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Reading Time | < 1 min 01 Jun 2016

Landlords return to property market

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Activity in the buy-to-let property market is slowly rising following changes to stamp duty land tax (SLDT), according to research by Paragon Mortgages.

A survey of more than 1,000 landlords found that while buy-to-let activity remained subdued in Q1 2016, landlords are slowly returning to the property market.

Findings show:

  • 19% of landlords say they expect to purchase a property in the coming year, up from 17% in Q4 2015.
  • 16% say they want to sell a property, down from 19% in Q4 2015.
  • 39% of landlords reported an increase in tenant demand, up from 34% in the previous quarter.

Stamp duty rates for people investing in buy-to-let property increased from 1 April 2016. Landlords purchasing a second home or investment will have to pay a 3% surcharge on additional property over £40,000.

John Heron, director of mortgages at Paragon Mortgages, said:

“In the previous quarter we saw more landlords respond very negatively to the announcements on stamp duty and tax on rental income with more intending to sell rather than buy property, this trend is now reversed and purchase intentions have risen.

“Landlords are clearly taking the view that buy-to-let remains an attractive long-term, demand driven investment, which continues to outperform other asset classes.”  

Talk to us today to find out more about stamp duty.

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Reading Time | < 1 min 31 May 2016

Fuel advisory rates update

Reading Time • < 1 minAdvisory rates that apply fuel cost for company cars changed as of 1 June 2016. The new rates will only apply for the following: a company reimbursing employees for business travel in their company cars employees are required to replay the cost of fue...
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Reading Time | < 1 min 31 May 2016

Savers fail to review pensions

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More than a quarter (28%) of savers have never reviewed their pension, according to research by Aviva.

A further 19% said they only review their retirement savings once every 5 years.

Receiving an annual statement (35%), a pay increase (28%) and starting a new job (17%) were the most popular triggers for a pension review.

Other findings: 

  • 27% of people think that their current contributions into a company pension scheme will provide them enough income for retirement 
  • 32% of women never review their savings, compared to 25% of men.

Clive Bolton, managing director of Retirement Solutions at Aviva UK Life, said:

"The lack of engagement with pensions is frightening. Ask most people what they earn now and they’ll have a pretty good idea, sometimes down to the penny, but most people have no idea what their pension is worth. 

"A pension is your salary when you’re no longer working. Surely it deserves more than a glance at a statement once a year."

 Contact us today to talk about retirement planning.

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Reading Time | 3 mins 27 May 2016

How EU Membership Affects Your Business Tax

Reading Time • 3 minsJust like the actual outcome of the Brexit referendum, the impact on business tax for the UK is hard to predict.
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Reading Time | < 1 min 27 May 2016

Payroll fraud costs £12 billion per year

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SMEs are collectively losing a total of £144 billion a year through fraud, with £12 billion being lost through payroll.

According to a report by UK Fraud Costs Measurement Committee, payroll fraud is responsible for 8% of losses among private businesses. The biggest source of fraud is procurement, causing annual losses of £127 billion.

The total annual cost of fraud in the UK per year is as high as £193 billion.

Other types of fraud impacting businesses include:

  • charity fraud which accounts for losses of £2 billion per year
  • insurance fraud costing £1.3 billion a year through illegitimate claims.

Fraud in the public sector has resulted losses of around £37.8 billion, equivalent to just 5.5 % of the £694 spent annually. 

Tax fraud costs £15.4 billion per year which equates to 3% of the total tax revenue.

Chris Clark, UK&I CEO at Experian, said:

“Although 95% of the fraud taking place is not a direct to end consumer cost, those lost funds are passed on to individuals in the form of higher costs on products and services.”

Simon Dukes, chief executive of fraud prevention organisation Cifas, added:

“To avoid known fraudsters entering the workplace, we recommend HR teams conduct thorough vetting and check to ensure prospective employees have not been involved in fraud before.”  

Contact us today to discuss your payroll.

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Reading Time | < 1 min 26 May 2016

FCA announces early exit charge cap proposal

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The Financial Conduct Authority (FCA) has announced that the level at which early exit charges for existing contract-based pensions, including workplace pensions are capped should be 1% of the value of a member’s pot. 

Under the proposals, firms will not be able to apply exit charges for personal pension contracts from the date the new rules come into force (which is yet to be determined).

The FCA is consulting on the following measures:

  • a 1% cap of a consumer’s policy value at exit. This will prevent a rise in charges for existing contracts with early exit penalties set at less than 1%
  • a 0% cap on early exit charges of consumer policy value in new contracts entered into after the rules come into force.

Christopher Woolard, director of strategy and competition at FCA, said:

“This is an important step so people feel able to access their pension savings should they wish to.”

Minister for pensions, Baroness Ros Altmann, commented:

“These changes are about giving everyone who has worked and saved hard for their retirement a fair deal by removing the final barriers to the pension freedoms.”

Dr Yvonne Braun, director of policy, long-term savings and protection at ABI, said:

“More than eight out of ten customers do not have to pay early exit charges to access their pensions, as the FCA has acknowledged. Where they do, most fees are 2% or less and were put in place decades before the freedom and choice reforms were introduced.”

Contact us today to talk about your retirement planning.

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Reading Time | < 1 min 25 May 2016

HMRC call times triple

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Average HMRC call waiting times have tripled over the last 18 months, resulting in a loss to taxpayers of £97 million last year, according to a report by The National Audit Office (NAO).

Research indicates that the quality of service may have been affected by the HMRC staff reductions that took place in 2014/15. 

Calls handled fell to 71%, falling short from HMRC’s target of 80% over the first 10 weeks. Performance declined further over the first 7 months of 2015/16 with average waiting times tripling compared to 2014/15. 

Call times peaked at 47 minutes for self-assessment tax returns during the deadline week for paper returns in October 2015.

Taxpayers are, however, mostly satisfied with HMRC services with only 1 in 5 disagreeing. 

An NOA survey found that 58% of taxpayers rate its services positively, 21% rate them as average while 21% rate them as terrible. 

Customer satisfaction was highest among taxpayers contacting HMRC online, compared to those contacting by phone.

HMRC are introducing digital tax accounts, with taxpayers providing information and make payments anytime during the tax year. It is hoped that the changes will increase efficiency, reduce administrative burden and improve overall levels of tax compliance.

Amyas Morse, head of the NAO, said:

“HMRC needs to move forward carefully and get their strategy back on track while maintaining, and hopefully improving, service standards.”

Contact us today to talk about your tax obligations.

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Reading Time | < 1 min 24 May 2016

Lack of financial backup planning endangering households

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1 in 5 households would not survive financially if they lost their main income through unexpected circumstances, according to research by Scottish Widows.

Research reveals that 25% of people could only afford household bills for up to 3 months, if they or their partner were unable to work due to long-term illness.

26% would only manage mortgage payments for up to 3 months, while a further 18% say they are unsure how long they can manage with household payments.

Households are failing to take action to secure a financial backup plan with internet connection and mobile phone contracts being higher priorities for many then financial security covers such as life insurance and critical illness cover.

Research found:

  • 81% consider internet connection as essential, while 72% see a mobile phone as a necessity
  • 29% think it’s vital to provide financial security such as life insurance and illness cover
  • 40% think it’s essential to provide security for dependents if they die
  • 36% would resort to their savings if they were unable to work.

Johnny Timpson, protection specialist at Scottish Widows

“No matter what our personal circumstances, it is vital for all of us to ensure we have an appropriate plan in place to protect our finances, helping avoid the need to dip into our savings, which could present even greater challenges further down the line.”

Talk to us today to discuss your financial planning.

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Reading Time | < 1 min 23 May 2016

Growing number of employees not engaged with workplace pension

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Around 1.5 million employees are unaware of their pension fund choices or have never reviewed their investments, according to research by Aviva.

The survey of 4,021 employees and analysis of data from the Office for National Statistics found that 19% of employees in small businesses are not aware of their pension choices.

15% of employees paying into a defined contribution pension scheme don’t know their funding choices or review them, compared to 9% in 2013 when auto-enrolment was introduced.

Fewer employees are also seeking financial advice with 4% admitting they do so, compared to 7% in 2013.

Financial constraints are the most common factor for employees to opt-out of workplace pension schemes:

  • 13% of employees feel that it is too late to start saving
  • 19% would rather use cash to fund their lifestyle and retirement
  • 20% do not feel their employer has explained auto-enrolment in a way they could understand.

Andy Curran, managing director, corporate & business solutions at Aviva, said:

“It is vital employees engage with the processes behind their pension. We must continue to make every effort to ensure people have all the support they need to make the most of their pension provision.”

Talk to us today to discuss auto-enrolment.

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