Client News

The latest news, launches and awards some of our clients have released and won.

Property investment – good idea?

With low interest rates, property remains attractive.

As the global financial crisis began to bite in 2008, central banks in several nations took action, attempting to shock the world economy back to life by slashing base interest rates.

The idea behind this kind of stimulus is to make saving less attractive, hopefully prompting people to spend instead – to buy that new car, extend the loft or, indeed, to purchase a completely new home.

In the UK, the Bank of England reduced interest rates to 2% in late 2008 and to 0.5% in early 2009, where they sat until 2016 when they dipped yet further, to an astonishing 0.25%.

A decade on from the recession, they’ve yet to recover in any meaningful way, sitting today at a meagre 0.75% – a far cry from 14.88% of 30 years ago this month. More…

Pensions – have you got enough to retire?

Are you on track for a comfortable retirement?

All of us dream of the day we can retire, saying goodbye to the alarm clock and commute, filling our days with sun-soaked beach holidays, leisurely rounds of golf, or cruising the world.

As delightful as that sounds, the days when people can retire at a certain date set by their employer or by the state are long gone for most people.

That is a bitter pill to swallow for some baby boomers, many of whom face remaining in some form of employment until well into their 60s and 70s.

Almost half a million people over the age of 70 were in full or part-time work at the end of March 2019, according to the Office for National Statistics (ONS).

This represents a rising year-on-year trend, and a 135% increase on the number of septuagenarians who remained in employment back in 2009. More…

The buy-to-let saga

The Government is being urged to stop its crackdown on the buy-to-let market, following evidence showing the negative effects of a string of tax changes.

The Intermediary Mortgage Lenders’ Association (IMLA) said recent changes are forcing some landlords out of the private rented sector.

It found that landlords with one buy-to-let property made up just 21% of the private rented sector in 2018, down from 40% in 2010.

Over the same eight-year period, landlords with five or more properties in the private rented sector had increased by 10% – from 38% to 48%.

Landlords were left reeling after November 2015 when the Treasury announced a 3% stamp duty land tax (SDLT) surcharge on the purchase of additional properties.

That surcharge sits on top of the various existing SDLT rates that apply to the purchase of homes in England worth more than £125,000.  More…

Are you using your Gift allowances?

Fewer people should have to pay tax on gifts made to loved ones in the years before their death, according to the Office for Tax Simplification (OTS).

Under the current rules, inheritance tax of up to 40% is paid when someone dies within seven years of making a gift.

The OTS called on the Treasury to reduce the period at which tax is due on gifts from seven to five years.

The five-year period was chosen to ease the administrative burden for executors of wills, who said it can be difficult to obtain records going back seven years.

The record-keeping problem is reportedly worse for individuals who have made gifts into trust, where the relevant period can be up to 14 years.

In addition to reducing the seven-year period to five years, it recommends abolishing the taper relief, so gifts given within the five years would be taxed at 40%.

Anyone can give away up to £3,000 a year without the gifts being added to the value of their estate.  More…

Calls grow for delay in extending IR35 to the private sector

Extending IR35 to the private sector could introduce “a complex web of new rules and liabilities throughout supply chains”.

Medium and large companies in the private sector are set to be responsible for determining the tax status of contractors from April 2020.

With that date looming, the Association of Chartered Certified Accountants (ACCA) has called for a one-year delay in the expansion of the legislation.

It believes a stay of execution will provide enough time to allow a full appraisal of the proposed rules and consider the best way forward for HMRC.

Off-payroll rules were reformed for contractors in the public sector in April 2017, with the aim of preventing what the Revenue regards as ‘disguised employment’.  More…

Businesses that flout their workplace pension duties face being subjected to random spot-checks by the Pensions Regulator.

Employers that provide details to HMRC are having that data cross-referenced by the watchdog in an attempt to identify non-compliance with auto-enrolment.

The checks are designed to identify businesses that are failing to enrol eligible staff into a workplace pension scheme or that make incorrect, or no, contributions.

All businesses with staff aged between 22 and state pension age, and earning more than £10,000 year, have to be auto-enrolled into a workplace pension.

Those who fail to comply may be the subject of short-notice inspections, which began in May and will continue throughout the summer. More…

The risks of a tax investigation

Will HMRC come knocking on your door?

It’s a fact – humans are bad at assessing risk. We’re terrified of things that rarely happen (plane crashes, power station meltdowns) but relatively blasé about things that are statistically more likely to harm us, such as unwashed lettuce.

The likelihood of HMRC swooping to investigate your business’s tax affairs seems to be a particularly difficult risk to quantify.

Why take the chance?

In 2017, the Government published a report called ‘Understanding evasion by small and mid-sized businesses’. The authors interviewed 45 people known to have engaged in deliberate tax evasion in an attempt to get to the bottom of what made them risk it.

It found that tax evaders cited a range of reasons for withholding tax.

Some judged the risk of detection to be low, and assumed evasion would be hard to prove even when suspected, or thought that any fine they did incur would be outweighed by the financial benefits of bending the rules.

Others were emboldened by a belief that, to paraphrase, “everybody does it, and nobody cares”.

Meanwhile, those who fancied themselves as having the gift of the gab simply assumed they would be able to talk their way out of prosecution.

The report concludes that it is a problem for HMRC if people think the chances of being investigated, prosecuted and fined are low, and recommends raising the perceived threat level to deter would-be evaders. More…

Dual-registration service passes 200,000 milestone

More than 200,000 startup owners have benefitted from a collaborative service that enables businesses to register for tax at the same time as registering their company.

The streamlined company registration service, which was announced by HMRC and Companies House in 2015, was launched to reduce the burden on business owners and their agents.

When a company is registered, Companies House notifies the Revenue so it can dispatch a unique taxpayer reference to the company’s registered office.

Most accountants take care of this task as part of a comprehensive business service, which involves setting up a company, liaising with HMRC on its behalf, and dealing with trading periods. More…

The apprenticeship levy – your understanding so far

Businesses are finally beginning to understand the apprenticeship levy, after previously voicing serious concerns over its complexity and lack of flexibility.

The apprenticeship levy took effect on 6 April 2017 and means businesses with an annual pay bill of more than £3 million must pay the levy towards apprenticeship funding.

It is charged at 0.5% of an employer’s annual pay bill, and each employer receives an allowance of £15,000 to offset against their levy payment.

Business groups, including the Institute of Directors (IoD), urged the Government to address ongoing problems with the levy – and it attempted to do so by announcing a package of reforms in Budget 2018.

Levy-paying businesses can transfer up to 10% of their training funds to other employers in their supply chain in 2018/19, and this will increase to 25% from April 2019. More…

Have you made a will?

Most people don’t like to think about their own mortality, but planning for the future is important to ensure your property, money and possessions are distributed the way you intend.

Writing a legally valid will is an essential part of this, and can provide peace of mind for you and your loved ones.

Despite this, a study from YouGov found that 62% of the UK’s adult population did not possess a will in 2017. In fact, most people tend to put it off, with only 36% of 45 to 54-year-olds saying they have a will, compared to 67% of over-55s.

When asked why they hadn’t made a will, the main reason was simply that they “hadn’t got round to it yet”. More…

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