Allotts Newsletters - Business Update

Allotts Newsletters - Throughout the year articles available for dowload.

Contact UsRequest a Meeting

Newsletters

Business Update

Spring 2017 - The gig economy: reining in a giant

It’s been hard to miss the news coverage given to the tribunal decision on the employment rights of Uber drivers.
Spring Newsletter 2017

When it comes to disputes over employment classification, it’s generally been a case of taxpayers wanting to establish self-employed status to benefit from the related tax advantages. However, the Uber drivers involved argued that they should be treated as employees, wanting entitlement to the national minimum wage, company pension contributions, holiday pay and sick pay.

Winter 2016 - Benefits of charitable giving

This is the last newsletter for 2016 and it’s certainly been a year of change for the UK! In our winter edition, we explore the most important developments in the world of business and taxation and we hope you enjoy reading it.


Winter Newsletter 2016

Our feature this edition is Salary sacrifice for benefits: change down the road. Salary sacrifice is generally a win-win for both employers and employees. But such arrangements are now under government scrutiny, with restrictions from 6 April 2017.

Our other stories include:

Capital gains tax: reliefs and timing The gains for the Treasury from capital gains tax have been rising. So it pays to understand the various reliefs you can claim and how to use them most effectively.

Changes to non-domicile status Next April will see significant change to the non-domicile rules. If you are likely to be caught by the new ‘15/20’ rule, you should seek guidance sooner rather than later.

Calling HMRC – is anybody there? A recent survey of small businesses attempting to communicate with HMRC found that only half found the experience satisfactory.

We hope you find the contents of this newsletter useful and informative and, as always, let us know if you think you may be affected by any of the topics in this edition.

Autumn 2016 - The new state pension system

April marked the beginning of the new single-tier state pension.
Autumn Newsletter 2016

The state pension regime underwent a seismic change on 6 April 2016. Until then the system had long consisted of two components: a basic state pension (£119.30 in 2016/17) and, for employees only, an earnings-related pension. On top of these two was the means-tested Pension Credit, guaranteeing a minimum overall weekly retirement income of £155.60 (in 2016/17).

Unless you reached your State Pension Age (SPA) before April this year, that complicated structure will no longer apply to you. In place of the two state pensions there is now a single-tier pension, pitched at a level just high enough (£155.65 a week maximum in 2016/17) to make the remaining element of Pension Credit largely irrelevant.

Spring 2016 - Top Up Your Pension Income

It’s a new year and the perfect time to think about reviewing your financial situation.
Spring Newsletter 2016

Both on a personal level and for your business, there are going to be a number of important changes this year so make sure you’re prepared. Our spring newsletter will help to remind you of what’s coming up in the world of business and taxation. We hope you enjoy reading it.

Our feature this edition is Incorporation of buy-to-let: pros and cons.

Our other stories include:

  • PAYE: a warning and an opportunity
  • Scottish tax residence rules
  • A ten mile distinction

We hope you find the contents of this newsletter useful and informative and, as always, let us know if you think you may be affected by any of the topics in this edition.

We hope you find the contents of this newsletter useful and informative and, as always, let us know if you think you may be affected by any of the topics in this edition.

Winter 2015 - Mixing Social Media With Business?

What your staff say about your business on social media can affect its reputation.
Winter Newsletter 2015

But what can you do if disaffected employees post derogatory comments on personal Facebook pages or Twitter accounts in their own time?

The Employment Appeal Tribunal (EAT) decided recently that an employee who posted negative and abusive comments on a social media site was fairly dismissed. But the case highlighted the challenges employers face where employees’ postings – often made with little thought – may instantly receive wide public exposure.

In the recent case of British Waterways Board (BW) v Smith, the employee, Mr Smith, had made offensive comments about colleagues on his personal Facebook page. He also indicated that he had drunk alcohol during a week he was on standby, which was not allowed, although he later denied he had actually done so. BW had a social media policy that expressly forbade "any action on the internet which might embarrass or discredit BW". The disciplinary hearing found that the remarks could have undermined the confidence that other employees and the public had in BW, and that Mr Smith’s breach of the social media policy amounted to gross misconduct, meriting dismissal.

Summer 2015 - Curtains For The Annual Tax Return?

Millions of taxpayers will no longer have to make annual tax returns if plans outlined in the Budget come to fruition.
Summer Newsletter 2015

But the timetable for giving personalised digital accounts to over 50 million individuals and small businesses by 2020 is ambitious, and it is worth remembering that other big government IT projects have run into difficulties.

The idea is that the digital accounts will bring together everything needed to calculate an individual’s tax position. This will include details that HM Revenue & Customs (HMRC) already holds, such as pensions and income taxed under PAYE, and third party material including savings income.

Data will be added in real time so taxpayers will know how much they owe through the year. Taxpayers will be able to register, update and file information at any time. They will also make tax payments directly from the account with an option to ‘pay as you go’.

Spring 2015 - Where There's A Will There's A Way

The intestacy rules in England and Wales have been changed. These are the rules that govern what happens to a person's estate...
Spring Newsletter 2015

... if they die without making a will. Over half the adult population have not made a will so this is an important change. The changes do not apply to the Scottish intestacy rules.

The new rules introduced in October tend to benefit a surviving spouse or civil partner and vary according to whether or not a couple have children.

Where there are no children, the rules now say that the surviving spouse or partner should receive all of the deceased person's estate outright. Previously, they would have received the first "450,000 plus half the remainder – and the other half would have been divided between the deceased person's other relatives.

Winter 2014 - Wake Up To Auto-Enrolment

Automatic enrolment of employees into pension schemes has passed the two year mark. The time to ignore it is over. Winter Newsletter 2014

About 4.7 million people have been automatically enrolled into a workplace pension since the system started in October 2012, according to The Pensions Regulator (TPR). However, a closer look at the numbers shows that by the end of September, fewer than 34,000 employers had completed their automatic enrolment declaration of compliance. The Government wisely chose to phase in the process of automatic enrolment, starting with the largest employers.

To date, auto-enrolment has generally been undertaken by employers with the resources to handle the administrative work involved. Even so, there have been glitches: TPR enforcement action meant one company in the FTSE 250 had to pay over £140,000 in back contributions after missing their staging date for the introduction of automatic enrolment.

Summer 2013 - Hopes For Holiday Lets Just Castles In The Air

Tax reforms have not been kind to owners of furnished holiday property in recent years. Tax relief for losses was restricted in 2011, and the qualifying conditions for the remaining income tax and capital gains tax (CGT) benefits were tightened up in 2012.Summer 2013

Now an Upper Tribunal (Tax and Chancery) decision has dashed hopes of most furnished holiday homes qualifying for inheritance tax (IHT) business property relief (BPR). The decision in HM Revenue & Customs v Pawson overturns the 2011 First-tier Tax Tribunal decision. HMRC previously accepted that BPR was normally available where lettings were short term and the owner, or their agent, was substantially involved with the provision of services. But this changed to a stricter interpretation a few years ago, with the emphasis on the level and type of services rather than who provided them. The original First-tier decision would have meant that relief was available despite only minimal services being provided – so virtually all furnished holiday homes would have qualified.

Spring 2013 - Your Shares Or Your Rights?

The Government is pushing ahead with its shares for rights scheme. It is included in the Growth and Infrastructure Bill that has been making its way through Parliament...
Spring 2013

...despite the scheme receiving a generally lukewarm response.

The scheme will create a new type of employment status called 'employee-owner'. In return for giving up various employment rights, an employee-owner will receive shares in their employer's company worth between £2,000 and £50,000. These shares will be exempt from capital gains tax (CGT). The employment rights given up relate to unfair dismissal, redundancy, and the right to request flexible working or time off for training. Also, 16 weeks' notice will be required when returning from maternity leave, instead of the usual eight.

Winter 2012 - Dividend Or Bonus?

Right now is a good time for companies with a year-end of 31 December to decide if any further company profits should be withdrawn, and, if so, whether it should be done by way of dividend or a bonus.Winter 2012

The scheme will create a new type of employment status called 'employee-owner'. In return for giving up various employment rights, an employee-owner will receive shares in their employer's company worth between £2,000 and £50,000. These shares will be exempt from capital gains tax (CGT). The employment rights given up relate to unfair dismissal, redundancy, and the right to request flexible working or time off for training. Also, 16 weeks' notice will be required when returning from maternity leave, instead of the usual eight.

Summer 2012 - Dealing With Late Payments

Getting your customers to pay you promptly is critical to your cash flow and ability to plan ahead. Summer 2012

The longer it takes customers to pay, the more likely it is that they will not pay at all. Happily, there are steps you can take to encourage faster payment.

The scheme will create a new type of employment status called 'employee-owner'. In return for giving up various employment rights, an employee-owner will receive shares in their employer's company worth between £2,000 and £50,000. These shares will be exempt from capital gains tax (CGT). The employment rights given up relate to unfair dismissal, redundancy, and the right to request flexible working or time off for training. Also, 16 weeks' notice will be required when returning from maternity leave, instead of the usual eight.

Spring 2012 - Major changes Proposed For Employment Law

The law could be shifting in favour of employers, especially for smaller businesses.
Spring 2012

The Business Secretary, Vince Cable, has outlined a package of measures aimed at revising the way employers hire, manage disputes, and dismiss employees. The idea is to reduce unnecessary demands on business while still generally safeguarding employees' rights. From 6 April 2012, the period that employees must have been with an employer before they can claim unfair dismissal is to be raised from one to two years.

One of the more radical proposals is to introduce compensated, 'no fault' dismissals for micro-firms with fewer than ten employees. An underperforming employee of such a micro-firm could be paid off with a cash settlement, with no subsequent right to claim for unfair dismissal. The Government had previously aired the suggestion that compensated, 'no fault' dismissals might completely replace the unfair dismissal process. The resulting controversy ended in the Prime Minister's denial of the proposal.

Winter 2011 - Solving partnership problems

Partnerships can carry on for years without anyone even thinking about the partnership agreement. Then a problem arises and the partners discover that the agreement is inadequate, out-of-date or – worst of all – might not even exist.
Winter 2011

A well-designed partnership agreement can help solve a number of difficulties.

The basic problem is that the provisions of the Partnership Act 1890 apply where there is no specific agreement to the contrary. For example, under the Act, it is not possible to expel a partner, an individual partner can dissolve the partnership, and the death or bankruptcy of a partner will automatically dissolve the partnership.

An out-of-date or non-existent partnership agreement could make it difficult to deal with the problem of an under-performing partner. A well designed partnership agreement might give the majority the right to expel an individual partner or at least the power to alter a partner's status, maybe changing them to a salaried partner.

Autumn 2011 - 50% Tax Rate On The Way Out?

The Chancellor and the Business Secretary have recently indicated that the 50% tax rate will only be temporary. So if your income currently exceeds the £150,000 threshold, what measures can you take in the interim to avoid paying more tax than is absolutely necessary?
Autumn 2011

As an investor there are several ways to shelter investment income. For example, the annual investment limit for cash individual savings accounts (ISAs) is quite low at £5,340, but the maximum you can invest in a full ISA this year is £10,680.

Spring 2011 - Keeping The Peace At Work

Employers often face difficult decisions about disciplining, and sometimes dismissing, staff. Clear discipline and grievance policies can minimise the likelihood of workplace issues arising, and also help you to retain key staff by giving them the means to address...
Spring 2011

... any problems they face before matters get to the stage that they want to leave.

The tough economic climate may be making people more likely to fight redundancy, and financial and employment stress could lead to an increase in discipline and grievance issues. As an employer, you could also be caught by recent changes in the law; for example, the abolition of the default retirement age on 1 October 2011, and the right to request training introduced on 6 April 2010 for organisations with 250 plus employees and applicable to all employers from 6 April 2011.

The Advisory, Conciliation and Arbitration Service (ACAS) Code of Practice on disciplinary and grievance procedures (www.acas.org.uk) should be followed. Although the Code is not a legal requirement, it is strongly recommended that you use it because a failure to do so will tell against you at an Employment Tribunal.

Winter 2010 - 'Time To Pay' Woes

Since 2008 HM Revenue & Customs (HMRC) has provided the 'Time to Pay' (TTP) scheme, a rapid response service to businesses that need more time to pay their tax liabilities. Since then, the qualifying conditions for TTP have been tightened up considerably.
Winter 2010

Sometimes the guidelines for this scheme are misunderstood, leading to businesses being refused a TTP arrangement when one should otherwise have been granted. There is a myth that TTP cannot cover Pay As You Earn (PAYE) liabilities; in fact it can. If the PAYE due is less than £10,000 and it can be paid within 12 months, HMRC should grant TTP. Larger debts or longer payment periods will be referred to a senior HMRC officer.

If the PAYE liability relates to the 2010/11 tax year, there could be a penalty for late payment. Unfortunately, the PAYE computer that issues penalty warning letters does not record that a TTP arrangement has been set up.

Summer 2010 - For Richer, For Poorer

Your marital status – whether or not you are married or in a civil partnership – can make a considerable difference to your tax position.
Winter 2010

In its election manifesto, the Conservative Party proposed recognising 'marriage in the tax system' by allowing up to £750 of unused personal allowance to be transferred between spouses and civil partners if the recipient is a basic rate taxpayer. The idea – worth a token £150 a year – could still see the light of day as the Liberal Democrats have agreed not to oppose it.

Marriage is already a factor in tax planning and can be an advantage or a drawback. Married couples can transfer assets to each other with no capital gains tax (CGT) implications, as long as they are living together during the tax year in which the transfer takes place. Using this exemption, a couple could transfer a valuable asset into their joint names before its ultimate sale, so that they can each use the CGT annual exemption (£10,100 for 2010/11) against their own portion of the gain.

Spring 2010 - HMRC's New Charter Makes Taxpayer Promises

HM Revenue & Customs (HMRC) has continued in its attempts to improve its relationship with taxpayers by issuing a new taxpayers' charter. It is called 'Your Charter' and was launched on 11 November 2009.
Spring 2010

The Charter was included in the Finance Act 2009 and sets out taxpayers' rights and how they should expect to be treated by HMRC. It also outlines what HMRC expects in return.

The new Charter says that, as a taxpayer, you can expect HMRC to respect you and treat you as honest. HMRC also pledges to help you to get things right, treat you even-handedly, protect your information and respect your privacy. There are more direct commitments to 'tackling people who deliberately break the rules and challenge those who bend the rules' and to keeping the cost of dealing with HMRC as low as possible. In return, HMRC expects taxpayers to be honest, respect HMRC staff and take care to get things right. The Charter is published alongside the 'HMRC Vision' (launched on 3 November 2009) which is a statement of HMRC’s aspirations.

Winter 2009 - What Price Accommodation?

The huge increase in house prices in recent years has led some employers to provide free accommodation for directors and employees.
Winter 2009

But employers should remember that there is a special tax charge when they provide living accommodation for a director, employee, or a member of their household. Some accommodation is exempt from tax, where, for example

The Charter was included in the Finance Act 2009 and sets out taxpayers' rights and how they should expect to be treated by HMRC. It also outlines what HMRC expects in return.

An employer provides housing or lodgings for the better or proper performance of the employee's duties. Accommodation is supplied in accordance with customary practice.

The exemptions for proper performance and for customary practice do not apply to directors, unless the company is non-profit making or is set up for charitable purposes only.

Summer 2009 - Allotts: More than Chartered Accountants

However there are many other services which we offer to both businesses and individuals which you may not have come across but which may be of benefit to you.
Summer 2009

Advice on redundancy and staff termination payments. Recruitment assistance; placing advertisements, screening candidates and selecting for interview. Review of employment conditions and contracts. HR strategy and planning. Advice on employment legislation and grievance and disciplinary procedures, maternity and paternity pay, sick pay etc.

Spring 2009 - Opportunities On Assets

The value of many assets has fallen in the economic downturn. While that is generally bad news, it is most probably temporary, and shares and property are likely to appreciate again in the future.
Spring 2009

Until then, the depressed values present an opportunity to make gifts or to carry out other transactions that you might have considered before but put off because of the tax implications.

This may be a good time, for example, to pass assets to your children. If you make a gift, capital gains tax (CGT) is charged as if you had sold the asset at its market value. Although there is a tax relief for gifts, it does not cover non-business assets. Perhaps you have bought a property for a son or daughter, but kept it in your name. You could pass it on and, depending on what you paid for it, you might now have little or no CGT to pay on the gift. The lower value would also reduce any inheritance tax that might arise in the unfortunate event that you die within seven years.

Some business reorganisations give rise to CGT. Although there are certain tax reliefs, many arrangements do not qualify. There might now be much less tax on such a transaction than previously.

Winter 2008 - Where There's A Will...

If you don't make a will, you could end up leaving your relatives with serious problems after your death. Dying without a will increases the complexity and time involved in dealing with your estate. And the resulting uncertainty or disagreements between relatives can sour family relationships.
Spring 2009

If a person dies intestate – without a will – the law will determine who inherits what. Many people believe that all their assets will automatically go to their surviving spouse or civil partner, but that is only the case for small estates. Since 1993, the statutory legacy that a surviving spouse (and nowadays a civil partner) can inherit in England and Wales has been set at £125,000 where there are surviving children and £200,000 otherwise.

Autumn 2008 - Busy At Work Right Now?

When things in your life seem almost too much to handle, when 24 hours in a day are not enough, remember the mayonnaise jar… and the coffee.
Autumn 2008

A professor stood before his philosophy class and picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full. They agreed that it was. The professor then picked up a box of pebbles and poured them into the jar. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The professor picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He then asked once more if the jar was full.  The students responded with a "yes".

The professor then produced two cups of coffee and poured the entire contents into the jar, effectively filling the empty space between the sand. The students laughed. "Now", said the professor, I want you to recognise that this jar represents your life. The golf balls are the important things. Your family, your children, your health. Things that if everything else was lost and only they remained, your life would still be full. The pebbles are the other things that matter. Your job, your house, your car. The sand is everything else. The small stuff.

Spring 2008 - Sage 50 Accounts 2008

The recent launch of the latest version of the UK#39;s leading Business Management software brings a new name and new features that will help existing and new users manage their business more effectively.
Spring 2008

The product has been rebranded, Sage 50 Accounts, Accounts Plus and Accounts Professional, replacing the previously named Line 50 range. New software released, especially those that happen as an annual event, can sometimes be no more than a facelift.The Sage 50 2008 range definitely has some really useful additions this time around, some of which are highlighted below: