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Reading Time | < 1 min 03 May 2016

Apprenticeship levy could lead to businesses abandoning training

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The Confederation of British Industry (CBI) has called for a ‘radical rethink’ of the apprenticeship levy ahead of its April 2017 introduction.

Carolyn Fairbairn, CBI director general has warned of fundamental flaws to the levy’s guidelines which could encourage employers to abandon their existing training programmes in order to cover the levy’s costs.

From 6 April 2017, businesses with annual earnings of more than £3 million will need to pay a 0.5% levy to fund apprenticeships. 

Employers will also receive a £15,000 allowance, available through the Digital Apprenticeship Service to offset the levy costs.

The CBI has called for the following:

  • stronger role for the institute for apprenticeships, including measuring and managing the system around the levy
  • more flexibility on the levy and the way it is spent, including training and high quality support
  • the digital system for managing levy spend needs to support the delivery of apprenticeship training for businesses.

Fairbairn, added:

“Currently, the levy misunderstands training only as apprenticeships and the current design encourages firms to rebadge their existing programmes.

“Companies are having to change the ‘spec’ of graduate or management training schemes - programmes that are working perfectly well - just to fit apprenticeship standards.

“The government needs to work with business to resolve these issues before the levy launches. This means taking the time to get this right to design a flexible, business-led system – through the Institute – that encourages employers to spend on quality training opportunities.”

Talk to us today to find out more about the apprenticeship levy.

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Reading Time | < 1 min 29 Apr 2016

Rise of self-employed could result in retirement problem

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Increasing self-employment could lead to long-term retirement problems in the future, the Federation of Small Business (FSB) has warned.

Less than a third (31%) of the 1,600 self-employed workers surveyed reported that they were saving into a private pension, while 27% are planning to rely on their business to fund their retirement.

15% suggested that do not currently have retirement savings of any kind.

FSB also found:

  • ‘security of income’ was the biggest challenge for the self-employed with 18% reporting that they don’t know how much income they will have from ‘month to month’
  • income levels were diverse with 32% claimed to earn more than £2000 per month. 41% claimed to earn under £1000 while 19% said they earned less than £500 a month.

Self-employment in the country is at its highest record, up from 12% of the workforce in 2000 and 8% in 1980.

Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), said: 

“It has never been easier to go it alone and self-employment now stands at the highest level since records began. This should be celebrated as it brings freedom and flexibility to millions of people.

“Yet policymakers have been slow to respond to the boom in self-employment and are therefore playing catch up. If we do not act now to adapt to this changing workforce, we will only be shoring up problems for the future.”

Contact us today to discuss self-employment.

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Reading Time | 2 mins 28 Apr 2016

Changes to Pensions Allowances

Reading Time • 2 minsHealthcare professionals, in particular doctors and dentists, are facing the possibility of a  further tax charge as a result of...
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Reading Time | < 1 min 28 Apr 2016

Daily penalties date for late tax returns approaching

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Those who have yet to file their online tax return with HMRC for the 2014/15 tax year are being urged to do so by the end of this month.

The additional £10 daily charge will be levied on taxpayers for 90 days if they failed to submit their return by the end of April 2016. 

The legal filing deadline for online self-assessment is on 31 January. Those that fail to file their return face a fixed penalty fee of £100. 

Anyone who still has a return outstanding at the end of July will have accumulated fines of £1000, including the additional £10 per day penalty. 

Outstanding returns that are not filed to HMRC by 31 July 2016 will face a further penalty of at least £300.

Anthony Thomas, chairman of the Low Incomes Tax Reform Group, said:

“Importantly, the fines can be appealed against if you have a reasonable excuse for filing the return late.  This might include situations such as prolonged ill-health, bereavement, or family breakdown – to give just a few examples.

“We would strongly urge anyone with an overdue return to submit it as soon as possible; and to do so online as a paper return for 2014/15 will already attract the maximum £1,000 penalty. You can then appeal against the fines by writing to HMRC to explain why the return has been filed late.”

Talk to us today to discuss your tax return.

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Reading Time | < 1 min 27 Apr 2016

Wedding season 2016 – gifts and tax relief

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With wedding season fast approaching, the Institute of Chartered Accountants in England and Wales (ICAEW) is reminding guests of the tax relief available if they choose to make a gift to a married couple.

Gifts to married couples or civil partners are exempt from inheritance tax (IHT) as long as the couple have a UK residence.

The tax relief available on wedding gifts varies depending on the relationship between the giver and the recipient. 

The following applies for wedding gifts:

  • each parent can give up to £5,000 tax free
  • grandparents can give up to £2,500 each
  • relatives and friends can give up to £1,000.

All gifts must be made on or before the date of the wedding ceremony.

Anita Monteith, technical tax Manager at ICAEW, said:

“With more and more couples living together before marriage, it is becoming increasingly common for newlyweds to request gifts of cash rather than more traditional gifts such as a kettle or toaster for their new home.  

“Whatever the gift, all or part of it will be exempt from IHT provided the gift is made on or shortly before the date of the wedding or civil partnership ceremony.”

Contact us today to discuss your tax planning.

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Reading Time | < 1 min 26 Apr 2016

Businesses falling behind on digital technology adoption

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A ‘digital divide’ is opening up between the 55% of businesses that are adopting digital technologies and the 45% who are falling behind, according to research by Confederation of British Industry (CBI) and IBM.

Firms cited connectivity challenges and security concerns as barriers to adopting digital technologies in the workplace. 42% reported a lack of appropriate skills inside their business, while 33% were unclear on how they could make a return from digital investment.

Research also found:

  • 94% of the companies surveyed believe digital technology can improve business landscape, drive productivity, growth and job creation
  • 73% believe it can improve customer satisfaction and experience
  • 28% of “pioneer” firms have already invested in advance technologies over the past year
  • only 9% have adopted digital strategy, with 16% planning to do so in the next year.

Carolyn Fairbairn, CBI director general, said: 

“It’s vital that businesses in all sectors – from manufacturing to retail – truly understand digital technology’s potential, from the boardroom to the shop or factory floor. Giving digital a human face by appointing a chief technology officer will help businesses build the long-term digital strategies that will be critical to their futures.”

David Stokes, chief executive of IBM UK and Ireland, added:

“Digital offers not only the opportunity for much needed productivity gains alongside a new canvas upon which organisations can innovate to drive new levels of growth.”

Talk to us today to discuss investing in your business.

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Reading Time | 2 mins 25 Apr 2016

Why working capital can significantly impact final sale proceeds

Reading Time • 2 minsWorking capital is the capital (cash investment) that is needed to fund the everyday operations of a business. The amount of working capital a business requires will generally, but not always, increase as the business grows.
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Reading Time | < 1 min 25 Apr 2016

Register of persons with significant control requirement introduced

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As of 6 April 2016, all companies and limited liability partnerships (LLPS) must now keep a register of persons with significant control (PSC).

A PSC register is required for those who have ‘significant control’ over the company and come under the conditions listed in the legislation.

For companies these are:

  • owns 25% of the company shares
  • owns 25% of the voting rights
  • the right to appoint or remove a majority of directors on the board
  • has significant influence or control over the company
  • has significant influence or control over a trust or company that meets one of the other conditions.

The following criteria apply for limited liability partnerships (LLPs):

  • owns more than 25% of surplus assets on a winding up
  • owns 25% of the voting rights
  • the right to appoint or remove a majority of people involved in management
  • has significant influence or control over the company
  • has significant influence or control over a trust or company that meets one of the other conditions.

Both companies and LLPs need to record the information of individuals with significant control on a PSC register and filed with Companies House from 30 June 2016.

Information required and filing

The following information should be checked with the PSC and included in the register:

  • name
  • date of birth
  • address (both residential and service)
  • country of residence
  • nationality
  • which of the 5 conditions for being PSC are met
  • date they became a PSC
  • any restrictions on disclosing PSC information which are in place.

For companies and LLPs incorporated before 30 June 2016, they’ll need to provide a PSC register with their first confirmation statement to Companies House.

Contact us today to discuss business compliance.

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Reading Time | < 1 min 22 Apr 2016

Pension annual allowance reduced

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People saving towards their pension could miss out on the tax relief due to confusion around the new pensions tapered annual allowance, according to the Alliance Trust Savings.

From 6 April 2016, people with adjusted income over £150,000 will see their annual allowance reduced by £1 for every £2 of excess income, subject to a maximum reduction of £30,000.

People with adjusted income of £210,000 or more will have their annual allowance reduced down to the minimum of £10,000 for that tax year.

Additional rate taxpayers affected by the tapered allowance will be able to carry forward any unused allowance from the previous 3 years to increase their tax relief.

For example, an individual earning £210,000 or more making a contribution of £8,000 will benefit from a £2,000 basic rate tax relief, giving a gross payment into their pension of £10,000.

This will include a further £2,500 tax relief through self-assessment as their top rate of income tax is 45%.

Brian Davidson, senior pensions proposition manager at Alliance Trust Savings, said:

“The tax rules around pensions can be complex and with so much radical change to pensions over the last few years, some savers could easily miss out on tax relief in the new tax year. When the unclaimed tax relief could be as high as £58,500, it can make a substantial difference to retirement savings.

“When people realise that they are affected by the tapered annual allowance they could be forgiven for assuming that the carry forward rules will not apply which could be a costly error.”

Talk to us today to discuss your retirement planning.

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