Business for Tomorrow

ISSUE 04 | 2020

INSIDE

BUILDING YOUR #BUSINESSFORTOMORROW FIVE STRATEGIC PRIORITIES TO SUCCEED IN THE NEW WORLD ARE YOU STARTING A BUSINESS?

HAZLEWOODS

BUSINESS FOR TOMORROW

ABOUT US

Hazlewoods is one of the UK’s Top 30 independent Business Advisers and Chartered Accountants, with an established sector expertise that is hard to find elsewhere. Hazlewoods Financial Planning ranked 13th in the Financial Times Top 100 Financial Advisers 2019.

Hazlewoods has provided specialist accountancy, tax, audit and business advice to individuals and businesses of all shapes and sizes since the practice was founded by Marcus Hazlewood in 1919.

We have over 380 staff in two offices across Gloucestershire, who work with our clients locally, nationally and internationally.

Cheltenham office: Windsor House, Bayshill Road, Cheltenham, GL50 3AT Tel: 01242 237661 Staverton office: Staverton Court, Staverton, Cheltenham, GL51 0UX Tel: 01242 680000

Welcome FEATURES

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BUSINESS FOR TOMORROW We spoke to business leaders and experts about building their business for tomorrow.

BUILDING YOUR BUSINESS FOR TOMORROW Read our five key areas to consider when reviewing your business.

INTERNATIONAL HLB shares with us their five strategic priorities to succeed in the new world.

IHT PLANNING Hazlewoods financial planning looks at how you review your inheritance tax position.

TAX HEADLINES

It has been quite remarkable to see the perseverance, determination and sheer indomitable spirit in those we work with, and those within our own business too, over the last few months.

We have all had to make decisions quickly and adapt without much time for thought. There are great positives to be taken from this, albeit forced, approach, and many businesses have used the experience to make changes that would have previously been seen as very brave - too brave maybe – but not now.

Practically no-one saw any of this coming, and yet some have managed to successfully pull off a re-modelling of their businesses, in response to poor prospects for some months if they didn’t.

What many businesses have managed to achieve over the last few months really has been nothing short of incredible.

In this edition, we interview five business leaders, covering a variety of topics, and we hope you find their views and thoughts interesting to read.

Hazlewoods has been fully open for business throughout, and whilst I would not normally say anything like this in an open forum, we could not have asked for any more from our staff: so a big, public, thank you to everyone.

Therefore, whilst our 101st year in business has had some different features so far, nothing has changed in our desire to provide you with top quality advice and support, from people you know and trust.

With all best wishes for the success of your plans over the coming months, and we look forward to continuing to work with you.

Jon

Looking at the key changes with all of the recent announcements from the Government.

MEET OUR PEOPLE Our people are our most valuable asset. Some of our auditors look at how their role has changed and the future outlook.

JON CARTWRIGHT Partner 01242 237661 jon.cartwright@hazlewoods.co.uk

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BUSINESS

FOR TOMORROW The year 2020 has seen rapid and unforeseen change for individuals, communities and businesses across the world. In this edition of the Hazlewoods magazine we have taken the time to speak to a wide range of business leaders about the changes they have encountered in the last few months and how they have adapted to make sure they have a #BusinessForTomorrow.

BUSINESS LEADER OPINIONS The family business view: Bence Builders’ Merchants

There is no doubt that in times of crisis, a business needs strong leadership. Agility has been the keyword for many. With the Government announcements coming thick and fast in the first few weeks, business leaders were under pressure to comprehend the changes and what they meant for their businesses, and then communicate this to their employees effectively in a relatively short space of time.

The start-up view: The Cotswold Book Room

Although taking on a 70-year-old book shop may not seem like your typical start-up opportunity, husband and wife team, Gideon and Cathy, have cleared the decks in the Wotton-under-Edge based independent bookstore and have been working hard to bring it into the 21st century.

The recruitment point of view: GB Solutions GB Solutions is an established recruitment agency that has been operating in Gloucestershire for over 20 years, providing both temporary and permanent staff for businesses of all sizes in office roles. Partner, Sue Waters, spoke to us about the compulsory changes in their business as a result of lockdown and the recruitment outlook from their perspective.

The international business view: Stewart Golf

The COVID-19 pandemic has undoubtedly caused disruption to businesses globally. Although a lot of this disruption has been debilitating for many, some businesses have found themselves in a more positive position than they might have considered possible. Stewart Golf has been one of those ‘unlikely beneficiaries’ as founder, Mark Stewart, described it when we spoke to him about how the business has benefited from an unforeseen market change.

The sustainable business view: Zellar

Looking to the future, finding ways to manage cash and make prudent decisions for business money is going to be key to survival for many. Zellar founder, Gary Styles, agrees with this; he spoke to us about his passion for climate change and his aim to aim to make Zellar the lowest cost path to sustainability; educating consumers and helping SMEs to achieve net zero carbon within 10 years.

The development business view: RRA Architects

Working from home became the hot topic of lockdown and it seems everyone has become used to seeing journalists on television reporting from their perfectly set up home offices; concerts from A-listers’ home studios; and even Brad Pitt playing Dr. Fauci in his home library. But for many of us the home office has been a hurried, makeshift affair; struggling with trying to organise an area to work from with enough plug sockets and reasonably stable internet, whilst also keeping a watchful eye on the children.

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NDBUILT HA

EXPERT OPINIONS: #BusinessForTomorrow David Owen, CEO GFirst LEP Recovery from the coronavirus pandemic represents the single biggest economic challenge since the Second World War. However, it also presents the single biggest opportunity to reshape the British economy to make it more inclusive, productive, sustainable, innovative, and resilient.

As more companies announce home - working policies and close offices, urban dwellers will start to make the move to predominantly rural areas to live, work and play. As well as bringing positive financial benefits to the county it means that “blended working” - a mixture of working from home combined with time at a co-working site - will continue to become an accepted and expected form of working. This ambition will need to be supported by the acceleration of broadband delivery and a network of ‘work from anywhere’ locations; private sector, Growth Hubs, local authorities’ and repurposed commercial office sites.

During recession and periods of high unemployment it is usual to see a growth in start-up businesses. This pattern is likely to repeat itself during this recession and possibly to a high degree, as working from home becomes more widely spread. We are lucky to have a fantastic Growth Hub network in the county to help these new businesses.

“Think Gloucestershire” is a campaign we would like every Gloucestershire resident to be aware of and think about.

Think Gloucestershire means staycations in the county, it means shopping locally and it means businesses buying products and services from other Gloucestershire businesses.

In this hugely challenging time, the response of our business and wider community has been incredible, and I would like to thank all those who have gone above and beyond in their daily roles.

Sam Holliday, FSB Development Manager There is not much that is certain about the future of business but one thing does seem assured – to become a #BusinessforTomorrow you simply cannot just repeat what you did before. We are all fed up of hearing the phrase ‘the new normal’, but at least it is a constant reminder that the old normal is well and truly buried.

The successful future businesses will have learned from the coronavirus epidemic that you constantly need to be ready to reinvent your business, to think differently and to act differently – and to be adaptable for the inevitable future changes to come. It won’t be easy, but we are blessed with the most creative SMEs in the world, and that creativity could be the key weapon to win this very challenging current battle.

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BUILDING YOUR

#BUSINESSFORTOMORROW If you own or run a business or are starting a business for the first time, you have experienced some of the most challenging and changeable times for several decades.

The future is set to remain uncertain; it is crucial for businesses to have an agile strategy to build a #BusinessForTomorrow.

Here are our five key areas to consider when reviewing your business:

1. CASH REMAINS KING A number of businesses will experience pinch points in their cash flow management as their business begins trading again; working capital will have been eroded and delayed VAT and other payments will begin to fall due as Government support measures start to come to an end.

Businesses may find that they need to raise finance in the coming months. Debt finance, such as bank overdrafts and loans (including Government backed loans) is the most common source of finance for SMEs. However, there are other options available, including equity finance, business angels and venture capital/ private equity investment.

Furthermore, staffing levels and capacity will have a direct impact on your cash flow and it will be important to analyse each area of the business and the requirement to bring people back to work as and when they are required, or consider redundancies.

Cash flow was not just an exercise for the start of lockdown; you should keep reviewing and accessing your outgoings with a close eye on the cash coming into your business. You can link this up to a pipeline of the work you have coming in, to get a better prediction. Many businesses will not see cash shortages for some months to come.

Download our free cash flow templates by visiting: https://bit.ly/haz-cash-flow

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2. ASSESS YOUR SUPPLY CHAINS AND REVIEW YOUR EFFICIENCY Whether businesses closed or adapted operations to continue trading during lockdown, it is likely that most will now have a different look and feel to both their customer base and supply chain.

It is important for business owners to recognise these changes and, when planning for the future, incorporate them into their business strategies to ensure that they can run as efficiently as possible. Resources are likely to be limited and the challenges will be magnified where new products, new processes and new people have been introduced.

• How reliable are your suppliers?

• What are their lead times?

• How have processes and timings changed?

• Do you have alternative suppliers available?

Take the time to map out and audit your supply chain and routes to market. Also, to make sure you are delivering this as competitively as possible without carrying unnecessary stock or debt.

For many, lockdown has provided the opportunity to review efficiencies, whether that be in manufacturing processes or workflow management, and this is essential for businesses to adapt to changes that have happened and are continuing to happen. How can you make your business more efficient to protect margins and/or improve your customer offering, to gain that competitive advantage?

3. MANAGEMENT INFORMATION Having the right data that provides meaningful insight into your business on a day-to-day basis will help you in understanding changes in your resources, financials and, more importantly, your cashflow. Having a proper understanding of what people buy from you and why will enable you to set the right KPIs. A good forecast model will allow you to assess the impact on your business and plan accordingly; scenario planning will also help you to understand the risks and opportunities, that you may face.

Cloud accounting software features could really help you to understand your business in real-time; Xero’s business snapshot allows you to examine your business metrics so you can drive your organisation. It will also give an insight into the profitability of your business by showing your largest costs and revenue streams, and how long on average it takes for your customers to pay, allowing you to make well-informed decisions.

4. REVIEW YOUR BUSINESS STRUCTURE It may be the time, over the next few months, to put a new structure in place which will assist in growing your business whilst mitigating the risks of a future downturn.

Introducing holding companies, demergers, and new group structures can all be explored as ways to create additional value and mitigate financial risk in your business.

5. CONTINUE TO COMMUNICATE It is important to maintain good lines of communication with customers, suppliers, staff and advisers to ensure that your business continues to run smoothly. Lockdown has emphasised the importance of online communication, through emails, social media and video conferencing, so it is vital you are using each medium effectively.

If your operations or processes are changing, have you informed your customers in a timely manner? The customer experience is important for both retaining your customers and encouraging them to recommend you, so make sure you are engaging with them regularly and making them feel valued by keeping them up to date with your changes and how they affect them.

At a time when people have been apart, and many businesses look set to develop their remote working for the future, effective internal communication is vital for maintaining trust within an organisation and has a significant impact on employee engagement, and productivity. Now would be a good time to look at your internal communications campaigns to make sure they are engaging your employees in your new goals.

If you are now addressing your business plans in order to build your #BusinessForTomorrow, please get in touch with one of our business advisers who will be happy to help.

Now may also be a good time to review your dividend and remuneration policies.

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THE FAMILY BUSINESS VIEW

Bence Builders Merchants There is no doubt that in times of crisis, a business needs strong leadership.

Agility has been the keyword for many; with the Government announcements coming thick and fast in the first few weeks, business leaders were under pressure to comprehend the changes and what they meant for their businesses, and then communicate this to their employees effectively, in a relatively short space of time.

Paul Bence, is the sixth generation of the Bence family to lead Bence Builders Merchants, and he explained how none of that history and experience could have prepared the company for the challenges the COVID-19 pandemic presented them with.

Despite the challenges, the business has reacted swiftly to each release of guidance, continued operating throughout lockdown, and is now implementing changes to ensure the business continues to service local and national industry in the future.

PEOPLE ARE THE FOUNDATION It comes as no surprise that, as a long-standing family business, the values and wellbeing of its people remain at the heart of Bence’s operations.

In a recent interview with the Builders Merchants Federation, Paul highlighted showing your human side and engaging

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personally with staff as his number one priority in five top tips for leadership. In talking to us, he emphasised the need for a high level of emotional intelligence to lead people effectively through times of crisis.

In the very early stages of lockdown, Paul and his commercial director, Carlwyn Coombes, made the most of being an independent business and took the time to visit each of their sites and speak to everyone to find out how they were feeling about the situation and how feasible it would be to continue operating from their point of view.

Being able to show empathy and demonstrate understanding of the impact of the crisis on individuals in this way goes a long way to developing the trust your employees have in you and building a stronger team for tackling what the future holds.

MANAGING THE SUPPLY Having spoken to all of their employees, Bence’s took the decision to stay open during lockdown. With the world confined to their homes unless absolutely necessary, the DIYers came out in force; home training courses and YouTube instructional videos replaced pubs and restaurants and the builders’ merchants that had managed to stay open were inundated with grateful customers looking to source materials for their next project.

Bence’s has found that people have travelled from miles around to purchase their products and they have been very grateful that the business made the efforts to stay open safely, so that some semblance of normal life could continue.

On a more positive note, the benefit of the whole situation, as many businesses are eluding to, is that the crisis has pushed Bence’s into making decisions that they may not have done previously.

The main challenge has come in maintaining stock levels for certain products. Unsurprisingly, the supply chain for landscaping products is particularly under strain and Paul expects this to transfer to other products as the construction industry continues to get moving again.

Online operations and a new ecommerce site now present a real opportunity for the business and will become a key focus.

Prior to the pandemic, Bence’s was a traditional builders’ merchants operating with a mobile salesforce tasked with meeting customers face-to-face and developing strong relationships with their network. Video conferencing was totally alien, but is now firmly part of the business and saving both time and money.

His passion for the industry in which he works is clear; not only considering the impact of supply on his own business, but also how not being able to source sufficient product will impact the businesses they work with. Plaster products are a good example of this; due to shortages, Bence’s sourced a new supplier in Poland and Paul was keen to emphasise the importance of continuing to supply a niche market that is mainly made up of sole traders, who rely on purchasing their products. The business is taking responsibility for the role that they play in the supply chain, in order mitigate risk for themselves and their customers.

BUILDING THE FUTURE Paul explained that due to a combination of factors, the construction industry tends to be in the front seat when it comes to an economic downturn, and so despite the recent positive trends, they will not be taking it easy. In fact, Paul asserts that many experts are considering the upturn they are currently experiencing could in fact be a false dawn, with consumers panic buying, expecting shortages further down the line.

Despite its clear benefits, the development of online operations is one that comes with its own trials. Paul was quick to point out that they are not Amazon, and managing stock for over 15,000 product SKUs whilst operating with uncertain supply chains may be a bit of a guessing game to start off with.

Fundamentally, it is clear that the strong networks and relationships that Bence’s have developed over their many years in operation will provide a great foundation to make the transitional change to an increased online offering.

Despite the challenges ahead, people still do business with people, and Bence’s people have been doing it since 1854.

MEET THE MANAGING DIRECTOR Paul Bence Born and bred in Cheltenham, Paul achieved a degree from university in Bristol and then spent a year in the U.S . With a construction-based work placement in Maryland and further education in Pennsylvania. After accepting a graduate management position at Aggregate Industries, he ended up taking a position with the family business and took over as MD

at the ripe age of 30. The following decade showed a period of exponential growth and under Paul’s leadership the George Bence Group has five branches and over 130 staff with expertise in various product specialisms. Paul is also the Commercial Director at Cheltenham Town Football Club, a trading director at a national buying group for independent businesses and the chairman of the Builder Merchant Federation Kitchen & Bathroom Forum.

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THE START-UP VIEW

The Cotswold Book Room Although taking on a 70-year-old book shop may not seem like your typical start-up opportunity, husband and wife team, Gideon and Cathy, have cleared the decks in the Wotton-under-Edge-based independent bookstore and have been working hard to bring it into the 21st century.

Despite aiming to open in April of this year, the pair refuse to be deterred by the challenges of the recent lockdown and have instead used the time as an opportunity to revisit everything they had done, look at their suppliers and other relationships, and make sure all of the systems they had in place were efficient and ready to go when they were allowed to open their doors.

Gideon explained that their first steps to building their new business was to make sure they had the right advisers on board and clarified that it is so important to have confidence in the people you work with. They truly appreciate the personal support they get from the advisers they selected and believe the careful and thoughtful advice they receive from the professional team around them allows them to operate from a position of strength.

Consumer retail is totally new to the pair and they are currently very impressed with the new cloud-based systems they have implemented; a total upgrade from the fax machine they inherited when taking over last year.

The benefits are clear to Gideon; as they will both be working their usual jobs in engineering and medicine as well as running the shop, the time savings achieved by having all of your systems communicating with each other and the automation available are invaluable. It leaves them with headspace to think about their business overall and to concentrate on building business relationships rather than getting bogged down in the detail.

Gideon’s background in engineering was clear, as he talked us through his plan for the business over the coming months, a phased approach that has been adapted to suit the current situation. Currently in phase three, a rigorous testing of their stock management systems, software and firmware, the aim is to fully open in August.

The refreshed bookstore will provide books and stationery to the local community, as well as aiming to expand into author events, engagement with schools and writing groups, and many more activities in the future.

With the store celebrating its 70th birthday in November this year, Gideon concluded by announcing their aim to take it to 100 years!

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ARE YOU STARTING A BUSINESS? If you are thinking of setting up a small business, it is essential that you know exactly what is involved. Our step-by-step guide will take you through each of the key stages of the start-up process, from researching your idea through to launching your business, and is available to download from our website, here: bit.ly/haz-start-up-guide Getting the set-up right can make the process seem less daunting. Remember that half a million new businesses start up in the UK each year, with many operating successfully and profitably to achieve great success.

START-UP CHECKLIST 1. Evaluate the opportunity with a business plan including financial projections, location, key market and competition and your expertise.

2. Formulate a marketing strategy.

3. Draft a budget.

4. Choose an accountant.

5. Determine your business structure; sole trader, partnership, LLP or limited company, and get set up.

6. Register your business.

7. Set up your bank account and obtain funding.

8. Choose accounting software for record keeping.

9. Obtain insurances, such as public and employer liability insurance.

10. Start selling!

As an entrepreneur who has launched their own business, you will want to make sure you are doing everything to ensure its success. The Hazlewoods Accounting Solutions team are here to support your creativity and work with you to drive your business forward; whether that is for growth, to make a reasonable living, or with the aim of selling in the future.

GETTING YOU STARTED: THE BUSINESS PLAN A business plan presents management’s plans for a business in one concise and coherent document.

Business plans are most often prepared for the object of raising or maintaining finance and, as such, need to convince potential investors that: → the business has commercial merit; → a market exists; → the business has a capable management team; and → the potential returns are worth the risk of investing.

A business plan can take many forms, although there is an increasing convergence towards a standard model that supplies potential investors with a comprehensive yet concise description of the business and its aims.

A good business plan will generally contain the following sections: → executive summary; → background, history and overview of the business; → description of management and other key employees; → market analysis and research; → details of products and services to be offered; → sales and marketing strategy; → description of operations; → financial projections; → SWOT analysis; → potential exit routes; and → historical financial information.

In summary, a business plan should highlight the key value drivers, provide information to enable an indicative offer (if relevant), be capable of withstanding the due diligence process, and address what the business will look like in 3-5 years’ time by demonstrating growth.

Hazlewoods has extensive experience in preparing business plans and forecasts/models and we are able to provide advice throughout the fundraising process, whether it be debt, equity or other more complex instruments. Please get in touch if you would like more support in starting your business.

MEET THE COTSWOLD BOOK ROOM’S ADVISER, Hayley Scott Gideon and Cathy spent the first couple of months of 2020 refurbishing their shop, setting up Xero cloud accounting, researching ePOS software, to make sure they were ready to go in March. We have been with them every step of the way on this, so they could hit the ground running and not have to worry

about the day-to-day administration, and could just get stuck in with the business in hand: selling books!

Lockdown obviously put pay to that, so it was an opportunity to think outside the box. As well as continuing with the refurbishment work and ‘futureproofing’ the building, they spent

the time setting up the website, and allowing for online sales and collections.

This trading behind closed doors is helping them to build a local customer base and get the word out that the shop is open for business, albeit without actually being open!

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RECRUITMENT BUSINESS VIEW

GB Solutions LOOKING TO A DIGITAL FUTURE

GB Solutions is an established recruitment agency that has been operating in Gloucestershire for over 20 years, providing both temporary and permanent staff for businesses of all sizes in office roles. Partner, Sue Waters, spoke to us about the compulsory changes in their business as a result of lockdown and the recruitment outlook from their perspective.

It may seem difficult to see the positives at this point, but the partners found themselves in a position where they were forced to make immediate changes that may otherwise have taken them a few years to progress.

Sue explains how they are now moving forward from a stronger, more agile position.

When businesses started to close and focus on their immediate cashflow, it is no surprise that GB Solutions discovered a recruitment freeze had begun and their business dried up overnight.

NO STRANGERS TO CHANGE The last few years have seen some considerable change for the team at GB Solutions, particularly for Sue when an opportunity arose for her to step into a partner role in 2017.

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With the addition of a new commerce division, a brand refresh, and its strongest first quarter performance, the change around the corner was unforeseen and in stark contrast to the success they had been enjoying.

To say business fell off a cliff edge would not be understating the speed at which contracts were pulled and the GB Solutions offices had to be shut. As with all businesses, cashflow management became key and Sue attributes their ability to get through the first few weeks to the financial astuteness of business partner, Mike Goode.

Amidst cutting costs and furloughing staff, they found that their luck was in; as their lease came to an end on their offices, they were able to hand in their notice, removing long-term bricks and mortar commitment and begin their journey into remote and digital working.

MOVING TO THE CLOUD The recruitment industry has moved quickly in recent years; the days of paper CVs and meeting candidates in person seem a distant memory, with virtual meetings and social media such as LinkedIn taking over. Sue explains that the most successful recruitment consultants are online and available all of the time, particularly out of hours, and are more flexible to the requirements of candidates.

GB Solutions found that their existing systems and ways of operating meant they were more desk-bound than was suitable for the job and so they had been making a gradual move to becoming more digital and flexible.

Having moved to Microsoft 365 earlier in the year, the enforced pause in day-to-day activities provided by lockdown meant that the business had the ideal opportunity to move to a cloud-based customer relationship management (CRM) system. As well as being a higher performing option than their existing database, it also means when the business starts to bring staff back from furlough, they will have full access to all of their systems from any location.

Sue describes the local authority discretionary grant as a game changer at this point; they applied for the ÂŁ10,000 grant and the money was in their account within three days. Just one of the many Government support systems to keep British businesses moving.

The final piece of the puzzle was negotiating with their hardware suppliers, Cheltenham-based IT partners Smart, in order to change their desktop lease to laptops, and accessing new mobile phones through Eurolink. In a process that was planned as a step change over the next few years, GB Solutions now has a workforce that is fully mobile and flexible.

THE OUTLOOK Knowing that the business has the right technology in place means the team can continue to operate seamlessly; however, Sue explains that this is only half of the story. New working practices have to become ingrained, and where working from home offers a great deal of flexibility and benefits to some, others may find it more difficult.

Looking to the future, GB Solutions understands that the work of recruiters has changed; physical networking is currently on hold, which is a tool that is so vital to their work. Social networking, WhatsApp, and Zoom, are welcome replacements but, as many discussions are highlighting, this does not entirely replace the benefits of a face-to-face encounter.

Sue concludes, recruiters are basically sociable animals and if networking is slow to return it will be interesting to see how the recruitment industry further adapts, but if it is more virtually focused, GB Solutions are now well placed to move with it.

MEET THE SENIOR SPECIALIST RECRUITMENT CONSULTANT Sue Waters Sue started her working life as a buyer for Boots and then Sainsbury’s where she had built up a good understanding of retail, supply chain management and the demands of FTSE 100 businesses.

After a few years working in Switzerland and the US she returned to Monmouthshire, and joined GB Solutions in 2014. Sue bought into the business in 2018 and is now a Director, alongside Mike Goode. She is a

well-known face among the marketing community in Gloucestershire through networking and her online presence.

Frequently called upon to help organisations with careers advice and CV writing, she is also passionate about helping women find the roles they are looking for in organisations empathetic to their family needs.

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INTERNATIONAL BUSINESS VIEW

NDBUILT HA

Stewart Golf MAKING THE MOST OF THE SILVER LINING

The COVID-19 pandemic has undoubtedly caused disruption to businesses globally; although a lot of this disruption has been debilitating for many, some businesses have found themselves in a more positive position than they might have considered possible.

Having spoken to Mark about his company in our last magazine, we know that Stewart Golf is very focused on its employees, and so the decision was to take the steps necessary to keep the lights on, the business moving, and employees paid until the fog cleared.

Stewart Golf has been one of those ‘unlikely beneficiaries’ as founder, Mark Stewart, described it when we spoke to him about how the business has benefited from an unforeseen market change.

As part of plans to keep the business trading, Stewart Golf applied for the coronavirus business interruption loan scheme (CBILS), with the whole process taking just two weeks, which Mark explains felt considerably longer at the time.

SURVIVAL INSTINCT Like many businesses at the beginning of March 2020, Stewart Golf was assessing the outlook for the company; with sports and socialising being postponed for the foreseeable future and golf courses in the UK and many other countries they distribute to totally closed, Stewart Golf shut down production and braced for the unknown.

FROM THE DARKNESS CAME LIGHT With the company now prepared for four months of limited activity, the lockdown restrictions in the United States triggered an unexpected surge in sales for the Gloucestershire-based company.

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Many golf courses in the United States have remained open throughout the COVID-19 pandemic, but social distancing guidelines have meant that the use of rented buggies is either not allowed or restricted to single-rider use, so walking has been the only option left to those who wanted to continue playing. The result has been a surge in demand for golf trolleys across the USA. Stewart Golf’s USA website sales for the months of April and May 2020 were up by an astonishing 886% to a level of sales that was more than double the entirety of 2019. The first nine days of June were tracking a barely believable 1,898% up year-on-year, despite all trolleys being on an 6-8-week lead time.

CHAMPAGNE PROBLEMS As with any rapid growth, the increase in sales has not come without its challenges and Mark describes these as ‘champagne problems’, fully appreciating the difficult times that some companies find themselves in.

The logistics of the situation are now the company’s main challenge; supply chains for components have slowed as all companies get to grips with operating under new safety guidelines or on reduced staff, due to having furloughed employees themselves.

To address the increased level of demand, three weeks into the furlough scheme Stewart Golf had returned everyone to work and it has now taken on ten new employees in production, more than doubling its production staff. Training new employees sufficiently to

produce the quality, handmade products Stewart Golf has become renowned for, whilst adhering to social distancing guidelines, also takes time.

PROCEEDING WITH CAUTION Mark remains modest in his assessment of how the business has performed and he attributes the success to a change in market conditions of which they managed to take advantage. Globally, the Swedish golf market has remained strong, but there has equally been a far more cautious approach in many countries, where consumer confidence is low and may be slow to recover.

There is no doubt, however, that Stewart Golf is a business that was ready to respond to the change in market conditions and has taken advantage of the opportunity presented to it in an efficient and wellstructured manner. Having a well-established distribution partner in the United States and focusing on effective marketing for the last 10 years has proven to be key in their success this year.

Looking to the future, Mark asserts that although the level of sales may not remain, the current situation may have encouraged a change in golfing culture in the United States in particular. Where buggies were once the norm, their new customers and other golfers alike may recognise there are courses out there they did not realise they could walk and will be encouraged to do it more.

MEET THE CO-FOUNDER Mark Stewart Mark gained GCSE’s & ‘A’ Levels in Maths, Physics and Design and Technology at Newent School before graduating from Loughborough University in 2003 with a degree in Manufacturing Engineering & Management.

Mark won a ‘Young Businessperson of the Year’ award in 2009, and an

‘Outstanding Leadership’ award in 2018 after completing a Postgraduate Diploma in Leading Business at the University of Gloucestershire.

Mark has been married for 10 years to his wife Alexa and they have two young children. They live in Cheltenham. Outside work and family life Mark enjoys triathlon, cycling, DIY and the occasional round of golf!

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SUSTAINABLE BUSINESS VIEW

Zellar TURNING GREEN DREAMS INTO REALITY

Looking to the future, finding ways to manage cash and make prudent decisions for business money is going to be key to survival for many.

Sustainability and being green has not always gone hand in hand with cost savings. 88% of British SMEs value sustainability, but 70% struggle to make it a reality within their business; most cite cost as the primary barrier.

Further studies show that consumers gravitate towards companies with strong ethical and environmental credentials, so it would not be surprising to see sustainability go from a differentiator to a requirement in competitive markets in the years to come.

Zellar founder, Gary Styles, agrees with this; he spoke to us about his passion for climate change and his aim to make Zellar the lowest-cost path to sustainability, educating consumers and helping SMEs to achieve net zero carbon within 10 years.

BE THE CHANGE YOU WANT TO SEE Gary’s energy journey started in 1998 as he developed Online Direct, the UK’s first aggregator in the energy market. Having launched in 2003, the business has now processed over 500,000 B2B contracts.

Along the way Gary realised he had a passion for climate change and, understanding that the energy industry was part of the problem, has decided to make a change and develop a business

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that could revolutionise the way energy is purchased by SMEs in the UK in the future. He describes it as ‘being the change you want to see’, and so the concept for Zellar was formed.

SIX STEPS IN THE CARBON ZERO JOURNEY Gary explains that the Government has set a target of net zero emissions by 2050 and, in order to achieve this, the 6 million SMEs in the UK will be crucial to reaching the target, both in achieving themselves and driving the message through their communities. There is, however, a lack of support, education and understanding to help businesses achieve what appears to be an enormous goal.

Gary believes that the Government targets are not ambitious enough and has set up Zellar with a mission to help get 1 million SMEs to net carbon zero by 2030. By doing this, Gary estimates he will be able to save 100 million tonnes of CO2, and helping the UK to get to carbon zero more quickly.

6. OFFSETTING: In addition, Zellar will offer a variety of options for you to offset your business’s carbon footprint.

Zellar is a digital platform that makes managing sustainability easier for SMEs; the data available through the software provides insights for leaders into their business that help to measure environmental impact and change behaviour.

The energy industry has long been criticised for its lack of transparency and in the midst of a crisis, the world has demanded more information, and issues of trust and transparency have become increasingly important factors for consumers. Zellar’s strategy aims to address this by providing clear access to data and benchmarking, and capitalising on the natural competitiveness of businesses to achieve more.

In order to address the climate emergency, and make the goal more achievable for SMEs Gary and his team have created a model that gives people the opportunity to be part of the change:

CREATING SUSTAINABLE BUSINESS FOR THE FUTURE Further to short-term economic survival, saving money is not the only value in a greener strategy for businesses.

1. ZELLAR PASSPORT: described as t’he Strava for energy’, the Zellar passport holds data from all of its users in one place, allowing businesses to benchmark themselves locally, nationally and within their sector.

Those businesses with strong ethical and environmental credentials will undoubtedly attract the best talent as Generation-Z starts to take over, with millennials as the majority of the workforce. As the food industry has seen a shift in demands for knowledge of food provenance, Gary envisages that the energy market will begin to come under greater scrutiny and both employees and customers will have a heightened awareness of the businesses they work for and purchase from, and a desire to associate with those that have a sustainable purpose.

2. BUSINESS PLEDGE: Zellar supports businesses to identify what a realistic target is for them in achieving net zero.

3. NET ZERO SELF-AUDIT: the self-audit introduces an activity that became compulsory for large businesses in 2014 and is conducted online to avoid an energy auditor with a sales approach turning up at the door.

4. COMMISSION FREE COMPARISON SITE: the commission -free element means prices are lower than existing comparison models and Zellar encourages businesses to use the money saved to kickstart their net zero investment.

Gary concludes that education is key; with data visibility and understanding what good looks like through benchmarking.

It is then about spreading the word and using the new-found transparency to educate the masses. One of the many ways Zellar is achieving this is by harnessing the power of the influencer. Zellar ‘changemakers’, small and large, are signing up all the time to spread the word and encourage others to strive for carbon zero.

5. ZELLAR SCORE: the Zellar score introduces the first sustainability score for SMEs. Where reviews and standards have become commonplace in other industries, such as food hygiene, for example, the Zellar score is the first of its kind for the SME energy market and one that Gary envisions will become a standard for the future.

MEET THE FOUNDER Gary Styles Zellar was founded by Gary Styles who has been pioneering change in the energy market for 20 years. His innovation and industry developments bought efficiencies and reduced costs for thousands of SMEs across the UK. This experience has given Gary a unique perspective on the energy market, and never one to rest on his

laurels, he is now intent on shaking the industry up again. This time by using his business experience and passion for reducing the effects of climate change, to create a digital platform that will help business communities become more sustainable and responsible, in the most efficient way possible.

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DEVELOPMENT BUSINESS VIEW

RRA Architects TOP TIPS FOR IMPROVING YOUR WORKSPACE AT HOME

Working from home became the hot topic of lockdown and it seems everyone has become used to seeing journalists on television reporting from their perfectly set up home offices; concerts from A-listers’ home studios; and even Brad Pitt playing Dr. Fauci in his home library.

But for many of us the home office has been a hurried, makeshift affair; struggling with trying to organise an area to work from with enough plug sockets and reasonably stable internet, whilst also keeping a watchful eye on the children.

Of course, it would be great if we all had a dedicated office in our house; soundproofed, neutral, calming, with an ergonomically designed desk and chair and natural light streaming through the expansive windows, which overlook our stunning landscaped gardens!

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However, for the majority of us, reality is still more likely to be a semblance of a home office in a spare room or a laptop on one end of the kitchen table whilst organising the home school at the other.

Nonetheless, even if this is just a temporary set up, taking a few minutes to stand back, and reassess the space you have available to create your home office could pay dividends. Implementing some simple, inexpensive adjustments really can improve productivity, mood and health enormously.

So, here are RRA’s top tips for making the best of a temporary solution to enable you to set-up for your home office.

PHYSICAL COMFORT Even if you do have to work at the kitchen table, it is still worth trying to have an adjustable desk chair with lumbar support. Even the best dining chairs are not designed for working at a computer, so this is one area that is worth some investment.

Once you have your chair, and ideally a proper desk, but even at a normal table, it is vital that you check your positioning using the self-assessment checklist from the National Institute of Health here: https://bit.ly/workstation-checklist LIGHT It may be tempting to use that underutilised dark corner, but this could be detrimental to both your concentration and productivity – and you simply will not want to work there.

Try to position yourself in a well-lit area, ideally near a window to get plenty of natural light. It is even better if your window has a good view to encourage you to exercise your eyes by looking away from the screen regularly.

Add one or two desk lamps with a soft, gentle light for days when the weather is dull, or for evening working.

COLOUR Whilst many of the online images of home offices have bold colours which look striking in the photos, such décor can be distracting and may not provide the calm atmosphere you need to concentrate. A light, neutrally coloured area will allow you to focus on the task at hand and increase productivity.

STORAGE If possible, have a good amount of storage close by and use it! Clutter-free desks are better for inducing a focused, working environment. This might be

difficult if you are working on the kitchen table, but even some baskets under the table that you can organise supplies into will keep them close by, whilst also keeping distracting, clutter out of your vision.

VENTILATION AND TEMPERATURE No one likes a stuffy workplace: keep the airflow moving, and ideally have an open window if the weather allows.

Temperature can be a tricky one to get right, especially if males and females are working together; research has shown that females generally respond to temperature stress more than males and suffer more from cold extremities i.e. hands and feet. However, we do not work well if too hot or too cold, so it is worth finding your own comfortable temperature to maximise productivity.

ACOUSTICS We may not be able to control all the sounds, but with lots of meetings happening over the internet, trying to minimise background noise is an important consideration. There are the obvious things; shut doors, buy the children some headphones and let your household know you are in a meeting.

Less obvious is to ensure you have some softer surfaces or soft furnishings around you, they help to deaden and absorb sound.

PLANTS One of the current trends in architecture is ‘biophilic design,’ which means having plants in the building. The benefits of plants in the office are well established, but it seems their presence goes way beyond producing extra oxygen for us and looking pretty. Their ability to absorb pollutants is significantly beneficial and research has proven that just looking at plants helps lower stress MEET THE ARCHITECTS Mark Powles Mark Powles heads up RRA Architects Ltd, an award-wining practice established in 1986 and working mostly in the Herefordshire, Gloucestershire and Shropshire areas. With a reputation as a highly innovative architectural practice they cover all sectors and the services provided can be as minimal as just

indicators in the body. Even having pictures of plants or natural spaces can trigger mental and physical benefits. So, green up your area with some natural images and real plants for a boost.

AROMA Often overlooked when we are thinking about the visual and functional aspects of a working space, the aroma can have a profound effect on your comfort. Of course, bad smells are not going to help, so try to avoid potentially smelly areas, for example, being near the window above the outdoor bins. Then perhaps add a pleasant aroma to the area; a humidifier will help you avoid dry eyes and adding some essential oils, such as citrus scents or rosemary, is said to increase alertness and concentration.

HEALTHY HABITS Finally, try to really nail those healthy habits from day one: → Take a break from the computer at least every 15 minutes. → Remember to stand up, move away from your desk and stretch regularly. → Check your posture is right for work. → Set time limits and ‘leave your work.’

This can be a tough one when working at home, but it is important to have boundaries and separate home life and work life. → Eat lunch away from your desk and take breaks. → At the end of each work session take five minutes to tidy the area so it is clean, ready and welcoming for your return. → (And don’t forget to water the plants).

simple advice on planning or design, through to complete project management from design concept to handing over the keys of a finished project. Mark notes, “RRA has a great team and we really pride ourselves on truly listening to what the client wants and exploring how they intend to use their space to create appropriate and practical solutions. We are very proud that these solutions usually also exceed our clients’ expectations.

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FIVE

STRATEGIC PRIORITIES TO SUCCEED IN THE NEW WORLD

To increase succeed in the new world, HLB has identified five strategic priorities to unlock business transformation: → digital acceleration; → workforce transformation; → consumer acumen; → cost management; and → supply chain reinvention.

As we head down a path of uncertainty, the risk of sitting tight and not investing in transformation will decrease company growth or possibly result in lost market share.

To maintain competitiveness in the new world, business leaders must adopt greater agility to anticipate change and mitigate its impact. To drive sustainable change in the organisation and re-write the manual, tough questions need to be asked within boardrooms.

Hazlewoods is an independent member of HLB, a fast-growing, dynamic network of independent professional accounting firms and business advisers. Formed in 1969, HLB ranks in the top 12 international accounting networks, servicing clients through its member firms in 150 countries.

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At the dawn of the new decade, business leaders could not have foreseen the shock wave called COVID-19 that was about to hit the world. Pre-pandemic, HLB surveyed business leaders from more than 50 countries during the final quarter of 2019. From our findings, economic uncertainty emerged as the top concern among respondents. Today, a new world emerges; a post-pandemic world in which business leaders do not just face the economic down-turn they were anticipating, but a far more disrupted global economy and business environment altogether.

How do we navigate this new world? What is the road to economic recovery going to look like? What are the implications for my business? What is the long-term effect on consumer sentiment and behaviour?

MARCO DONZELLI CEO, HLB

SCOTT LAWRENCE Partner

https://hlb.global/

01242 237661 scott.lawrence@hazlewoods.co.uk

While a V-shaped economic recovery would be the best outcome for most, there is the possibility recovery will be more sluggish. Without a vaccine or widespread immunity, there is the risk of a second wave of infections, which could lead to a second decline in economic activity or even another wave of lockdown measures. This is a doom scenario that requires great resilience to weather the storm yet again.

But post-pandemic challenges go beyond economic uncertainty and recovery. There are permanent changes to how societies operate and businesses across all sectors need to pivot and adapt to succeed in the new world. Greater agility is the superpower separating the successful business models from those who will fall behind in the near future.

The pandemic changed the paradigm of competitive advantage. Operational agility, lean supply chains, deep understanding of customers and a high level of remote work readiness are now the key factors to success. This gives smaller, more nimble players in the market an edge over the larger, more established ones for whom change often comes at a slower pace. We believe a growth mindset and greater agility are the key ingredients to success in the post-pandemic world, separating tomorrow’s leaders from the competition.

Technology will play a major factor in enterprise survivability well into the future. Companies that find ways to leverage digitalisation to allow for near instantaneous scalability will be better positioned to mitigate future disruptions. If we learned one significant lesson from the pandemic, it is that we should not attempt to modify our existing business plans, but we should instead re-write the manual on how to do business to ensure sustainability.

Strategies based on binary outcomes — having a widely available vaccine by the end of 2020 or not — are a risky endeavour. Instead, focussing on the areas identified in this report will boost agility and allow a business to pivot more easily when challenging times hit. Failing to transform and move with the changes taking place in the market will result in lost market share and competition overtaking you.

IF NOT NOW, THEN WHEN? If one thing is certain in today’s uncertain business environment, it is that the world will not return to how it operated pre-pandemic. The time is now for business leaders to recognise the need for greater agility to succeed.

To read the full report from HLB, visit: bit.ly/five-priorities

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HOW DO I REVIEW MY INHERITANCE TAX POSITION? Succession planning is a process that takes time and needs buy-in from all the family, so the sooner that process begins the better.

As the cost of Government support for those affected by the coronavirus continues to increase, talk inevitably turns to how it will be funded. Tax rises are an option but with Boris Johnson pledging not to increase income tax, national insurance and VAT there is perhaps limited opportunity. Inheritance tax (IHT) has been in the spotlight recently and this may be an area that changes, so now could be a good time to review your IHT position.

STEP 1 - INITIAL MEETING The first step is an initial meeting to discuss your circumstances in more detail and to get an understanding of your objectives.

As part of this, we can discuss any existing arrangements you may have in place.

The key to any plan is you being at the heart of it. Our approach to IHT planning puts you first and we ensure your affairs are arranged efficiently, and that you are the priority.

Once you are comfortable with this, we can then review what options there may be to ensure more of your estate goes to the people you want it to. Being independent means we are not tied to any provider or product, allowing us to recommend the best possible solutions for your objectives from across the entire market.

Meanwhile, our cash flow modelling simulation will demonstrate the impact our planning will have on both the IHT liability on your estate and your future financial position, to provide you with confidence in the planning recommended.

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01242 680000 andy.hogarth@hazlewoods.co.uk

STEP 2 - QUANTIFYING THE LIABILITY The next step is to understand whether an IHT liability is likely to be payable on your estate and, if so, how much this will be. Through obtaining some basic details about your circumstances (e.g. assets; liabilities; will provisions) we are able to provide a summary of your current position and the IHT that would be payable on your estate.

STEP 3 – PUTTING A PLAN IN PLACE Once we know what the liability is likely to be, we can then discuss and recommend options to help mitigate/reduce this. This process will include reviewing existing arrangements and making recommendations on the ongoing suitability of these.

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ANDY HOGARTH Manager

STEP 4 – REGULAR REVIEWS Over time your circumstances change, meaning it is important our solutions are flexible and we regularly review these with you to ensure they remain suitable and in line with your objectives. In addition, IHT legislation is subject to change, meaning further options or opportunities may become available.

Through regular review meetings we can ensure your affairs are continually arranged in the most efficient manner, commensurate with your objectives and in line with the most up to date rules and legislation.

IHT: THE FIGURES WEDDING GIFTS Parents can make a wedding gift of £5,000 to their children IHT free.

Grandparents and great grandparents can make wedding gifts of £2,500 IHT free.

All other individuals can make wedding gifts of £1,000.

GIFT ALLOWANCES ALLOWANCES Nil-rate band: £325,000 is the amount everyone can pass on IHT free.

Residence nil-rate band: £175,000 is the extra allowance parents potentially qualify for by passing their home on to their children, step or foster children and grandchildren.

Married couples each qualify for these allowances.

Transfers of assets between spouses are exempt from IHT.

%

IHT RATES IHT is levied at a rate of 40% on chargeable estates.

This is reduced to 36% if the individual leaves 10% of their net estate to charity.

Individuals can gift £3,000 each year IHT-free. Individuals can use last year’s allowance, if this was not used.

Individuals can also gift £250 to as many people as they wish each year, IHT free.

Regular gifts out of income can also be made, IHT free.

Gifts in excess of this are likely to be deemed ‘potentially exempt transfers’.

The individual needs to live for a further seven years for the gift to be IHT free.

RELIEFS Business property relief: Investments in certain businesses qualify for 50% or 100% IHT relief. The business or asset must have been owned for two years prior to death.

Agricultural property relief: Certain agricultural land and buildings qualify for 50% or 100% IHT relief. The land or property must have been owned for two years if occupied by the owner, or seven years if occupied by someone else.

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RESTRUCTURING: MAKE YOUR BUSINESS FIT FOR PURPOSE

This is a difficult time for many businesses due to COVID-19 issues, whilst others are doing fantastically well despite the current challenging circumstances.

The last few months have made business leaders think carefully about their business risks and whether their current structure is actually fit for purpose. It may be the time over the next few months to put a new structure in place, which will assist in growing your business whilst mitigating the risks of a future downturn.

RISK OF PROPERTIES AND TRADE IN THE SAME COMPANY Hazlewoods has helped a number of clients move their property assets out of their existing trading company.

The risk is if there was a downturn in trade which resulted in, for example, a significant supplier not being paid, they may seek to claim their debts by pursuing a claim against the assets of the company. This could result in a property potentially having to be sold (and at a ‘fire sale’ price) in order to pay this outstanding debt.

It may be possible to mitigate this risk by moving the property into a new holding company that sits above the current trading company. Clearly, there are tax issues involved (and potential commercial issues if a bank has security over the property) in introducing a new holding company but, in our experience, it should be possible to carry out this exercise tax-free.

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HOW CAN WE HELP YOU? Debt advisory: help identify sources of finance and advise on the optimum structure to achieve your objectives.

Services include raising and refinancing debt, debt restructuring (including private equity/alternative funding sources) and cash flow management.

Restructuring: work with owners, investors and creditors to protect and realise value. Services include assessing corporate viability, evaluating options to recover value, strategic planning and implementation.

DIFFERENT BUSINESSES IN THE SAME COMPANY Sometimes a company will have set up separate businesses/trades over time, which may be run by the same or a different management team in the company. One may be valuable whilst another may not, or it may be desirable to sell one of the businesses before the other. A company selling one of its businesses whilst retaining another can be very tax-inefficient and commercially more difficult.

Furthermore, in a similar situation to the potential separation of property, there is also a risk that if one of the businesses fails then this could adversely impact on the valuable business.

It is possible to restructure the company by moving out one of the businesses, in a tax-efficient manner, into a new company formed for the purpose (and this could also be carried out at the same time as moving the property as discussed above). There can also be significant tax and commercial advantages of carrying out what is known as a demerger, so the individual

Corporate simplification: assist in simplifying group structures, eliminating surplus/dormant companies and reducing regulatory risk, cost and management time. Hazlewoods can also advise on the optimal solution to dispose of surplus group companies, whether it be by solvent liquidation or managed exit.

Business recovery and insolvency: assist management in restructuring businesses, preserving value and avoiding formal insolvency. Our Business Recovery and Insolvency team can help provide frank, proactive and commercial advice. We work with you to provide the best solution for all parties.

businesses (whether they are trading or investment businesses) become held directly by the individual shareholders.

Care needs to be taken to carry out the restructuring in the correct way, to avoid falling into tax traps.

CREATE NEW GROUP STRUCTURE There are other instances where the shareholders may actually wish to consider bringing companies together within a group, as this can enable tax losses to be offset between the companies in the future and allow tax efficient transfers of assets around the group. If a company joining the group is valuable, there will be tax implications on the transfer of ownership of the shares which would need to be considered.

SOLVENT LIQUIDATION OF A COMPANY If a company has sold its business, or ceased to trade, then it can often be worthwhile to carry out what is known as a ‘members’ voluntary liquidation’ to distribute the remaining assets (often significant cash balances) of the

company. By distributing the funds in this way, they are treated as ‘capital’ so there are likely to be significant tax benefits compared with taking the funds out as dividends or salary. However, this option needs to be considered carefully since if the shareholder(s) are going to continue with a similar business in the future the potential tax benefits of this route may be eradicated.

Hopefully, the above gives you a flavour of some of the options for restructuring your business to mitigate risk and create additional value. The potential tax implications of carrying out such restructuring need to be considered and the tax cost of doing things the wrong way can be significant. We will ensure that any restructuring fits with your commercial requirements whilst being carried out tax efficiently.

If you wish to consider restructuring your business or discussing the above in more detail then please contact Pete Woodall pete.woodall@hazlewoods.co.uk or 01242 680000, or your usual contact at Hazlewoods.

PETE WOODALL Associate Partner 01242 680000 peter.woodall@hazlewoods.co.uk

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TAX HEADLINES ARE YOU DISPOSING OF A RESIDENTIAL PROPERTY? There has been a significant change to the tax reporting and payment requirements for disposals of UK residential properties from 6 April 2020. See below for our quick-fire Q&A on the new rules.

Q. WHAT IS THE HEADLINE CHANGE? A. Disposals of any direct and indirect interests in UK residential property or land on or after 6 April 2020, now need to be reported and tax paid within 30 days, rather than under self-assessment.

Q. DOES THIS INCLUDE MY OWN HOME? A. Reporting is only required by UK residents where there is a capital gains tax (CGT) liability. Disposals of your own home, where it has been your main residence throughout the ownership period, should be covered by principal private residence relief and will therefore not need to be reported.

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If there have been periods when you have not lived there, let out your home or used part of it as a business, however, reporting may be required.

Q. WHEN DO I NEED TO REPORT AND PAY THE TAX? A. If you have disposed of a UK residential property on or after 6 April 2020 (i.e. exchange of contracts) then you will need to report and pay the tax due (as a payment on account) within 30 days of completion of the sale.

Q. WHAT INFORMATION WILL I NEED TO REPORT? A. In order to be able to calculate the capital gain due, information such as costs of acquisition, enhancement

expenditure incurred, periods of ownership whilst living in the property etc. will be required. If you are looking to engage a professional adviser to help file the return, giving as much notice as possible will be advisable for them to help you to file on time.

Q. WHAT IF I FILE LATE? A. HMRC has announced an initial ‘soft landing’ period with no late filing penalties issued for late returns received on or up to 31 July 2020.

Interest will continue to accrue, however, on any late paid tax. After this date, the 30-day deadline will need to be met in order to avoid a late filing penalty.

SDLT DEADLINE RELAXED FOR MAIN RESIDENCE DISPOSALS A 3% SDLT surcharge was introduced in April 2016 for the purchase of second homes. This charge also applies where a new main residence is purchased but where your previous home is not sold at the same time. It is, however, possible to claw back this surcharge if the old property is disposed of within three years.

With the coronavirus pandemic freezing the property market for a while, and with an ongoing impact on property disposals, HMRC released updated guidance to extend this three-year time limit in certain circumstances.

Under the new guidance, new homes purchased on or after 1 January 2017 may still be eligible for a refund after the three-year window has expired if: → there are exceptional circumstances beyond their control from disposing of their old home within the threeyear time limit; and → the old home is sold as soon as reasonably possible.

The guidance states that exceptional circumstances may include being

prevented from selling the property due to government guidance during the coronavirus pandemic.

HMRC has said that they will consider each case separately and it is only possible to put in a request for exceptional circumstances at the point a refund has been requested and once your old home has been sold.

Note that the currently position for sales of property for Scotland and Wales is different. Please contact us if you would like further information on this.

TIME TO PAY ARRANGEMENTS With the COVID-19 pandemic having cash flow implications for many businesses and individuals, HMRC introduced some formal tax payment deferrals. This included deferring quarterly VAT payments for periods up to 30 June 2020, as well as the second self-assessment payment due on 31 July 2020 for individuals and trusts.

Although no formal deferrals have been announced for other taxes such as PAYE, NIC and corporation tax, HMRC are being more receptive to agreeing time to pay arrangements or short-term deferrals for these liabilities.

For deferred payments of PAYE and NIC, no interest or penalties will be charged.

If, however, you have also made a claim under the coronavirus job retention scheme for furloughed employees, you will still be required to pay the related PAYE and NICs received as part of the grant to HMRC.

exceptional cases, they may agree to an early loss carry back claim based on anticipated losses for the current period, which could result in a repayment of tax. Under normal circumstances it would generally not be possible to do this until the current accounting period has ended.

For deferred payments of corporation tax, late payment interest will continue to be charged but no penalties will be raised providing the corporation tax return is filed on time. In order to help with cashflow further, HMRC has also published guidance confirming that, in

NICK HAINES Partner 01242 237661 nick.haines@hazlewoods.co.uk

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CORONAVIRUS JOB RETENTION SCHEME: KEEPING THE WORKFORCE EMPLOYED

At Hazlewoods we are seeing, hearing and understanding the huge impact the coronavirus pandemic is having on our clients’ businesses across the country. Last month the Treasury announced that in excess of 25% of employees in the UK were covered by the Government’s furlough, or coronavirus job retention scheme (CJRS), totalling approximately 8.9 million workers.

This unprecedented scheme has provided a much-needed lifeline for businesses large and small, across all different sectors, enabling staff to continue to receive up to 80% of their salary (subject to the £2,500 cap) whilst being furloughed from their roles.

Our own CJRS team has worked tirelessly to answer client queries from across our base of over 6,500 business clients, helped to set up clients with access to the Government Gateway portals to facilitate their own claims, and physically made in excess of £6.8 million in CJRS claims for our clients to date.

The start of July has heralded the beginning of a new flexible furlough scheme to try and stimulate the economy and encourage the workforce back into action. We are already seeing the benefit of eased restrictions with a number of clients no longer claiming any furlough at all, and an even bigger number having significantly reduced the number of their staff needing to use the scheme.

Whilst not all businesses will be able to sustain their employment numbers at their pre-pandemic levels, we are confident that a great many of our clients will have been able to use the CJRS to maximum benefit and thus enable their businesses to withstand these difficult times.

In his summer statement, the Chancellor did have some positive news. Although he confirmed that the furlough scheme would continue to wind down as planned, ending in October, with the aim of ensuring that after this time those furloughed employees are retained by their employers, he announced a new ‘coronavirus job retention bonus’ scheme. This new scheme will be introduced at a cost of up to £9 billion and just shy of one-third of the total package announced during his speech.

Under the scheme, employers will receive a one-off £1,000 bonus for each furloughed employee that is continuously employed by the business until at least 31 January 2021.

To qualify, the employee must earn at least £520 per month on average from when the furlough scheme ends up until the end of January 2021. The employees must also have been included on a furlough claim submitted by 5 July 2020.

If you would like further information on the CJRS schemes or other employment taxes, please get in touch with Katie Williams at katie.williams@hazlewoods.co.uk or 01242 237661.

KATIE WILLIAMS Director 01242 237661 katie.williams@hazlewoods.co.uk

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CLOUD UPDATE STRENGTHEN YOUR BUSINESS AND WEATHER FUTURE STORMS

What a difference six months makes.

Or, in the world of accounting records and bookkeeping, we could probably call it five years?

In 2015, the words ‘cloud accounting’ wouldn’t have meant much to many, even accountants! However, we are now in a world where managing your accounting records via a widely accessible onlinebased program is the norm.

For most, the jump from paper-based records, to Excel, to cloud, has meant time savings, real-time reporting, and more informed decision-making. There is no going back now, especially with the Making Tax Digital world we now live in only set to grow, if HMRC can be relied upon.

We work with many hundreds of clients using Xero to process their business bank transactions, sales quotes and invoices, bills and staff expenses, all through one platform. We then add value via timely monthly or quarterly reporting, VAT submissions to HMRC and producing year-end accounts from the online records prepared.

Recent updates in Xero include the roll-out of HubDoc, a receipt and invoice management tool which is included with most Xero subscriptions.

As well as allowing uploads of invoices via a unique e-mail address or receipt capture via an app, HubDoc can also link to online supplier accounts to automatically extract bills when they are generated; a further time saving. Paper records really can be a thing of the past.

SO, WHERE NEXT? The COVID-19 pandemic has made most businesses re-assess where they are now, and what the next 12 to 24 months will bring. Budgeting and forecasting have always allowed businesses to produce more insightful reporting, and with the current climate

so uncertain, a thought-through and considered budget will be critical when assessing staffing levels and cash pinch points. Please speak to us if you would like assistance on how to prepare a budget, and how they can be shown within Xero.

The reporting tools already available, without further monthly expense, can also help businesses choosing to diversify, strengthen and weather any future storms.

For example, we know of businesses in the hospitality industry, who, in the ‘before’ times, were purely premises based. They are now branching out into home delivery, and a few may switch purely to this route in the next 12 months. But, how do they assess the profitability of each revenue stream?

Xero allows each sector of a business to be tracked, so reports can be run independently, to really show the business strengths and weaknesses.

These reports may be used to make difficult, but ultimately positive, business decisions.

As well as reporting opportunities within the software itself, there are ‘bolt-on’ apps available to assist with staff expense recording and cash-flow.

Fluidly, a management cash-flow software, incorporates actual data from Xero and artificial intelligence to produce more accurate cashflow forecasts. It also provides the opportunity for scenario planning, and the impact of purchasing a new piece of machinery, opening a new premises, etc. Talk to your Hazlewoods adviser if you would like further insight into this.

With employees soon to be back out on the road, it is a good opportunity to review your staff expense recording systems. Snap and scan receipts as they are incurred using your mobile phone and accurately track and submit mileage on the go with the map in Xero Expenses; the claim value is then calculated based on the rate per mile offered by the employer.

Expensify, a stand-alone software that integrates with Xero, can also be explored as an option. Features include connections to apps such as Uber, for automatic receipt imports, mileage tracking and the opportunity to build custom reports.

Many apps provide free trials, so you can explore the features available before subscribing, to assess whether these will be useful for you.

Now more than ever, future-proofing your business needs to be at the forefront. Using software to provide you with insightful reports and keep your record keeping as up-to-date and accurate as possible will help to make those all-important commercial decisions easier, strengthening your business for the future.

RHIANNON HOOPER Director 01242 237661 rhiannon.hooper@hazlewoods.co.uk

HAYLEY SCOTT Manager 01242 237661 hayley.scott@hazlewoods.co.uk

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MIND, BODY AND SOUL WHAT HAVE OUR PEOPLE BEEN UP TO? People are at the heart of everything we do at Hazlewoods.

Although lockdown has been a time where our employees have physically been apart, we have come together in a new enhanced programme called ‘Mind, Body and Soul’. We asked everyone for ideas and suggestions on activities or resources they need, then created a schedule packed full of information, events and competitions to keep everyone connected and entertained.

Health and wellbeing is nothing new at Hazlewoods, as we established a programme in 2017 with monthly activities ranging from chair yoga to bootcamps, massage to cooking demos. The new challenge was to make this even more fun and virtual!

EASTER EGG HUNT A usual highlight of the Hazlewoods calendar is Easter, often with a quick Easter egg hunt round the offices. Not to be deterred by being at home, the egg hunt went virtual with an egg hidden online and plenty of chocolate for the winners.

LOOKING AFTER THE MIND Early on, we had a fantastic range of resources with apps to help with wellbeing, advice on sleep, hypnotherapy, areas to learn new languages and virtual wellbeing festivals.

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CRAFT AND ART GALORE! Our May craft competition to win a day’s holiday saw paintings, felting, crocheting, and macramé, to name just a few of the entries. Hazlewoods creativity does not stop there, with over 20 entries to a photography competition in June run by workplace art consultants, Little Van Gogh.

WEEKLY QUIZ Quizmaster, Martin Howard, has entertained teams every week with his quiz, which has included themed rounds such as James Bond – just an excuse for Martin to dress up really!

KEEPING FIT For the fitness fanatics, or even those just getting into it, Wednesday mornings now start with a virtual fitness class and on Fridays there is morning yoga for the early risers.

FOR THE SOUL The quote of the day has been particularly well supported, with people submitting their quotes to keep their colleagues and friends motivated or even just amused whilst they are apart.

Our ideas for activities are constantly evolving, and we welcome ideas for new activities we could try.

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MEET OUR PEOPLE KATIE BOND, Senior Associate Joining Hazlewoods straight after my A-levels, I have now been working in our Corporate Services team at the Cheltenham office for nearly six years. I chose the AAT route to becoming an accountant, which has meant that I qualified at 22 and I am much younger than many of my peers. Whilst there is a lot of pressure to go to university, I felt that AAT was the best route for me, and I am now further in my career than I would have been, gaining added experience along the way. I am a senior associate, which involves leading audits for a variety of clients. I am also involved in non-work-related activities, such as the social committee, which involves organising events throughout the year and our annual Christmas party.

A typical day pre lockdown involved visiting clients to perform statutory audits, mentoring trainees and working alongside other departments within Hazlewoods to solve client problems. I am often the main day-to-day contact for clients and therefore also answer ad hoc queries. A highlight of my role is meeting new people and having an insight into a variety of different businesses and industries.

COVID-19 has changed my day to day role in a variety of ways. I began lockdown working on my dining room table with only my laptop and portable screen. As lockdown has continued and working from home is here to stay, I have invested in equipment and have now set up a permanent comfortable and motivating space to work from.

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Thanks to our IT team, IT issues have been minimal and overall it has been easy transitioning to this new working style and environment.

Working in the audit team meant I was already set up and used to working away from the office as I regularly travelled across the country, working on site at clients’ offices.

Clients have adapted well to meetings moving from face-to-face to video calling. The rapport I have built with clients over my time at Hazlewoods has been maintained with regular contact to catch up, and to see whether we can assist with any of the new challenges that they are facing.

Communication is by far the most significant skill which has enabled the ‘new norm’ to run effortlessly. In order to maintain team engagement and continue support between the team members, from managers to new graduates, over this period of working from home, we have introduced open microphone sessions. When a group of people are working on the same client we keep the video calls running in the background to create an office environment, whereby you can ask questions as and when they arise rather than inefficiently having to email or call. This has been positively valued and a great way to replicate the social aspect that could otherwise be lost from no longer working in the same room as the whole team.

DAN TOWN, Director I have over 20 years’ experience working as a business adviser and accountant, 15 of which have been focused on corporate clients including large and complex group structures, funds, and owner-managed businesses amongst others. I have a particular interest in the property and construction industries having specialised in that area for a lot of my career.

I’m originally from London and this is where I developed significant experience with listed clients; I have worked for both other mid-tier and Big Four accountants over the years and joined Hazlewoods in early July. The firm has such a great reputation in the South West and further afield, so it is an exciting move for me.

I’m really looking forward to the opportunities available working here; the firm has a great range of clients from the start-ups to the international corporations, and it is exciting to be part of it.

Moving firms can always be a daunting prospect and with the majority of people working remotely at the moment, it has been a really interesting time and not quite how I had imagined my first few weeks of working at Hazlewoods would be. However, everyone has been so supportive and welcoming since I joined and accommodating with the numerous questions I’ve been asking.

COVID-19 has certainly changed the way in which auditors operate, both during lockdown and as we are coming out of lockdown to new ways of working.

Lockdown has given auditors plenty to think about and practical problems which perhaps previously we had taken for granted. For example, stock takes and physical asset verification during lockdown proved difficult and I was being challenged almost daily to come up with innovative ways of auditing, to gain sufficient levels of audit assurance whilst acting within the Government guidelines.

I’ve noticed that I speak to clients and the audit team more and this is normally via video conference to still get that personal touch, which I feel is important for an

audit relationship to be successful. I’ve found that I have probably used every video conferencing tool available in the market space, I never knew there were that many but it just shows how technology has come on over the past few years!

COVID-19 has made me think that we can certainly be more efficient with our time and how we spend it during the day, and that a video call can be a good substitute for a traditional face-to-face meeting when it is permited. There will be times when a face-to-face meeting is more practical or required, for example, attendance at an audit committee or AGM which in person will be more suitable; however, for other meetings, a video call might suffice and I can see this being a preferred choice in the future as we become more trusting of new technology and new ways of forming business relationships.

The key going forward will be how audits change and how they will be carried out. Historically, a team will go onsite for 1-2 weeks depending on the size of the engagement, with senior team members popping out intermittently to check on progress. COVID-19 has meant all audits have been carried out remotely and going forwards I can see the approach changing to a hybrid of being onsite at clients and working remotely.

During my short time here at Hazlewoods I can see as a firm we have the technology in place to make this work and this will only lead to a tailored approach for clients to best suit their needs going forwards. It will also open up opportunities for new business relationships which previously might not have happened; COVID-19 has proven more than ever it doesn’t matter where in the country you are located, the important part is delivery of an audit and I can see this opening up new opportunities which personally I am excited to see.

Overall, it’s been a great start to my career with the firm and looking forward to meeting my clients and colleagues face-to-face when we are finally able to, whenever that might be!

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CHARITY Following their yearly employee poll, Hazlewoods has named Severn Freewheelers as their charity of the year for 2020/21, receiving an outstanding 52% of the vote.

Severn Freewheelers provides a free out-of-hours courier service for hospitals across Gloucestershire, Worcestershire, North Wiltshire, and Herefordshire, carrying blood, pathology samples, patient scans/ x-rays, human milk and other medical essentials.

The experienced volunteer motorcycle riders all hold an advanced riding qualification and work from 7.00pm to 7.00am during the week and all day at weekends and public holidays.

Understandably, the service cannot run without the support of its members, volunteers and fundraisers, and with it costing on average £14,000 to run a bike for the year, the fundraising is vital for the service to continue.

With COVID-19 driving many organisations to make changes, Severn Freewheelers has extended their service to run 24/7 during the pandemic. Furthermore, they are now

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collecting and delivering prescriptions to people’s homes to reduce the burden on pharmacies, highlighting the need for fundraising support more than ever.

Hazlewoods has had a very positive few years with their fundraising efforts; in 2019, the business celebrated its centenary year by raising a fantastic £121,171 for Maggie’s centre in Cheltenham.

In 2020 employees will continue to rise to the challenge and look for ways to raise money for Severn Freewheelers.

Andy Harris, Partner and Chair of the Social Committee at Hazlewoods said “We are so pleased to have Severn Freewheelers as our charity of the year this year. 2019 was a very special year for our centenary and everyone worked so hard to raise such a fantastic amount.

“Although the outlook for this year is different, our employees are already coming up with innovative ways to continue our fundraising efforts and we are proud to be supporting a charity that works hard for our local hospitals and NHS.” Tim Kidwell, at Severn Freewheelers added, “We are delighted to have the support of Hazlewoods having been chosen as their charity of the year.

We need around £70,000 per annum to run the service and we estimate that this saves the NHS in excess of £450,000, so any support we receive really is helping to save lives.”

ANDY HARRIS Partner 01242 237661 andrew.harris@hazlewoods.co.uk

CONTRIBUTORS THIS ISSUE’S AUTHORS

JON CARTWRIGHT Partner

KATIE BOND Senior Associate

01242 237661 jon.cartwright@hazlewoods.co.uk

01242 237661 katie.bond@hazlewoods.co.uk

ANDY HARRIS Partner

ANDY HOGARTH Manager

NICK HAINES Partner

01242 237661 nick.haines@hazlewoods.co.uk

RHIANNON HOOPER Director

01242 237661 andrew.harris@hazlewoods.co.uk

01242 680000 andy.hogarth@hazlewoods.co.uk

01242 237661 rhiannon.hooper@hazlewoods.co.uk

SCOTT LAWRENCE Partner

HAYLEY SCOTT Manager

DAN TOWN Director

01242 237661 scott.lawrence@hazlewoods.co.uk

01242 237661 hayley.scott@hazlewoods.co.uk

KATIE WILLIAMS Director

PETE WOODALL Associate Partner

01242 237661 katie.williams@hazlewoods.co.uk

01242 680000 dan.town@hazlewoods.co.uk

01242 680000 peter.woodall@hazlewoods.co.uk

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Summer 2020 Cheltenham office Windsor House, Bayshill Road, Cheltenham, GL50 3AT Tel: 01242 237661

Staverton office Staverton Court, Staverton, Cheltenham, GL51 0UX Tel: 01242 680000

This newsletter has been prepared as a guide to topics of current financial business interests. We strongly recommend you take professional advice before making decisions on matters discussed here. No responsibility for any loss to any person acting as a result of the material can be accepted by us. Hazlewoods LLP is a Limited Liability Partnership registered in England and Wales with number OC311817.

Registered office: Staverton Court, Staverton, Cheltenham, Glos, GL51 0UX. A list of LLP partners is available for inspection at each office.

Hazlewoods LLP is registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales.

www.hazlewoods.co.uk

@Hazlewoods