In Focus Issue 7 by Randall & Payne

in focus turn your business strategies into reality

issue seven: Winter 2015/16

Master your figures in 2016

New Randall & Payne Partners business advice

Autumn Will You Be Taxed Getting The Right Statement 2015 Out Of Buy-To-Let? Finance For Growth

accountancy & audit

tax advice

wealth management

1 finance

welcome

in this issue welcome to issue seven

0804

Hello, Happy New Year and welcome to the seventh issue of ‘in focus’ magazine – your guide to growing both your business and your profits. Since the last in focus, among other things, we’ve: •

Unwrapped chocolate for the MS Society and assisted in raising their profile as well as £762

•

Actively fundraised in-house for our own 2015 nominated charity, Gloucestershire Young Carers, raising over £300

•

Supported our clients with many different financing options to help grow their business, see the finance article on page 7 for more details.

New Randall & Payne Partners Announced

In this issue:

04 - 05 Staff News

Baby boom; new partners announced.

06 - 07 Business Advice

Getting the right finance for growth; the 4 key stages of the business lifecycle; IIGE.

08 Quorum

Randall & Payne Quorum allows business leaders to connect and share strategies.

09 - 11 Payroll News

Paye legislation is changing; the national living wage - are you ready?

04 Tim Watkins Managing Partner

The National Living Wage - Are You Ready?

“R&P and in focus magazine deliver up-to-the-minute creative solutions and expert advice. Let us help you make 2016 your year for business growth.” Tim Watkins, Managing Partner

Winter 2015/16

10 www.randall-payne.co.uk

contents

business advice accountancy & audit tax advice wealth management financing business startups valuations buyouts debt factoring

Academies Update

18 - 19

The 4 key stages of the business lifecycle. 07

IMPROVE

INVEST

GROW

EXIT

12 - 17 Tax News

Will you be taxed out of the Buy-To-Let market? The new dividend tax regime; Accelerated Tax collection; Autumn Statement.

20 - 23

18 -19 Academies Update

The academies accounts return, Financial Handbook.

20 - 21 In The Community

Fundraising for Gloucestershire Young Carers; unwrapping chocolate for MS.

22 Dates for the Diary

23 Tax Reference

The R&P staff have generously given time, money and their talents to raise funds for our chosen charity for 2015 Gloucestershire Young Carers.

20 - 21

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Winter 2015/16

R&P update

news focus turn your business strategies into reality

your guide to what’s new in the world of business...

Staff News More babies! Congratulations to Vicky McNaught-Davis and Jo Boyer who have each recently given birth to baby girls. Jo’s little girl is called Abigail, Vicky’s is called Ella and is a huge hit with her Vicky McNaught-Davis older brother, two year old Charlie.

Jo Boyer

New Randall & Payne Partners Announced Randall & Payne are excited and proud to announce the new additions to our board of Partners! We’re proud of our firm’s long history and for a long time we’ve also been proud of the dynamic, youthful profile of our partnership team - and that’s just got younger, with the promotion of Rob Case, Rob Stokes, Oliver Newbold and Vicky McNaught-Davis. All four new partners offer breadth and depth in knowledge and experience and all excel in their chosen specialisms: Vicky in the Legal and Professionals’ sector, Oliver in Corporate Finance, Rob Case in VAT and Rob Stokes in Academies and Audit. Our track record in helping companies grow from initial ideas to multi-million pound businesses speaks for itself. Often the people with the best business ideas can only maximise their potential if they have the best support and advice. That’s what our partners deliver: commercially-minded, creative solutions to help you grow.

Left to right: Will Abbott, Rob Case, Vicky McNaught-Davis, Russel Byrd, Oliver Newbold, Rob Stokes and Tim Watkins.

Winter 2015/16

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R&P update

Rob Case

I have a love of the great outdoors, spending the spare time I have running and cycling in our beautiful county and helping to organise events for the local Scouts group. My specialism is in VAT, I help to bring a sense of understanding to the complications presented by this indirect tax. With its complexities across many sectors, having a sound interpretation of the situation is what I seek to provide, often bringing a light hearted, but informative approach to what is often seen as an unpopular and overcomplicated tax.

Vicky McNaught-Davis

As you have seen from our article on page four, Vicky is currently on maternity leave, having recently given birth to a daughter, Ella. Vicky has two small children and those of us with families we know that Vicky and husband Matt have their hands full. Vicky will be back with us later in 2016 to resume as head of the Accounts Team. Vicky’s particular expertise is in the Legal and Professionals’ sector.

Ollie Newbold

I have two young children so I have very little time to indulge in my interests of old – going to the cinema, having a meal with friends and watching classic films. Nowadays, in my spare time, I am more likely to be binge-watching box sets with a cup of tea in a rare moment of relaxation. 2016 may even see my interests expand to ‘keeping fit’, but I have been promising this for almost two decades now! I specialise in Corporate Finance and I find this work thoroughly engaging because I am often advising or helping my clients through a significant event.

Rob Stokes

In my spare time I am a bit of a sport addict trying to retain some fitness to play rugby for a local side, a bit of five-a-side and, pre-injury, basketball, whilst indulging in watching as much sport as possible. I joined R&P in 2012 as client director, following their acquisition of Morgan Waugh Haines, bringing my mixed portfolio. From there I have continued to learn new skills from the expanded team and to continue to develop my academies specialisation. I now help run the audit team whilst also being the lead on the outsourcing team.

For more information visit our website www.randall-payne.co.uk

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Winter 2015/16

business advice

Getting the Right Finance for Growth

Ollie Newbold

Randall and Payne has been helping businesses in the county to succeed and grow for over 100 years and as business advisors they have helped to secure premises and affordable finance for a number of businesses. A recent example of this was when long-term client, Hobbs Bros Ltd, needed to raise finance for new premises for their oil distribution business. Mark Hobbs, Hobbs Bros’ fourth generation owner and director, called on Randall & Payne for advice. Oliver explains: “We knew that we had to look at the project as a whole, to understand what the cost of developing the site might be and then consider the financing implications attached to it. This was right at the peak of the credit crunch and, at the time, development funding was very thin on the ground. We knew that it was going to be a very specialist site which, in itself, attached difficulties in terms of satisfying lenders’ requirements regarding risk mitigation. “Timing was also an issue as the lease on Hobbs’ existing site was due to expire at the end of October 2013. Thankfully we were able to arrange a shortterm rolling lease in order to allow the development of the new site.”

R&P also needed to be able to demonstrate clearly that the business would be able to meet the debt servicing requirements and strict lending criteria throughout the course of the year. The oil market tends to be seasonal, with winter the best trading period for Hobbs Bros, giving wildly fluctuating growth margins and making it difficult to project business performance. “To allay uncertainty for funders we needed to model how the business was likely to perform over various scenarios, so that no matter what the scenario, we were comfortable that the business could afford to repay the bank borrowings,” said John Barker. After arranging short term funding to enable the site to be developed, R&P worked with a number of different funders to

provide a package that would dovetail with the original loan to enable repayment over a longer term. They finally put in place one simple loan that enabled the business to repay its debts over a very straightforward structure. Mark said: “Randall & Payne helping us with the finance side of the business and sorting out the financing for our new build allowed me to concentrate on running my business and looking after my customers, which has made my life a lot easier.” “Like Randall & Payne, Hobbs Bros Ltd has been trading for over 100 years. We wanted to help secure the longevity of the company and this depot allows for their continued growth in the future,” says Oliver. if

For help from our Corporate Finance Team, contact us on 01242 776000.

Hobbs Bros. - Watch our video at: http://www.randall-payne.co.uk/services/business-advisors/raising-finance/

Above: Oliver Newbold, Mark Hobbs and John Barker planning for growth.

Winter 2015/16

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business advice

The 4 key stages of the business lifecycle.

John Barker

As part of the ‘Improve; Invest; Grow; Exit’ series of seminars, John Barker advises clients on the various funding avenues available to them. Since our last in focus magazine we have run two IIGE seminars, which are perfect for those looking to grow the business (either organically or through acquisition), looking to obtain finance or seeking an exit from the business. The feedback we have had for these events has been extremely positive and the January and February seminars are already fully booked. As John says: “It’s important to fully understand the longterm plans for the business so that we can advise on the most appropriate lending structure, not just for here and now, but for what will fit in with the business plan in three, five or 10 years-time.

IMPROVE

“The High Street banks still account for 80% of all funding to the SME market-place and we have strong links with all the local banks, but it also means that 20% of funding comes from other sources and much of this is via the ‘Alternative Funding Market’. “Many of our clients ask us about the different lenders in the market. Whether they need to gain an understanding of how to access peer-to-peer funding; Equity Crowdfunding; the difference between Selective Invoice Financing and Full Book Factoring or what an Invoice Trading platform is, we are here to assist and guide them through this increasingly complex arena. “The structure that we look to put in place for clients can be amazingly diverse, but the diversity also means that, at times, some of our clients believe that traditional funding avenues are no longer available to them. Sometimes it’s simply a case of re-structuring proposals into a manner in which the High Street banks will lend. We will also provide guidance to clients regarding security required by the lender and fee levels being charged.

INVEST

GROW

“With so many funders available to us, the Corporate Finance Team has never been busier, but no matter what the size of the deal, obtaining the funding a client needs still provides a great sense of achievement. We’re looking forward to an equally busy 2016.”

For more information on accessing finance contact the Corporate Finance Team on 01242 776000.

EXIT

The next available dates for this free seminar are 24th March and 28th April – we would recommend you book early to avoid disappointment. Further seminars will be scheduled in 2016 and will be announced on our website.

if www.randall-payne.co.uk

Winter 2015/16

business news

business advice

Need help to turn your business strategy into reality?

Randall & Payne Quorum allows business leaders to connect and share strategies for growth while gaining skills and tools to implement them. For a small investment you not only get a sounding board for your ideas, but real training and the knowledge that you can see and measure your progress regularly. • • • •

Online Tools Remote Business Support Accounting For Business Workshop for Business Leaders

• Minimising Tax • Making the most of your wealth

Don’t just take our word for it... As business owners sometimes we forget the importance of planning ahead and the Quorum is a great place to share your problems and find the answers to resolve them. Steve Barnett – Glevum Security Next Quorum Meetings: Febuary 16th November 29th June 14th To book a place contact Jo Kline or September 13th Will Abbott on 01242 776000

WILL ABBOTT Partner LLB FCA AMSF MInstLM Will is Head of the Business Advisory Team and Lead Facilitator in the Randall & Payne “Skills For Business” training programmes. He is also an accredited Mindshop business coach who received the High Achiever award in 2011 and 2015 and helps clients to take a step back from their business in order to see it clearly: its strengths and weaknesses, its goals and what needs to be done in order to reach them: “By looking at your business in its entirety, we can help your business to take advantage of the opportunities. The overall strategy should include growth; profit improvement; tax planning; fore-casting and raising finance; acquisitions; succession; valuations and ultimately disposal.”

3. Map out your advertising plan month-by-month, taking holidays, seasons and cultural events into account, plus your business objectives, so nothing gets missed. 4. Video can be a great way to advertise your business and show people how you operate to help them form an impression of you and your business and make them feel they already know you.

Here are some quick-start tips for 2016:

5. If you’ve been tackling the same events the same way each year it may be time to try something different. Change is essential for growth and taking an intelligent risk can offer massive benefits.

1. Take a look at last year. Go over, with your team, what worked and what didn’t.

For more information call Will on: 01242 776000

2. Investment in better technology. This can speed up processes, provide enhanced security and help you keep in touch with clients and their needs.

Winter 2015/16

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PAYE Legislation Is Changing

payroll news

Payrolling Benefits Randall & Payne have been advising clients of the changes in dealing with certain benefits. Following consultation last year and subject to final HMRC guidance, with effect from 6th April 2016 many benefits in kind can be dealt with through the payroll. Initially HMRC said only four benefits could be payrolled – car, car fuel, subscription and medical insurance, but subsequently HMRC has extended the framework. The following benefits are however excluded: Beneficial loans/living accommodation/credit tokens and vouchers. The employer will also still need to calculate and pay Class 1A National Insurance Contributions, but may save some time on completing forms P11D and P46 Car Procedures. There will clearly be some up-front time and costs involved in amending the payroll process.

The Procedure; To payroll benefits the employer must make an electronic application for authorisation from HMRC. This must be done before the start of the new PAYE year (before 5th April 2016). The employer can generally only withdraw from the arrangements at the end of a year, or when benefits cease to be provided. The legislation provides detailed rules on how to calculate the amount that is payrolled each pay period and what to do in certain circumstances, for example: • Benefits provided after employment ended • Making in-year adjustments to reflect changes in the benefit • Where employee has insufficient income to allow recovery of the tax due • Where an employee fails to make good a benefit which was expected.

From 2017 additional data about cars will be required.

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The Framework: • Employer to register via Payroll Registration Service • Employers select which benefits they want to payroll • Select any employees they want to exclude • The default setting is for all employees • This automatically removes the selected benefit from the PAYE code and places flags on HMRC’s system to stop them being reinstated in error No P11D at year end, but P11D(b) is still required (for Class 1A NIC). Individuals can be excluded in-year but only if they have insufficient income to pay the tax on the benefit. Employers can start payrolling during a year if they are offering benefits for the first time. Draft regulations were published in September 2015 and HMRC will provide further guidance once the regulations are finalised.

For more information regarding the payrolling of benefits please contact John Gaze on 01242 776000. Winter 2015/16

if 9

payroll news

The National Living Wage Are You Ready? Firms are advised to take simple steps now to be prepared to pay new National Living Wage, as a poll reveals that 93% of bosses support the initiative, with the majority believing it will boost productivity and retain staff. The government is urging Britain’s businesses to take four simple steps to prepare early for the changes coming into force on 1 April 2016, when the new wage will become law: •

know the correct rate of pay - £7.20 per hour for staff aged 25 and over.

•

find out which staff are eligible for the new rate

•

update the company payroll in time for 1 April 2016

•

communicate the changes to staff as soon as possible

Employers can find out more by visiting www.livingwage.gov.uk. Business Minister Nick Boles said:

86% said it would boost staff morale

“The government’s new National Living Wage will provide a direct boost to over two-and-a-half million workers in the UK – rewarding and providing security for working people.

82% believed customers were likely to return if the business paid the right rates of pay

“I am urging businesses to get ready now to pay the new £7.20 rate from 1 April 2016. With just under four months left, there are some easy steps employers can take to make sure they are ready.

Despite the popular support for the measure, the poll also revealed that many firms were yet to take key steps to be prepared: • only around 45% had updated payroll to take account of staff aged 25 and over on 1 April 2016 • just 39% had communicated the upcoming changes to staff

“By taking these measures, companies will be able to properly reward their staff and avoid falling foul of the law when it takes effect.” The new survey conducted for the Department for Business, Innovation and Skills (BIS) asked 1,000 employers across Britain about the NLW. When asked if they thought the new rate would be good for businesses, many respondents identified a range of positive impacts: 93% of all bosses agreed the National Living Wage was a good idea 88% said it would make staff more productive 83% believed it would make staff more loyal towards their employer

Winter 2015/16

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payroll news • just 39% had communicated the upcoming changes to staff • only 29% had looked online for more information about National Living Wage entitlement

Your Local Colour Printers

This comes despite 63% of bosses saying they knew who in their business should be getting the new National Living Wage. The new National Living Wage is a key part of the government’s plan to continue to move to a higher wage, lower tax and lower welfare society, building a more productive Britain and giving families the security of well-paid work and follows on from recent National Minimum wage rates which are: • £6.70 for 21yr olds and over • £5.30 for 18 -20yr old • £3.87 for under 18yr olds • £3.30 for apprentices (this rate applies to all apprentices in year 1 of an apprenticeship & 16 - 18 yr old apprentices in any year of if an apprenticeship) For any payroll queries, please contact Karen Harries or Danielle Longney in our Payroll Department.

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Untitled-1 1

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Engage with target audiences Create brand equity Increase business profit The Isaac Partnership is here to help when you need that extra marketing brainpower, with no waffle and just straight talking advice. We have over 15 years experience in building strategies and delivering rich marketing content for print, web and social media channels. Our clients benefit from our award-winning ‘one stop shop’ agency approach, allowing a continued level of both creativity and service, all under one roof.

Our national media partners include:

Call 01453 840369 to set up an initial consultation. Our offices are one minute from Junction 13 of the M5. www.isaacpartnership.co.uk SocialMedia #isaac4design All rights reserved for our collective media partners: Google and the Google logo are registered trademarks of Google Inc.; Sky logo is a registered trademark of Sky UK Limited © 2015; ExterionMedia logo is a registered trademark of ExterionMedia Group; Clear Channel is a registered trademark of Clear Channel Communications, Inc.

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Winter 2015/16

tax news

Tax News ...with James Geary

Will You Be Taxed Out Of The Buy-To-Let Market? In his Summer Budget 2015, George Osborne announced a major blow to the buy-to-let sector, with a restriction on the tax relief for interest on buy to let mortgages to just basic rate relief. Although we are still some way off the levels experienced before the bubble burst in 2007 and 2008, the buy-to-let property market has seen a resurgence since the start of this decade, helped by the continuing low interest rates and consequently attractive mortgage deals, as well as a returning confidence in the long term appreciation in value of property. For lower earners and pensioners with modest retirement incomes being boosted by the rental profits, the change of rules is unlikely to have an impact. However, for higher rate tax payers, with income of £43,000 or more, who have invested in property, the impact is notable. For example, an individual with a £200,000 mortgage at 3% will face additional annual income tax of £1,200 on their profits once the new restriction is fully phased in by 2021.

the market - a situation that will only be exacerbated by the inevitable rise in interest rates in the near future. The new rules only apply to individuals and not to certain business structures so, in order to preserve tax relief, it may be viable for some investors to look into the possibility of changing their business structure. There is no “one size fits all” and it will not suit all investors, but is certainly something worth considering. Randall & Payne are advising a number of clients in this area, some who are already in the market and some who are considering entering it. Let us help you find the right solution for your situation. if

For a portfolio investor with ten similar properties, this could therefore cost £12,000 per year. Cash flow on buy-to-let ventures is often very tight due to the capital repayments on mortgages, so in many cases this loss of tax relief could turn a venture into a cash loss-maker, which may cause up to one in five buy-to-let investors to pull out of

Watch our video at: www.randall-payne.co.uk/services/tax-planning

For more information on this major change please speak to your usual Randall & Payne contact, or James Geary in the tax team on 01242 776000

Winter 2015/16

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tax news

The New Dividend Tax Regime In the Summer 2015 Budget, George Osborne announced fundamental changes to the way in which dividends are taxed.

increase dividend payments before this date.

The changes will not take place until dividend receipts from 6 April 2016, but individuals who extract profits from their company as dividends may need to consider whether to

When a dividend is paid to an individual it is subject to different tax rates compared to other income, due to a 10% notional tax credit being added to the dividend. So for an individual who has dividend income which falls into the basic rate band, the effective

Dividend falls into:

Basic rate band

Higher rate band

Additional rate band

Effective dividend tax rate now:

25%

30.6%

Rate from 6 April 2016:

7.5%

32.5%

38.1%

New rates of tax on dividend income will be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers. A new Dividend Tax Allowance will remove the first £5,000 of dividends received in a tax year from taxation. There are winners and losers from the new regime. An example of a winner is a higher rate taxpayer who has dividend income of £5,000. In the current tax year he will have a tax liability of £1,250 (25% of £5,000). Next year he will have no tax liability. An example of a loser under the regime will be the sole shareholder of a company who takes a small salary and then dividends up to the threshold at which higher rate tax is payable. In the current tax year he has no income tax on the salary (as the salary is below the personal allowance) and no

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tax on the dividend. Next year only £5,000 of the dividend will not be taxable. Will trading as a limited company still be the best option? If you are currently trading as a limited company you may think that to trade as a sole trader or as a partnership may be a better option for you after April 2016. In our view there is still a benefit in tax terms for most individuals to continue to trade as a limited company. The tax saved by incorporation compared to being unincorporated will be reduced next year but there is still an annual tax saving. Will it be better to take a dividend rather than an increase in salary? In our view there is still a benefit for a directorshareholder to take a dividend rather than a salary. The amount of the tax saved

tax rate is nil as the 10% tax credit covers the 10% tax liability. For a higher rate (40%) taxpayer, the effective tax rate on a dividend receipt is 25%. From 6 April 2016: The 10% dividend tax credit is abolished with the result that the cash dividend received will be the gross amount potentially subject to tax.

The table on the left shows a comparison between the current and prospective tax rates.

will be less than under the current regime. However, if the company is making R&D Tax Relief claims this may mean that salary is more beneficial overall, depending on the amount of time spent on R&D. Should dividends be paid before 6 April 2016? If you do not currently extract all the company profits as a dividend you may wish to consider increasing dividends before the 6 April 2016. However, other tax issues may come into play, for example the loss of the personal tax allowance if your total ‘adjusted net income’ exceeds £100,000. There will also be non-tax issues such as the availability of funds or profits in the company to pay the dividend. Please contact us if you require any further information or advice and before you make any decisions about changing the amount of dividends taken.

if Winter 2015/16

tax news

This year’s Autumn Statement covered many expected, and some unexpected topics. The headlines included a u-turn on tax credits and an increase on stamp duty for second homes.

Our tax team summarise the most significant changes below: Stamp Duty Land Tax

Funding for Innovation

Perhaps the biggest tax announcement was a further blow to the buy-to-let property market, hot on the heels of the restriction of tax relief on finance costs and abolition of the “wear and tear” allowance. In recognition of the fact that property investors who do not need to borrow to buy property would not be affected by the former of these two measures, there is now to be an increased SDLT charge on purchases of residential property from April 2016.

We have already seen an increase in the level of relief for Research & Development to 230% this year and already knew about the start of the “Advance Assurance” scheme for small companies making R&D claims for the first time. This scheme started in November and will give companies assurance that their first three years of claims will be accepted on the basis agreed during that process.

The increased charge will apply to buy-to-let properties and second homes bought for in excess of £40,000 and will result in an extra 3% SDLT charge. The increase will not apply to caravans, mobile homes or houseboats. Further, it is currently proposed that it will not apply to limited companies or to funds investing in residential property, the latter in recognition of the fact that those funds are supporting the government’s housing agenda. On the face of it, this would seem to be yet another reason for property letting businesses to run as limited companies. However, before investors rush to incorporate, there will be a consultation on the new rules before April 2016 and a specific point to be addressed is whether the exemption for companies is “appropriate” – so we must wait to see the outcome of the consultation before we can be sure. The government has stated that it will use the funds raised from the SDLT increase to help first time buyers who are struggling to afford to get onto the housing ladder. A further proposed SDLT change is a proposal for the 30 day filing and payment period following a property transaction to be shortened to just 14 days by 2017-18. Again there is to be consultation on this change.

Winter 2015/16

The government has now announced further support for innovation through Innovate UK, in the form of an additional £165 million, although this will be via loans rather than grants. This is, on the face of it, less attractive, but given that grants can have a severely detrimental effect on the level of R&D Tax Relief, this may in fact be a blessing in disguise. Now that the international OECD review on Base Erosion and Profit Shifting (BEPS) has concluded, we should soon see draft legislation for the updated “Patent Box” relief, for which a consultation document has already been released. The good news for UK companies, as we expected, is that the key changes in rules require a “nexus” between the place R&D takes place and the place where the Intellectual Property is exploited. This means that a UK company developing its own products and then trading within the UK should not be negatively affected by the new rules. Apprenticeships Levy Earlier this year the government announced a levy on businesses to help fund support for apprentices. It has now been confirmed that, where the levy would be less than £15,000, the business will not need to pay it. The levy is calculated as 0.5% of the business wages bill, so businesses with a wage bill of less than £3 million will not need to pay it, removing 98% of businesses from the charge - good news for small and medium sized businesses nationwide.

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tax news Small Business Rates Relief

Capital Gains Tax on Residential Property

This will be extended for a further year.

With effect from April 2019, it is the government’s intention to require a payment on account of Capital Gains Tax on a residential property sale within 30 days of completion of the transaction. This will not include any properties exempt from tax under the “main residence” provisions. This could in some cases result in tax being payable by individuals over 18 months earlier than is currently the case.

Local Government Reform – Business Rates The government will devolve powers to local authorities and councils, in particular with regard to Business Rates. Local councils will have the power to reduce Business Rates in order to make their areas more attractive for business. It appears they will not have the power to increase rates, although they will have the power to charge a premium on certain infrastructure projects (although only with the support of the majority of business members of the Local Enterprise Partnership). Company Car Taxation Historically, diesel cars have carried a higher benefit-in-kind tax charge than petrol cars, due to the taxable percentage of list price being 3% higher. This diesel supplement was due to end in April 2016, but it has now been extended until 2021. This is bad news for the motor industry where significant work has been done to manufacture cleaner diesel cars, which was the reason for the proposed abolition of the supplement. Further Measures to Tackle Tax Avoidance The government is introducing further measures to counter tax avoidance involving Intangible Fixed Assets, Capital Allowances and Stamp Duty Land Tax. These changes are generally aimed at more complex tax avoidance arrangements, but with consultation and draft legislation not expected until the 2016 Finance Bill, this is an area which will need to be watched carefully as any rule changes may catch normal commercial transactions. Of particular concern is a proposal to adjust disposal values for Capital Allowances where they are artificially low in order for “a person” to obtain a tax advantage. We are to hope that this will not affect commercial property transactions where a low value is agreed by mutual consent between the two parties in full understanding that the buyer will have a much lower allowances claim. Again we must await the finer detail on this.

The finer detail of this measure will be consulted on during 2016, but it is clear that this change will need to tie in with the government’s plans for Digital Tax Accounts. Assistance for First Time Buyers Some further changes have been made to the Help to Buy scheme to make it more accessible, particularly on Shared Ownership. This scheme will now be available for properties worth up to £80,000 outside London or £90,000 in London. The occupant can purchase a shared ownership stake of between 25% and 75%, and rent on the balance will not be more than 3% of the balance of the purchase price annually. The occupant can then increase their proportionate ownership as and when they can afford it. The government will also provide support to first time buyers under the age of 40 in the form of a 20% discount on 200,000 “Starter Homes”. House Builders will need to apply for their developments to be classified as Starter Homes, and they will then receive the funding to enable them to sell the properties with the benefit of the 20% discount. Childcare Support It is confirmed that the new Childcare Support will come in from 2017, which will enable families with gross income of under £100,000 (previously proposed was £150,000) to receive up to £10,000 of tax free childcare support. This new mechanism will be directly administered by the government, unlike the current Employer Childcare Support mechanism, typically run using childcare vouchers. This broadens the scope of support so that those who are not in full employment (e.g. business partners or self-employed) will also be able to benefit. if

For advice on how the Autumn Statement will affect you or your business, contact Randall & Payne’s Tax Department on 01242 776000.

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Winter 2015/16

tax news

Don’t Fall Foul of HMRC’s Accelerated Tax Collection Randall & Payne, are urging businesses not to be complacent if they receive accelerated payment notices (APNs) from HM Revenue & Customs (HMRC) New figures reveal that the government department has collected more than £1 billion using APNs since it was granted the new powers in 2014/15.

Earlier this year, it was revealed in HMRC’s annual report on tax avoidance that, of the £596m received from APNs during 2014/15, some £28m was refunded after legal challenges.

Under the accelerated payment rules, HMRC is able to make taxpayers pay disputed tax in advance, rather than waiting for the outcome of a tax tribunal ruling.

“While many of those targeted by these new powers may have legitimately avoided paying tax, there will be some individuals and businesses who have been unfairly targeted and this is evident in the number of refunds already issued by HMRC,” added John. “Seeking professional advice sooner rather than later is crucial as you may have a good case and we have the experience and expertise to help you to win it.”

Once an APN is received, taxpayers have 90 days to pay the outstanding tax, whether they feel it is due or not, or face additional penalties. If the taxpayer wins the case the money is reimbursed to them with interest. During the first year HMRC issued more than 10,000 notices to businesses or individuals who had used a disclosable scheme under the Disclosure of Tax Avoidance Schemes (DOTAS) rules.

For more information please contact John Gaze on 01242 776000

John Gaze, Tax Manager at Randall & Payne, said: “Receiving an APN should not be taken lightly, as it can have a serious effect on the liquidity and reputation of you and your business. The fact that HMRC has collected more than £1 billion, shows that they are serious when it comes to potential tax avoidance.”

Ten things you need to know about Accelerated Payment Notices (APNs)

1. You must pay within 90 days 2. Don’t ignore it 3. Problems paying? Contact HMRC 4. You may not get all your APNs at once 5. You can receive more than one APN 6. Paying the APN is not settling your tax affairs 7. You have a right to make representations against the APN 8. You can object to an APN under specific circumstances 9. The amount due on an APN may be different to a settlement opportunity calculation 10. You can still settle your affairs after you’ve received an APN

Winter 2015/16

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tax news

Scrapping of Business Record Checks “a Victory for Common Sense” The Chartered Institute of Taxation (CIOT), the leading professional body in the United Kingdom concerned solely with taxation, has welcomed the news that HM Revenue and Customs (HMRC) are to scrap Business Record Checks. Business Record Checks are a compliance procedure HMRC use when they want to confirm that a business is keeping sufficient information on its income (sales) and expenses to produce an accurate tax return. They have been criticised for being ineffective and poorly targeted. James Geary, Local Branch Chair for the CIOT, member of the CIOT’s Owner Managed Business Sub-Committee and Head of Corporate Tax at Randall & Payne, commented:

“This announcement is a victory for common sense. “Tax advisers are strongly supportive of efforts to improve record keeping by business but, as HMRC themselves acknowledge, this initiative has not proved a cost-effective way of achieving the desired result. Despite efforts by HMRC to identify businesses at ‘high risk’ of having inadequate records most of those they called on were found to be keeping records to an acceptable standard. The evidence is that records are being kept to an appropriate standard by most small businesses in the UK. “We hope this signifies a more realistic approach from HMRC to the perceived problem of small business record keeping. An educative approach, with initiatives such as HMRC’s online learning packages, is a much more sensible way forward in helping businesses keep adequate records to enable them to produce accurate tax returns when these are required. The CIOT and our members are keen to work with HMRC to ensure the quality of educational products is as high as it can be.” The CIOT has warned business owners that keeping good records is still essential to enable them to produce accurate accounts and tax returns. James Geary said: “Scrapping Business Record Checks does not mean HMRC are going to get laxer on tax compliance by small business. It remains crucial for businesses of all sizes to keep records up to

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date and in good order. This is likely to become even more important as HMRC bring in digital tax accounts, which may require businesses to submit data more frequently.” Along with the CIOT, Association of Taxation Technicians and other professional bodies, the CIOT’s Low Incomes Tax Reform Group has been involved in discussions with HMRC over the future of Business Record Checks. The Group’s Chairman, Anthony Thomas, commented:

“Pulling the plug on Business Record Checks is certainly the right decision. “HMRC have gone about trying to improve business records in completely the wrong way. A lot of public money and businesses’ time has been wasted going through checks which, as HMRC’s own research shows, were not necessary in the vast majority of cases. “We have consistently argued over a long period with HMRC for an approach focused on educating new businesses about good practice rather than trying to catch them after they become non-compliant. We hope today’s move means HMRC are now on board with this approach too.” One of the key aims of the CIOT is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through their Low Incomes Tax Reform Group (LITRG), an initiative to give a voice to the unrepresented taxpayer, the CIOT has a particular focus on improving the tax system, including tax credits and benefits. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes. The CIOT draws on members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. They are politically neutral and their comments and recommendations on tax issues are made in line with their charitable objectives.

Winter 2015/16

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academies news

Academies Update

Academy Accounts Return The annual Academies Accounts Return is due for submission via the Document Exchange by 31 January 2016, with the final version already released on the EFA website. The EFA, to assist in the completion of the return, ran a live webinar on the 2nd December which included a question and answer session together with a session on what are seen as the most challenging aspects of completing the return. Common errors found in the 2014 returns are listed below: • Not all tabs were completed • The form was not completed using round ‘000’s as requested • The counter party tab was weak, which in itself is a key issue as this is most important in the consolidation process

•

The staff costs did not include NI and pensions and where staff numbers were provided it needs to be full time equivalent and not the actual numbers

• Non-disclosure of those earning over £60,000 or inclusion in the wrong box on being in post for under a year. if

If you missed the seminar and would like help with completing the return, contact our Academies Team on 01242 776000

EFA Contact information The Education Funding Agency Information Exchange is now the prime portal for keeping the EFA up to date with changes in details of contacts, alongside being the place to request the E-Bulletin to be sent to headteachers, CFO’s, members and trustees. The information requested by the Academies Financial Handbook is that within 14 days of vacating or filling of the position of Chair of trustees, Accounting officer, Chief financial officer and the appointment of all trustees and members. if

For more information on the services provided by our Academies Team please contact Rob Stokes on 01242 776000.

Winter 2015/16

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academies news

Academies Financial Handbook 2015 The Education Funding Agency has issued the latest iteration of the Academies Financial Handbook which sets out the responsibilities and requirements relating to the financial governance and management of Academy Trusts. The handbook came into effect on 1 September 2015 and so applies to all Academies who were operating from 1 September 2015. The primary requirement within the new document is governance and stresses the need for the Trust’s governance arrangements to be published on their websites and, importantly, that they should be easily accessible, without the need to download an additional document. Key changes include, but are not limited to: • Not having de facto trustees or shadow directors • Accounting Officers must adhere to the 7 principles of public life • Ensuring the register of interests includes family relationships including between members and trustees, and trustees and trust employees • Notifying the EFA on appointment of trustees or members. You can read about the changes in more detail at: https://www.gov.uk/government/publications/academies-financial-handbook-2015 or come along to our next Academies Seminar, where we’ll be discussing the new regulatory requirements in more detail, along with a number of other issues affecting academies. if

Come along to a free Academies Seminar! At Randall & Payne we pride ourselves in sharing our knowledge and helping others. Our Academies Seminars run termly and are open to all converted Academies, whether you’re clients or not. Save the date – the next seminar is scheduled for the morning

of January 26th 2016. If you are interested in attending, an agenda and booking form is available at: www.randall-payne.co.uk/news-new/events/

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Winter 2015/16

in the community

R&P’s fundraising efforts for Gloucestershire Young Carers The R&P staff have generously given time, money and their talents to raise funds for our chosen charity for 2015, Gloucestershire Young Carers. Since the last magazine several unique and fun activities have happened in-house which the staff have generously supported.

Autumn Bake Off

Keeping up the momentum of BBC Bake Off, Rob Case and Lindsay Collins were our very own Paul Hollywood and Mary Berry, organising and judging our own in-house Bake Off. Held just before Halloween, cakes were baked by our 13 budding bakers in an autumn theme. They were judged by Rob and Lindsay using the ‘Guidelines for Cake Show Judging by the International Cake Exploration Societé’ – yes all very serious. Our ‘bakers dozen’ of staff members put themselves to the test and made some amazing autumn/halloween themed cakes, which the other members of staff kindly bought and ate after the judging was over (it’s a hard life!).

The 2015 winner was Vicky Bowden and her amazing Bonfire Cake. The total amount raised was £150.

Christmas Bazaar

Carers supported by GYC have published the ‘We Cook We Care’ cookbook, containing some of their favourite recipes to cook for their dependent adult. To encourage staff to buy the cookbook, we held a Christmas Bazaar on 4th December, with homemade cupcakes, mince pies, spiced berry cordial and a selection of donated items for sale which would make excellent Christmas presents and stocking fillers for family & friends. As well as selling a number of the cookbooks, the lunchtime Bazaar raised £112.50 to add to our donation to GYC. Its fair to say the staff at Randall & Payne are very kind-hearted and generous, raising almost £300 just from amongst themselves.

Winter 2015/16

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in the community Books for Cash

Randall & Payne’s Charity Book Shop, was set up in the attic of our offices in Chargrove House in November. Staff donated their read books, fiction, non-fiction and children’s, for other members of staff to buy for a small donation per book. Staff benefit from a good read for a bargain price and the knowledge that their donation will be going towards the annual total raised for GYC. In just a short time we have raised £19.50 and the sales and donations of the ‘book shop’ will continue.

Unwrapping Good Chocolate for MS

We were delighted to welcome the MS Society to Chargrove on December 8th, where they held a chocolate themed fundraiser. The event was sponsored by Sterling Networks who generously donated the registration fee to the MS Society, their chosen charity. A fun filled evening was enjoyed by over 50 people as Professor of Chocolate Studies from the University of Happiness, Laurence Trackman, presented some humorous anecdotes on the history of chocolate. The UK consumes 660,000 tons of chocolate every year. Bad chocolate is very bad for you, good chocolate (yes there is such a thing!) is very good for you - Laurence explained the difference and concluded the evening with a tasting session of ‘good’ chocolate and a raffle. A total of £762 was raised for The MS Society.

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Winter 2015/16

dates for the diary

january 2016 monday

tuesday

wednesday

thursday

friday

saturday

sunday

New Year’s Day 1 2 3 Corp Tax due - period ending 31/3/15

4 5 6 7 8 9 10

Due date for CT61 11 12 13 14 15 16 17 quarter to 31/12/15

Due date for & Class 1 18 19 20 21 22 PAYE 23 24 2015/16 PAYE Month 9

NIC payments (electronic submission)

Tax return and Academies 25 26 27 28 29 30 31 IIGE Seminar

Academies AAR filing deadline

Seminar

february 2016 monday

tuesday

wednesday

thursday

friday

saturday

sunday

Due date for £100 penalty if 1 2 3 4 5 6 7

2014/15 Tax return not filed online Corp tax due – period ending 30/4/15

VAT return 31/12/15

Last date to 10 11 12 13 14 request NIC deterent for 2015/16

Quorum Due date for 15 16 17 18 19 20 21 2015/16 PAYE month 10

IIGE Seminar PAYE & Class 22 23 24 25 26 27 28 1 NIC payments (electronic submission)

march 2016 monday

tuesday

wednesday

thursday

friday

saturday

sunday

Self Assessment Corp Tax due Mothering Sunday 1 2 3 4 5 6 tax for 2014/2015 - period ending

7 VAT filing and

payment deadline

31/5/15 Last day to pay 2014/15 income TAX

paid after this date incurs 5% surcharge

8 14 15 16 17 18 19 20 Due date for

Budget Day

21 22 23 24 IIGE Seminar PAYE & Class 1 NIC payments (electronic submission)

2015/16 PAYE month 11

Good Friday 25 26 27

31 Submit National non-domestic rates (NNDR) on-line form. Easter Monday 28 29 30 End of corporation tax financial year deadline CT600 31/3/2015

Winter 2015/16

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tax reference

income tax reliefs 2015/16 Personal allowance born after 5 April 1948 £10,600

allowance by £1 for every £2 of ‘adjusted net income’ over £100,000.)

born after 5 April 1938 and before 6 April 1948* £10,600

Married couple’s allowance for people born before 6 April 1935 or 75 and over

born before 6 April 1938 £10,660

(relief at 10%)* min. amount

(For higher earners reduce personal

* For people born before April 1948 reduce allowance by £1 for every £2 of adjusted net income over £27,000 to the minimum of the standard Personal Allowances of £10,600.

vehicle benefits Company cars 2015/16 CO2 emissions (gm/km)

£8,355 £3,220

% of cars list price taxed

Blind person allowance

£2,290

Maximum transferable personal 1-50 5 allowance between spouses £1,060 51-75 9 76-94 13 95 14 100 15 105 16 110 17 115 18 120 19 125 20 130 21 135 22 140 23 145 24 150 25 155 26 For expenditure incurred on or after 160 27 6 April 2013 165 28 (since 1 April 2013 for companies) cars with 170 29 CO2 emissions not exceeding 130gm/km 175 30 (previously 160gm/km) receive an 180 31 18% allowance p.a. 185 32 190 33 Cars with CO2 emissions over 130gm/km 195 34 receive an 8% allowance p.a. 200 35 205 36 210 and more 37

capital allowances on cars

For diesel cars add a 3% supplement but maximum still 37%. For cars registered before 1st January 1998 the charge is based on engine size. Company Vans 2015/16 £3150 Car Fuel Benefit 2015/16 £22,100 x appropriate percentage* *percentage used to calculate the taxable benefit of the car for which the fuel is provided.

mileage allowances

Cars and vans Rate per mile Up to 10,000 miles 45p Over 10,000 miles 25p Bicycles 20p Motorcycles 24p These indicate the maximum tax free mileage allowance for own vehicle business use. Any excess is taxable.

corporation tax year to 31/3/2016 Profits band Rate Now unified at a flat rate at 20%* *Different rates apply for ringfenced (broadly oil industry) profit.

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income tax rates 2015/16 Band £ Rate % 0 - 5,000 10* 0 - 31,785 20** 31,786 - 150,000 40*** Over 150,000 45**** *Only applicable to dividends and savings income. The 10% rate is not available if taxable non-savings income exceeds £5,000. ** Except dividends (10%). *** Except dividends (32.5%). **** Except dividends (37.5%). Other income taxed first, then savings income and finally dividends.

value added tax Standard rate

20%

Reduced rate

Annual Registration Limit: from 1.4.15 (1.4.14 - 31.3.15 £81,000) £82,000 Annual Deregistration Limit: from 1.4.15 (1.4.14 - 31.3.15 £79,000) £80,000

No change to the Flat rate scheme/Cash account limits

pension premiums 2015/16

• Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings. • Any contributions in excess of £40,000, whether personal or by the employer, may be subject to income tax on the individual. • Where the £40,000 limit is not fully used it may be possible to carry the unused amount forward for three years. • Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’. • Tax relief for large contributions may be spread over several years.

Winter 2015/16

I N B

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That’s why 1000’s of businesses have trusted us for over 136 years to see their big picture and to provide them with the knowledge and advice they need to plan ahead for growth. For a free consultation call 01242 776000 www.randall-payne.co.uk Chartered Accountants • Business Development • Tax Planning • Audit • Wealth Management Randall & Payne iRandall & Payne is a brand name of Randall & Payne LLP. Registered in England & Wales number: OC345710. Chargrove House, Main Road, Shurdington, Cheltenham, Glos. GL51 4GA. Unless otherwise indicated we use the word partner to refer to a member of the LLP. Registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk for the UK, 24 under reference number C002244548 and www.cro.ie/auditors for Ireland, under reference number EWC002244548. A member of the ICAEW Practice Assurance Scheme.