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Spring Budget 2017 – What’s New?

Spring Budget 2017

The chancellor’s opening statement about productivity still being too low, families feeling squeezed, the need to make Britain ready for its ‘global future’ outside the EU and having an economy that ‘works for everyone’ was all pretty standard stuff which no-one would really disagree with or be surprised by. That tone ran through a Budget that was clearly designed to reassure the markets as we approach the triggering of Article 50.

The announced changes in the tax regime were all expected including the upcoming changes in Corporation Tax. His comments on Business Rates gave clarity but it wasn’t a surprise that they won’t be abolished. However, his unveiling of three measures to help those affected (no business losing small business rate relief will see its bill increase next year by more than £50 a month; 90% of local pubs will have a £1,000 discount on their business rates bill; and a £300m fund for local councils to offer discretionary relief for hard-hit cases will be launched) is good news.

There was also an emphasis on tax avoidance with various steps being introduced including tackling the abuse of foreign pension schemes; the introduction of VAT on roaming telecoms services; and the implementation of new financial penalties for professionals who enable a tax avoidance arrangement that is later defeated by HMRC.

In a bid to lessen the attractiveness of incorporation for self employed people, he also confirmed that he will reduce the tax-free dividend allowance for all shareholders from £5,000 to £2,000 with effect from April 2018.  This will affect all investors, not just those who own their own companies.  I expect that this is not the last we will see of such measures, with a report considering the wider implications of different working practices due in the summer.  There is also consultation launched today on the tax treatment of various employee benefits and expenses.

A very welcome piece of news for smaller self employed businesses is the deferral of the Making Tax Digital requirement for online submission of quarterly accounting information by a year from 2018 to 2019 for those businesses with a turnover below the VAT threshold.  Larger sole traders and partnerships will still need to get to grips with the new system in April 2018 and will need to start planning now, but the smallest businesses and landlords now have a year’s grace.

There was good news for the science and innovation sectors with some of the £23bn of investment he announced in the Autumn being allocated. This included £300m for research talent; £16m for a 5G mobile technology hub; and £200m for fibre broadband. We don’t know how the North West will directly benefit but it’s got to be welcomed.  The £90m of extra transport infrastructure funding for the North also sounds like good news.

We work with many manufacturing businesses who I know will welcome the introduction of T-Levels as there is a consensus that young people often lack the skills that are needed in the workplace.  Those manufacturing businesses will also be heartened to hear of the reduction of the administrative burden surrounding R&D tax credits announced today.

In summary, this Budget was a bit of a non-event. There were no real surprises or shocks, which was to be expected, as the government will not want to rock the Brexit boat.  However, we might see some significant change in the way that employed and self employed people are taxed over the next few years, stemming from some of the consultations and reports launched today.

BUDGET BUTTON

Two Wheeled Professionals Roll Again…

PM+M Business Professionals (on 2 wheels) 170816Inspired by the successes of Team GB cyclists in the Rio velodrome, last Wednesday afternoon saw nine local professionals, including two of PM+M’s own, heading out onto the lanes of the Ribble Valley in glorious sunshine to build and cement their business connections.

For the second in the series of 2 wheeled networking events, there were four riders who had participated in the first event and five new faces, whilst the list of those wanting to attend gets ever longer.

The ride set off from The Green Jersey in Clitheroe, heading out to Sawley then on to Bolton By Bowland, and Hellifield before returning via Grindleton and Waddington. The route was just shy of 30 miles and undertaken with an average speed of over 17mph – brisk enough to feel challenging, but not to the extent that it made conversation difficult, after all that is the point of the event, to talk to each other and discuss ways to support or collaborate.

After the ride there was chance to dissect the ride over coffee and for the obligatory photo.

Companies represented were:

PM+M Wealth Management
The Green Jersey
Harrison Drury Solicitors
Forbes Solicitors
NatWest Business Banking
Anderton Bosonet Estate Agents
Atlantik AV
MC Financial Forecasting

Despite a request for another event this week, the next one will be in September (date TBC). Since details of the event were shared on twitter and Facebook the requests to attend future events have been coming in thick and fast, perhaps most notably from the head of world cycling’s governing body Brian Cookson. Brian is now based in Switzerland but gets back to his second home in Whalley from time to time and wants to join us when his diary permits – what better endorsement could you ask for!

If you are interested in joining the guest-list/waiting- list, then get in touch with event organisers Neil Welsh neil.welsh@pmm.co.uk or Tony Brierley tony.brierley@pmm.co.uk

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How’s Business?

SurveyEver felt like telling the Government what it’s REALLY like being in business in 2015?  Well, here’s your chance.  The Quarterly Economic Survey conducted by the British Chambers of Commerce is a highly respected snapshot of economic conditions for business.  It is taken seriously by Central Government, is one of only three national surveys regularly used by the Bank of England when setting monetary policy and is reported widely in the media.

Each quarter, businesses from across the UK are asked to take part in the survey.  Whilst almost 7,500 companies completed the last survey we need more East Lancashire businesses to complete the survey.

Your input is crucial in helping us understand the local economy and beyond.  From this quarter we are also keen to provide a local picture for East Lancashire. In order to do this we need as many local businesses as possible completing the survey. The East Lancashire of Commerce Chamber will publish the results each quarter in the Business Life magazine. Your support is gratefully appreciated.

You can complete the survey by clicking the button below:

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PM+M Gets Local Business Community’s Brains Ticking with First Ever Quiz

Over 70 people attended with 22 teams taking part from a whole variety of sectors including financial institutions, law firms, property companies and insolvency practioners. They answered questions across a number of challenging rounds from NumbersColours and Music to Around the WorldNature and Picture.

A collection raised over £400 for Derian House Children’s Hospice, Chorley.

PM+M is a leading chartered accountancy, business advisory and wealth management group.  The firm was founded in 1919 and now operates from offices in Blackburn and Burnley.

This winning team was Woodcocks Solicitors who notched up an impressive 86.5 points. They were followed by worthy runners up Southerns Solicitors.

Stephen Anderson – managing partner at PM+M – said; “We were delighted with how the first quiz went. The reaction from everyone who attended was brilliant and there was an infectious buzz in the room that was spurred on by a healthy dose of competitiveness. We were also very happy to raise so much for Derian House which is a wonderful cause.”

New Tax Relief Arrangement of Small Cash Donations to a Charity

In previous years, charities were unable to claim a tax refund on small cash donations.  New rules will see this change.

The HMRC have announced that charities can now reclaim the basic rate tax of 20% deducted from a cash donation of no more than £20.  This type of donation, usually from street collections etc, will now be considered a gift.

These new rules will allow charities to claim back up to £1,250 of the £5,000 per year limit on small donations.

Those who pay tax above the basic rate will not be subject to a higher rate tax relief on these small cash donations.  The original Gift Aid scheme provides this kind of relief if that is what you are looking for.

Small businesses ‘hit by record levels of late payment’

The UK’s late payment culture is getting worse, with the amount owed to small and medium-sized enterprises reaching record levels, a new report has revealed.

The latest research, from payment organisation Bacs, shows that late payments have now reached an all-time high of £33.6 billion.

The average amount owed to each firm is also at its highest ever level of £39,000 and firms are also having to wait longer to receive their payments.

Half of all UK SMEs are affected by the problem of late payment, and are waiting on average 28 days longer than their original payment terms to have their invoices settled.

Large companies account for nearly half of all late payments, with many blaming their internal systems for the delay.

Commenting on the research, Mike Hutchinson from Bacs said, ‘The issue of late payment is continuing to get worse for SMEs in the UK at a time when they need to be able to plan ahead for growth and ensure a strong cash flow’.

Small businesses are advised to make sure that they agree payment terms upfront, and to work to promote a culture of prompt payment throughout their business.

We can help with your cash flow planning needs – please contact us for further assistance.

Autumn Statement date is announced

The Chancellor George Osborne will make his Autumn Statement on 29 November, the Treasury has announced.

The Statement will follow the latest economic forecasts from the Office for Budget Responsibility (OBR).

It is seen as a replacement for the Pre-Budget Report, which was first introduced by Gordon Brown to outline the Government’s tax plans.

Osborne will instead use his Statement to provide an update on the UK economy and respond to the updated growth figures from the OBR.

Speaking at a dinner earlier this week, the Chancellor conceded that his short-term hopes for the economy have been revised down, but he insisted that the Government would continue with its deficit reduction plan.

PM+M awarded ‘Silver Status’ by Investors in People

We are delighted to announce that PM+M has been awarded the coveted Investors in People (IIP) Silver Status Award. We received a Certification of Recognition confirming PM+M’s Silver Status in July.

PM+M has been a proud IIP accredited firm for many years but our new Silver Status is a further mark of excellence and follows an intensive reassessment process involving interviews with our staff.

IIP Silver Status is awarded to organisations that demonstrate a forward-thinking and progressive approach to business improvement through people.

Receiving IIP Silver Status positions PM+M in the top 2% of IIP accredited companies in the UK. Just 80 organisations in the North West have received this accolade, only 11 of which are in Lancashire. We look forward to building on this success.

HMRC admits millions have not paid correct amount of tax

HM Revenue & Customs (HMRC) has said that up to 4.7 million taxpayers will be sent letters later this year telling them they paid either too much or too little income tax in 2010/11.

Every year HMRC conducts a reconciliation exercise to check that people have paid the right tax via the PAYE system. Last September, HMRC faced severe criticism when it emerged that 5.7 million people had not paid the correct tax via PAYE for the years 2008/09 and 2009/10, which led to about 1.4 million people having to pay an extra £1,428 each on average, while about 900,000 taxpayers had their debts of up to £300 written off. The explanation given by the Revenue was that a new, more effective computer system had revealed previous calculation errors.

This year the reconciliation exercise for 2010/11 will take place in late July, and HMRC estimates that between 1.7 and 3.5 million people will be repaid an average of £340 each, while 1.2 million will owe £500-£600 each.

Cheques for people previously overtaxed are due to be sent out in August and September, and calculations for underpayments will be sent in batches after that, with the last going out in December.

Those presented with a bill will have time to challenge the calculations if they think they are wrong. If the challenge is unsuccessful then the money will be taken from their earnings each month via a change to their PAYE tax code for 2012/13.

Up to £3,000 per individual will be collected this time via PAYE, more than the previous limit of £2,000.

“We expect that hardly anyone will be faced with a bill larger than £3,000, but if they want to pay us in one go by cheque they can,” said an HMRC spokesman.

HMRC to target e-traders in new tax campaign

HM Revenue and Customs (HMRC) is to launch a series of new campaigns to tackle tax avoidance, it has announced.

One of the campaigns will target those who use e-marketplace sites such as e-Bay and Amazon to buy and sell goods as a trade or business.

While occasional sellers are unlikely to be liable to tax, people earning a living as self-employed traders may need to pay income tax, national insurance and VAT.

Meanwhile, private tutors and coaches who are able to earn either a main or secondary income from their expertise will be the subject of a separate campaign to recoup unpaid tax.

HMRC said it will also build on its plumbers’ campaign and ‘give an opportunity to another group of tradespeople to come forward and declare unpaid tax’.

It confirmed that it would be using ‘cutting-edge tools’ including a ‘web robot’ to search the internet and find targeted information about specified people and companies.

“By being open about our areas of interest for the coming year we hope to maximise that exchange of information and ensure we reduce the tax gap and help customers pay what they owe,” commented Mike Wells, HMRC’s Director of Risk and Intelligence.

Meanwhile Gary Ashford, of the Chartered Institute of Taxation (CIOT), said: “The news last week that HMRC have launched 16 criminal investigations off the back of earlier campaigns shows that the taxman is taking a very tough line against suspected tax evaders.

“It will be important for HMRC to explain to e-traders the borderline between an individual selling one’s own surplus belongings and moving into trading,” he added.