Torr Waterfield’s 2017 charity of the year – Alzheimer’s Society

Every year we support a different charity and this year it is the Alzheimer’s Society.

I think most of us know friends or family that have been affected by dementia. Currently around 850,000 people in the UK have been diagnosed and of those, 42,000 are under 65. This total is predicted to rise to over 1,000,000 by 2021. Living with dementia has huge emotional, social, psychological and practical impacts on not only the sufferer but also on their family; one of the saddest things a person can do is watch their loved one become upset as they “disappear”.

The vast majority of causes at present cannot be cured, although there are some drug treatments available which may help slow down the symptoms. However with care and support someone who has been diagnosed with dementia can live well. The Alzheimer’s Society aims to raise £1 billion over the next 10 years in order to achieve their 3 main goals:-

Support and advice service– in whatever way is needed either face- to-face, telephone or online advice and by 2022 to reach out to everyone at time of diagnosis.

Increase public awareness – so that people with dementia are treated as equal members of society, ending the stigma associated with the condition.

Research – investing in the UK’s first dedicated Dementia Research Institute as well as in biomedical, prevention, assistive technology and care research.

So we want to help by raising as much money as we can and there will be lots of opportunities to help us support this national charity throughout the year – more details to follow later.

If you would like to know more please visit www.alzheimers.org.uk

Denise Burley, Accounts & Tax In_aid_of_Alzheimers_logo.jpg

Time for new change

As you may or may not be aware The Royal Mint has revealed that a new issue of the £1 coin is to take place and is set to be released on 28th March 2017.

So why change?

Approximately 1 in 30 £1 coins are counterfeit – this in itself is a fairly high amount.

However, when you put this ratio into the estimated amount of £1 coins in circulation it is staggering.

As of March 2014, The Royal Mint estimated that there were 1,553,000,000 £1 coins in circulation of which 3.04% were counterfeit – meaning that there is around £47,211,200 of counterfeit £1 coins in circulation. The new coin should be considerably more difficult to attempt to fake due to a number of new features.

What are the features?

12-sides – New distinctive shape – making it instantly recognisable.

Bimetallic – it is made of two metals. The outer ring is gold coloured (nickel-brass) and the inner ring is silver coloured (nickel-plated alloy).

Latent image – it has an image like a hologram that changes from a ‘£’ symbol to the number ‘1’ when the coin is seen from different angles.

Micro-lettering – it has very small lettering on the lower inside rim on both sides of the coin. One pound on the obverse “heads” side and the year of production on the reverse “tails” side, for example 2016 or 2017.

Milled edges – it has grooves on alternate sides.

Hidden high security feature – a high security feature has been in built into the coin to protect it from counterfeiting in the future.

When will this happen?

The new coins will be introduced on 28th March 2017 leading to a co-circulation period where both old and new coins will be accepted. On 16th October 2017 a demonetisation period will begin where the old £1 coins are under no obligation to be accepted and should not be redistributed – they can however be deposited into most high street banks.

How can it affect my Business?

If you have a cash handling business then you need to ensure all machines that accept pound coins are compatible with the new design and if not, then your machinery supplier needs to be contacted as a matter of urgency. Once October 2017 comes around you have the right to refuse the old style one pound coins as this is the beginning of the demonetisation period. As mentioned above, once this time comes, do not worry, as the old style pound coins can be deposited into most high street banks for a significant period of time.

The pound won’t be round for much longer…

If you would like to discuss this more please contact us 0116 2423400

Brook Lucas, Accounts & Tax 

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More Personal Tax to pay in January 2018?

No one wants to pay more tax, but from 6th April 2016, individuals who receive dividends will be taxed under new legislation. To explain how much this new measure could cost you we have created a short helpful video. 

Please visit our YouTube channel here to watch.  

Having viewed the video, if you would like to know how this will personally affect you in January 2018, please click here. 

VAT on Commercial Vehicles

You would think that it was easy to identify a commercial vehicle, such as a HGV or a transit van and in most cases it is. However vehicle companies are now manufacturing vehicles that have a dual purpose.

These vehicles are car derived vans which are sold as lifestyle vehicles that can also be used for private use, they may look similar to cars but the manufacturer will have altered the inside so it can be sold as a commercial vehicle. For example the rear seats and seat belts may have been removed.

HMRC have produced a list of dual purpose vehicles such as combi vans and double cab pick-ups which highlights which vehicles are classed as commercial and which are not.

If you are claiming back the VAT on a commercial vehicle it is important to identify when it is being used for private use, as the VAT man will thoroughly check when this is occurring! If there is any private use then there may be a claw-back of VAT claimed. The VAT man will allow for occasional personal use of a commercial vehicle, but it is important to be able to prove it is only incidental use.

In essence, if you buy a commercial vehicle for your business you can normally reclaim the VAT in full. However, if it has a dual purpose and it is used significantly for personal use, there will be a restriction on the VAT that can be reclaimed.

If you require any further information on this please contact the office on 0116 242 3400.

Tom Luckett, Accounts & Tax

Have you paid your self-assessment bill?

Tax Payments – How late can you be?

With the madness of the January tax return deadline, it may have slipped some of your minds to actually pay your self-assessment bill. If this is the case then you may be wondering how you will be penalised for doing so.

For those that have filed their self-assessment tax return before the deadline but have not paid the bill, there will be interest accruing at 2.75% pa for the first 30 days.

However, after 30 days from the deadline the full amount of tax due will be subject to a 5% penalty. This means that if you had a liability of £5,000 unpaid by midnight on 2 March 2017, there would be an immediate fine of £250 added to your account.

Similarly, if after 6 and 12 months from the filing deadline you have not paid the full balance, then there would be additional 5% penalties on the tax outstanding at those dates.

Furthering the example above, should there still be an outstanding debt of £5,000 on 1 August 2017 then an additional £250 penalty will be accrued and if the debt has still not been settled by 1 February 2018 then another £250 will be added. This means that within just 12 months, a £5,000 tax bill will have penalties totaling £750.

On top of this there will also still be interest accruing on both the tax and penalties. Making the estimated amount owing on 1 February 2018 £5,887.

Sam Jefferson, Accounts & Tax 

If you need further help please contact us.

Correcting Errors on Your VAT Return

Picture the scene: it’s the end of the month, you’ve just submitted your VAT return for the quarter, you close your laptop and there behind it is a small pile of invoices that you’d forgotten to include.

This isn’t uncommon.  Here’s a few questions that you might be thinking:

Can I amend the return that I’ve submitted?

Unfortunately not, once the return is submitted there is no mechanism to adjust or amend it.

Can I just pay the correct amount?

Again, this isn’t accepted by HMRC. Their systems will assume you’ve under/overpaid and may charge interest & penalties or refund any overpayment.

OK, how do I make the correction?

There are two methods to fix an error on a VAT return, and which one to use depends on the size of the mistake.

  • If the net value of the errors is £10,000 or less; or
  • Less than 1% of your box 6 figure and less than £50,000

Then you can adjust the mistake on your next VAT return by adding the value to box 1 or box 4 as required. You will also need to keep details of the inaccuracy should HMRC ever enquire about the return.

If the errors do not meet the threshold above, then you are required to report them to HMRC immediately.

You should complete a form VAT652 which can be found here:

https://www.gov.uk/government/publications/vat-notification-of-errors-in-vat-returns-vat-652

HMRC may charge you interest and penalties if they deem the error to be due to careless or dishonest behaviour.

If you’d like any assistance in making the adjustments, please feel free to get in touch with our team on 0116 242 3400.

Matt Smith- Accountant, Audit & Tax Matt Smith

 

ARE YOU THINKING OF SELLING YOUR BUSINESS?

Selling a business can be a lengthy and stressful process. A sale may be considered due to pending retirement, illness, a lifestyle change, or a host of other reasons. The better and more time you have to prepare for a sale, the less stressful the experience will be.

Here at Torr Waterfield, we can help you with the process, from start to finish. Here are a few pointers to help you on your way…..

  • Review the strengths and weaknesses of your business. A SWOT analysis will help you to identify and address the weaknesses and threats, and improve the strengths and opportunities before sale
  • Consider the Key Performance Indicators (KPIs) of the business, and how these can be identified and reviewed both by you and a potential buyer
  • What do you think the business is worth and what is the minimum value you would be prepared to sell it for? Just as importantly, are there likely to be potential buyers willing to pay that minimum price?
  • Consider ways to increase sales and reduce costs in the immediate period prior to sale. A business is often valued on a price to earnings ratio or earnings multiple method, so recent increased profitability can increase its value
  • Consider the infrastructure and management profile of the business, and whether the necessary skills and knowhow are sufficient in the event of your retirement/removal
  • Consider your own tax position and ensure the sale method is the most suitable to you e.g. Entrepreneur’s Relief is available for business asset and share sales fitting certain criteria. This relief allows chargeable gains on sales to be taxed at 10%, even for higher rate tax payers. Other sales methods, such as sale of assets and goodwill, may be more appropriate
  • Consider employee issues in the event of a sale; e.g. does TUPE (transfer of employment rights) apply? How will your employees react prior to and after a sale? Do you advise them of your plans and keep them up to date with progress?
  • Ensure that the position, legal or otherwise, and potential impact on a sale of any minority shareholders or partners has been taken into account
  • Consider what may happen to the business premises; will they be part of the sale? Are they owned by your Personal Pension, in which case it may be worthwhile continuing to lease the premises to the purchaser?
  • Appoint professional advisors and expert help to assist with your valuation, to help with any legal agreements that need to be drawn up and to review your tax position prior to and after the sale

You only sell your business once, so it must be done properly to ensure you get full benefit.

If you would like to find out more about selling your business, please speak to me at Torr Waterfield

Peter Morris , Director _DSC4779

 

Shared parental leave – What are you entitled to?

Shared parental leave (SPL) allows employed parents and adopters to share leave and pay with their partner to care for children from birth until their first birthday.

  • Only employees can take SPL; they must have a partner (separated partners still qualify if sharing responsibility for care of child at the time of birth)
  • SPL allows mothers (or adopters) to shorten their maternity leave (and pay) to share the leave (and pay) with their partner in order to care for children in their first year; it is the mother’s choice whether to share leave
  • The mother can only share with one person; it is her choice provided her partner satisfies the qualifying conditions
  • Even if only one parent is entitled to SPL and/or ShPP (e.g. one is self-employed or not entitled to ShPP), the other partner may still  be entitled to SPL/ShPP if both satisfy the qualifying conditions
  • The employee taking SPL must have been employed 26 weeks by the 15th week before the expected week of childbirth and remain employed in the week before the start of SPL. Their partner must also satisfy an employment and earnings test
  • At least 8 weeks’ written notice must be given to end maternity leave and start of SPL
  • SPL can only be taken a week at a time but can start mid-week. SPLIT days can be used to work part-time by agreement with employer
  • SPL can be taken by both parents at the same time or at separate times; they must decide how to take it. The mother can remain on maternity leave while the partner is on SPL
  • SPL can be taken in up to three separate blocks (unlike maternity leave) or more if the employer agrees
  • There are detailed notice provisions which must be followed
  • Employees can work for up to 20 days during SPL (SPLIT days), as well as 10 days during maternity leave (KIT days). These must be agreed with employer.

 SHARED PARENTAL PAY (ShPP) 

Can pay be transferred as well as leave?

Yes.  Statutory maternity pay (SMP) is available to female employees from the 11th week before the expected week of birth or the actual birth if earlier.  It is paid for 39 weeks (the maternity pay period – MPP) with the first 6 weeks being at 90% of pay (and then either the flat rate of £139.58 or 90 per cent if this is lower for the remaining 33 weeks.  But, only 37 weeks is available for ShPP as the mother must take the first 2 weeks after the birth. Women who do not qualify for SMP will often qualify for maternity allowance which is paid at £139.58 or 90 per cent of average earnings if this is lower.

If you wish to discuss any of this in more detail please contact us 0116 2423400 

Becky Edwards, Payroll Manager 

Charities and Fundraising – New changes

The Fundraising Regulator fundraisingregulator.org.uk was established a year ago to oversee charity fundraising in England and Wales.  There are different rules for charities registered in Scotland.

The new body assumed responsibility for this area on 7 July 2016.

So far most people are unaware of its existence, but that should change as we proceed into 2017.  Generally the Code of Fundraising Practice will affect charities and anyone involved in their management.  The general public should however be aware of the new rules and there are schemes being drawn up to protect people from over eager charities.

The biggest effect on charities is that the Fundraising Regulator will be funded by a voluntary levy.  Charities with spending of over £100,000 on fundraising will be asked to pay between £150 and £15,000 annually, this being on a sliding scale with the top end only being relevant for a small number of very large charities; exempt charities will be charged a flat rate of £1,000.

Below the £100,000 threshold, a charity may choose to register and pay just £50.

Third party fundraising agencies and similar organisations may also sign up and pay between £100 and £1,200 annually.

Although, as already stated, this is a voluntary levy, it is important for charities to consider the message they are giving out by not being registered.  It may well influence potential donors if they feel that the charity is not abiding by the Code.  The government has also retained powers within the legislation to make the levy compulsory if the voluntary approach does not work!

Finally, the Regulator is working on a Fundraising Preference Service which should be launched this year.  This will enable individuals to register and then have control over how, or whether, charities contact them for fundraising purposes.  This is expected to work in a similar fashion to the existing Telephone Preference Service and the Mail Preference Service.

There is of course much more detail behind all of this and we will be happy to help. Please get in touch if you would like to discuss this further 0116 2423400

Neil Ford, Technical Manager Neil Ford April 2012

The New Marriage Allowance

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The marriage allowance allows you transfer £1,100 of your Personal Allowance to your husband, wife or civil partner – if they earn more than you.

This reduces their tax by up to £220 in the tax year (6 April to 5 April the next year).

In order to benefit as a couple, you (as the lower earner) must have an income of £11,000 or less.

If you are eligible for marriage allowance in the 2015/2016 tax year, you can backdate your claim to 6 April 2015 and reduce the tax paid by up to £432.

Who can apply?

You can get marriage allowance if all the following apply:

  • You are married or in a civil partnership
  • You don’t earn anything, or your income is under £11,000
  • Your Partner’s income is between £11,001 and £43,000

You can also apply for marriage allowance if you or your partner:

  • Are currently receiving a pension
  • Live abroad – as long as you get a Personal Allowance

If you or your Partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.

If you would like to discuss this please get in touch. 

Paula McIntosh, Administration  

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