Leonherman Blog

Demand for digital Tax advice


Research by HMRC has shown that the demand for digital tax advice has increased following a survey of 2,900 small businesses and landlords.

With the majority of small businesses and landlords expecting to consult an accountant in order to comply with Making Tax Digital.

Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs – meaning the end of the annual tax return for millions.

Of those 2,900 surveyed, 72% will ask an accountant for advice, 15% will use the HMRC website, 13% will use the HMRC helpline with others saying they will ask family and friends first.

If you’re considering changing your accounting software or currently use a manual system you will need to check your chosen method will meet MTD requirements.

We work with a number of different accounting software from Xero, to Quick Books and Sage.  If you want to know more about Making Tax Digital and how it will affect you, get in touch with our Tax team on 0161 249 5040.


Posted in Ask the Expert, News

Highly Commended at this years Damar’s Apprenticeships awards

damar logo

We are pleased to announce that we received a highly commended award at this years Damar’s apprenticeships awards.

The Managing Director Jonathan Bourne said; “The judges were extremely impressed by the standard of your nomination, that even though you missed out on the award itself, we wanted to recognise your nomination by awarding a Highly Commended award.”

Leonherman has worked in partnership with Damar Training for the past six years for the recruitment and provision of accredited training programmes. The partnership has brought much success with apprentices and trainees progressing to semi-senior accounts roles, continuing to study towards further professional study qualifications through ACCA and becoming Senior Accountants.

Leonherman is very much committed to operating as a Training Practice, recruiting Apprentices at an early stage to develop an individual and provide a well-rounded training programme in order to produce the highest calibre accountants who can then go on to become supervisors and managers within the firm.

Please get in touch or call 0161 249 5040 to discuss how you can apply for our Apprenticeship Programme

Posted in Office News

Are your workers really self-employed?

Self-employment on the rise

Previously we have reported that the House of Commons Work and Pensions Committee published a report calling on the Government to close the loopholes that allow “bogus” self-employment practice.

Most of the people working for organisations such as such as Uber, Amazon, Hermes and Deliveroo are not on the payroll, have limited workers’ rights and are paid for each delivery or “gig”. The Committee recommended a default assumption of “worker” status, rather than “self-employed”. The economist Mathew Taylor was also asked to produce a report on the status of such workers and suggested that a new category of “dependent contractor” should be established.

HMRC and the Treasury have now published a consultation into a thorough review of employment status.

Consultation on employment status
HMRC published a consultation on employment status on 7 February as a follow up to the Taylor Review of Modern Working Practices.

Individuals and their employers have to know which employment status applies to ensure the right protections are applied – from the National Minimum Wage and holiday pay, to unfair dismissal protection and statutory redundancy pay.

Employment status also affects the taxes that an individual and their employer pay. It is therefore essential in maintaining a clear and effective tax base, with individuals and employers knowing what rates of tax and National Insurance Contributions (NICs) are applicable to everyone in their organisation.

The existing legislation defining an employee for both tax and employment rights ultimately relies on whether a contract of service exists. No further definition or clarity is provided in the legislation.

As a result, over time the courts have interpreted the legislation and developed tests to determine an individual’s employment status. These tests are contained in a number of key precedent cases, including a mixture of employment rights and tax judgments.

A possible solution suggested is to legislate a more detailed definition of employment incorporating the irreducible minimum core tests established by case law:

  • Mutuality of obligation
  • Control over the individual
  • Personal service

If you are unsure of your employee status or those of your employees and contractors get in touch with our Tax Team on 0161 249 5040

Posted in News

Personal tax changes to be aware of pre April 2018

Spring Budget

This is the first year we won’t be seeing a spring budget, Chancellor Philip Hammond has said that he will simple give a 15 minute speech on March 13. When Mr Hammond announced his plan to move the Budget from March to the autumn and the scrapping of the Autumn statement, he said; “No other major economy makes hundreds of tax changes twice a year, and neither should we.”

Prior to April 6, we have put together a reminder of the following changes that were announced in last year’s Autumn budget:

Income tax – 2018/19

  • Personal allowance – to increase from £11,500 to £11,850
  • Basic rate – 20% on income from £11,850 to £46,350
  • Higher rate – 40% on income between £46,351 and £150,000
  • Additional rate – 45% on income > £150,000
  • Dividends:
    • First £2,000 – 0%
    • Ordinary rate – 7.5%
    • Higher rate – 32.5%
    • Additional rate – 38.1%

Tax free dividends reduced

The tax rate on dividends was increased by 7.5% from 6 April 2016 as a way of collecting tax from owner managed businesses. However, at the same time, a 0% rate was introduced on the first £5,000 of dividend income.

The government has reduced the 0% band from £5,000 to £2,000 from 6 April 2018. This will see basic rate, higher rate and top rate taxpayers tax bills increase by up to £225, £975 and £1,143 respectively, or double this in the case of husband and wife sharing family income.

Property taxation changes

There have been numerous property tax changes in recent years, including increased Stamp Duty Land Tax on purchases of second homes, a higher rate of capital gains tax on residential property disposal and the withdrawal of the 10% wear and tear allowance for furnished lettings.

The most recent and perhaps significant change was the announcements of a withdrawal of higher rate tax relief for interest expense on debts related to dwelling houses, which is being phased in over four years commencing 6 April 2017 with a restriction relating to 25% of the interest expense.

In the year to 5 April 2019, the restriction will be applied to 50% of the interest expense, with the percentage increasing to 75% and 100% in the years to 5 April 2020 and 2021 respectively. This will add further pressure for buy-to-let landlords with significant income from property funded by debt to de-leverage their property portfolios or alternatively (in some cases) face income losses.

For those individuals who receive significant rents, which have previously been largely covered by mortgage interest, not only may they face a higher marginal rate of tax but in some cases will find their entitlement to the personal allowance and child benefit removed.

If you have any questions on how these changes will affect you get in touch or call 0161 249 5040

Posted in News

Why move to the cloud?


More and more businesses are moving to cloud based accounting software allowing them to access their accounts on the go whilst they are out and about. Leonherman is proud to be an accountant partner of Xero accounting software. Xero is an online accounting system designed for small businesses to work with their accountants and staff in real time. There is no software to install and can be accessed on the go all you need is an internet connection.

Xero covers everything you would expect from an accounting system from invoicing, managing payables, banking, management reporting to calculating VAT returns and expense claims. As it allows you to access your accounts whilst on the move from your phone or laptop and with its plain English terms and user friendly functionality it won’t take you long to get up and running.

But don’t just take our word for it, here is a review from a client who moved from Sage to Xero – Why choose online accounting?

If you would like to know how using Xero can help your business, get in touch with us. As Leonherman are partners of Xero and can assist you to buy and use the software – call us on 0161 249 5040 or email partners@leonherman.co.uk

Posted in News

Bag your business’s share of government’s £900m research help

R&D 2

SMEs are cashing in to the tune of more than £900 million a year as they take advantage of a valuable allowance from HMRC which recognises their research and innovation work.

The R&D tax credit scheme rewards firms for their time and effort in researching, developing and refining new products, applications and services. So if your business has been exploring new ways of setting itself apart in its market, whether it’s using cutting-edge technology or just refining age-old business processes, you could claim a slice of this big pie!

South Manchester chartered accountants and business advisers Leonherman have taken on several claims by SMEs for help under the scheme. Their Tax Manager, Campbell Black, says the broad definition of what constitutes ‘R&D’ means there is probably some element of this kind of work involved in what many businesses do.

“Many businesses have been involved in some kind of research during their life cycle, and through this scheme, they can claim just reward for their work,” Mr Black adds.

The real benefit for R&D tax relief for businesses in their formative stages which are not yet turning a profit is that it can be applied in one of two ways – either by being carried over as a trading loss into future years, or this loss being surrendered in return for a cash payment from HMRC.

Such has been the success of this scheme that, says Mr Black, it has become an important source of funding for many SMEs, especially those in tech-related fields. As a result, the amount claimed in 2015-16 was 45 per cent up on the previous year.

“The £905million which was granted in cash payments for the 2015-16 financial year represents the equivalent of several mainstream investment funds – that makes R&D tax relief a real lifeline for tech start-ups and innovative SMEs which are working to develop products and services, but which are not yet breaking even,” he says.

As a result of many of these businesses not having to resort to seeking external funding, it means some are likely to be able to keep control of their vision and plans for their future, rather than have to surrender a stake in their venture.

An important factor in raising awareness of the availability of R&D tax credits has been the removal of a minimum spend of £10,000 on R&D before a business qualifies for help, notes Mr Black.

“This has brought many much smaller-scale projects within the scope of the scheme, so we would say to businesses which are unsure whether any of their work has qualified for help, that they should contact us to get advice.”

You don’t need to have made a technical breakthrough, or developed a new product to claim funding. Leonherman has helped businesses working in sectors as diverse as architecture and power generation to make successful claims.

And the scope of allowable expenditure under the scheme is also very broad, covering the likes of energy and software development costs, in addition to direct staff costs for the time spent on the research.

“There is no hard and fast definition of what constitutes R&D costs which are allowable under the scheme, so if you’re unsure about whether work your business has done qualifies for assistance, contact us, and we will evaluate it, and confirm whether you have a valid claim.”

So to get sound advice to help your business claim its share of the rewards for its R&D, call Leonherman on 0161 249 5040, or email

Posted in News

January Newsletter – Are you on target to achieve your goals or is it time to set new ones?



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 2018 Newsletter – Are you on target to achieve your goals or is it time to set new ones?

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

Posted in Uncategorized

An update on Making Tax Digital


We updated you back in July following the announcement that Making Tax Digital (MTD) is to be delayed until April 2019.

However it is very clear that MTD will not be going away and now is a good time to start getting your business accounts ready.

Every individual and business now has access to their own personalised digital tax account and these are being regularly expanded and improved. HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world, modernising the tax system to make it more effective, more efficient and easier for customers to comply.

What is Making Tax Digital?

Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs – meaning the end of the annual tax return for millions.

Who is affected first?

From April 2019, MTD will be enforced for VAT registered businesses with a turnover above the threshold, for VAT registration which is currently £85k. There will be no other roll out, in terms of Income tax, before April 2020. However, for those that want to be proactive, HMRC began accepting unincorporated businesses and landlords into a MTD pilot scheme for Income tax last summer.

Deadlines for VAT submission to HMRC will not change, for example, businesses with a VAT quarter ending 31 March will be required to submit their return by 7 May.

Businesses qualifying for MTD with a year end of 31 March will be required to prepare and submit their VAT returns from 1 April 2019, using the MTD format.

How do I comply?

VAT records will need to be prepared and submitted on MTD approved software or spreadsheets in conjunction with other software, for submission, in order to meet full MTD requirements.

Free software may be provided by HMRC, however businesses will need to contact their software providers to ensure that the software they are currently using will be MTD compatible by April 2019.

For businesses that are voluntarily registered for VAT with a turnover below the VAT threshold, they will continue to have access to the HMRC portal to submit their VAT returns and have the option of not complying with MTD for VAT purposes from April 2019.

If you’re considering changing your accounting software or currently use a manual system you will need to check your chosen method will meet MTD requirements.

We work with a number of different accounting software from Xero, to Quick Books and Sage.  If you want to know more about Making Tax Digital and how it will affect you, get in touch with our Tax team on 0161 249 5040.

Posted in News

Wishing you a Merry Christmas from Leonherman

Christmas image 2017

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 22 December 2017 for the Christmas holidays reopening at 9am on Tuesday, 2 January 2018

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

Wood St Mission Toy Appeal

Posted in Office News

IR35 “off payroll” rule may be extended to the Private Sector

HMRC Inquiries v2

It was not covered in last months Budget speech, however the other documents released on Budget day mention the possible extension of the rules for personal service companies in the public sector to workers in the private sector.

The government will consult in 2018 on how to tackle non-compliance with the intermediaries legislation (commonly known as IR35) in the private sector. The legislation which currently only applies in the public sector seeks to ensure that individuals who effectively work as employees are taxed as employees, even if they choose to structure their work through a company.

At this stage we do not know what this would mean for these individuals and will keep you updated as soon as we know more.

Posted in News