In Focus issue 22 Winter 2021 | Randall & Payne Accountants & Business Advisors

ISSUE 22 | WINTER 2021 RANDALL-PAYNE.CO.UK

We make your success our priority

TM

Results today, consequences tomorrow The power of real-time financial information can be a game changer BUDGET 2021 ROUND-UP ACCOUNTANCY

GOING CONCERN

Can you teach an old dog new tricks?

Understanding your accounts better

Three critical areas your auditor will question you about

What does it mean for business?

- TAX PAGES 4-5

IN THE COMMUNITY

OUR NEWS

GUEST ARTICLE

CORPORATE FINANCE

CELEBRATING THE 2021 WINNERS AND BUSINESS RESILIENCE

FUNDRAISING AND APPRENTICESHIP SUCCESS

HOW TO SUCCESSFULLY NAVIGATE TUPE

MANAGING AN ACQUISITION FROM WITHIN

WELCOME

MEET OUR SENIOR TEAM Tim Watkins Managing Partner

Will Abbott

Will Abbott | Partner

Partner Specialism: Business Advisory

Rob Case Partner Specialism: Tax & VAT

Ollie Newbold

Welcome to issue 22 of In Focus.

My new favourite words are “hybrid” and “blended”, terms which I am using and hearing frequently as business and the economy in Gloucestershire and throughout the Country bounce back from the pandemic.

As Tim comments on page 7 the new normal is not going to be straight forward, it will be a mix of the old ways of working and the retention of some of the new ways. Meetings will be a mix of video and face to face as an obvious example.

Uncertainty has always been a factor when running a business and that will continue. The ability to access good quality data has been available for some time, but new cloud based software allows for its efficient analysis and removes some of the subjective interpretation that can lead to poor decisions as I discuss on pages 10-11. Nic talks about his experience of embracing new technology on page 9, Nikki offers some useful advice about what your accounts actually mean on page 15 and guidance on the post pandemic Audit landscape with reference to Going Concern issues is on pages 12-13.

Of course our Budget summary is also in this issue.

We are very pleased that one of our trainees, Ethan King was a finalist for Outstanding Apprentice of the Year and 2

– Winter 2021

towards the other end of his career, Tim celebrated 40 years at the firm.

Our commitment to training, particularly in these challenging times, for school leavers and graduates remains strong and our high levels of staff retention are testament to our culture. Talking of awards it was wonderful to yet again host the Gloucestershire Live Business Awards and again share some great success stories in person over a splendid dinner.

Ollie can now claim to be an expert on TUPE, following our acquisition of Little and Company. The law is one thing, but successfully managing the transition of new employees into the team is a key plank of a successful merger and Ollie shares his insights on page 8.

I recently saw a short video of a University Vice-Chancellor talking about the rapid pace of change in today’s world. The twist is that he was speaking 40 years ago! The only constant is change and in this issue I am pleased share insights and information from the team at Randall & Payne that I trust is relevant to your journey into the future.

Partner Specialism: Corporate Finance

Simon Dudfield Director Specialism: Medical Services

Nikki Cairns Client Director Specialism: Accounts

James Geary Client Director Specialism: Corporate Tax

Nicholas Gratton Client Director Specialism: Accounts

Ryan Moore Client Director Specialism: Audit

Shaun Pegler Client Director Specialism: Accounts

Subscribe at www.randall-payne.co.uk/ news/subscribe-to-in-focus T: 01242 776000 E: marketing@randall-payne.co.uk randall-payne.co.uk @RandallPayne

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Supporting the

CONTENTS

IN THIS ISSUE NEWS FOCUS | 4 – 5 What you need to know following the Autumn Budget 2021

IN THE COMMUNITY | 6

P4 Round-up of the

Autumn Budget 2021

Celebrating the resilience of Gloucestershire businesses and this year’s award winners

TIM’S VIEW | 7 Uncertainty? Let’s talk about it.

CORPORATE FINANCE | 8 Managing an acquisition from within and navigating the TUPE process

ACCOUNTANCY | 9 Can you teach an old dog new tricks?

BUSINESS ADVISORY | 10 – 11 Results today, consequences tomorrow. How the power of real-time financial information can be a game changer

AUDIT | 12 – 13 Preparing for audit after the pandemic

P10-11 A crystal ball for

your business finances!

TAX | 14 R&D Tax Relief – a reminder of the basis, current statistics and topical issues

ACCOUNTANCY | 15 Helping our clients to understand their accounts and tax return better

RANDALL & PAYNE NEWS | 16 – 17 Tim’s 40th anniversary, smashing our fundraising target and celebrating apprenticeship success

GUEST ARTICLE | 18 HR People Support advise on how to successfully navigate TUPE

EVENTS | 19 Key dates for your diary

P12-13 Audit: 3 key areas critical for business now

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BUDGET 2021

Rob Case | Partner

Budget synopsis for a “post-COVID era” October 2021 saw Rishi Sunak stand up and deliver the government’s plans for the year ahead which he described as “focused on a post-COVID era”.

A positive, upbeat Mr Sunak held court over parliament and read out his plans which appear to suggest that he is standing by his dislike of enforcing heavy taxes, but has it really done enough to help business and the economy bounce back?

My team and I provide a brief overview of the most prudent points to note for businesses:

Personal and Partnership Taxation Basis Period Reform Making Tax Digital for Income Tax is set to be implemented from April 2024 (delayed from April 2023), affecting self-employed traders that draw up annual accounts to a date different to 31 March or 5 April each year.

Under current rules, a business’ profit or loss for a tax year is usually the profit or loss for the year up to the accounting date in the tax year.

The reform changes this to a ‘tax year basis’ with effect from the tax year 2024 to 4

– Winter 2021

2025, so that a business’ profit or loss for a tax year is the profit or loss arising in the tax year itself, regardless of its accounting date.

On transition to the tax year basis in the tax year 2023 to 2024 all business’ basis periods will be aligned to the tax year and any extra profits (subject to overlap relief) will be brought into charge at that time.

For businesses with higher profits in 2023 to 2024, due to the change in basis there will be an allowance to automatically spread the transitional period additional profits over a period of five years, although taxpayers can elect out of this should they wish.

There are some practical considerations here, especially around any filing deadlines for LLP’s and those businesses that continue to draw up their accounts to a different year end. It is likely that many businesses will change their year-end to match the tax year end, but there can be a number of reasons as to why a business chooses a different year end.

30 Day reporting for Capital Gains Tax (CGT) extended to 60 days UK residents that dispose of an interest in UK residential property that results in CGT to pay were currently required to make a payment on account of CGT within 30 days of the completion of the disposal.

This has been extended to 60 days for disposals that complete on or after 27 October 2021.

Increase of the rates of income tax applicable to dividend income The government is increasing the rates of dividend taxation at a rate equivalent to the new Social Care Levy being introduced. Currently the ordinary rate of dividend taxation, upper rate and additional rate are 7.5%, 32.5% and 38.1% respectively. This measure increases each rate to 8.75% 33.75% and 39.35% from April 2022.

We expect small businesses to consider the timing and amount of dividends declared over the coming months to April 2022 which may be issued while the rates are more favourable.

BUDGET 2021

James Geary Client Director and Head of Corporate Tax

Business Taxation Annual Investment Allowance – extension of temporary £1 million limit The Annual Investment Allowance (AIA) was set to return to its “permanent” level of £200,000 from 1 January 2022, having been temporarily extended to £1million, the budget announced that the increased limit will continue until the end of March 2023. The “super-deduction” of 130% for most new and unused plant and machinery, including commercial vehicles, which means that for most everyday equipment purchases, this extension will mean very little.

However it is good news for businesses going through a substantial building refit or refurbishment which may involve significant spend on “special rate” expenditure – largely meaning “integral features” such as heating, air conditioning, water systems, electrics and similar.

Under the super-deduction rules this expenditure obtains a 50% allowance in year 1, but the extension of the AIA increased limit means for many smaller commercial buildings, 100% allowances will be available for up to £1 million of such costs.

Remember that the timing of your spend on plant and equipment could have a dramatic effect on the timing of your tax liabilities.

Research & Development (R&D) tax relief reform R&D tax reliefs will be reformed to support modern research methods so qualifying expenditure will include data and cloud costs. To more effectively capture the benefits of R&D funded by the reliefs support will be refocused towards innovation in the UK, and to target abuse and improve compliance. These changes will be legislated for in the Finance Bill 2022-23 and take effect from April 2023.

Further details of these changes and next steps for the review will be set out in due course.

It will be interesting to see what they mean by refocusing support towards innovation in the UK, particularly as the recently published R&D claim statistics show the costs of overseas labour increasing dramatically as a percentage of costs claimed for the reliefs.

Business Rates Relief Further relief from Business Rates for the retail, hospitality and leisure sector was announced, meaning that over 90% of businesses in the sector will receive at least 50% off their expected bills in the 2022-23 year.

In a further reform, where businesses make improvement to premises that support net zero targets (such as renewable energy investments), they will not face higher rates bills on the enhanced value until 12 months after the improvements.

Further changes have been promised for 2023 giving more reliefs to support the decarbonisation of buildings.

Corporate re-domiciliation A consultation has been launched on a “re-domiciliation” process which would allow non-UK resident companies to relocate their tax residence to the UK under a much simpler process, without the need to carry out complex corporate restructures. This would bring the UK into line with some 50 other countries who have re-domiciliation regimes.

This is very early days at the moment but could become of more interest where a business is active in the UK but due to overseas residence, is not able to benefit from UK tax breaks, for example.

Tax Administration Discovery assessments A change to the law is being made to clarify the use of discovery assessments

by HMRC to recover tax in three areas – High Income Child Benefit Charge (HICBC), Gift Aid, and pension scheme tax charges – where the individual tax payer receives income through PAYE, i.e. not in a self assessment.

Discovery assessments are usually used to enable HMRC to look back up to four tax years and amend a tax assessment where they “discover”

A change to the law is being made to clarify the use of discovery assessments by HMRC to recover tax in three areas – High Income Child Benefit Charge, Gift Aid, and pension scheme tax charges – where the individual tax payer receives income through PAYE

something that was not declared, and to assess it to tax.

A recent case involving HICBC was decided against HMRC, where the Upper Tribunal found that the assessments raised were not legally valid. While HMRC are appealing the decision to the higher courts, they are changing the law in the meantime to clarify the rules to put beyond doubt.

This is not a particularly shocking or unfair measure, as the case had shown that there was a risk that those who do not declare their liability could escape it, which of course would be unfair on those who did declare and paid it. So making everyone in receipt of any of the three additional incomes liable for the payment of the tax.

The above is a brief overview on how the measures on the whole may have a significant impact on your finances and your business, the impact of some are still to be determined.

To discuss your situation in more detail contact your advisor on 01242 776000, or email Tax@randallpayne.co.uk and we would be happy to chat this through with you.

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IN THE COMMUNITY

Celebrating business resilience:

the winners of the Gloucestershire Live Business Awards 2021 We were delighted to once again celebrate the achievements from the Gloucestershire business community at this esteemed annual celebration; the 23rd Gloucestershire Live Business Awards.

Fiona Hughes Marketing Manager Following their absence in 2020, we felt grateful to be able to come together and be part of this ceremony held in the Centaur at the Cheltenham Racecourse, get dressed up again and celebrate face-to-face once more! As the pre-eminent awards evening for Gloucestershire, the ceremony provided a platform to truly showcase the winners’ achievements.

Our host for the evening, magician and television presenter, Ben Hanlin kept us entertained with his fantastic tricks and entertaining style of presenting. Ben introduced our annual video, recorded as the message from the headline sponsor, after the three-course dinner and appeared to be well-received by the audience going by their applause (and laughter!).

Our managing partner, Tim Watkins said: “A win this year feels even more momentous after last year’s awards had to be cancelled due to such difficult circumstances.

“It was such a special evening celebrating the success and resilience of our business community.

Congratulations to all the winners – and the finalists should also feel extremely proud of their achievement.”

Thank you to Louise Cains, Events Manager, and the team at Reach Plc who made the event such a success and finally congratulations again to all the winners and finalists of the 23rd Gloucestershire Live Business Awards!

– Winter 2021

1. Business of the Year – Spirax Sarco 2. Family Business of the Year – Badham

Pharmacy 3. Small Business of the Year – Leaf

Creative Design 4. Start-Up Business of the Year –

Prosperity Care and Wellbeing 5. Business Innovation Award – Fire & Flow

Coffee 6. Best Place to Work – Vanessa

We were thrilled that Faye Hatcher, BBC Gloucestershire Radio presenter, agreed to be a part of the charity video for Scoo-B-Doo, who support the neonatal unit at Gloucestershire Royal Hospital, along with staff from the unit to raise awareness about the charity’s important work for families with sick and premature babies. Thank you to everyone who kindly donated on the night and raised an impressive £3,335.

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The Winners

Arbuthnott Fabrics 7. Corporate Social Responsibility Award –

The Beeswax Wrap Co. 8. New Business of the Year – The Coconut

Tree 9. Best Employee Award – Paul Dixon, Mill

House Care and Dementia Care Home 10. Business in the Face of Adversity Special

Award – The Cheltenham Trust 11. Local Business Hero – Paul Dixon, Mill

House Care and Dementia Care Home 12. Young Business Person of the Year –

Oliver Bruce, PinPoint Media 13. Lifetime Achievement Award – Dr Diane

Savory, OBE DL, chair at GFirst LEP 14. Special Recognition Award For

The Great Work Of The NHS In Gloucestershire – Gloucestershire NHS, accepted by Peter Lachecki, chair of Gloucestershire Hospitals NHS Foundation Trust

TIM’S VIEW

Tim Watkins | Managing Partner

Uncertainty?

Let’s talk about it Although the pandemic prevented us being together, we continued to provide service to clients remotely. Today, the anticipation of offices coming back to life and the comforting hum of the coffee machine brings back some normality.

I was at a meeting recently where we started to talk about the new normal.

The debate moved from new normal to an uncertain future and that that is what we are all trying to get to grips with. The pandemic has been one thing but none of us expected the HGV driver situation, recruitment difficulties, energy price rises to name a few of the things we are having to deal with. I expect there will be more surprises as we all move forward. It will perhaps be several years before we know the full extent of what we have been through and how it has affected us all.

What does it all mean? All of these different sets of circumstances since the pandemic started are things we couldn’t anticipate. They come along quickly and are difficult to digest and understand and further separate us from what was relatively comfortable at the start of 2020.

Apart from the need to digitalise all our systems to allow home working, as we planned our return back to the office it became apparent that having the option and facilities to work from home had become “normal for staff”.

After consulting with all our teams we engaged an HR consultant to help us devise a Working from Home policy to allow the choice. In March 2020 we could not have predicted this huge change to the 9 to 5 way we had always worked.

With some working from home and some in the office communication is more essential than ever.

Communication won’t solve the problems but it will help us all to cope with the uncertainty and anxiety of it all. We have embraced this by coming together over MS teams and to ZOOM but there is something reassuring about that chat with a colleague across the desk, or whilst making coffee to try and make sense of what is going on. This, for me is why it has been so good to

see so many of our team back in the office, albeit working flexibly, and hear that level of background chat and yes, laughter.

It has also been good for me to get back to some face to face communications with clients. There is more quality to those meetings for both parties and it helps to discuss plans and to be able to have an input, to be able to put in place systems and forecasts to facilitate those plans, to hear about R&D projects underway and to have those chats about what is affecting us all. It should be no surprise that what affects one affects us all, in some ways it is reassuring, and if we are all talking it will be easier to find the solutions.

If we are all talking then all will be well in the end.

Contact Tim Watkins for more information by emailing tim.watkins@randall-payne.co.uk or call 01242 776000. randall-payne.co.uk 7

CORPORATE FINANCE

Ollie Newbold | Partner

Managing an acquisition from within I have acted on a significant number of acquisitions and sales of businesses over the years at Randall & Payne so I understand the TUPE requirements but have never been involved ‘first-hand’.

I am aware of TUPE requirements, however, in transactions I have advised on for clients I have left this to the HR professionals to navigate the process with the involvement of the buyer and seller. Seeing the full TUPE process from the client’s perspective was a valuable lesson as there are learnings from having been through this process which I will share with my clients in the future.

Randall & Payne recently acquired Little and Company (see InFocus issue 21 for the full details) and, as a result, we engaged with HR People Support Ltd to manage the TUPE process and to assist the employees with the transition to become part of our team. Gemma Irvine of HR People Support sets out the objectives and background of a TUPE process in her Guest article on page 22.

Notably from my perspective the TUPE process, can on first review, seem quite onerous and process based. However, as we understood the procedures better through discussions with HR People Support, we recognised that the process afforded us a great opportunity to: � Engage with the team at an early

opportunity through consultation meetings; � Use these one-to-one meetings as

an opportunity to build a rapport and trust with the team given that being the subject of an acquisition can be an uncertain time for the business being acquired; � Present what we stand for and set

out our culture and strategic plans; � Ask questions of the team to

understand their concerns and allay any fears they may have.

Seeing the full TUPE process from the client’s perspective was a valuable lesson as there are learnings from having been through this process which I will share with my clients in the future.

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– Winter 2021

In summary, the TUPE process has a number of key steps as Gemma highlights in her article. The process can seem complex but, with the right advice, it is broken down into manageable stages.

The key point for me is to welcome the process as an opportunity to engage with your new team and to set out what makes your organisation tick and how the new team will be a critical part of it.

From a more administrative perspective, having professional support in obtaining the necessary information to complete the ELI (Employee Liability Information) was helpful. Not only did this share the load of information review, the breadth of information collated was particularly relevant for future requirements as this represents the critical information that an employer needs to know.

I am sure that, having been at the centre of the TUPE process now, I will be sharing the knowledge and experience I have gained when carrying out future acquisition projects with clients.

Contact Ollie Newbold for more information by emailing oliver.newbold@randall-payne.co.uk or call 01242 776000.

ACCOUNTING

Can you teach an old dog new tricks?

The key is to have an open mind; to be prepared to consider a new way of tackling a problem; to be prepared to change.

Nicholas Gratton Client Director We have all heard, and probably said, such things as: you can’t teach an old dog new tricks; stuck in a rut; set in their ways. All of these paint a picture of a person that has developed a way of working that may well have been efficient but over time things have changed yet the way of working has remained the same.

Whilst there may be nothing wrong in sticking with a tried and tested methodology, you can run the risk of missing out on the opportunities offered by a new approach.

By cherry picking those ideas and methods that have been developed by others that are most suited to your business can keep your practices refreshed and up to date.

Think about it, if your competitors are evolving new ways of tackling a problem will you lose business because of it?

When I meet clients to discuss their accounts and their tax bills there is the opportunity to talk about much more.

We can review the performance of the

Think about it, if your competitors are evolving new ways of tackling a problem, will you lose business because of it? business, make suggestions or provide recommendations that I have seen from businesses in the same sector.

After merging with Randall & Payne, it has become obvious to me that my Little & Company colleagues and I need to be more open to change! Working smarter and using technology will continue to help us get the job done, making it easier to identify risks and opportunities for clients.

An obvious example is the less paper working environment. I would like to say paperless but the merger of the two firms and the mountain of files we have brought with us has had a big impact on the overall “match statistics”, at least until a lengthy process of scanning the files has been completed!

Randall & Payne have been investing in working in a shared electronic manner utilising the flexibility offered by the cloud for some time. The impact of the Coronavirus pandemic has only served to accelerate that process to enable a safe working environment to be created to ensure that client service has been maintained.

This “old dog” is determined to embrace the possibilities on offer; to have an open mind.

Contact Nicholas for more information by emailing nicholas.gratton@randall-payne. co.uk or call 01242 776000.

Bite-Sized Thinking

›› Flexibility and the willingness to embrace change will keep you ahead of the competition ›› Even a change will be positive and help you achieve continued success To find out more about any of the topics discussed in this article, visit randall-payne.co.uk randall-payne.co.uk 9

BUSINESS ADVISORY

Will Abbott | Partner

Results today, consequences tomorrow I am calling this the democratisation of forecasting, as the ability to produce a model and a forecast efficiently and cost effectively means it is now available for all businesses.

There have been rapid developments in the use of cloud based technology for the finance function to the extent that there is every reason for any business of any size to have a financial model and a forecast.

The key benefit this brings is foresight, allowing business owners to see the consequences for future cash balances, liabilities and profits of current results.

This allows better planning for investment, payments to shareholders, recruitment, innovation, growth and so forth as well as focussing the mind on corrective actions that may need to be taken.

My clients have described it variously as “removing the blindfold”, “showing me the way ahead” and “demonstrating the consequences for the future of the way the business is performing today”.

Business is ultimately about winning in the marketplace and a fluid financial model and forecast can contribute greatly to getting and staying ahead of competitors. It is as close as you will 10

– Winter 2021

get to a crystal ball for your business finances! The two areas can bring great insights.

The financial model will set a benchmark for the core business activity and focusses on understanding the interactions between sales, costs of sales

and gross margin. This is basic stuff but I am surprised by how often it is not well understood and often the underlying book-keeping is not robust enough to support a full and accurate analysis. It is the heart of the business and a clear understanding and target can add much to performance.

Diagram illustrating how acting on a forecast drives change FINANCIAL MODEL

FORECAST

MONITOR

SUCCESS

CHANGE

ACTION

BUSINESS ADVISORY It is the rolling forecast that I find is the most beneficial for clients that are using these for the first time. The time for complicated spreadsheets and days to prepare are gone. Once the original budget is in place, updating is very efficient using the right technology.

The combination of actual results to date plus budget figures to year end, or longer, instantly shows the impact of either exceeding or missing the budget.

Nowhere is this more powerful than in the rolling cashflow forecast. Removing much of the uncertainty around future cash balances and giving the time to act is a guarantee to more undisturbed nights.

It is as close as you will get to a crystal ball for your business finances!

These tools, along with monthly video catch ups to review performance, are rapidly becoming the norm in the way we work with business clients.

Understanding the results today, the impact for tomorrow and proactively changing those potential outcomes is fundamental to success and will be a game changer for all sizes of business. Therefore we foresee the democratisation of financial forecasting, as technology allows effective monitoring of your business for the many rather than the few.

Contact Will Abbott for more information by emailing will.abbott@randall-payne.co.uk or call 01242 776000.

The power of real-time financial information is a game changer for truhouse.

The power of real-time financial information and a rolling forecast can be a game changer and offers peace of mind that key decisions are based on solid data.

We were approached by Natalie Little a Director at truhouse., a successful and growing company providing replacement windows and doors.

The growth in the business was driving a need for more robust financial reporting and forecasting.

The start point was to understand the direct costs of the business and most importantly the gross margin. This sets a key target for both quoting and measuring the productivity at the heart of the business.

Once established we could develop realistic sales growth targets and identify when additional capacity would be needed. This then fed in the detailed three-way financial forecast including the profit and loss, balance sheet and cashflow.

Using Xero for the book-keeping linked to Futrli, we are able to report actual performance against budget and update the forecast on a rolling basis every month. As we provide a full service from book-keeping through to management accounts we know the data is robust.

The time efficient way in which the forecast is updated means we can spend more time each month working with the directors reviewing progress against action plans, dealing with challenges and acting on opportunities. When the wider senior team needs to be involved, we have facilitated workshops exploring deeper issues including business values and competitive advantage.

“It is a pleasure working with Natalie and Chris who are both open to embracing new ideas and technology and very keen to ensure success is embedded in the business.” says Will.

“Moving to Randall & Payne was a big decision for us, but we’ve seen a step change in the level of support and information we now receive. We believe Will and his team will continue to make significant contributions to the success of our business.”

Natalie Little, Director truhouse.

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AUDIT

Preparing for audit after the pandemic The pandemic has caused huge disruption to businesses and the audit of forward looking judgements has become inherently complex. There are key items companies can focus on when preparing for the audit of going concern.

Ryan Moore Audit Client Director

The audit of Going Concern The audit of going concern was already an area of focus for the audit regulator following the high profile collapse of a number of UK Corporates and the pandemic gave rise to a number of new scenarios which required executives to think on their feet. This was a particularly challenging period for auditors, as the length and extent of the pandemic was unknown. The significant uncertainty around March 2020 resulted in many Companies preparing a “material uncertainty” in respect of going concern within their accounts. Over time, and as companies have successfully navigated lockdown trading conditions, the knowledge and information gained

by Boards’ and auditors provided a good benchmark for assessing Going Concern.

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– Winter 2021

Given the severity of the support measures introduced by the government, the removal of the stimulus packages will once again have introduced uncertainty to many Going Concern assessments; as there is no longer any clear evidence available to show how Companies will cope without the support measures in place. The audit of going concern is heavily reliant upon the detailed cash-flow forecasts produced by the Board.

The three areas highlighted are critical for all businesses to think about now and are key to understanding some of the questions which your auditor may ask you:

1. B usiness planning and cash flow forecasting Scenario planning and cash flow forecasting is critical to assessing what could happen on your business in the coming months. We are encouraging all business owners to review a range of scenarios and the associated cash-flows which could arise from these situations.

I.e. what does a full time return of staff look like on the business with only 80% demand? What did demand look like at its worst point during 2020 lockdowns and how long could the business survive in this environment with a full workforce?

Plans should be rigorous and capture all business costs, but also be clear and easy to understand / refer to as part of your decision making processes in the future.

The audit of going concern is heavily reliant upon the detailed cash-flow forecasts produced by the Board

AUDIT

2. Review your business culture The pandemic has been incredibly tough for everyone and we have all reacted differently to the challenges we have faced. We must appreciate that not everybody returning to work will be able to hit the ground running. Business owners should use this opportunity to reconnect with their staff and take time to understand their individual requirements which work for both the individual and the business needs.

Early discussion and talking to your Auditor about market trends will help you to produce forecasts which are considered to be “best practice”.

3. Legal and compliance The return to work from furlough, changes to working conditions (i.e. introduction of flexible working policies) and the possibility that some staff may unfortunately be made redundant, presents a number of potential compliance hurdles for many business owners. We recommend that small business owners familiarise themselves with the latest information concerning employment law and take advice from professionals where matters are complex.

As always, it is important to engage with your Auditors early and to understand what information they would need to be in a position to sign off their Auditors report. Early discussion and talking to your Auditor about market trends will help you to produce forecasts which are considered to be “best practice”. This will

not only lead to a better understanding of your business, but will support you in reaching the right conclusion in respect of going concern for your year-end financial statements.

We are working closely with many of our clients using software such as Futrli to provide business owners with the insights they need to help predict the future of their business. If you would like to hear more about how we can help you manage your cash flow, help with your Going Concern assessment and navigate these uncertain times please do get in touch.

An audit should be more than just endorsing the numbers or backing up last year’s results. For us, it’s about reading between the lines, noticing the big achievements and the small wins. It’s about highlighting the upturns, the downturns and the areas for improvements.

It’s about seeing the patterns and the progress and ensuring transparency’s in place, so others do too.

We have the vision to see things differently.

Contact Ryan Moore for more information by emailing ryan.moore@randall-payne.co.uk or call 01242 776000. randall-payne.co.uk 13

TAX

R&D Tax Relief –

a reminder of the basis, current statistics and topical issues R&D Tax Relief continues to be a major investment by the government and is benefitting innovative businesses by an ever increasing amount.

James Geary Client Director and Head of Corporate Tax HMRC have recently published their latest annual claim statistics for the year to 31 March 2020, which make for interesting reading, although the sector and regional data is very limited, with further breakdowns expected in Spring 2022.

Key points of interest from the statistics: � 85,900 claims were made – an increase of 16%. This is driven by a rise in the number of claims by SMEs (small or medium sized enterprises) to 76,225.

This includes nearly 20,000 first time claims � £7.4 billion of support was awarded –

an increase of 19%. This corresponds to £47.5 billion of R&D expenditure – an increase of 15%. Out of this, £4.4 billion is via the SME scheme, an increase of 25% The biggest three sectors claiming support are Manufacturing, ICT and “Professional Scientific & Technical”, although the support is available across 14

– Winter 2021

many more sectors, including many you may not expect. The scope of the relief remains wider than businesses realise so we strongly advise that you discuss your situation with us if you are doing any development work involving the resolution of technical issues, as your business may be eligible to claim a significant sum.

when HMRC come knocking. There are working groups who are now starting to look more closely to decide on the best way to tackle these rogue agents – both by means of targeting them directly, but also by raising awareness in the business world of how to spot them before signing up to often highly restrictive terms and hidden small print.

The South West is shown as the sixth largest region in the UK both by number of claims and amount of support.

Through my volunteering with the Chartered Institute of Taxation, I am lucky to be able to sit on a couple of the working groups with HMRC and the Treasury, both in terms of HMRC’s processing capabilities but also on how to tackle fraud and “rogue agents”.

A striking statistic is that nearly 15,000 claims made were for under £5,000, which suggests a large number of small first time claims, but potentially this is also one of the biggest fraud risk areas.

As the level of support is rising, HMRC are stepping up their compliance activity, and have increased their staff numbers to be able to handle a higher volume of enquiries.

In recent years there has been a huge increase in the number of “boutique” firms claiming to be R&D claim specialists, who can over-promise on claims and then leave their customers high and dry

We continue to offer a free, no obligation service to chat through your situation and determine whether your business has a viable claim, and if a claim looks unlikely we will be up front and tell you this. With the potential savings available if you do qualify, it really is worth investing the time to find out.

Contact James by emailing james.geary@randall-payne.co.uk or call 01242 776000.

ACCOUNTING

Understanding your accounts All businesses need to prepare accounts, and whilst accountants exist to make this necessity easier for clients, all too often we hear the phrase “I’ll just sign them, I don’t understand what I’m reading anyway”.

Nikki Cairns Client Director There are some simple points, that when clarified, could help you to understand what you are signing. Business owners and managers should understand their financial picture in order that the information can be used to better plan for the future of the business through growth, succession, sale etc. These are as follows: � Profit and Loss Account. This is a

record of the income and expenses a business has incurred over a given time period, in the majority of cases this will be 12 months, and will show if there has been a profit or a loss made in that time.

I n simple terms this is the revenue with the various costs subtracted, resulting in a net profit or loss. Most profit and loss accounts are initially compiled using the transactions that have gone through the business bank account.

Other items are then also brought into the accounts in order to be compliant with accounting legislation such as movements in prepayments or accruals. These are items that may have been either paid for within the accounting period but relate to another period or have been incurred but not yet invoiced. � Balance sheet. This is a snapshot

in time of the assets and liabilities of the business as at the end of the period that the profit and loss account covers. Assets are items that benefit a company economically, such as inventory, buildings, equipment and cash. They help a business manufacture goods or provide services, now and in the future. Liabilities are a company’s obligations—either money owed or services not yet performed.

No matter your type of business entity, a set of accounts leads to a tax return and one of our most common questions is: “Why do my accounts show a loss but the tax computation shows a profit?”

The answer is differences between accounting and tax legislation and having to reconcile the two. Commonly this being depreciation and capital allowances.

For accounts purposes assets are depreciated over a number of years which is determined by the accountant or the client and different rates are normally applied to different types of assets, and will have an adjusted year on year economic benefit on the balance sheet.

However for tax, many assets qualify for allowances that mean they can be written off in full in their year of purchase or are subject to allowances that are at rates set by Government.

Accountants have studied for years to gain the level of understanding that we have and, the learning never ends.

We know that it is a complex area of your business so a good accountant would never mind you asking questions about anything in your accounts.

Contact Nikki for more information by emailing Nicola.cairns@randallpayne.co.uk or call 01242 776000. randall-payne.co.uk 15

RANDALL & PAYNE NEWS

CELEBRATING OUR MANAGING PARTNER’S 40 YEAR WORK ANNIVERSARY

Tim Watkins celebrated 40 years with the firm in September.

Tim joined as a young trainee back in 1981 and eventually worked his way up to Managing Partner in 2015.

The team couldn’t let this monumental work anniversary go by without acknowledging it, even though Tim would have been happy to let it slip by! We marked the occasion with a surprise gathering with a few staff one lunch time with a glass of fizz and a slice of cake. Will Abbott said a few words and we raised a toast to Tim!

He explained: “Accountancy is in my blood. My father and uncle were both accountants and I followed Dad into Randall & Payne. He was a partner here when I joined and encouraged me over the years to keep training and passing those exams so I certainly owe him a lot.”

Much has changed to the accounting landscape with the sea change in technology happening during his time as Managing Partner, with the transition to cloud accounting, the introduction of Making Tax Digital and most recently the shift to remote working expedited by the pandemic.

At the end of August we managed to get some of the team together for a charity rounders game with bar and BBQ hosted by our friends at the Hatherley & Reddings cricket club.

Smashing our fundraising target for SCOO-B-DOO After being extended due to the pandemic, December 2021 will mark the end of our charity partnership with Scoo-B-Doo who were voted for by our team in 2018.

With our pledge to raise £15,000 to buy an incubator for the neonatal unit at Gloucestershire Royal Hospital, and the hindrance of the pandemic, we extended our support for Scoo-BDoo for a further 18 months.

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– Winter 2021

We are delighted to announce we have now not only achieved our target but exceeded it having almost raised a staggering £18,000. A huge heart felt thank you to all our staff and their friends and families for their support.

When it came to the individual challenges, one in particular stood out.

Shelley from our Audit team took on a 7 hour running challenge dressed in a Scooby-Doo onesie! She ran over 30 miles on a ridiculously hot day in July raising an amazing £455 for our cause.

Our biggest fundraiser this year took place whilst working from home and many of us took on the Randall & Payne 10K active challenge and walked, ran, cycled and even rowed the distance, together clocking up close to 400km and raising over £1000.

RANDALL & PAYNE NEWS

ETHAN’S APPRENTICESHIP JOURNEY HITS NEW HEIGHTS

In October 2021 we celebrated Ethan King being a well-deserved finalist for Outstanding Apprentice of the Year (Business, Administrative & Financial Services) at the Gloucestershire Live Apprenticeship Awards.

Shaun Pegler Client Director Our people are the life-blood of the firm and each year we have an intake of trainees and apprentices and are continually pleased with the calibre and drive our successful recruits demonstrate and what they can achieve. A few of the senior team started out here as apprentices themselves!

Ethan’s apprenticeship started four years ago when he began working in the accounts team on manual sole trade accounts preparation and he progressed quickly to working more closely with larger clients. In this time his role has evolved and it continues to do so as he gains vital knowledge and experience. It was fair to say having his achievements acknowledged meant a lot to him.

“Being a finalist was a massive honour and despite not coming home with the award it was still a great night. Thanks to Reach for putting on a fantastic event and congratulations to all the winners!” commented Ethan.

His proactive approach and willingness to take on new challenges has benefitted other teams, and he is confident to make suggestions

to his managers, recommending improvements with possible solutions as well.

Demonstrating he is a team player, Ethan supported newer trainees in our trainee mentoring programme. He is always available to answer questions, taking the time to assist and explain things to share his knowledge and experience.

Ethan was involved in a project to modernise how our files are prepared which saw the firm move onto a digital working paper software. Ethan trialled the software and assisted with its implementation including training his colleagues. As a direct result of this project, the firm has seen improvements to productivity through being able to access a file by multiple users simultaneously. Other benefits include being a step closer to the paperless office, work/life balance improved by being able to work from home and client data is more secure with no physical files. Most importantly it enabled the firm to continue to service our clients throughout the pandemic.

Next steps... Ethan has now started to work towards his chartered qualification and has just passed the first of many more exams to come!

“It’s the first time we have met Ethan and I was impressed by his professionalism, as well as being such a nice guy! Ethan came to visit us to get some queries answered regarding our accounts and speed up the process. It’s good for us to meet the staff who are assisting with the production of our accounts and he enjoyed getting out of the office and getting more of a feel for what we do.”

Jamie Underwood, Director

randall-payne.co.uk 17

GUEST ARTICLE

How to successfully navigate TUPE Gemma Irvine, Senior HR Consultant | HR People Support Ltd

(Transfer of Undertakings, Protection of Employment regulations 2006) Acquisition or takeover opportunities involving TUPE shouldn’t be rejected. We explore the complexities and myths surrounding TUPE and how they can be overcome.

TUPE only applies in certain situations.

The legal position…TUPE applies where there is a relevant transfer, defined as transfer of an economic entity which retains its identity. This can be when a business as a whole, or part, is transferred, or where there is a service provision that has been transferred, such as a cleaning or catering contract.

The legal position is complex and so professional legal advice, as part of a transfer, should be sought.

Where TUPE applies… there are certain obligations that the transferor and the transferee must meet. This starts with the provision of ELI, or employee liability information, 28 days prior to the proposed date of transfer. This ensures the transferee has all the necessary information about staff, compliant with GDPR, and the liability to be taken on, to therefore assess the risk adequately before proceeding.

Information and consultation...

Employees that are due to transfer should be informed and have the necessary 18

– Winter 2021

information provided. This can be done directly for under 10 employees, or at least through employee representatives if more employees are affected.

Generally, these consultation meetings are best held face to face, to ensure that individuals have the opportunity to meet the key managers in the transfer process, and to discuss any concerns they may have about the measures that affect them.

TUPE is complex… but when you allow sufficient time to plan, communicate and engage, it makes for a smooth transfer and the ability to maintain engagement with staff. Trust is built in the consultation meetings, through the delivery of key business information, and by providing an opportunity to discuss each individuals concerns. Agreements should then be delivered and maintained, especially post-transfer.

Retention of terms and conditions of employment… post transfer there may be a temptation to change these, or harmonise to bring consistency across the company. However, any dismissal or potential contractual changes due

to the transfer itself could be automatically unfair.

Communication… is the most important element of the transfer process, aside from meeting your legal obligations.

The more staff know and the more they are able to trust in what you say, the more likely you are to have an engaged workforce underpinning your business for the future.

Plan, communicate and engage.

Then communicate some more!

TUPE is complex. Yes, you will need advice to navigate the complexities, but it is achievable.

For more information, specialist advice or guidance on TUPE, or any other HR issue impacting on your business, contact HR People Support. www.hrpeoplesupport.co.uk

EVENTS

Key Events ONLINE ADVICE

Business Bitesize Will Abbott, Partner, Business Advisory Video loaded on www.randall-payne.co.uk/news/videos New topic added every Thursday

KEY DEADLINES NOV 21

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Will Abbott uploads his weekly 5 minute video to share his experience and advice to help you win at business.

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Whether its effective change management; knowing the 5 key areas to improve your financial performance; or the tool you need to create actions to achieve your vision; Will’s business bitesize videos are something not to be missed.

DEC 21

There are many topics already covered and all are available to watch on our website.

New videos are uploaded every Thursday.

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orporation Tax due C period ended 31/01/21 Due date for 2021/22 PAYE month 7 PAYE & Class 1 NIC payments (electronic) Accounts deadline to Companies House – periods to 28/02/21 Corporation Tax return deadline to HMRC – periods to 30/11/20

Corporation Tax due – period ended 28/02/21 New advisory fuel rates come into force Due date for 2021/22 PAYE month 8 PAYE & Class 1 NIC payments (electronic) Self Assessment tax return deadline (if owing less than £3,000 and need HMRC to collect tax through PAYE code) Accounts deadline to Companies House – periods to 31/03/21 Corporation Tax return deadline to HMRC – periods to 31/12/20

JAN 22

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Corporation Tax due – period ended 31/03/21 Due date for 2021/22 PAYE month 9 PAYE & Class 1 NIC payments (electronic) Accounts deadline to Companies House – periods to 30/04/21 Corporation Tax return deadline to HMRC – periods to 31/01/21 Self Assessment tax return deadline – period to 5/04/21

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1 Advice Clinic

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Every Monday, 1:30-4:30pm

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Got a tricky business question or need advice to move forward? Whether you want to raise finance, tackle your profit and growth issues or get some tips on saving tax or investing wealth, our expert team can provide the right professional guidance at our next Advice Clinic. Give us a call to book your free one-hour slot with the relevant expert on 01242 776000.

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C orporation Tax due – period ended 30/04/21 Due for 2021/22 PAYE month 10 PAYE & Class 1 NIC payments (electronic) Accounts deadline to Companies House – periods to 31/05/21 Corporation Tax return deadline to HMRC – periods to 28/02/21 Late payment penalty if Self Assessment tax unpaid

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HMRC can target you at any time

HMRC conducted 337,000 tax enquiries last year, showing just how many UK taxpayers it suspects of underpaying tax.

From the agricultural industry to the ownership of rental property, it doesn’t matter what sector you operate in.

HMRC do not discriminate between big and small and anyone who submits a tax return can be at risk of investigation.

Call us on 01242 776 000 or visit randall-payne.co.uk to take advantage of the benefits included with our Tax Investigation Service.

Tax Investigation Service