Capital gains tax and UK residential property

The Government’s intention is to accelerate the payment of capital gains tax on residential property.

At present if you are resident in the UK and you sell a residential property you should consider whether there is a capital gain to report to HMRC. If the gain exceeds the tax-free amount (currently £11,700) or total proceeds are more than four times the tax-free amount you should report it. An exception to this is where the property is your main home for tax purposes and the total gain qualifies for ‘private residence relief’. (more…)

Do you import? You need to be prepared for a no deal Brexit

If you import from the EU, you should start preparing now in case the UK leaves the EU without a deal on the 29th March 2019. You may have received a letter from HMRC about this.
HMRC has put in place transitional simplified procedures to make it easier for you to import goods. The TSP registration opens on 7th February 2019.

These transitional simplified procedures reduce the amount of information you need to give in an import declaration when the goods are crossing the border. (more…)

Be Prepared – In case of death checklist

When someone dies it will be necessary for another person to obtain a grant of representation to access most of the deceased’s assets and administer their Estate. It is often an emotional time for the person dealing with the Estate and it can be both demanding and time consuming. Sometimes knowing where to start is one of the hardest things, particularly if you have no idea what the deceased’s person’s Estate includes. Anything you can do during life to make this process run smoothly for the administrator will take away a lot of stress for your loved ones.

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The A-Z of Charnwood Accountants

Accountants – seems silly not to start here as that’s the day to day job and fundamentally what we are!

Business Advisors – We’re not just about the numbers though – a big part of the services we provide focus around general business advisory services. We see the detail behind the scenes of your business and will always look at ways to help you improve.

Communication – this is key for a successful relationship. If you only hear from your accountant once a year then that’s not enough. We speak to all our clients before their year end, following the year end to agree the accounts and after key events such as recent budgets. All clients will receive personal e-mails on any changes that will impact their business. We also encourage our clients to call us with queries with no fear that the clock will start running as soon as we answer! (more…)

5 Ways to tell if your accountant cares about you

For many people an accountant is an expensive and necessary evil much like the taxes they pay them to calculate. But this does not have to be the case. The relationship between a business owner and their accountant should be just that – a relationship. There should be understanding, compassion and assistance available when required. Above all your accountant should care about you and your business. (more…)

THE FRIGHTENING RISE OF INTERNET BANKING SCAMS

THE FRIGHTENING RISE OF INTERNET BANKING SCAMS

There appears to be a flourishing industry of ever more complex and sophisticated scams that are designed to divert our hard earned money from our bank account into the wrong hands.

Even within our own client base we have seen a frightening increase in the number of clients that have fallen foul of these scammers. Often, because of the complex nature of the scams, and due to the clients’ own inadvertent involvement, the clients have had no way of recouping their funds.

“IT WILL NEVER HAPPEN TO ME!”

We all believe that the systems and internal controls we have in place will protect us. However, the clients who suffer these scams often do have strong internal controls and the recent experiences have shown that everyone is vulnerable if the fraudster(s) catch you at the wrong time, on the wrong day, with the right information.

The good news is that we believe there are two golden rules to follow that will significantly reduce the risk of you or your business being the next one to lose out.

GOLDEN RULE 1

No matter what, always ensure that when anyone is contacted in relation to the business bank account, that they understand who initiated the phone call.

This is particularly important when phone calls/messages get passed on within the business. It should always be made clear whether the business has contacted the individual/perceived bank or whether the call came into the business.

If the phone call was an incoming call at no point should any information be discussed or any actions initiated in relation to logging on to the business banking system.

It is vitally important that the telephone number given as a return contact number and/or any website verification/sites provided should not be used or relied upon. It is important that a trusted number exists within the organisation for the actual bank, so that it can be used to verify the relevant person.

We cannot emphasise enough how important it is that any action involving the business bank account, only gets undertaken once the steps are retraced through a trusted number /actual contact, at the bank.

You would be surprised how many of the current scams would have been avoided if this golden rule had been applied.

GOLDEN RULE 2

This is mainly for people who have access to internet banking but it is equally important.

No “new payee” should be set up on the system or existing bank details changed for a current payee, without face to face contact or a phone conversation with a trusted individual to confirm that the new bank details are correct and valid.

Many of the current scams would have been avoided by following this second golden rule.

Neither of the above will strike you as particularly difficult or onerous, and you may feel these are both solid internal controls within your own business already. However, we finish by pointing out this is not something you can implement once and assume that everybody obeys these rules on a day to day basis. These should be regularly communicated for the benefit of all new staff and to remind existing staff, so that the risk of succumbing to one of the ever more sophisticated scams is significantly reduced or eliminated.

We hope you find this article interesting and we urge you to action/review the 2 golden rules in your organisation (and your personal life) to prevent any more people falling victim to the growing army of crooks.

DAVE MCKEON
Charnwood Accountants & Business Advisors LLP

A new style of exit for the owner manager business

Dave McKeon from Charnwood Accountants LLP sets out a new style of exit to add new and exciting business opportunities to owner managed business. This “John Lewis” style of exit offers a wealth of opportunity to businesses to move forward in a new and exciting style of ownership that suits modern business. Utilising an Employee Ownership Trust can add real value to the business and it’s potential for growth.

The main points are set out below:-

Benefits

• Employee engagement
• Potentially stronger growth in difficult markets
• Longevity of the business
• Ability of the current owners (and their successors) to maintain
shareholding after sale of the majority to the Trustees
• Highly effective exit route
• Highly tax effective exit (0% tax)
• Ongoing ownership incentives for employees
• Ongoing tax incentives for employees

Identifying Traits to Assess Suitability

• A desire to leave the business as a lasting legacy
• Employee retention and motivation
• Responsible capitalism
• Attraction of future talent
• Stronger growth
• Competitor differentiation

Initial Questions to Ask

• What percentage of current owner(s) shares will ultimately be sold
(and/or initial tranches)? (Must be more than 50%)
• Over what period of time do the current owners wish to sell/gift their
shares to the EOT and receive proceeds?
• Are there any special conditions that are required in the Trust Deed to
protect the future of the business?
• How will the Trust fund the purchase of the shares?
• Will the employees feel a sense of real ownership of the business in
the absence of direct ownership?
• The tax implications of this model of ownership for the company?
• The tax implications of this model of ownership for the employees?
• What form of hybrid ownership (mix of current ownership, new direct
ownership and employees via the Trust) best serves commercial requirements now and in the future?

Potential sources of finance

• Funding from the company
• Funding by the employees
• Vendor finance
• Loan finance (including peer to peer loans)
• Mezzanine finance
• Equity finance
• Crowd funding

Dave McKeon is happy to meet and discuss the potential of this idea with any forward thinking local businesses.

Increasing need for business advice among self-employed as more people become their own boss

The  pros and cons of being your own boss have been highlighted by Charnwood Accountants after new research revealed that almost one in seven people in the UK is now self-employed,

Chris Hutton, partner with Charnwood Accountants in Mountsorrel, said working for yourself offers a wide range of benefits – but it also presents a number of drawbacks.

His comments came in response to the Government’s 2015 Workplace Employment Relations Study which found that microbusinesses accounted for 33 per cent of private sector employment and 19 per cent of total output.

And, according to a survey by the Royal Society of Arts, 27 per cent of people who have become self-employed in the past five years have done so to escape joblessness.

Chris said: “Although people working in microbusinesses  tend to earn less,  receive less training  and have fewer benefits, research has shown that they are also the most satisfied group  of workers in the UK labour market  Among the reasons given for this are better job control, more  influence in decision making and even satisfaction with pay.

“However, despite benefits such as flexible working hours and the option to choose what work you undertake, there can be drawbacks – namely no sick pay, holiday pay or redundancy   pay; worry about not being paid on time; longer, unsocial hours; little or no support and no company contribution to a pension.

“With more people moving into self-employment, there is a corresponding growing need for good business advice among freelancers, sole traders and microbusinesses.

“Those who are starting up and feeling the pressure should to talk to their business adviser for guidance and support.”