address the inheritance tax concerns of those who don’t own a property.

If after these additional measures you still have an inheritance tax liability, you may look to give away assets thus reducing the size of your estate. This can be problematic in that you can’t then use those assets, but often more importantly you need to survive a further seven years from the date of the gift for it not to be added back into your estate for IHT purposes.

There are however, investments that can be made that allow you to achieve 100% relief for inheritance tax purposes whilst remaining under your control and from which you can access funds if required. It’s a relief that owners of small family businesses will often use to pass on shares in their unquoted trading companies free of tax, and is known as Business Property Relief (“BPR”).

But if you don’t own a family business you can still take advantage of this relief. One of the simplest methods can be to acquire a portfolio of qualifying trading company shares quoted on the AIM share market. Provided you hold the shares and survive for 2 years from purchase, the value of those shares will be 100% relievable. It should be remembered that shares on the AIM market can be higher risk and will not be appropriate for everyone. You should take appropriate advice before investing.

If AIM shares sound too risky for you, there are other investments that make use of BPR by holding shares in unquoted companies that engage in trades such as asset finance, solar power, and property finance. They focus more on capital preservation producing predictable, modest returns rather than high growth. There is an increasing number of providers in the market and they are often complex in structure, and again taking advice is highly recommended.  These investments can, however, be highly effective in both individual and trust tax planning.

If you do need advice regarding investments that benefit from Business Property Relief or any aspect of Inheritance Tax, please call 01254 679131 or contact one of our advisers:

Richard Hesketh ( – Wealth Management and Investments

Jane Parry ( – Head of Tax


FRS 102 – Derivatives And Their Consequences

shutterstock_143308669It’s likely that some people who will be applying FRS 102, for the first time in their 2015 accounts are still thinking that financial instruments are nothing to do with them, but this view should be taken lightly.

FRS 102 introduces the concept of “basic” and “complex” financial instruments. Whilst some companies may be of the view that they do not engage in complex activities, there are some common pitfalls.

For example, any contracts that involve paying or receiving cash or shares are classed as financial instruments and these instruments must be reviewed. Many companies go nowhere near derivatives, but some might be using them without really knowing it, for instance if they have foreign currency forward contracts or if they have entered into an agreement with a bank to fix a loan interest rate, which actually takes the form of an interest rate swap.

Under FRS 102, these rate swap valuations must be recognised in the accounts. This means their fair value must be presented on the balance sheet and their yearly movements reflected in the profit and loss account. Derivatives can have either a positive or negative fair value, but a fixed interest rate swap instrument in the current economic climate is more likely to have a negative one.

Fair values can be volatile and this volatility will be reflected in the results and may impact on your tax liabilities, profit sharing and bonus arrangements and any banking covenants.

If you think your business may be affected by any of the changes of FRS 102, please contact Chris Johnson on 01254 679131 or click the button below to download our free FRS 102 help sheet.


Praxity Corporate Finance European Conference

shutterstock_148608140Last week in Brussels the PM+M Corporate Finance team linked up with colleagues from across Europe from the Praxity alliance of accounting firms. The meeting was focused on ensuring owner managed and SME clients get the same level of coordinated international service in corporate finance as larger corporate businesses.

The discussions covered issues such as:

  • The changing economic climate for owner-managed businesses across each country
  • The appetite of clients across Europe for acquisitions and disposals and the success of their plans
  • The differing attitudes of banks to finance deals and expansion across different countries
  • How the legal frameworks across Europe differed in terms of being able to control and complete acquisitions and fundraising exercises

The event strengthened ties between the advisers in different countries and improved everyone’s understanding of corporate finance markets across Europe. Our clients and professional network will benefit from our depth of knowledge and contact base whenever they look to do a transaction involving a European business. Particularly impressive features were the depth of understanding of the renewable energy sector in our Germany colleagues and the widespread knowledge across our European firms of engineering and manufacturing business transactions.

If you are thinking of doing a deal with someone based in a different European country, please get in touch with David Gorton for a free briefing on the likely issues and differences of deals in that country on either 01254 679131 or at


Research and Development (R&D) Tax Reliefs

shutterstock_84635077The recent budget saw the Chancellor raise the amount of R&D tax reliefs for small and medium sized companies (i.e. companies with fewer than 500 employees) from 225% to 230% from 1 April 2015.

This means a small or medium sized company incurring £100,000 worth of qualifying R&D expenditure would receive tax relief as normal through their accounts for the £100,000 spent together with an additional £130,000 (£100,000 x 130%) tax deduction via their company tax return.

If the company is loss making, the loss can be surrendered for a cash repayment of up to 33% of the qualifying R&D expenditure which is particularly helpful for the cash flow of a fledgling business.

What projects qualify for R&D?

A common misconception is that only larger companies with specialist R&D departments making groundbreaking leaps in the advancement of science or technology will qualify.

However, at PM+M we have made numerous R&D claims on behalf of our clients, of varying sizes and across a number of business sectors.  The R&D projects we see tend to fall into the following areas:

• The integration of two or more existing components/systems to create new assemblies/systems etc.

• The replacement or substitution of one material for another i.e. replacing metal with a more durable substance.

• Develop a system, process, material or device to be: faster, lighter, stronger, cheaper or more accurate.

Basically, if you are doing something that your competitors are not doing and would be impressed by, there is a reasonable chance that it could qualify as an R&D activity.

What costs qualify?

The main cost is usually the salaries of people engaged in the R&D activity, including employer’s national insurance and any pension contributions. Other allowable costs typically include consumables, sub-contractors costs (with some restrictions), software and some utility costs if these can be directly related to the project.

For more information on R&D, please click the button below for a copy of our helpsheet. Alternatively, you can contact the PM+M tax team on 01254 679131 or by email


HMRC Digitalises Services for Registered Charities

shutterstock_169711982It was only last month that HMRC released the VAT MOSS service online for suppliers of digital services to fulfil their tax obligations. HMRC is continuing its digital revolution with the release of a new online service for charities.

The online service will allow charities to register themselves, replacing the current ChA1 paper form. Although charities have been able to reclaim tax online since 2013, they would have had to go through the long process of submitting a paper form to register.

Charities can now register solely online by providing various details about themselves, along with supporting documentation. Registration using the paper ChA1 form will no longer be available although forms that have already been submitted but have yet to be processed will be considered by HMRC.

It would seem that HMRC are taking that step forward by moving away from paper one step at a time. The move toward digital should, in theory, improve customer service and efficiency when dealing with matters that may have historically taken a long time.

If you are a registered charity and would like advice on how these changes might affect you, please contact Helen Binns (Charity Specialist) on 01254 679131 or by email at

Check Your Tax Codes for Errors

shutterstock_124340350Three million people in the UK have more than one source of income and could potentially face backdated tax bills of £2,000 per year because of errors made by HMRC.

Those most likely to be affected are people with two or more sources of income such as multiple pensions, those who continue to work part-time after retirement and former armed services personnel who now have civilian jobs, but still draw an army pension. The problems stem from the calculations based on a person’s personal allowance, of £10,000 having been allocated to more than one source of income.

For example, if you have retired but have chosen to take on a part-time role whilst receiving your pension, HMRC may calculate your tax payable based on your pension less £10,000 and then separately calculate the tax band on your pay from your part time role less £10,000.

The duplicated personal allowance will therefore result in an underpayment of income tax.

The mistake is only found one year later when the bill for the unpaid tax is sent. It is important that you take a close look at your code number to ensure no mistake has been made, or you could receive a nasty surprise.

If you suspect an error in your tax code and wish to seek advice on what to do next, get in touch with our tax team on 01254 679131.

How Much Will Care Cost You?

shutterstock_89750356January saw PM+M’s Wealth Management team present its second ‘Long Term Care and Inheritance Tax’ seminar. Over the years we’ve developed a specialism for advising elderly clients and their families.

Inheritance Tax has always been an area of concern for families looking to transfer wealth down the generations without handing over too much to the treasury.

However, we are increasingly seeing requests for advice on Long Term Care planning as more families grapple with the potentially high cost of providing care, either in a residential setting or at home. With more people living longer, it is an inevitable consequence more of us will need assistance in our later years.

The cost of long term care isn’t cheap as highlighted in articles on the BBC’s news website this week – It states that 60% of people are expected to need care in their old age, with one in ten of us facing care costs in excess of £100,000. If you want to know the average weekly cost of providing care in your area, they’ve helpfully provided a care calculator based on your postcode. You can access the calculator here.

Knowing the weekly cost of care is just one side of the coin. There are also a number of planning issues that need to be addressed, questions such as:

  1. How much assistance is available from your local authority?
  2. Where should monies be placed to meet the immediate costs of care, and where should they be invested to meet longer term care needs?
  3. What assets would be exempt from any long term care assessment?
  4. What will happen to the family home?

Careful planning early on can result in reducing the overall impact of care costs, ensuring care needs remain affordable and result in more of a person’s estate being available to pass down to the next generation.

You don’t have to do the planning alone and if you do require assistance, please give me a call on 01254 679131 and I will be more than happy to help.

Richard Hesketh, Client Manager, PM+M Wealth Management

Supplying Digital Services to Consumers in the EU


If your business supplies digital services to consumers in other EU countries, you need to be aware of new VAT rules.

On 1 January 2015, HMRC put in place new ‘place of supply’ rules for VAT on the supply of digital services by businesses to consumers in the EU.

The new rules state that all supplies of telecommunications, broadcasting and e-services to consumers will be charged based on the rate of the location of the consumer, rather than the location of the supplier (as has previously been the case).

What is classed as a ‘Digital Service’?

•    The supply of television or radio programmes.

•    Fixed and mobile telephony, fax and connection to the internet.

•    Video on demand, downloaded applications (commonly known as ‘apps’), music downloads, gaming, e-books, anti-virus software and online auctions.

If your business supplies digital services to consumers in the EU, you will have a requirement to VAT register in each country in which your customers are located.  However, a streamlined process has been introduced by HMRC which allows you to avoid this.  Instead, you can register for HMRC’s new service called VAT MOSS (VAT Mini One Stop Shop).

Once you have registered for the MOSS service, each calendar quarter you submit a single MOSS VAT Return and single payment to HMRC. The relevant parts of the return and payment will then be forwarded to the member state(s) where the consumers are located. This fulfils your VAT obligations without the need for individual registrations in each country.

If you have not done so already, we recommend that you put the processes in place to comply with these new rules sooner rather than later. HMRC have warned that any business that does not comply with the new VAT rules will be excluded from using the MOSS service for 2 years and fined. This means excluded companies will have to register for VAT in each of the EU member states that they supply digital services to.