As we wind down for Christmas it’s worth taking a moment to reflect on the year that has passed.
It was another difficult one for many local businesses but with bulldog tenacity they have not only survived but prospered in many cases.
At Barringtons we hear success stories every day and take pride in seeing our clients’ businesses grow and offer more jobs to local people.
It’s testament to their grit, determination and often sense of humour to take on the recession and bite back. And now it seems there is light at the end of the tunnel.
The economy is coming out of recession, unemployment is down and business confidence is returning. Hence we welcomed many areas of the Chancellor’s Autumn Statement.
His Christmas stocking included several helpful items for business such as the £1,000 rates discount to help boost the high street, a doubling up on the Small Business Rate Relief scheme and a freeze on fuel duty.
There was good news also for employers looking to give young people a chance. His gift to them was a break on paying National Insurance contributions when employing younger workers. At present it kicks in at the age of 16, but it will now be delayed to 21.
There will also be more money in the pot to support apprenticeships and an opportunity for more young people to go to university by scrapping the cap on places.
We also welcomed the increase on a basic personal allowance (up to £10,000 for 2014-15) which should technically give more local people cash in their pockets to spend on the high street.
This could well be blown on frivolous heating of their homes however….! Yes, energy costs remain a hot topic and the Prime Minister’s promise to come down heavy on the providers, I fear, is likely to fall on deaf ears.
Meanwhile businesses have RTI and Auto Enrolment to contend with. Our Payroll Bureau has received no end of calls for support from employers suffering an administrative headache.
All that said the New Year is indeed looking a lot brighter. This area remains a fantastic place to be thanks to hard work, determination and a fantastic skills base.
Hard-hitting HMRC campaigns have put out the message – ‘there simply is no hiding place from the taxman.’
A new clampdown aims to ensure company directors submit their personal tax returns with transparency when it comes to any full or part time employment, dividends or any other sources of taxable income.
Barringtons Tax Manager Jo Hamilton said: “Details of all company directors listed with Companies House are available at the touch of a button. The database is continually scoured so there is no way of slipping through the net.
“Avoidance or simply an administrative error could lead to a significant fine so we urge directors to file full returns. With our help, you can utilise legitimate tax reliefs efficiently and reduce your liability.”
HM Revenues and Customs taskforces are targeting various areas of the country in ‘short, sharp bursts of activity.’
Since 2011/12 they have collected more than £80m. This year the estimated figure is £90m.
Jo added: “The Government concedes that taxpayers are "perfectly entitled" to use accountants to lower their tax bills. Breaking tax rules is, of course, illegal but planning your finances carefully so you don't pay more tax than you have is simply sensible.”
For help with tax returns contact Jo Hamilton on 01782 713700.
Our Payroll Bureau is busy helping businesses of all sizes get to grips with new legislation including Real Time Information (RTI) and Auto Enrolment.
RTI represented the biggest shake-up in the 60-year history of the PAYE scheme and in October, it became compulsory for all employers to report national insurance and income tax deductions every time they pay staff.
It means HMRC no longer has to wait until the end of each tax year to work out if a person has paid the right amount of tax or not. For employers, however, it has created a mountain of extra paperwork – and Barringtons are here to help take the headache away.
Payroll Bureau Manager Sue Howie said: “The new system does place a burden on employers to maintain accurate records and report staff payments, in real time, coinciding with payday.
“From the start of the new tax year there will be penalties for employers who miss deadlines. We are supporting all manner of businesses with RTI, allowing them to avoid fines and spend time doing what they do best, running their business.”
Meanwhile reforms to get more people saving for their retirement are in full swing in larger companies. Now, Auto Enrolment, which makes it compulsory for companies to enroll workers into a pension scheme, is beginning to bite for smaller employers.
Its phased introduction will hit employers with between 50 and 249 staff from April 2014 to April 2015.
For firms with fewer than 50 employees, the planned dates fall between June 2015 and April 2017.
Employees are automatically enrolled into a workplace pension scheme with employer contributions if they are aged between 22 and the state pension age, earn at least £8,105 a year, and are not already in a scheme that meets minimum standards.
Again Auto Enrolment has triggered many calls for support to our Payroll Bureau at Newcastle.
The team, shortlisted for a prestigious national award in the autumn, supports every type of business in its payroll function looking after tasks such as tax and National Insurance deductions from pay packets as well as maternity arrangements and redundancy settlements.
Call Sue Howie in the Payroll Bureau on 01782 713700.
As house prices continue to rise, it’s time to start thinking about inheritance tax.
According to the country’s biggest lender, the Halifax – now part of the Lloyds Banking Group - strong demand for homes combined with fewer properties on the market, pushed up prices by another 1.1% in November 2013.
Economists predict that low interest rates and the return of 95% mortgages, will see yet more people invest in bricks and mortar in 2014, pushing prices up further.
It was the 10th successive monthly increase – and while that’s good news to all home-owners, it does have implications when it comes to leaving property to loves ones.
Barringtons managing director Phil Wood said: “People start to pay inheritance tax on assets, such as property or money, worth more than £325,000.
“While the boom of yesteryear remains a long way off, it’s worth seeing one of our specialists to arrange your finances and put yourself in a tax efficient position.”
As indicated in his Autumn Statement, the Chancellor aims to keep pace with rising property prices and start collecting millions more in inheritance tax (IHT).
The sums predicted to be raised through IHT between this tax year (2013-14) and 2017-2018 has risen from £18.4bn to £21.4bn.
People can avoid paying more than they legally need to by, for example, ‘gifting’ money each year or moving wealth into a family trust.
IHT is a complex area and Barringtons has experts who can unravel it and ensure you maximise your estate and all you have worked for.
Call us on 01782 713700 for help on inheritance tax matters.
Pound for Pound – you don’t get much better than Barringtons staff when it comes to raising cash for charity.
Kind-hearted colleagues have taken part in all manner of fundraisers in 2013 – from a marathon walk and army-style obstacle course to dress down days and collections, including the latest effort – Bring A Pound to Work Day.
Everyone chipped in £1 (and more besides) for the Douglas Macmillan Hospice at Trentham - one of our chosen charities of the year. It brought our fundraising total to more than £1500 for the ‘Dougie Mac’ where fantastic care is given to local cancer sufferers.
Hats off to Client Services Manager Lee Bridgwood who took on the Special Forces-designed Tough Mudder challenge as a follow-up to his skydive for the hospice. Lee survived the gruelling challenge and raised almost £600!
Meanwhile our resident Dr Who fanatic James Nicholls continues to wade through his mammoth collection of DVDs from 1978 to present day. Now up to 2007, with David Tennant as the Time Lord, he has so far raised more than £500.
James, who hit the headlines in the Sentinel and Chronicle and was interviewed on BBC Radio Stoke, is splitting the funds between the Dougie Mac and Macmillan Cancer Support.
Fundraising has also been strong in South Cheshire where Barringtons was the first business supporter of a new appeal to build a Centre of Excellence for St Luke’s Hospice near Sandbach.
The centre, offering palliative training to carers, will ensure elderly people end their days with dignity. From a charity quiz, we donated £500 to get the appeal off to a good start.
And it doesn’t stop there. Instead of Christmas cards, staff are now chipping in cash to charity. Barringtons managing director Phil Wood said: “Well done to every member of staff. If they are not staging fundraisers, they are sponsoring someone who is.”
Barringtons is also an active member of the BuyIGive1 (B1G1) global campaign which sees vital support given to poverty stricken countries every time a business sells a product or service.
Thousands of HMRC inspectors are set to swoop as part of a major crack down on tax avoidance. To learn more, follow this link…
Landlords and business people who let out property as an additional source of income are being urged to come forward as part of a new HMRC amnesty.
The Let Property Campaign aims to net tax from landlords who have failed to pay either through misunderstanding or deliberate evasion.
Barringtons Tax Manager Jo Hamilton said: “This applies to everyone who lets out a property – whether you have one property or several, let to students or gain income from holiday lettings.
“The campaign gives you the opportunity to avoid action and come forward voluntarily.”
HMRC estimate over a million landlords are not paying up, to the tune of £500m a year.
Its digital intelligence system gives information on every property let out in the UK and abroad.
The campaign runs to the end of 2014 and those who don’t come forward can expect higher penalties.
Jo added: “Our advice is to avoid the inspectors when they swoop by having your return fully prepared. There are various allowances that can be claimed to reduce liability and still earn a good income.”
Contact Jo Hamilton on 01782 713700.
Whilst most of the services of VAT registered plumbers and gas engineers in buildings other than new dwellings are subject to the full (20%) rate of VAT, some work can be subject to the lower (5%) rate where, for example, it qualifies as installation of ‘energy saving materials.’
Installation of energy saving materials includes the supply and installation of, amongst others, goods such as most kinds of insulation, thermostatic radiator valves, solar panels and certain types of boilers – namely those fuelled by wood, straw or similar vegetal matter.
I am aware that certain schemes have been quite widely marketed under which the installation of a central heating system (using a standard boiler as opposed to one of the above examples) which also includes energy saving goods has been subject to a reduced rate of VAT – in effect, the total price of the installation is apportioned between the full and lower rates of VAT, to take account of the energy saving goods forming part of the overall installation. In some cases, a fee is paid depending upon the VAT purportedly saved.
One such scheme, a ‘VAT Optimiser’ was recently tested in the Tax Tribunal (AN Checker Heating & Service Engineers LON/2009/00673). In this case, the Appellant used a piece of software to apportion an installation of a heating system into what were considered to be two categories of supply – one for the supply and installation of energy saving materials, considered to be subject to the lower rate of VAT, and the balance for the predominant part of the work, unquestionably subject to the full rate of VAT.
The Tribunal (apparently with a degree of regret), applying ‘Card Protection Plan’ principles found that there was in fact only one overall supply being made, rather than two distinct supplies, each with its own VAT rate and, furthermore, that single supply was subject to VAT at the rate of the overriding supply (in this case, the installation of a central heating system) – i.e. at 20%.
Whilst the decision might itself be appealed, it would appear prudent to bring it to the attention of any of your clients which may potentially be affected by it. It will of course be undoubtedly the taxpayer – in this case the installer – who will be expected to make up any shortfall in VAT paid on such work plus, almost invariably, interest and penalties.
Please do not hesitate to contact us should you have any questions or issues you wish to discuss with regard to the above.
Colleagues have said Bon Voyage to Anthony Roberts from Client Services who has set off on a round-the-world adventure.
He and his girlfriend, Claire, are now in Thailand exploring the country on night trains before settling down on a secluded island to enjoy Christmas.
The pair will jet to Sydney for New Year and then stay on to support England in the Ashes.
Then it’s off to New Zealand to explore by car. Before returning next Christmas, they will have also taken in the Americas and more of Asia.
Bags packed and ready for the off, he said: “There’s never a good time to leave a job but we’ve been planning a trip like this for years and just recently decided to go for it.
“Barringtons have been very supportive and I will miss my colleagues.”
Anthony plans to return to us and is keeping in touch with work pals by email.