Category Archives: Hints and Tips

UK Company Ownership Register Postponed

shutterstock_178654685Back in April, we blogged about legislation being introduced in January 2016 that will require public disclosure of major interests in UK companies. This has now been postponed until April 2016, and additionally, companies will have until June 2016 to file the information with Companies House. This information will then have to be updated at least once every 12 months.

The information that will need to be submitted in compliance with The Small Business, Enterprise and Employment Act 2015 (the Enterprise Act) will be available to the public and must include details of anyone with an interest of 25% or more in the business.

The Government’s target of clamping down on money laundering and tax evasion may have significant commercial issues for many businesses in the UK. Companies may be reluctant to disclose this seemingly sensitive information. It is not uncommon to seek to keep an investment confidential, especially in an early stage business which may shake up a market or upset existing customers or suppliers.

Come June 2016, anyone who doesn’t take reasonable steps to comply with the new rules or anyone who hasn’t filed the information with Companies House may be convicted of a criminal offence, with the penalties including a possible prison sentence and disqualification from being a director. Persons of Significant Control will also be responsible for disclosing any interests or shares they may have in a directly or indirectly competing company to their current employer or fellow directors.

If you have business interests which could be affected by the impending Enterprise Act, please contact David Gorton (Senior Partner & Head of Corporate Services), who specialises in business structuring, at or call 01254 679131.

Invoice Financing For SMEs

Invioce FinanceMany SMEs have been held back by Britain’s late payment culture for far too long and, as a result, the Government’s plans to relax invoice financing rules early next year are highly anticipated.

From early 2016, The Department for Business, Innovation and Skills (BIS) is banning contractual “non-assignment” clauses used by bigger businesses which effectively prevent SME suppliers from accessing funds through invoice finance.

Currently 44,000 businesses have access to invoice financing. This means that they are able to fund working capital and gain access to the cash they need straightaway instead of waiting to receive payment for an invoice, which can often be beyond agreed credit terms.

Unpaid invoices are often the biggest asset an SME has and invoice financing is an important means of funding working capital. Any restriction on access to funding, intentional or not, hampers growth and when combined with a late payment culture still prevalent in many large businesses, the effects can be devastating for an SME.

Although invoice financing isn’t right for every business, SMEs have found it incredibly difficult to establish reasonable terms with larger companies. The Government plans to introduce a new Late Payments Commissioner to deal with supply chain bullying as well as a conciliation service designed to assist small businesses in settling late payment issues and disputes.

Larger businesses should start to ensure that they’re compliant with the new rules and take this opportunity to be more transparent and open about their payment terms. SMEs will soon have new options to help them grow and plan ahead with greater confidence by knowing they will have the cash in place to move their businesses forward.

For more information on how your business can raise alternative finance, please contact Jim Akrill at or call 01254 679131.

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.