Leonherman Blog

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

Supporting Wood Street Mission

Wood St Mission Toy Appeal

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.

With the support of our team here at Leonherman and clients we have been able to collect a full range of toys for children across the Greater Manchester area.

 

Posted in News

Make the most of dead time

Ticking Time

We have all been there before – stuck in a city with time to kill between meetings. Some of us head off for the nearest coffee shop at this time while others might make a few calls or go for a stroll in order to think about the next meeting. Perhaps there is a better way to make the most of this dead time.

Focus on a project

Long waits in the airport or sitting on a long-haul flight can be used as the ideal time to focus on a special project. It may or may not be related to the reason for your corporate trip. Perhaps it is a good time to go through the notes of a presentation or the final details of a big project. You should bear in mind that there may be some difficulties getting online (particularly on planes) so you should download the files you need in advance of boarding in order to work offline.

Plan an activity

The line between work and private life is becoming increasingly blurred. As a result, one notable trend in corporate travel is business-leisure travel. In other words, business travellers try to make the most of the time between professional appointments on a corporate trip to get to know their destination or stay a few days longer to sightsee.

Make progress with your work

Periods of dead time between journeys can be used to make progress with work. For instance, you can catch up on email or read through some documents. If you are on a business trip for a few days, it can be a good time to do your expenses, check into your return flight and so forth.

Relax

Business trips tend to be a bit stressful. Therefore, it is extremely important to make sure you get some downtime on your own. A good set of headphones can be your best friend when it comes to getting some rest on a plane. Audio books can also be a good way to relax and can even provide some inspiration for your work. Perhaps watching a bit of Netflix or Amazon Prime on your tablet can help to take your mind off work. If you are sporty, it can be good to hit the gym or go for a run (which is also a great way to see a city if you are visiting on business).

Posted in News

A summary of the 2017 Autumn Budget

Spring Budget

Chancellor Philip Hammond has today delivered his second budget, he began by saying; “The economy continues to grow, create more jobs than ever before and continues to confound those who talk it down.”

He said that this budgets resolves to “look forward and not backwards.”

Here are the main points:

Taxation & Pay:

  • Tax free personal allowance to rise to £11,850 in April 2018
  • Higher rate income tax threshold to rise to £46,350
  • The National Living Wage will increase by 4.4% to £7.83 an hour from April 2018
  • Short haul air passenger duty rates and long haul economy rates to be frozen, paid for by an increase on premium class tickets and on private jets

Business:

  • Corporation Tax will be cut to 17% by 2020
  • VAT threshold for small businesses to remain at £85,000 for two years
  • A reminder that Tax free dividend allowance will be reduced from £5,000 to £2,000 from April 2018
  • £500m for 5G mobile networks, fibre broadband and artificial intelligence
  • £540m to support the growth of electric cars, including more charging points
  • A further 2.3bn allocated for R&D
  • Rises in business rates to be measures against CPI (Consumer Price Index) and not RPI (Retail Price Index)

The State of the Economy:

  • Growth forecast for 2017 downgraded from 2% to 1.5%
  • GDP downgraded to 1.4%, 1.3% and 1.5% in subsequent years before rising to 1.6% in 2021-22
  • Annual rate of CPI inflation forecast to fall from a peak of 3% to 2% later this year
  • Another 600,000 people forecast to be in work by 2022

Transport/Infrastructure/Regions:

  • £320m to be invested in former Redcar steelworks site
  • Second devolution deal for West Midlands
  • £1.7bn transport fund for city regions
  • £2bn for Scottish government, £1.2bn for Welsh government and £650m for Northern Ireland

Fuel:

  • Vehicle excise duty for diesel cars that do not meet latest standards to rise by one band in April 2018
  • Tax hike will not apply to van owners
  • Existing diesel supplement in company car tax to rise by 1%
  • Proceeds to fund a new £220m clean air fund
  • Fuel duty rise for petrol and diesel cars scheduled for April 2018 scrapped

Housing:

  • Stamp duty to be abolished immediately for first time buyers purchasing properties worth £300,000
  • 80% of all first time buyers will not pay stamp duty
  • Long term goal to build 300,000 homes a year by the mid 2020s
  • Compulsory purchase of land banked by developers for financial reasons
  • Reviews into delays in permitted developments going forward
  • New homelessness task force

Public Borrowing/deficit/spending:

  • Annual borrowing £49.9bn this year, £8.4bn lower than forecast in March
  • Borrowing forecast to fall in every subsequent year from £39.5bn in 2018-19 to £25.6bn in 2022-23
  • Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.4% this year
  • Debt will peak at 86.5% of GDP this year, then fall to 86.4% next year reaching 79.1% in 2022-23

Pensions, Savings and Welfare:

  • £1.5bn package to “address concerns” about Universal Credit
  • Pensions and savings regime left largely untouched
  • The lifetime allowance for pensions is to increase in line with CPI, rising to £1,030,000 for 2018/19

Health and Social Care:

  • £2.8bn in extra funding for the NHS England
  • £350m immediately to address pressures this winter, £1.6bn for 2018-19 and the remainder in 2019-20
  • £10bn capital investment fund for hospitals

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

Posted in News

Changes to pension Tax relief in the budget

Spring Budget

There is once again speculation about further restrictions to tax relief on pensions in the Chancellor’s Autumn Budget. With the Chancellor looking to increase tax revenues without increasing tax rates, a raid on pension savings is an easy target as the cost of pension tax relief is estimated to be in excess of £35 billion a year.

Currently individuals can generally obtain tax relief at their marginal tax rate on up to £40,000 each tax year. Thus, for a higher rate taxpayer, a £10,000 gross pension investment costs only £6,000 after tax relief. Consider increasing your pension savings just in case?

The budget will take place on Wednesday 22nd November and we will keep you updated of the outcomes, follow us on Twitter and check back for a budget summary.

If you have any concerns about these pending changes and want to know how to maximise your pension please get in touch on 0161 249 5040 or email us

Posted in Ask the Expert, News

Healthier people = More productive people

Fruit Bowl

For a number of years, businesses have invested more and more in health and well being initiatives. Large international businesses tend to have the resources to put such initiatives in place, but smaller firms can also introduce positive measures without spending a fortune.

Most businesses recognise that sitting in front of a computer all day doesn’t offer much opportunity for movement. In addition, office environments don’t typically lend themselves to healthy eating as team members often bring unhealthy snacks into the office. Time poor employees tend to grab a quick lunch which can be unhealthy if it is fast food or similar.

The above can have a negative impact on the productivity of your team. Sickness absence tends to be higher among unhealthy people and this puts pressure on those people who have to pick up the extra workload.

What can you do to address this?

Start with activity. You could offer a contribution towards gym memberships for your staff. Most gym chains offer discounts for business staff and this could be funded through a salary sacrifice scheme or as an employee benefit. Another option may be to organise lunchtime running sessions or form a company sports team.

From a nutritional perspective, you could encourage healthy eating by offering healthy snacks such as fruit bowls in the office. If you have a vending machine in the office building, you could request that the supplier swaps it for a healthy snacks / drinks machine.

Other options to consider rolling out in your business might include offering standing desks for staff. This encourages movement and can be better for people who suffer with back problems. If a lot of your staff are smokers, you can offer “quit smoking” classes at lunchtimes.

Encouraging people to become healthier can help turn your business into a more attractive place to work. Introducing a few small lifestyle changes such as those outlined above doesn’t have to cost a fortune but may contribute towards creating a healthier, happier and more productive team.

If you would like to know how any of these employee benefits can also offer tax savings for the business as well as a benefit to your employees. Contact our Tax team on 0161 249 5040.

Posted in News

Is your business due more credit than you realise?

research-and-development

R&D tax credits are a valuable government relief which HM Revenue & Customs (‘HMRC’) is actively encouraging companies to claim across all business sectors and they can deliver substantial reductions in corporation tax payments or give a cash injection for loss-making companies.

If your company is involved in innovating, developing, refining or adding value to a process, product, device, material or services then it can qualify for R&D tax credits.

An R&D claim takes into account the time invested, including the obstacles you encounter, as you strive in the pursuit of business goals – even if you do not achieve them.

A claim can be triggered from the moment you or your staff have an idea.  So from the second you have that ‘Eureka moment’, you should start recording the time you spend on its development.

If you can answer ‘Yes’ to any of the following questions, you may be eligible for R&D tax relief:

  1. Have you developed your own software?
  2. Have you improved a process or product?
  3. Have you made any advances in science and/or technology?
  4. Have you filed any patent applications?

R&D Tax Relief Facts

  • R&D tax relief covers companies in virtually every sector including their support functions. Here are just some…
    construction; advertising; telecoms; financial services; gambling; manufacturing; energy; defence; life sciences; software; internet/communications/website/databases; professional services
  • To claim you must be a limited company
  • The tax relief is open to both SMEs and large companies
  • Even if an R&D project does not produce a positive outcome you can still claim
  • You can backdate a claim up to two years after the R&D has taken place

R&D Tax Relief Myths

  • Claiming is risky and may lead to broader tax investigations
  • HMRC does not want you to succeed so makes it hard to qualify
  • You need to own the intellectual property rights to make an R&D claim
  • “My company is too small to make a claim”
  • “We are just sub-contractors so we cannot claim”
  • “We do not work in a lab wearing white coats!”

Eligible costs

The following costs should be apportioned to the R&D project:

  • Staffing
  • Materials, water, fuel, power
  • Software directly used in the R&D project
  • Subcontracted-out R&D activities

Case Studies

It’s a misconception that only technical innovations and new product development qualifies for R&D tax relief. The following real-life case studies of less obvious R&D claims:

  • Company A was asked to install an energy-efficient commercial power generator in a residential setting. When this proved too noisy, R&D commenced to develop the generator to ‘fit’ the setting.
  • Company B working in the construction sector created a software tool to manage site reports to help track requirements under Health & Safety legislation.
  • Company C from the renewable energy sector was investigating using different chemicals to create biofuel. Whilst its attempts proved unsuccessful, it still had a claim for R&D relief.
  • Company D, a firm of architects, had developed software to improve internal processes which qualified for R&D.

R&D activities are often not obvious, but we can assist if you have any doubt as to whether you have an R&D claim, and we can confirm whether this is the case.

Assuming there is a claim we will commence a technical appraisal to support this, and establish the costs incurred in the R&D project(s). We will then submit the claim to HMRC and liaise with them until it is agreed and completed.

To get expert advice on your R&D claim, call Leonherman on 0161 249 5040, or email partners@leonherman.co.uk 

 

Posted in Ask the Expert, News

GDPR – What is it and how will it affect you?

GDPR

What is GDPR?

On May 25, 2018, a new European privacy regulation called The General Data Protection Regulation (GDPR) will come into effect replacing the current Data Protection Act 1998.

This regulation will apply to all companies selling to and storing personal information about citizens in Europe, including companies on other continents. It provides citizens of the EU with greater control over their personal data and assurances that their information is being securely protected across Europe.

According to the GDPR directive, personal data is any information related to a person such as a name, a photo, an email address, bank details and updates on social networking websites, location details, medical information, or a computer IP address.

How GDPR will affect your business?

There is a lot of scaremongering about the impact of GDPR, focusing on how much data control is required and how hefty the fines can be. However, the reality is lots of businesses are already complying with GDPR and working with service providers who have experience of delivering GDPR compliant services.

This new data protection regulation puts the consumer in the driver’s seat and the task of complying with this regulation falls upon businesses and organisations.

Customers are within their right to request a copy of whatever data is held on them by a business, and how it is used, as well as to have that data erased once the business has completed any previously agreed data processing. If your company holds personal data on someone, you should be prepared for the possibility of that data being requested or removed.

What do you need to do?

All organisations and companies that work with personal data should appoint a data protection officer or data controller who is in charge of GDPR compliance.

There are tough penalties for those companies and organisations who don’t comply with GDPR fines of up to 4% of annual global revenue or 20 million Euros, whichever is greater.

The conditions for obtaining consent are stricter under GDPR requirements as the individual must have the right to withdraw consent at any time. This means you have to be able to prove that the individual agreed to a certain action, to receive a newsletter for instance. Businesses are not allowed to assume or add a disclaimer, and providing an opt-out option is not enough.

If you purchase marketing lists, you are still responsible for getting the proper consent information, even if a vendor or outsourced partner was responsible for gathering the data.

Currently if you meet potential customers at a trade show and exchange business cards, when you come back to the office you are likely to add the contacts to the company’s mailing list. In 2018, this will not be possible anymore. Companies will have to look at new ways of collecting customer information.

It is clear to see that GDPR will create challenges and pain for us as businesses, but it also creates opportunity.

Companies who show they value an individual’s privacy (beyond mere legal compliance), who are transparent about how the data is used, who design and implement new and improved ways of managing customer data throughout its life cycle build deeper trust and retain more loyal customers.

As with any new regulation we are getting more and more information all the time and we will keep you updated as and when this new information is published.

In the meantime if you are concerned with regards to how GDPR will affect you, get in touch on 0161 249 5040

Posted in News

New government childcare schemes

childcare

Working parents can start applying for two new Government childcare schemes launching this year – Tax-Free Childcare which begins immediately and 30 hours free childcare which started this September.

This means that working parents of children, aged under 4 on 31 August 2017, can now apply through the new digital childcare service for Tax-Free Childcare and receive a Government top-up of £2 for every £8 that they pay into their Tax-Free Childcare account.  This will apply to children under 12 years old but parents of disabled children under 17 will also be able to apply for Tax-Free Childcare.

This new scheme is designed for working families, including the self-employed, in the UK. For every £8 you pay in, the government will add an extra £2, up to £2,000 per child, or £4,000 per year for disabled children under 17 years old. The special account is then used to pay for childcare with an OFSTED registered nursery or childminder.

In addition, parents of 2-3 year olds, who will be eligible for a 30 hours free childcare place in September 2017, can apply through the childcare service and start arranging a place with their childcare provider.

Your local council will have all the information you need to apply for your free 30 hours and Tax Free childcare account.

If you want to know more about you can benefit from these new schemes, get in touch with our Tax team on 0161 249 5040.

Posted in News

HMRC to withdraw paper copies for mortgage applications

To Let Signs

HMRC is to stop issuing paper copies of clients’ tax calculations and tax year overviews for mortgage applications for the self-employed. You can read the full article in CCH Daily.

HMRC has been in discussion with UK Finance (formerly the Council of Mortgage Lenders) and their members to understand lenders’ requirements and make the necessary changes so that they will accept self-served copies of the tax calculation from the HMRC online account or the commercial software used to file the self-assessment return.

The majority of lenders have now agreed to accept self-serve copies and HMRC has produced a list of these lenders on its website click here to view the full list. It is understood that the majority of major lenders are now on the HMRC list, although some smaller finance firms may decide not to go down this route as the volume of self-employed mortgages is so low.

This means that all agents who have filed a self-assessment return online will be able to print a copy of the tax calculation and/or the Tax Year Overview when it suits them rather than calling HMRC and waiting up to two weeks to receive a copy.

If you are concerned with regards to how this will effect you, get in touch on 0161 249 5040

* Article courtesy of CCH Daily

Posted in Ask the Expert