Would your business benefit from monthly or quarterly management accounts?

Having quality management accounts can be beneficial to your business as they can help you to grow by making it more efficient and hopefully more profitable.

Management accounts are a set of detailed accounts prepared to illustrate the company’s   performance. The goals of the accounts are to provide key financial information which will help with short term financial decisions and in planning for long term development. 

The main advantage of having management accounts is being able to control the business. If you want to make projections, cash flows or be able to be accepted for finance, management accounts are an essential starting point. They will provide you with the up to date information throughout the year to give you accurate feedback of performance. If you find that your business is growing rapidly and want to be able to plan for the future, we recommend that you put in the controls and ways of reporting now to help guide the growth.

Typically, the accounts are prepared on a quarterly basis; it is not uncommon however to have monthly reports supplied to the business.

If you feel that additional guidance is needed as your business starts to grow, then please get in contact with us so we can help you make the right the decisions. Please visit our website for a complete list of our support services Click Here. 

Or contact us on 0116 2423400 or info@torrwaterfield.co.uk 

Eoghan Macilwraith, Accounts & Tax 

 

Autumn Budget – 29 October 2018

So, we already knew about some of the announcements before the chancellor, the Rt. Hon. Philip Hammond MP, spoke yesterday, so much so he even made a joke about toilets and leaks. As ever there was good news and bad news for taxpayers, a full summary is on our website but here are some good news/bad news highlights:

If you are a business…

Good news

  • Capital allowances – Annual Investment Allowance (AIA) increasing from £200,000 pa to £1million pa for 2 years from 1 January 2019
  • Capital allowances – a new Structures and Buildings Allowance (SBA) for non-residential buildings on eligible construction costs on or after 29 October 2018, this will enable business to claim 2% pa on cost
  • The corporation tax rate, as previously announced, will drop to 17% from 2020

Bad news

  • Capital allowances – the writing down allowance (WDA) on special rate pools, for things such as cars with CO2 emissions of over 130g/km, reducing from 8% to 6% pa
  • Capital allowances – discontinued 100% allowances for energy & water efficient equipment, although you will still be able to claim AIA’s
  • National Living Wage (previously National Minimum Wage) for over 25’s increasing from £7.83 per hour to £8.21 (which also has an effect on the auto-enrolment pension contribution cost)

And more bad news for larger companies

  • Digital Services Tax – for large digital companies (e.g. Amazon) – 2% on revenues linked to UK
  • Corporate capital loss restriction for large companies (from April 2020) – there is already a £5m cap on income losses, this is now extended to capital losses as well
  • Employment allowance restricted to businesses below £100,000 employers NIC
  • R&D tax credit (cashing in instead of reducing tax bill) capped at 3 times the PAYE & NIC liability
  • Off payroll working (IR35) currently in force for public companies will be introduced on private medium and large companies (although not until 2020) – PAYE and NIC will be deducted from the deemed employee and Employers National Insurance will be payable by the company.

If you are an Employee…

Good news

  • Personal allowance increasing from £11,850 to £12,500
  • Higher rate threshold increasing from £46,350 to £50,000 (these two increases will mean a basic rate tax payer will save £130 pa, a higher rate tax payer £860 pa and an additional rate taxpayer £600 pa)
  • National Living Wage for over 25’s increasing from £7.83 per hour to £8.21

Bad news

Other taxes…

Good news

  • Stamp Duty – First time buyers of a qualifying shared ownership in a property of £500,000 or less will get an exemption from SDLT and this is backdated to 22 November 2017 (i.e. you can claim a refund)
  • Stamp duty refunds – the time to make a claim for a refund on the 3% supplement on buying your new home before selling your old home, has been extended from 3 months to 12 months from the sale of your old home (although the filing deadline for SDLT returns is reduced to 14 days after the effective rate of transaction)
  • Capital Gains – annual exemption increased from £11,700 to £12,000 pa

Bad news

  • Rent a room relief – you will actually need to have shared the premises during part of the time you are claiming the relief, effectively excluding income from places like Airbnb
  • Entrepreneurs relief – to qualify, the minimum period is extended from 12 months to 24 months
  • Capital Gains – private residence relief final period exemption reduced from 18 months to 9 months
  • Capital Gains – lettings relief will only apply when the property is in shared ownership with a tenant, in reality this means very few people will qualify and therefore only get private residence relief on sale of their home, however this is subject to consultation and may well change

The above is only a brief summary of the proposed changes. For a more detailed breakdown please visit our website here.

If you have any questions about the budget, or how it will impact you or your business, please contact us on 0116 242 3400 and we will be happy to help.

Denise Burley

Self-employed Class 2 National Insurance will not be scrapped

The government has decided not to proceed with plans to abolish Class 2 National Insurance Contributions (NICs) from April 2019.

Class 2 NICs are currently paid at a rate of £2.95 per week by self-employed individuals with profits of £6,205 or more per year. The government had planned to scrap the Class 2 contribution and had been investigating ways in which self-employed individuals with low profits, could maintain their State Pension entitlement if this inexpensive contribution had been abolished.

In a written statement to MPs, Robert Jenrick, Exchequer Secretary to the Treasury, stated that:

‘This change was originally intended to simplify the tax system for the self-employed. We delayed the implementation of this policy in November to consider concerns relating to the impact on self-employed individuals with low profits. We have since engaged with interested parties to explore the issue and further options for addressing any unintended consequences.’

‘A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the State Pension rise substantially. Having listened to those likely to be affected by this change we have concluded that it would not be right to proceed during this parliament, given the negative impacts it could have on some of the lowest earning in our society.’

If you want to discuss any of this further please get on touch, 0116 2423400 or info@torrwaterfield.co.uk 

The Rutland Plod – TW Challenge 2018

Last year the team, friends and family took part in a 2 day challenge, walking 23 miles per day along The Llyn Peninsula. This year we are challenging ourselves even further by trekking 40 miles around Rutland overnight. This means no time to rest as the team begins the challenge at 10pm on Saturday 27 October and will continue non-stop (except for a few pub breaks!) through into the late afternoon of Sunday 28 October, taking a total of 16 to 18 hours to complete.

After parking our cars Mike Waterfield and Stu Caney will lead the team along the south end of Rutland Water before walking up the west side. This will be a good starting point as it will prevent the group from getting lost in the dark as Rutland Water will be on our right hand side for a couple of hours (around 6 miles).

Shortly after midnight and a short break to recharge, we will cross over the River Gwash, pass through Braunston in Rutland and then make our way south whilst the sun rises. The clocks will have gone back by this point which means we have an early finish! Matt Smith and other members of Torr Waterfield will be meeting us once we reach Morcott at around 9am, when we will then follow the River Welland from Barrowden after breakfast for 6 miles. This will lead us to the built up village of Ketton where we can stop for a bite to eat at around 1pm before eventually getting back to the starting point for 3pm.

We will also be meeting a few others in Ketton who were not able to join us for the whole 40 miles. They will be walking the last 5 miles with us and celebrating the success of completing the challenge!

For any long distance walking challenge there is only one form of training that will ensure you perform well – walking! So in the lead up to the challenge we will be doing a number of training walks to ensure we can endure the whole 40 miles! Our first training walk was last Saturday starting from Bradgate Park and walking 15 miles which took around 6 hours.

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Over the coming weeks we will be posting other blogs to keep you updated on how our training is going and once we complete the challenge we will let you know how tough it was and how much money we raised in total.

The money we raise will be donated to our charity of the year, Coping with Cancer. To find out more about them you can look at our previous blog https://torrwaterfield.wordpress.com/2018/02/28/our-charity-of-the-year-coping-with-cancer/ or visit their website https://www.c-w-c.org.uk/ 

If you would like to show support and sponsor us no matter how small or large you can do so by donating on our just giving page www.totalgiving.co.uk/mypage/torrwaterrutland18    

Amy Fisher, Fundraising Lead – 0116 2423400

Have you taken advantage of the Marriage Allowance?

A married couple or civil partnership can apply to transfer 10% of the income tax personal allowance from one to the other. Although called the marriage ‘allowance’, it is a transfer rather than an additional allowance.

To qualify for the allowance, neither of the partners can be higher rate taxpayers and cannot be claiming the married couple’s allowance. To benefit as a couple, one person should be earning below the personal allowance (£11,850 for 2018/19).

The maximum tax saving in 2018/19 is £237.00 (10% of the £11,850 personal allowance at 20%).

 

How to apply

 The application for the transfer is made by the person who wants to transfer part of their allowance to their partner. It is absolutely fundamental that the recipient of the allowance does not make the claim.

If your income is predictable, you can apply during the tax year here. If you apply during the tax year, the claim is in place until withdrawn or through either death or divorce.

If your income is unpredictable, because you are self-employed for example, you can make an application after the tax year on your Self-Assessment Tax Return. This claim must be done each year – it does not remain in place for future years.

 

Backdated claims

 Currently, you can backdate marriage allowance claims to include any tax year since 5 April 2015 if you were eligible. This means you could claim back as much as £662 if you can claim for 15/16, 16/17 and the 17/18 tax year.

 The Married couple’s allowance

 If either you or your partner were born before 6 April 1935 you may benefit more from the Married Couple’s Allowance instead, which you can read more about here.

For further information or help on the above, please call the office on 0116 242 3400 or email us at info@torrwaterfield.co.uk

Aiden Hyett, Accounts & Tax 

VAT on building a new home

If you’re building a new home, you may be able to reclaim the VAT back on the materials used, potentially making a lot of difference to the final costs.

You can apply for a VAT refund on building materials and services if you’re:

  • building a new home
  • converting a property into a home
  • building a non-profit communal residence – e.g. a hospice
  • building a property for a charity

The building work and materials have to qualify and you must apply to HM Revenue and Customs (HMRC) within 3 months of completing the work.

To qualify for the reclaim of VAT, you must meet the following conditions:

  • You may claim a VAT refund for building materials that are incorporated into the building and can’t be removed without tools or damaging the building.
  • The building must be for one of the following purposes:
  • Non-business – you can’t charge a fee for the use of the building
  • Charitable, for example a hospice
  • Residential, for example a children’s home

What doesn’t qualify?

  • building projects in the Channel Islands
  • materials or services that don’t have any VAT – for example, they were zero-rated or exempt
  • professional or supervisory fees – for example, architects or surveyors
  • hiring machinery or equipment
  • buildings for business purposes
  • buildings that can’t be sold or used separately from another property because of a planning permission condition
  • building materials that aren’t permanently attached to or part of the building itself
  • fitted furniture, some electrical and gas appliances, carpets or garden ornaments

How to claim

Fill in form 431NB to claim a VAT refund on a new build, or 431C to claim for a conversion.

There are lots of useful guidance notes included with these forms.

For further information or help on the above, please call the office on 0116 242 3400 or emails on info@torrwaterfield.co.uk 

James Yarnall, Accounts 

Is your child about to collect their GCSES? – You need to tell the Tax Man

(A-levels, further education or an approved training course, you MUST tell the taxman if you’re claiming child benefit or risk losing out on thousands of pounds a year)

June was a busy period for students throughout the UK as they completed their GCSE and A-Level exams, but what happens to your child benefits afterwards?

Your Child Benefit stops on 31 August on or after your child’s 16th birthday if they leave education or training. It continues if they stay in approved education or training, but you must tell the Child Benefit Office.

You’ll be sent a letter in your child’s last year at school asking you to confirm their plans.

You must report any change of circumstances to the Child Benefit Office.

‘What If my child continues education or training?’

Use the online service to tell the Child Benefit Office that your child is staying in approved education or training after age 16.

Approved education:

Education must be full-time (more than an average of 12 hours a week supervised study or course-related work experience) and can include:

  • A levels or similar – eg Pre-U, International Baccalaureate
  • Scottish Highers
  • NVQs and other vocational qualifications up to level 3
  • home education – if started before your child turned 16
  • traineeships in England

Courses are not approved if paid for by an employer or ‘advanced’, eg a university degree or BTEC Higher National Certificate.

Approved training should be unpaid and can include:

  • Foundation Apprenticeships or Traineeships in Wales
  • Employability Fund programmes or Get Ready for Work (if started before 1 April 2013) in Scotland
  • United Youth Pilot, Training for Success, Pathways to Success or Collaboration and Innovation Programme in Northern Ireland

Courses that are part of a job contract are not approved.

‘What if my child decides to leave education or training?’

Use the online service (CH459) to tell the Child Benefit Office that your child aged 16 or over has left approved education or training.

When your child leaves approved education or training, payments will stop at the end of February, 31 May, 31 August or 30 November (whichever comes first).

 Temporary breaks

 If there has been a break in your child’s education or training (for example if they change college), you might get Child Benefit during the break. In this case you should tell the Child Benefit Office.

 Apply for an extension

You could get Child Benefit for 20 weeks (called an ‘extension’) if your child leaves approved education or training and either:

  • registers with their local careers service, Connexions (or a similar organisation in Northern Ireland, the EU, Norway, Iceland or Liechtenstein)
  • signed up to join the armed forces

To qualify for this, your child must:

  • be 16 or 17
  • work less than 24 hours a week
  • not get certain benefits (eg Income Support)

You must have been entitled to Child Benefit immediately before they left the approved education or training and apply for it within 3 months of them leaving.

Apply for the extension online

If you have any queries regarding this information please feel free to contact a member of TorrWaterfield on 0116 242 3400

Sam Koelling, Accountant

Help When You Need It

For the times when you need a second opinion, simply don’t know the answer, or it’s outside of your business remit, you can contact our dedicated Employment Law, Health & Safety and Commercial Legal Advice lines.

Because we have partnered with Croner Taxwise you’ll receive access to the UK’s leading Employment Law firm, free of charge.

Croner Taxwise specialists will offer you advice on all Employment Law related issues, acting as an external HR team for you.

Employment Law Advice Line

The specialist team will provide you with commercially sound advice on matters relating to looking after your employees and their welfare.

From managing absenteeism to calculating holiday entitlements, the Employment Law team is here to help.

Health & Safety Advice Line

The key with Health & Safety in the workplace is to proactively manage your obligations and not, as many do, wait until something happens.

The dedicated Commercial Health and Safety experts are only a phone call away. They are ready to answer any questions you may have and help you understand your safety obligations.

Commercial Legal Advice Line

Their Legal Consultants are, as you would expect, highly experienced solicitors who you can call to advise you on issues ranging from landlord and tenant litigation to ascertaining if an issue worth pursuing on formal legal representation or not.

Access to all of these advice lines is FREE to all our Fee Protection clients. Call us today to find out more 0116 2423400

Tax refund scams warning from HMRC

HMRC has issued a warning to taxpayers regarding the latest tax refund scams. These scams are targeting individuals via email and SMS messages.

HMRC is currently processing genuine tax refunds for the 2017/18 tax year and the fraudsters are sending scam messages which claim that taxpayers are entitled to a rebate. These messages go on to request that they provide their personal and account details in order to make their claim.

HMRC is keen to stress that it will only ever inform individuals of a tax refund by post or through their employer, and never via email, text messaging or voicemail.

Commenting on the issue, Treasury Minister Mel Stride said

We know that criminals will try and use events like the end of the financial year, the self assessment deadline, and the issuing of tax refunds to target the public and attempt to get them to reveal their personal data’.

HMRC is advising taxpayers not to click on any links, download any attachments or provide any personal information, and to forward any suspect messages to HMRC.

Please get in touch if you wish to discuss any of this further.

Torrwaterfield – 0116 2423400 info@torrwaterfield.co.uk

Clause 24 in the Finance Act – Is it affecting you?

We have known for some time that Landlords have been hit hard by recent tax changes:

  • Clause 24 restricting relief for interest;
  • 8% extra capital gains tax;
  • 3% extra stamp duty.

Clause 24 of the Finance Act set out restrictions for individuals on claiming loan interest as a cost against property investment income, for individuals it works as follows:

  • For the tax year just ended 2017/2018, 75% of the interest can be claimed in full and 25% will get relief at 20%;
  • For this tax year just started 2018/19, 50% of the interest can be claimed in full and 50% will get relief at 20%;
  • From 6 April next year to 5 April 2020, 25% of the interest can be claimed in full and 75% will get relief at 20%;
  • And finally from 6 April 2021, 100% will get only 20% relief.

Essentially Clause 24 removes Interest from the allowable property expenses, and gives you tax relief at 20% instead, so that Higher Rate tax payers will pay more tax.

However, these rules do not apply to companies and therefore they will continue to claim full relief.

If you would like to discuss any of this further please get in touch on 0116 2423400 or info@torrwaterfield.co.uk

Paul Witherington, Accounts & Tax