Leonherman Blog

Things to stop doing in 2019

Stop sign

Many of us will have made a new year’s resolution for 2019, listing what we want to start doing e.g. to learn a new language, get in shape or spend more time with our family. 

But have you thought about what you should stop doing?

Today’s blog lists 4 things that you should stop doing to ensure 2019 is your most productive:

  1. Stop trying to get your inbox to zero

The entire concept of getting your inbox to zero unread messages assumes that email is your top priority and therefore you should strive to do it perfectly. Email is only a tool. Your top priority should be creating and executing your business objectives, looking after your customers and growing profitability.

When it comes to managing your email, you should scan through your inbox a few times a day, pick out the priority emails and deal with those as soon as you have time to do so. It can be helpful to schedule “email time” in the morning and afternoon in order to keep your day free to deal with your meetings and other priorities.

  1. Stop fighting your internal clock

Some people are early birds and others are night owls. Rather than fight with your body, work with it. If you are more productive in the morning, get up early and start work. Equally, if you are a night owl, then start late and finish late. You don’t need to be seen to stay late and work all night in the office. If you want to be really successful, focus on getting things done rather than being seen to work long hours.

  1. Stop managing and start leading

We focus on doing things right and this has its place in any business. However, if you want to be a business leader, then stop managing and start leading. Leaders focus on doing the right things, and then involve the their team in order to ensure those things are done properly.

  1. Stop snacking on unhealthy things in the office

Snacking on sugary treats will give you sugar highs and lows throughout the day and won’t do much for your health.  Replace cakes and sugary biscuits with fruit, nuts and healthy snacks like yoghurt.

If you can stop at least one of these things you will notice a difference in your productivity levels, so just imagine how much you can achieve if you action all of the above? 

We wish you a productive 2019 get in touch to see how we can help you to achieve your goals and ambitions.

Posted in Ask the Expert, News

January Newsletter – Making Tax Digital is almost here….

News

Read all about our latest news at Leonherman, including business advice, information on the services we offer to make your life easier and any internal news here:

January 2019 Newsletter – Making Tax Digital is almost here….

If you would like to receive our newsletters directly to your inbox get in touch or call 0161 249 5040

Posted in News

New Year, New Plans & Resolutions

New Year Plans

In January we tend to think about New Year’s resolutions along with reflect on the previous year and plan out what we want to achieve for this coming year along with book a holiday! January is also a good time to start planning your tax affairs before the end of the tax year on 5th April.

An obvious tax planning point would be to maximise your ISA allowances for the 2018/19 tax year (currently £20,000 each) and you might also want to consider increasing your pension savings before 5 April 2019 as the unused annual pension allowance is lost after three years.

Pension planning

For most taxpayers the maximum pension contribution is £40,000 each tax year, although this depends on their earnings. This limit covers contributions by both the individual and their employer.

Note that the unused allowance for a particular tax year may be carried forward for three years and can be added to the relief for the current year, but then lapses if unused. Hence the unused pension allowance for 2015/16 will lapse on 5 April 2019 if unused. Under the current rules the net after tax cost of saving £10,000 in a personal pension for a higher rate taxpayer is only £6,000 but there are rumours that this relief may be reduced in future. 

Increased capital allowances start 1 January 2019

The Chancellor announced a temporary increase in the Annual Investment Allowance (AIA) for expenditure on plant and machinery to £1 million from 1 January 2019. However transitional rules mean that the full amount will not necessarily apply to your business straight away.

New capital allowance for commercial buildings

The Autumn 2018 Budget announced a new 2% straight line tax deduction for the cost of construction or renovation of commercial buildings and structures. HMRC have now issued a technical note setting out the details for the operation of the new relief.

Unlike the old Industrial Buildings Allowance the new relief is available for the construction of shops and offices as well as factories and warehouses.

The new tax break is available where the contract is entered into and construction costs are incurred on or after 29 October 2019. The allowance is available to commercial property landlords as well as trading businesses. There are special rules for leasehold buildings, which determine whether the landlord or tenant is entitled to the allowance.

There are more generous plant and machinery allowances available for fixtures and fittings within the building and we can work with you to help you maximise tax relief. The AIA referred above would mean that there may be 100% capital allowances for equipment such as central heating and air conditioning. 

Advisory fuel rate for company cars

These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 December 2018. Where there has been a change the previous rate is shown in brackets.

Engine Size Petrol Diesel LPG
1400cc or less 12p

 

  8p

(7p)

1600cc or less   10p  
1401cc to 2000cc 15p   10p

(9p)

1601 to 2000cc   12p

 

 
Over 2000cc 22p

 

14p

(13p)

15p (13p)

Note that for hybrid cars you must use the petrol or diesel rate.

You can continue to use the previous rates for up to 1 month from the date the new rates apply. 

Passing on the family home

New inheritance tax rules for passing on the family home started on 6 April 2017. This additional relief should be taken into consideration when drafting your Will.

From 6 April 2017 an additional nil rate band of up to £175,000 is available on death where your residence is left to direct descendants. This is in addition to the normal £325,000 nil rate band.

This additional relief is however restricted If your assets exceed £2 million. The rules are fairly complicated and need to be looked at on an individual basis.

This additional inheritance tax relief is available even when you downsize to a smaller property.

For example if a married couple currently live in a large house worth £500,000 and downsize to a flat worth £250,000 they could give away some of the proceeds during their lifetime and yet still benefit from inheritance tax relief based on the higher valued property.  They could even sell up completely and move into a rental property and still get the inheritance tax relief!
We recommend that you seek the advice before making any tax planning decisions to ensure you have a tax plan that suits you get in touch or call 0161 249 5040

Posted in News

Digital Accounting – What next?

Digital Accounting

Throughout much of last year we have been advising our clients that Making Tax Digital (MTD) is coming.

Now that we are in 2019, there is going to be less talking about it and more action, as MTD comes in from April this year. With businesses above the VAT threshold needing to keep digital records and this could apply to all businesses from 2020. With businesses updating HMRC quarterly for their corporation tax, Income Tax and National Insurance obligations digitally. It is a significant change for many and means the end of the annual tax return with all your information stored in one place.

This change in the way HMRC wants information from tax payers means that you may need to move from your existing desktop or manual record keeping and onto an online accounting package.

The good news is there are many options available to you and we are certified in the installation and operation of many online accounting software services, which are all digitally compliant and specifically designed for small and medium sized businesses.

Digital accounting software has significant advantages over the traditional ways of bookkeeping including:

  • Seeing a clear picture of your current financial position, in real-time
  • Having your accounts 100% online, so there’s no software to install and everything is backed up automatically. Updates are free and instantly available
  • Avoid upfront accounting software costs – upgrades, maintenance, system administration costs and server failures are no longer an issue
  • Have your bank feed your data directly into your accounts on a regular basis;
  • Take a photo on your phone of a purchase invoice and it was posted automatically
  • See who owes you money, who you owe and your business bank balance 24/7, 365 from your phone!

 

How do you make the change?

As quickly as possible! All we need is a commitment to change and we will take you through a step by step process, which means you will be up and running in no time and we can assist you to:

  • Extract your existing data and upload this to your new digital accounting software
  • Link your accounts to your bank account
  • Enable Apps to your phone or tablet to let you work “on the go”; and
  • Demonstrate the system and show you how to get the most from your accounts

 

Please get in touch to allow us to find the best solution for you and to help you with this transition by calling us on 0161 249 5040.

 

Useful links from HMRC:

https://www.gov.uk/guidance/agents-use-software-to-send-income-tax-updates

https://www.gov.uk/guidance/help-and-support-for-making-tax-digital

https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat

 

 

Posted in Ask the Expert, News

Wishing you a Merry Christmas from Leonherman

LH_Christmas_Header_2018-01

Wishing you a Merry Christmas & a Happy New Year from all of us here at Leonherman.

Please note that our office will be closed from 11:30am on Friday 21st December 2018 for the Christmas holidays reopening at 9am on Wednesday 2nd January 2019.

We are once again proud to be supporting the Wood Street Mission Christmas Toy Appeal, helping local families struggling to make ends meet by donating new toys and food.

Posted in News, Office News

Proud to be supporting Wood Street Mission

Wood St Mission v1

Once again we are supporting Wood Street Mission this year, in the run up to Christmas 2018, supporting local families less fortunate than ourselves to have a memorable Christmas for their children.

The 2017 event was hugely successful and we have been working together again with our clients and team here at Leonherman to achieve an even bigger gift haul for local children in 2018.

It has not been possible without your support.

Fundraising efforts have included; a pumpkin carving competition (yes we began in October), guess the number of sweets in the jar, donations of gifts and cake sales.

There is still time to support this worthy cause, so feel free to pop in if you are passing all donations are greatly received.

Posted in News, Office News

Information overload leads to bias decision making

Information Overload

Most people these days have too much information and not enough time. We don’t have the time to weigh up every facet of every decision. This tends to encourage us to take shortcuts where we can, meaning we often go into a meeting or a negotiation with an idea as to what the outcome might be.

This is known as “confirmation bias” where our natural tendency is to seek out information or to look at things in a way that confirms our preconceptions.

It is almost impossible to be unbiased in our day to day lives. The key to managing this is awareness. For example, if you feel uncomfortable about the facts surrounding a particular decision, try to tune into what is driving that emotional response. Are you uncomfortable because you think you are right and the facts prove you wrong?

Will the outcome of the decision making process result in a positive outcome for the business? If so, try to park your personal feelings on the subject and go along with the decision that is best for the business and the whole.

When making bigger business decisions, you should involve a team of people so that alternative options can be considered. Having a different view to others in the room is healthy. Debate should be encouraged – especially when it comes to business decisions. Encourage those around you to share alternative views and invite others to play devil’s advocate.

You should avoid leading questions. If you want to make unbiased decisions, you need to gather data, analyse that data and move forward on the basis of what the data tells you rather than what you would like the answer to be.

 

Leonherman has many years of experience working with businesses of all shapes and sizes; we work with you to ensure you are making the right decisions for both the short and long term, helping you to stay on track and one step ahead get in touch or call 0161 249 5040

Posted in News

How to get clients to pay you on time

Debtors

You’ve done the work and you invoiced the client 60 days ago, yet you are still waiting to get paid 30 days after payment was due.

Is it time to chase for payment?

Nobody wants to be chasing clients for payment. However, this is business and you are entitled to be paid for the work that you have done. Unless your firm is a bank, you are not in the business of providing credit to your clients.

So what should you do?

Manage expectations

Set out your invoicing and payment terms with your clients early on. If you are dealing with a new client, you should consider asking for 50% of the cost upfront before you start doing work for them. Talking about your payment terms up front with your client will help to avoid any awkward conversations further down the line.

Discounts and interest charges

Some firms offer clients a discount for settling invoices early. You could offer your clients a 5% discount if they pay an invoice within 10 working days. Conversely, you could charge clients 5% interest for payments that are over 60 days late. You can set this out in your payment terms at the very beginning of an interaction with a client.

Regular reminders

You should create a standard email that you can send out to clients as a payment reminder. Your email should be firm but not aggressive.

Set out that payment is due and make it easy for your client to click a link through to an online payments page, should they want to settle their bill immediately. You could even set automated reminder emails that go out to clients 10, 20 and 30 days after the initial invoice date.

Your clients are busy people. Sometimes they forget to process invoices and they might be a bit behind on their admin work.

Sometimes a gentle nudge is all that is needed in order to receive payment. You need to strike a balance between regular follow up and maintaining a good relationship with your clients, so that they come back to do business with you again in the future. Firm but fair is best.

If this doesn’t work and you are no closer to receiving payment, you may need to seek external help.

Get in touch if you are in this situation, as part of our role as your Business Adviser we will work with you to find the best solution for you and your business.

Posted in Ask the Expert, News

A summary of the Autumn Statement

Budget 2016

The Chancellor Philip Hammond yesterday delivered his third budget, he began by saying; “This is a budget that shows the British people that the hard work is paying off.”

He went on to say; “As the UK prepares to leave the EU, the government is taking further steps to ensure a positive future by investing in public services, supporting businesses and boosting living standards across the country.”

Here are the main points:

Personal Tax:

  • Tax free personal allowance to rise from £11,850 to £12,500 in April 2019
  • Higher rate income tax threshold to rise to £50,000 in April 2019
  • The National Living Wage will increase from £7.83 to £8.21 per hour from April 2019

Business:

  • Corporation Tax will be cut to 17% by 2020
  • VAT threshold for small businesses to remain at £85,000 until 2022
  • A reminder that the Tax free dividend allowance was reduced from £5,000 to £2,000 in April 2018
  • £900m in business rates relief for small businesses
  • Business rates with a rateable value of £51,000 or less to be cut by a third over 2 years
  • £650m to rejuvenate high streets (though Chancellor stated “the change our high streets face is irreversible”)
  • Apprenticeship levy contributions by small firms to be reduced to 5%
  • Private Finance Initiative (PFI) contracts to be abolished
  • New Digital Services Tax to be introduced on UK revenues for tech giants from April 2020 (2%)
  • From the 1st April 2020, if you are surrendering R&D credits to get a cash refund there is a limit to the refund, which is 3 times the amount of PAYE and NIC liability for that year

Brexit:

  • Extra £500m for preparations for leaving the EU
  • A commemorative 50p coin to mark the UK’s departure from the EU
  • Spring Statement next March could be upgraded to full Budget if needed

Transport:

  • Opening the use of e-passport gates at airports to USA, Canada, New Zealand, Australia and Japan
  • Air passenger duty to be indexed in line with inflation
  • £420m to tackle potholes, bridge repairs and other minor works in this financial year

Housing:

  • Stamp Duty abolished for all first time buyers of shared ownership properties valued up to £500,000
  • New partnerships with housing associations in England to deliver 13,000 homes
  • £500m for the Housing Infrastructure Fund, enabling 650,000 homes to be built

Pensions and Savings:

  • The lifetime allowance for pension savings will increase in 2019-20, rising to £1,055,000
  • The band of savings income that is subject to the, 0% starting rate will be kept at its current level of £5,000 for 2019-20
  • The adult ISA annual subscription limit for 2019-20 will remain unchanged at £20,000.

Healthcare and NHS:

  • Extra £20.5bn for the NHS over next 5 years
  • £2bn extra per year for mental health services
  • Extra £700m for Councils for care for the elderly and disabled
  • £10m for air ambulances

If you have any questions on how the Autumn Budget will affect you get in touch or call 0161 249 5040

Posted in Benefits, News

Class 2 National Insurance for the Self Employed to remain

Self-employment on the rise

Back in 2016 the government consulted on a proposed abolition of Class 2 National Insurance contributions (NICs) for the self-employed. This flat rate contribution, currently £2.95 a week is payable by the self-employed in addition to Class 4 contributions based on the level of profits. The flat rate contributions were due to cease on 5 April 2019 but will now continue “for the life of this parliament”.

In order to maintain their NI Contribution record, many self-employed individuals voluntarily continue to pay Class 2 contributions despite their profits being below the £6,205 small earnings exemption. Having a full NI contribution history helps maximize an individual’s entitlement to State Benefits. For example full State Pension entitlement requires 35 years contributions.

With the abolition of Class 2 NICs, those with low profits or making losses would need to make voluntary Class 3 contributions (currently £14.65 a week, £761.80 a year) in order for that year to count as a contribution year.

Check your contribution history

In order to maximise entitlement to full State Benefits a full contribution record is required. It is possible to check your National Insurance record online to see:

  • What you’ve paid, up to the start of the current tax year (6 April 2018)
  • Any National Insurance credits you’ve received
  • If gaps in contributions or credits mean some years don’t count towards your State Pension
  • If you can pay voluntary contributions to fill any gaps and how much it will cost

 

We recommend that you seek the advice from a qualified accountant before making any tax planning decisions to ensure you have a tax plan that suits you get in touch or call 0161 249 5040

Posted in News