Archive for October, 2019

The uncertainty continues

Thursday, October 31st, 2019

The Brexit issue continues to drag its heels and it now looks as if we will have a general election until matters are resolved.

Another crucial matter that will be delayed is the presentation of a Budget that will determine any changes to the tax code next year.

However, while the politicians attempt to resolve these issues, what can we do?

This is not a time to sit back and wait to see what happens. At the very least we recommend that you create a plan of action for your business. This planning should include all aspects of your business: sales, costs, investment in new plant and equipment and most importantly, the management of your working capital including cash flow.

If undertaken with care, this planning exercise will reveal trouble spots before they arise. In particular, it will flag up any cash flow low-spots and give you time to agree funding with your bank.

There are no downsides to this planning process, only wins.

Once you have your plan it is a simple matter to upload the data into your account’s software. This will enable you to compare actual monthly results with your plan and remedy any variations as they happen.

This build and creation of management accounts for thriving businesses is something we advocate. If this is a process you would like to take on for your business, please call. We can help you create your plan and advise you which accounts software to use.

Whatever the outcome of the Brexit situation, using your management accounts to increase your business fitness will place you in the front line when matters are resolved. You can hit the ground running.

Heads up for contractors

Tuesday, October 29th, 2019

Contractors completing energy improvements on the homes of low-income families will need to be registered with a new government quality scheme – the Energy Company Obligation (ECO) – to give residents confidence that they will get a good service.

Work undertaken through ECO offers free energy-saving measures, including insulation and new boilers for low-income and vulnerable households.

The Energy Minister Kwasi Kwarteng recently confirmed that those completing this work will need to be registered through a new quality scheme, delivered by ‘TrustMark’. It will also protect all homeowners having energy efficiency improvement work done on their properties, when they choose to use a ‘TrustMark’ registered business.

Around 15% of households take an energy efficiency measure each year, with over one million installing additional or replacement loft insulation and over one million upgrading to double glazed windows. The energy efficiency industry is worth over £20 billion in Great Britain, employing nearly 150,000 and selling exports worth over £1 billion every year.

Emissions from buildings account for nearly a quarter of all carbon emissions, which the government is committed to reducing. Under this government, the UK became the first G7 economy to put into law a commitment that Britain will reach net zero greenhouse gas emission by 2050. Insulation in domestic premises can make a significant contribution to reaching our carbon targets and help reduce the cost of heating homes.

This new scheme will guarantee households the peace of mind that workers installing energy efficiency measures in their homes are trusted tradespeople.

All consumers who want energy efficiency and home improvement measures installed on their own homes will be able to search the ‘TrustMark’ website for trusted and certified tradespeople.

Contractors working in this energy efficiency sector should register with the ECO scheme asap.

Beefing-up UK exports

Thursday, October 24th, 2019

UK farmers looking for opportunities to export beef products to China will be encouraged by the recent relaxation of export criteria. A recent UK government press release titled “China opens doors to British Beef” explains what is being offered.

A summary of the press release is reproduced below:

The British beef industry is set to benefit from an estimated £230 million boost as the Chinese government today (18 October) finalised details of a historic UK-China agreement.

For the first time in over 20 years, UK farmers and beef producers will have full access to the Chinese market, marking the end of a ban imposed by China following the BSE outbreak in 1996.

Today’s announcement follows extensive inspections by the Chinese authorities – who have confirmed that British beef producers meet the necessary standards to export to their market – and marks the final step in securing access.

The Chinese authorities have cleared four beef sites for export in the first instance – with further sites under review – and the first exports are expected to be shipped in the next few months.

The China-UK beef agreement is the culmination of several years of engagement between UK and Chinese government officials. China’s ban was lifted in June last year when market access engagement for UK beef exports began.

It follows a number of inspections and inward missions hosted by the Agriculture and Horticulture Development Board (AHDB), in partnership with Quality Meat Scotland (QMS) and Hybu Cig Cymru (Meat Promotion Wales HCC) and other industry bodies, as well as government departments and agencies.

The announcement comes after China recently approved five British pork plants to export products to China, which will build on a market which is already worth £70 million per year.

China is currently the UK’s eighth largest export market for food and drink, with more than £610 million worth of products bought by Chinese consumers last year.

Win while you save

Tuesday, October 22nd, 2019

In a further attempt to incentivise savings our government has created a new saving vehicle called a PrizeSaver account. Here’s what the Treasury press release on the launch says:

Treasury launches pilot of new PrizeSaver account on International Credit Union Day.

  • Savers who put away as little as £1 with participating credit unions have chance to win up to £5,000 a month.
  • Account is part of work to raise awareness of credit unions and encourage greater saving for the future.

Savers could now win up to £5,000 a month with the launch of a new account with credit unions today (Thursday 17 October).

To mark International Credit Union Day, the Treasury has teamed up with 15 credit unions across Britain to launch the new PrizeSaver pilot account. The pilot will give people who open an account with participating credit unions the chance to win prizes every month and boost their savings.

Every month will see a top prize of £5,000 awarded to the winning saver, with a further 20 smaller prizes of £20 also awarded. Accounts are available now with the first wave of credit unions and the first prize-draws will take place in mid-December.

The pilot, announced at last year’s Budget, is designed to help improve people’s financial resilience by encouraging greater saving for the future, as well as raise awareness of credit unions and the services they offer.

Credit unions are a type of member-owned cooperative, controlled and run by members. Most either serve specific local areas or certain professions like the police. Credit unions redistribute their profits to members through interest or dividends, or by investing in new services to meet the needs of their members.

The account is partly inspired by the ‘Save to Win’ scheme in the US, which has helped credit union members save $200 million and has awarded $3.1 million in prizes nationwide.

The pilot will run until the end of March 2021 and will help inform understanding of the PrizeSaver model. The Treasury will work with participating credit unions to evaluate the success of the PrizeSaver accounts throughout the pilot, with an ambition to roll the account out more widely if successful.

Cars and taxing issues

Thursday, October 17th, 2019

We have listed below a number of issues that you will need to consider if directors or employees use a car for business purposes.

Essentially, if the car is owned by the business any private use of the vehicle will trigger a tax charge for the driver (car user) and a possible NIC bill for the employer.

Use of a car may be exempt from these possible charges in the following circumstances:

  • If the car is owned privately by the director or employee and any costs met by the employer relate to business journeys.
  • If the car is owned by the employer but no private use of the vehicle is allowed. Employers are required to notify employees that this is the case and check that these instructions are complied with.
  • If a car is adapted for an employee that is disabled. This use is only exempt if the private use is restricted to journeys between home and work and travel to work-related training events.
  • There is no fuel related tax charge if any personal fuel is paid for by the employee or if the employer pays, but the private element is reimbursed by the employee.
  • The use of pool cars is generally ignored. This assumes that there is no private use and that cars are kept at the business premises.

The way in which any taxable benefits are reportable to HMRC is complex. Partly, this depends on how the benefit is formalised. For example, is it a salary-sacrifice arrangement? Generally, any chargeable, private use of a company car is returned to HMRC each year on a form P11D. This will then determine the amount of tax payable by employees on the deemed benefit provided and also contribute to the amount of any NIC payable by the employer.

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