Leonherman Blog

Pay rises for over 2 million employees

As of yesterday 1 April 2019, the national living wage has increased by 5%, equating to £8.21 an hour for employees aged 25 and over; this compares to £7.83 an hour for the 2018-2019 rate.

The national minimum wage has also increased, benefiting around 2.1 million employees. This is an increase from £7.38 an hour to £7.70 an hour for employees aged between 21 and 24, equating to an additional £580 a year for full-time employees, and a pay rise from £5.90 an hour to £6.15 an hour for those aged between 18 and 20, providing an extra £455 a year for full-time staff in this age group.

Philip Hammond, Chancellor of the Exchequer, said: “This government is dedicated to increasing the wages of the lowest paid, which is why we introduced the national living wage and have continued to increase the national minimum wage rates; benefiting millions of employees.”

“This government is committed to raising productivity performance across the income spectrum, so that the wages of the lowest paid can increase sustainably over time. While the proportion of low paid jobs is now at its lowest level for 20 years.”

You can read more on the .gov website 

Posted in News

Spring Newsletter – Making Tax Digital is coming

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:

March 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

Moving forwards in uncertain times

2019 looks set to be a year filled with uncertainty for businesses.

The future is always unknown but this year more than ever businesses will need to navigate some particularly choppy waters due to market uncertainty and global political turmoil (without wishing to mention the B word).

Focus on what you can control 

As a business you can always control your response, attitude, behaviour, actions and words. You can choose to be proactive and inquisitive rather than paralysed. In times of uncertainty, the best businesses step up and embrace change. When times are uncertain, your team wants you to lead the way. Bring your team with you on the journey, ask them for their opinion, include them in your planning conversations and challenge them to come up with new solutions.

Cash is king 

In uncertain times, the old adage that “cash is king” carries even more weight. Cash is the lifeblood of your business and poor cash flow management kills businesses during tough economic times. Market volatility also creates opportunities. If you have cash or credit available to take advantage of these opportunities when they present themselves, you may be able to move quickly and move your business forward. As such, good cash flow management can allow you to cash in.

Embrace change and adapt 

As your particular market changes, there will be opportunities for you to adapt. For example, if your customers have less budget to spend on buying products and services in your sector, it might be an opportunity for you to introduce a lower priced “value offering.” You could even go one step further and change your pricing model. For example, you could move clients to monthly retainers rather than charging a once-off annual fee.

Diversify 

If you depend on one big client to keep your business going, you should consider how to diversify your client base. Sometimes even giant businesses fail during tough times. If your biggest client goes out of business, you don’t want to be collateral damage. Just like in investing, the key is to have a diversified portfolio. Now could be a good time to look at trying to win some new clients in order to make your business more resilient.

At Leonherman we pride ourselves on working with our clients through the full life circle of their business to offer advice and support. Get in touch to find out how we can help you to achieve your business goals on 0161 249 5040

Posted in Ask the Expert, News

Spring Statement 2019 summary

Yesterday the Chancellor Philip Hammond issued his spring statement, this would usually have made more of a noise within the media but with the Prime Minister also holding the latest vote on Brexit yesterday it very much took a back seat.

The key highlights for you to be aware of include:

Economy:

The chancellor described the economy as being “remarkably robust” adding that it has “defied expectations”. This was supported by GDP growth rates of 1.2% this year.

Brexit:

Mr Hammond very much used the Spring Statement to acknowledge the cloud of uncertainty over the economy due to Brexit and stated that “The most urgent task is to lift uncertainty.”

He also warned of a sharp and sudden spike in inflation under a no-deal, due to the economy operating close to full capacity and the impact of higher prices for imports. Whereas if a Brexit deal is reached, Hammond announced, the government will hold a full spending review in the summer. This will set departmental budgets, including three-year budgets for resource spending, and will shape the priorities of the Autumn Budget.

Business and enterprise:

Mr Hammond said that he wanted to “build on the UK’s fundamental strengths”, announcing a £37 billion productivity fund, focusing on improving skills throughout the workforce.

Housing and Environment:

Mr Hammond devoted a significant part of his speech to housing and the environment, announcing £3 billion for the Affordable Homes Guarantee Scheme, which he said would support the delivery of around 30,000 affordable homes.

He also announced £717 million from the Housing Infrastructure Fund to support the construction of homes in West London, Cheshire, Didcot and Cambridge. 

In conclusion there have not been any significant changes that we need to make you aware of with the focus of the government being firmly on Brexit with the Budget taking place in the autumn.

 

However one thing to bring to your attention is to ensure you make the most of this financial years ISA and pension allowances prior to 5th April.

Posted in News

Workplace pension contributions to rise

From April 2019, the amount of money people pay into workplace pensions will rise as minimum contributions from employees are increased from 3% to 5% under auto-enrolment rules. Employers will also see their contributions go up from 2% to 3%.

To put it into perspective, someone earning around £27,000 and paying in the auto-enrolment minimum will see their personal contribution rise from about £500 this year to more than £850 in 2019/20.

The new rates are as follows:

Year Employer minimum contribution Employee minimum contribution Total minimum contribution
April 2018 (current rate) 2% 3% 5%
April 2019 3% 5% 8%

 

All employers with staff in a pension scheme for automatic enrolment must take action to make sure at least the minimum amounts are being paid into their pension scheme. This applies to you whether you set up a pension scheme for automatic enrolment or you decided to use an existing scheme.

However, you don’t need to take any further action if you don’t have any staff in a pension scheme for automatic enrolment, or if you are already paying above the increased minimum amounts.

By law a total minimum amount of contributions must be paid into the scheme. If you are already using Leonherman for your payroll the increases will happen automatically.

Get in touch if you are unsure of what to do next or take a look at The Pensions Regulator website.

Posted in Ask the Expert, News

Things to stop doing in 2019

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….

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

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?

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