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RBS Business Banking Switch – are you affected?

If you are a Royal Bank of Scotland customer, and your business has an annual turnover of less than £25 million, then you may be eligible for incentives to switch your banking to another provider.

Overview

For many years the provision of business current accounts and credit for SMEs has been dominated in the UK by the incumbent ‘big four’ banks (HSBC, Lloyds, Barclays and RBS) who together hold around 85% market share.

As a condition of the government providing financial support to Royal Bank of Scotland (RBS) in 2008, the state-owned bank is now preparing to hand over £6 billion in customer deposits and £4.2 billion in loans to challenger banks, known as the ‘business banking switch scheme’.

The government hopes this will increase competition within the banking sector and provide customers with far greater choice.

However, many business owners are still in the dark about the scheme, here we explain what the new incentive means for SMEs.

What is the business banking switch?

This is an incentivised switching scheme for challenger banks to pick up some of the RBS customer base.

Originally known as the ‘incentivised switching scheme’, it is now better known as at the ‘business banking switch’. Banking Competition Remedies Ltd (BCR) is the organisation tasked with overseeing the implementation of the scheme, independent of RBS and the UK Government.

There is £225 million worth of funding available to challenger banks in the form of dowries to encourage the switch of eligible customers.

The dowries range in size from £750 – £50,000 depending on the customer’s business turnover. Challenger banks will determine how to apply the dowries for the benefit of the eligible RBS customers through preferential offers and incentives.

Eligibility

The scheme is open to eligible RBS SME banking customers. All eligible customers should have already been contacted by RBS. To participate, your turnover must be £25 million or less, and you may not be allowed to apply if your business is in financial difficulty. Those seeking to participate in the scheme will need to be registered on the RBS microsite and will be provided with a unique reference to confirm eligibility.

Who are the challenger banks?

Eleven banks have been approved to join the scheme, including:

  • Arbuthnot Latham
  • CYBG
  • Co-Operative Bank
  • Hampden & Co
  • Metro Bank
  • Monzo
  • Nationwide Building Society
  • Santander
  • Starling Bank
  • Handelsbanken
  • TSB

When is it happening?

BCR has confirmed that the business banking switch will launch via a dedicated switching website on 25 February 2019, but applicants can register their interest now via the RBS microsite.

Should you switch?

As with any big business decision, it’s always better to seek professional advice. Although some of the offers may seem too good to miss, it’s important to consider what your bank can offer you in the long-term.

If you are an eligible RBS customer and would like to talk about the business banking switch, please contact Tim Mills on 01254 679131, or via email at tim.mills@pmm.co.uk.

HMRC brings uncertainty surrounding entrepreneurs’ relief to an end

A much welcomed amendment to the Finance Bill 2018-19 is being proposed which should bring to an end to the recent uncertainty surrounding entrepreneurs’ relief, triggered by the 2018 Autumn Budget announcements (as covered in our recent blog).

The change comes following lobbying by the ICAEW and CIOT and is set out in this ICAEW blog post.

The proposed 2018 Budget amendments remain, but with an alternative to the new test where an individual’s shareholding in a trading company will qualify for entrepreneurs’ relief where either or both of the following conditions are met:

  1. By virtue of that holding, the individual is beneficially entitled to at least 5% of the profits available for distribution to equity holders and, on a winding up, would be beneficially entitled to at least 5% of assets so available, or
  2. In the event of a disposal of the whole of the ordinary share capital of the company, the individual would be beneficially entitled to at least 5% of the proceeds.

This new second part of the test should remove the uncertainty surrounding shareholders with alphabet shares as it indicates that where a company with alphabet shares is disposed of, then provided the shareholder receives at least 5% of the sale proceeds, they should qualify for entrepreneur’s relief even if they have not had an entitlement to 5% of dividends.

It is hoped that the amended test is adopted into law and provides an end to uncertainty for the vast majority of private company shareholders.

For further advice or a discussion about entrepreneurs’ relief, please contact our tax director, Claire Astley, on 01254 679131 or via email at claire.astley@pmm.co.uk.

Christmas present appeal 2018

 

 

 

 

 

 

In 2010, we launched the first ever PM+M Christmas present appeal where our team, clients and friends were asked to donate Christmas presents for local vulnerable children. Due to the success and generosity over the past eight years we have decided to run the appeal again.

Over the next few weeks we’ll be collecting gifts for Blackburn, Burnley and Bury Children’s Services and want to make it our biggest year ever!

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
  • Gifts can either be 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. The last day for drop off is Thursday 13 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 office addresses are below. Should you require any further information, please get in touch with our marketing team on 01254 679131.

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Jim Akrill – corporate finance partner at PM+M discusses why shareholders need to plan for the future

Jim, what is one of the most common questions you ask your corporate clients?
There are many but one of the most important is:  What would you like to achieve and how are you going to do it? It is always surprising to find how many look not much further forward than next week when they need to be thinking longer term.

What is the problem?
Well, we often see a reality gap between the current position of the business and the value aspirations of the shareholders. Not only that, but the thoughts of individual shareholders on matters such as strategy and value realisation also vary. Needless to say, if you have disagreement at the top then the business is more likely to underperform. And some of the changes required might not be overnight fixes. It’s often the “elephant in the room” syndrome.

How do you overcome that?
These things need to be discussed openly and often they are not, especially in family businesses. Shareholders must be encouraged to produce a plan to deliver both business and personal objectives which can only be done through honest dialogue. We work with business owners to resolve various issues, including those relating to growth, exit and succession.

When should the process start?
It’s never too early to start, so now. And it doesn’t just apply to more mature businesses. For example, we are working with a new, high growth software business and already talking about how to realise value for the shareholders.

What does the process involve?
We begin with a strategic review which looks at shareholder aspirations for the business, and ultimately themselves, as well as assessing business performance. Significant issues can be identified and we can start to work with shareholders to agree a shared vision for the future. For some businesses a sale might be the best way forward. For others it might be a question of re-focusing and making changes to create additional value.

How challenging is it?
It depends! Some businesses face more difficult circumstances than others and you can imagine how challenging shareholder dynamics can be. We work in partnership with shareholders to create achievable action plans. Being part of a larger accountancy practice also allows us to tap into other skilled professionals from within the firm. So, for example, we will work closely with our tax and wealth management colleagues to ensure that all angles are considered. This provides reassurance for our clients.

If you would like to discuss how you can plan for the future, please contact our Corporate Finance Partner, Jim Akrill, on 01254 604353 or via email at jim.akrill@pmm.co.uk.

 

PM+M payroll shortlisted at The Rewards 2018

We are pleased to announce that for a second year running, our PM+M payroll team have been shortlisted for The Service Provider Team Award at The Rewards 2018.

The popular ceremony, The Rewards, previously the payroll world awards, is returning for its 7th year and is known as the leading independent awards for payroll, HR and reward professionals in the UK.

The ceremony will be taking place at Hilton London Bankside on November 7 and is the most distinguished event on the industry’s calendar. It is the perfect opportunity to celebrate high achievements and excellence in payroll, reward and related sectors.

Entrants must demonstrate outstanding performance and the judges will be looking for evidence of success in one or more of the following criteria;

  • Outstanding effort under testing circumstances
  • Significant improvements in performance
  • Achievement of targets/incentives
  • Achievement of training/qualifications
  • Implementation of new procedures or systems
  • Excellent teamwork within their own team or with other departments
  • Excellent customer service record

Providing outsourced payroll solutions to over 400 clients, our payroll team at PM+M are highly regarded as one of the leading payroll providers in the North West. Over the past year we have seen many changes to our way of working, having implemented several changes that have enhanced both our procedures and our service delivery to clients.

Julie Mason – head of payroll at PM+M – commented: “The PM+M payroll bureau has grown tremendously and seen a digital transformation over the last twelve months. We have introduced new systems and procedures to improve our services for clients and ensure we provide great value for money.  We work really hard to help our clients and are thrilled to be nominated.  We can’t wait to find out the results!!”

PM+M apprentice James Cocker appears on Sky News

Yesterday saw thousands of students across the UK receive their highly anticipated A-Level results, which for many acted as a deciding factor of where they were going to spend the next three years at university.

Recent statistics however have shown that more and more students are opting for apprenticeships over university degrees, as a way of kickstarting their careers through work-based learning without the burden of debt.

As a firm committed to supporting the region’s young people and producing home grown talent, PM+M recruits a number of apprentices each year. This year’s intake of 7 apprentices was our largest to date. We are so pleased that the first 5 are settling in well and taking working life in their stride and are looking forward to the remaining 2 joining us in September.

Yesterday was a particularly eventful day for James Cocker, one of our new Run My Business team apprentices, who alongside receiving his own A-Level results, also made an appearance on Sky News discussing the benefits of apprenticeships compared to university tuition.

In his interview, James commented, “I know there’s a chance I’m missing out on some of the social aspects of university, but I can easily visit my friends at uni and I’m already making new friends at work, so I’m definitely going to have a good social life.

“Plus, instead of being £60,000 in debt after three or four years, I might have earned a similar amount, so I’ll effectively be £120,000 better off.”

We would like to offer our congratulations to James and our corporate services apprentice, Rebecca Nuttall, on their outstanding A-Level results, and a huge thank you to all of our apprentices for choosing to join us at PM+M.

Inheritance tax hits record high

Inheritance tax planning is something that many of us don’t want to think about. Facing your own mortality isn’t easy and can involve some difficult decisions, particularly in complex and extended families.

Recent statistics released by the government have revealed that over the last financial year, inheritance tax receipts reached their highest-ever level (totalling £5.2bn in 2017/18), a value that has increased by a staggering 8% (£388m) since the 2016/17 financial year.

There can be significant benefits from doing some basic tax planning at the right time, providing reassurance that your affairs are in order and your family aren’t going to face a huge tax bill. We always tell our clients to keep it simple. There are some elaborate schemes out there, but they usually bring lots of complexity and can reduce future flexibility. More often than not, some sensible advance planning can achieve substantial benefits without the complexity.

The right tax planning can help you steer clear of large inheritance tax bills and make sure that you avoid adding to this tax take, allowing you to achieve more from your money and secure your family’s future. The key to inheritance tax efficiency is to think about it early and be open with your family. Having conversations now can avoid problems later and pave the way for some effective tax planning.

To find out more about how we can help you plan efficiently to reduce future tax liabilities, please feel free to contact either Jane Parry (jane.parry@pmm.co.uk) or Wendy Anderson (wendy.anderson@pmm.co.uk).

Full article and latest statistics available here

Is your business ready for Making Tax Digital?

Making Tax Digital (‘MTD’) for VAT is the first phase in what is intended to make the UK tax system more streamlined and will bring about major changes to affected businesses.

As part of the new legislation, businesses that are VAT registered and trading over the VAT registration limit on 1 April 2019 will be required to keep their accounting records digitally and submit their VAT return to HMRC through MTD compatible software. This means businesses will no longer be able to submit manually through the HMRC gateway.

It is vital that all affected businesses are aware of their obligations relating to these changes and the processes which need to be put in place to make them compliant.

We are urging all UK business owners to consider their options now to ensure that they are compliant in time for the deadline of 1 April 2019. PM+M have already helped numerous clients prepare for MTD and will continue to support businesses as they start the process to comply with HMRC’s new rules.

We would be more than happy to answer any questions you have about MTD and advise you on the best route to take for your business. Please feel free to:

  • Read our helpsheet
     
  • Attend one of our FREE Making Tax Digital seminars to find out more about the implications of MTD:

Tuesday 4 September
PM+M, Greenbank Technology Park, Challenge Way, Blackburn, BB1 5QB (register your place here)

Tuesday 11 September
East Lancashire Chamber of Commerce, Red Rose Court, Clayton Business Park, Accrington, Lancashire, BB5 5JR (register your place here)

  • Call into one of our FREE MTD drop-ins – with no appointment necessary, call into our offices from 9am – 5pm on one of the below dates for a free consultation with a specialist MTD consultant who will talk you through your next steps and provide guidance on which software to use and how / when to implement this into your business:

Wednesday 18 July
PM+M, Greenbank Technology Park, Challenge Way, Blackburn, BB1 5QB (register your place here)

Thursday 9 August
PM+M, 9A Finsley Gate, Burnley, BB11 2HA (register your place here)

Friday 17 August
PM+M, Waterfold House, Waterfold Business Park, Bury, BL9 7BR (register your place here)

  • Get in touch with us for a consultation on how to prepare for MTD, which will be followed by software set up and training – we would welcome the opportunity to sit down with you to discuss your options in more details. Once you have chosen your preferred cloud software package, we will then provide you with setup assistance, alongside ongoing support whenever you need it. We will also train you and your team on the best ways to use whichever system you have decided to use.

For any further information, help or advice with your Making Tax Digital requirements, please do not hesitate to contact us on 01254 679131 or email MTD@pmm.co.uk

Informative and Entertaining – who would have thought you’d hear that when talking pensions?

On 6 June 2018, over 40 delegates gathered at Turf Moor, not to greet the imminent arrival of European Football at Burnley FC for the first time in 55 years, but for the arrival of Sir Steve Webb, former Minister for Pensions and now Director of Policy for Royal London, to listen to him deliver a highly anticipated ‘Tour of the Pensions Landscape’ as guest speaker at our wealth management seminar.

It is probably fair to say that pensions aren’t known for being exciting, but that view was quickly dismissed by the passionate and witty discussion of Steve. Having spent 18 years as an MP, Steve’s public-speaking abilities are second to none and his presentation at Turf Moor yesterday certainly didn’t disappoint. Steering away from the standard PowerPoint presentation, Steve took a freshly-upholstered chair from Burnley FC’s newly refurbished Chairman’s Lounge, literally turned it upside down and used the four legs as the four pillars of his discussion, giving insight into state pensions, workplace pensions, pension freedoms and the tax treatment of pensions, describing the latter as the broken leg of the chair.

Discussion and debate took place around the merits of making voluntary national insurance payments for those unlikely to receive a full state pension and increasing workplace pension contributions to ensure employees can afford to retire. When he got to explanations around pension freedoms and tax there were notes aplenty being taken, interspersed by fits of laughter as Steve ensured there was never a dull moment – it was a masterclass of content and delivery.

Should you wish to discuss your own pension and retirement issues, please don’t hesitate to get in touch with a member of our team. PM+M wealth management works collaboratively with our tax team and can navigate you from the beginning to the end of your pension journey, considering everything from investment choice to tax-relief, and Lifetime Allowance to Tapered Annual Allowance and estate planning. Our specialists can help you to plan, understand your options and ultimately help you achieve more from whatever route you take. For a confidential, no obligation discussion, please contact us 01254 679131 or via email at wealthmanagement@pmm.co.uk.

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

Gender pay gap: a comparison

By 4 April 2018, all UK firms with over 250 employees were required to publish details of their gender pay gap.

Although we don’t fit this description and so were not legally required to submit a report, we decided to conduct our own analysis to help us understand our own pay gap patterns and identify ways in which we could make changes for the better.

We are pleased to report that PM+M has a mean gender pay gap of only 2.9 per cent, comparable to the top 20 accountancy practices in the UK which average a 16.8 per cent gap. When looking at the median gender pay gap, PM+M posted a -14.6 per cent gap, which compares to a 12.1 per cent national average and a Lancashire average of 7.6 per cent.

Our minimal pay gap is reflective of our strong belief in a diverse workplace, inclusive culture and flexibility for our people, and we are really proud to be so far ahead of our peers in this area.

With PM+M having a female managing partner and four of our thirteen partners being female, we truly understand the importance of gender diversity in the workplace and equal opportunities for all. Our focus on gender equality as a priority area confirms our commitment to closing the gender pay gap altogether to ensure that diversity and inclusion is maintained at PM+M in the years to come.