In this May 2019 issue:

Doctors tapering off as pension tax rules bite; Record IHT tax take parallels estate planning confusion; Payslips for all; Van or company car: what’s the real thing? How long do you want to work…?

Doctors tapering off as pension tax rules bite

Measures designed to limit the cost of pensions tax relief to the Treasury are having some unwelcome consequences, as some senior doctors have found their incomes disappearing.

Some members of the medical profession have found changes to legislation mean their earnings are getting swallowed up by the tax system. According to a recent Financial Times report some NHS consultants are being landed with tax bills of up to £87,000, prompting them to reduce working hours or even take early retirement.

The doctors’ problems primarily stem from the implementation of the pension annual allowance tapering rules. These have two key trigger points:

• ‘Threshold income’ (broadly speaking total income from all sources, less personal pension contributions) exceeding £110,000; and

• ‘Adjusted income’ (broadly total income from all sources plus employer pension contributions) exceeding £150,000.

If both levels are crossed, then the standard annual allowance for pension contributions of £40,000 is reduced by £1 for each £2 by which ‘adjusted income’ exceeds £150,000, subject to a minimum annual allowance of £10,000. The all-or-nothing nature of the triggers can mean that just an extra £1 of earnings brings the taper rules into play. That additional £1 could therefore result in an additional tax bill of much more than £1.

To complicate matters further, £110,000 sits almost in the middle of the band of income between £100,000 and £125,000 at which the personal allowance is tapered away, creating an effective marginal tax rate of up to 60% (61.5% in Scotland). Added to that will usually be 2% national insurance contributions.

The Financial Times article said that many doctors had been ‘surprised’ by their pension tax bills. This implies they had not sought personal financial advice on how the pension taper rules, introduced from April 2016, would affect them.

There are ongoing discussions between the Treasury and the Department for Health and Social Care about the issue, but it seems highly unlikely the former will forgo the revenue generated by the annual allowance rules (over £560m in 2016/17). In the meantime, the episode serves as a reminder of the importance of regular financial reviews to avoid – or at least be aware of – the growing range of tax traps in the UK’s labyrinthine tax legislation.

The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

Record IHT take parallels estate planning confusion

While the Treasury benefitted from record inheritance tax (IHT) receipts of £5.2bn in 2018, new figures show that many people are unaware of how the IHT system works or how it could help them pass their wealth to their beneficiaries.

A survey out in April from Quilter showed that only 37% of those asked were aware of inheritance tax rules. Under half of those surveyed knew about basic IHT rules around gifting or the nil rate band. At the same time, however, 60% thought the rules likely to be important for how they could pass wealth on, highlighting the disconnect between the information available and understanding the practical implications for individuals and their families.

The Office of Tax Simplification (OTS) is due to deliver the second part of its review of IHT regulations during this spring, following an initial report in January that looked largely at administrative issues. The review is aimed at simplifying how IHT is implemented, with the second of the reviews expected to focus on specific areas of change.

With additional complications like the residence nil rate band still focusing on the nuclear family, the IHT regime appears out of step with modern families and concerns about inter-generational wealth. A House of Lords committee on intergenerational fairness has already reported across a range of issues from housing to pension credits and estate tax.

Among a raft of recommendations, they called IHT “capricious and not fit for purpose”. Going back to fundamentals, the Lords report questions why and how assets should be taxed at death or on transfer to the next generation. The report suggested options such as a capital receipts tax payable on income received by beneficiaries or exempting certain assets from IHT if earmarked for first home purchase by a family member.

Whether any of these ideas come to fruition, and whatever the awaited OTS report recommends, there are ways in which the existing IHT regime can currently benefit your own estate planning and ensure a fairer distribution of your assets through your family. The £3,000 a year annual gift allowance is good place to start. So is reviewing your will and making sure your assets will be dispersed the way you wish.

Let us know if we can help.

Payslips for all

It may have come as a surprise to realise that until this April, not all workers were entitled to a payslip.

From 6 April, all workers now have a statutory right to receive an itemised payslip, including zero hour and casual workers. Up to that date, the right only extended to employees. Employers must now be prepared to provide information on ‘time worked’ with details of the number of hours being paid on workers’ payslips. This can be given either as a single aggregated figure or separate figures for different types of work at different rates. Workers should be able to clearly see that they have been paid for the hours worked at the appropriate statutory rates where relevant.

As the new rules were coming into force, however, the Department for Business, Energy and Industrial Strategy (BEIS) released a survey revealing that many don’t entirely understand all the information on their slips – only 62% were confident about everything they saw. Gaps in understanding were higher for women than men (55% of women compared to 70% of men admitted to not understanding their complete payslips) and younger workers.

April also marked the 20th anniversary of the national minimum wage (NMW), which has risen this year to £7.70 an hour for employees between 21 and 24. At the same time the national living wage saw a record 5% increase to £8.21 an hour for employees over 25, However, the BEIS survey also revealed misunderstanding around entitlement to the NMW, with around 30% believing that only permanent employees are entitled to receive it.

With the new payslip rules now in force, it’s even more important for all workers to be aware of their entitlements and check that they are receiving them. But many people don’t check their payslips, trusting their employers to get it right and assuming deductions are correct. Payroll offices do make mistakes or may have been given erroneous information on pay and allowances. For permanent employees likely affected by April’s increase to auto-enrolment contributions, there is even more reason to make sure everything is present and correct.

Encouraging employees to question anything they don’t understand, and to ask if concerned about unknown deductions, will go a long way to consolidating trust. Ensuring engagement with wages flows into helping workers with informed financial decision-making, pensions planning and alleviating one of the major factors of workplace stress.

Van or company car: what’s the real thing?

The phrase ‘define your terms’ could have been invented for the benefit-in-kind rules around company cars. A recent case that ended up in the Upper Tribunal between Coca-Cola and HMRC illustrates the importance of understanding when a van is a van – or legally a car.

These definitions determine the relevant income tax and NICs payable where a vehicle is provided to an employee as a benefit-in-kind. The charges vary considerably between ‘cars’ and ‘vans’, with tax on company cars generally much higher than for vans.

In the legislation, the key concept is around use as a ‘goods vehicle’, so:

• A car is not classed as a goods vehicle.
• A van is a goods vehicle with a weight of 3.5 tonnes or less when loaded.
• A ‘goods vehicle’ is described as one “of a construction primarily suited for the conveyance of goods or burden of any description”.

The case centered on three models of vehicles provided by Coca-Cola to technicians who had previously been provided with cars. Over time the equipment they were required to use became heavier and they were offered different vehicles – either a ‘panel’ van or a modified vehicle. Two models of a VW Kombi had dual capability, where some elements could be added or removed for additional passengers or equipment. Which is where the problems started.

The employees who were given these vehicles had their PAYE coding notices adjusted by HMRC for car benefit and the employer, Coca-Cola, was assessed for Class 1A NICs. They appealed initially to the First Tier Tribunal on the grounds that the vehicles were not cars but vans. The models came under scrutiny under the definition of “construction” and whether they were “primarily suited” for the purpose used, which was ‘the conveyance of goods’.

The case hinged on the second element of primary suitability. Because the Kombi model could be used both for carrying passengers and for conveying goods, the Upper Tribunal ruled it did not have a primary suitability for only conveying goods and so could not be classed as a goods vehicle. It therefore had to classed as a car for benefit-in-kind purposes. The other model narrowly fell on the other side of the argument. Ultimately the VW models were deemed to be more like mini-buses, while the other vehicle on offer was a van.

The upshot of this complex case is that the external appearance of any vehicle is not the deciding factor for benefits-in-kind. Internal configuration and the purposes behind it will make a difference. Being aware of how legal definitions may be applied could ultimately save you and your employees some potentially painful lessons.

How long do you want to work…?

As people are living longer, a parallel older-age profile is emerging in the labour force.

Source: National Statistics 16/4/2019

Labour market statistics for the period December 2018 to February 2019 revealed some impressive results. In the UK, employment of those aged 16–64 was running at 76.1%, the joint highest level ever and up 0.7% on a year ago.

Drill down into National Statistics numbers and some interesting facts emerge:

• The increases are being driven by more women aged 50–64 in the workforce. At the start of the decade, 58.5% of women aged 50–64 were in employment, whereas the latest figure is 68.1%. Coincidentally in 2000, that was the male rate of employment in the 50–64 age band.
• The proportion of men aged 50–64 in work has also risen over the same period, but less dramatically – from 71.4% in 2010 to 76.8% now.
• At 65 and beyond, employment is reaching record levels for both men and women, as the graph shows. Women and men aged 65 and over have an employment rate of 7.9% and 14.2% respectively, compared to 5.5% (women) and 10.8% (men) in January 2010.

There are several reasons for the increase in employment beyond age 50:

• For women – and now men – the rise of state pension age (SPA) has undoubtedly had an impact. As recently as April 2010, the SPA for a woman was 60. By October next year, both men and women will share a SPA of 66.
• The ending of compulsory retirement ages has encouraged longer working lives.
• The gradual disappearance of final salary pension schemes, particularly in the private sector, has forced some people to revise their retirement plans.
• Economic conditions have played their part. Real (inflation-adjusted) wage growth has been virtually zero over the last 10 years, limiting the scope for retirement savings.

Working for longer can be beneficial to health, although the case is by no means clear cut: continuing work-related stress could be life shortening. The key is to be able to choose when to stop work, rather than have the decision forced upon you. To get into that position, there is no substitute for adequate retirement planning – preferably well before the age 50, yet alone 65, is reached.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

In this April 2019 issue:

  1. Probate fees hike delayed.
  2. Remember the Spring Statement?
  3. Up and running – MTD for VAT is live.
  4. Painful lessons from the loan tax charge.
  5. Property tax payment window cut.

1. Probate fees hike delayed


An expected revision of the probate fees structure for England and Wales set for 1 April has been delayed.

The proposed changes will increase the cost of probate from the current single, flat charge of £215 to a minimum of £250. A new fee structure based on the size of estate being administered will rise through six bands to a maximum of £6,000. The probate fee threshold will rise from £5,000 to £50,000. Over half of estates will pay no probate under the higher threshold and more than 25,000 more estates a year will be exempt.

By classifying the increases as a fee rather than a tax, the government was able to put the changes forward as a statutory instrument or secondary legislation, rather than primary legislation which requires greater parliamentary scrutiny.

Citing pressures on parliamentary time from the ongoing Brexit crisis, the Ministry of Justice announced that the statutory instrument has yet to be approved. Once this happens, the new regime will come into effect 21 days later. While such instruments are normally passed without debate, MPs can raise objections and force a vote on an issue, leading to amendments and further delay. The Labour party has already objected to the probate proposals and as yet there is no new timetable.

The confusion on the timing of the changes has created a log jam with HMRC as people tried to beat the original 1 April deadline and apply for probate. HMRC must process inheritance tax (IHT) registration forms before probate can begin This has led to HMRC taking a more flexible stance on registering an estate for IHT purposes. It has said the process will be more flexible for the time being on IHT registration so that people can wait to submit IHT forms before starting the probate application.

Individuals who may be asked to be executors should think carefully about the terms of any executorship once the new fee structure is in place. Bank accounts can be frozen while probate is being processed, so they could be asked to help fund probate fees if a loan is not secured. Under the new regime, these could be substantial.

2. Remember the Spring Statement?

The Chancellor’s Spring Statement could easily have passed you by as March was dominated by other high-profile events.


Ever since he announced a move to an Autumn Budget in 2016, Philip Hammond has made it clear that he wanted to avoid the Spring Statement becoming a mini-Budget. His vision was that in March he would simply be presenting a brief response to the latest forecasts from the Office for Budget Responsibility (OBR). As the Treasury website stressed, “there will now only be one major fiscal event each year”.

Nevertheless, it is unlikely that either the Treasury or the Chancellor wanted the Spring Statement to be an event that was completely overshadowed by other parliamentary business occurring on the same day, as it was by the votes on whether to rule out a no-deal Brexit. Ironically, the Chancellor made his statement on the assumption of “a smooth and orderly exit from the EU”.

There were virtually no new tax initiatives in the Statement, although there were hints that a ‘deal dividend’ would help in keeping taxes low as well as allow increased public expenditure. In the background papers published alongside the Statement, there were reminders that the tax screw continues to be tightened in some areas. For example, Mr Hammond promised a consultation paper fleshing out two measures announced in the October Budget, designed to restrict two long-standing capital gains tax reliefs on residential property.

The OBR’s calculations explain why the Chancellor did not mention fresh tax cuts, as opposed to maintaining low tax levels. In this new 2019/20 financial year, government borrowing is projected to increase by £6.5bn and to still be £13.5bn by 2023/24. Income tax and national insurance contribution receipts have been rising faster than expected and are the main reason why the OBR’s overall finance figures looked rosier in March than last October.

As has been the case for some years now, if you want to see your tax bill reduce, taking control of your personal opportunities for improved tax planning is the place to start.

3. Up and running – MTD for VAT is live

After tests, pilots and amid continuing controversy, Making Tax Digital (MTD) for VAT went live on 1 April.


All VAT registered businesses above the £85,000 threshold are now required to keep their records digitally and submit their VAT return via compatible software. HMRC stated that around 100,000 had registered by the April Fool’s deadline out of an estimated 1.2 million businesses affected.

It’s worth remembering that 1 April marked the requirement to keep digital records, not to sign up for MTD itself. Once a business is signed up, it can no longer submit VAT returns through previous methods, such as typing figures into the portal. For businesses who submit VAT returns on a calendar quarter basis, signing up earlier than necessary could mean HMRC will expect the return to be submitted via MTD software, which the business may not be ready for.

With the first quarterly VAT return affected by MTD the June 2019 return, HMRC is taking a relaxed line on any penalties for the first year of the roll out as companies become more familiar with the requirements. Where businesses are doing their best to comply with MTD, filing and record keeping penalties may not be issued.
Digital records
Where a business has not yet signed up, it should have begun to keep its records digitally for the next VAT period starting on or after 1 April. If they are using software, this must be MTD-compatible. They can then sign up to the MTD service and have their software authorised.

Companies unfamiliar with software systems can use bridging products that will work with spreadsheets and HMRC has a list of those available. Any existing exemptions from online VAT filing will be maintained, while those unable to register for the new regime on grounds of age, disability, religion or location can apply to be exempt.

HMRC issued additional guidance prior to the launch. Where more than one product is used to keep digital records, these must be digitally linked. This is defined as a transfer or exchange of data between products and could include importing and exporting files, linking cells in spreadsheets and uploading and downloading files. These links between products must be in place by 31 March 2020, except for businesses who have secured a deferral from HMRC which have until 30 September 2020.

Regardless of where they are in their digital compliance and software upgrades, businesses should still aim to pay their VAT on time. Let know if we can help.

4. Painful lessons from the loan tax charge

5 April also marked the deadline from which those still affected by loan schemes will now have to pay a potentially punishing tax bill. The controversy surrounding the loan charge deadline is a reminder of the dangers of aggressive tax planning.

If you were offered a way of being paid a ‘salary’ that involved no income tax and no national insurance contributions (NICs), would it ring alarm bells?

In the late 1990s and early 2000s, many contractors and consultants were offered the option of joining schemes which purported to make tax and NICs disappear. At the time, some decided the chance was too good to miss. Their choice was often in response to IR35, the HMRC crackdown on people sidestepping taxation as employees by claiming self-employment or operating via one-person companies. The schemes promoted had various structures, but one key factor was that they relied on earnings being replaced by low or zero-interest loans that were never intended to be repaid – hence the schemes often being described by HMRC as ‘disguised remuneration schemes’.

HMRC never approved these schemes but took their time to act against them. Blocking legislation for new loans was announced in 2010, by which time HMRC was already challenging some schemes through the courts. However, it was not until 2016 that the then Chancellor, George Osborne, introduced legislation that treated the amount of any loans outstanding at 5 April 2019 as income. It is that measure which has recently brought the subject into the headlines. HMRC has estimated that 50,000 people face a charge averaging £64,000.

With hindsight, avoiding all tax and NICs on earnings now looks a deal too good to be true. That it seemed credible 15–20 years ago shows how attitudes to tax avoidance have changed since the turn of the century. It is also a reminder that if you are offered an avoidance scheme that appears to make your tax liability evaporate, it could be many years before you – or possibly even your executors – discover it does not.

A parliamentary group has called for the charge to be delayed for six months following a debate which had to be abandoned due to flooding in the House of Commons. They have also challenged HMRC about its statements around the loan charge. The controversy looks set to continue.

5. Property tax payment window cut

From 1 March the timescale for payment of stamp duty land tax (SDLT) in England and Northern Ireland has been cut in half.

Both residential and commercial property transactions now have only 14 days to pay SDLT.

The cut, down from 30 days previously, affects all property transactions in the two countries. The 14 days start from the ‘effective date’ of the transaction. The effective date is usually when the transfer is completed, but there can be circumstances where the majority of the contract has been ‘performed’ prior to completion.

Even where no tax is due, for example where a property is nil-rated at under £125,000 or there is another form of exemption, HMRC still requires a return to be filed within 14 days of completion of the transaction.

Once the 14-day window has closed, interest will begin to run on the charge and penalties will become due. The time limit applies to both UK and non-UK purchasers. If the return is filed late, the following penalties apply:

• £100 if a return is filed up to three months after the filing date;
• £200 if a return is filed more than three months after the filing date.


If a return is not filed within 12 months after the filing date, a tax-based penalty is also payable, which can be up to the full amount of tax due.

HMRC has said the process has been simplified and they believe the shorter window will increase efficiency. The majority of SDLT returns and payments have been completed within seven days during the previous 30-day window, so HMRC does not believe very many transactions would be adversely affected. Those dealing in more complex transactions, however, have expressed concern about the shorter time frame.

Individual purchasers are responsible for ensuring the tax is paid, though they are likely to have a solicitor or conveyancer acting for them. Where property is transferred as a result of an inheritance, or where no money or other payment is involved, or because of divorce or dissolution of a civil partnership, there is no SDLT charge to pay.

SDLT returns should be made electronically via HMRC. There are different forms for different types of transactions. There is still a 30-day window to apply for a deferral of SDLT, although the return in relation to any deferral must be filed within the new 14-day window.

MTD for VAT goes live

It has finally happened. After tests, pilots and amid continuing controversy and concern from small business leaders, Making Tax Digital (MTD) for VAT hit its deadline and went live at the start of this month.

It means that all VAT registered businesses above the £85,000 threshold are now required to keep their records digitally and submit their VAT return via compatible software.

According to figures from the taxman, around 100,000 businesses had registered to do so on deadline day, April 1, out of an estimated 1.2 million that will be affected.

And it appears that many still don’t know how it will affect them. A survey of 500 companies carried out for the Daily Telegraph newspaper on the eve of the deadline revealed almost a quarter had not even heard of MTD.

It is worth remembering that April 1 marked the requirement to keep digital records, not to sign up for MTD itself.

Once a business is signed up, it can no longer submit VAT returns through previous methods, such as typing figures into the portal.

For businesses who submit VAT returns on a calendar quarter basis, signing up earlier than necessary could mean HMRC will expect the return to be submitted via MTD software, which the business may not be ready for.

With the first quarterly VAT return affected by MTD being the June 2019 return, HMRC is taking a relaxed line on any penalties for the first year of the roll out as companies become more familiar with the requirements.

Where businesses are doing their best to comply with MTD, filing and record keeping penalties may not be issued.

Businesses that have not yet signed up should have begun to keep records digitally for the next VAT period starting on or after April 1.

If they are using software, this must be MTD-compatible. They can then sign up to the MTD service and have their software authorised.

Companies unfamiliar with software systems can use bridging products that will work with spreadsheets and HMRC has produced a list of those available.

Any existing exemptions from online VAT filing will be maintained, while those unable to register for the new regime on grounds of age, disability, religion or location can apply to be exempt.

HMRC also issued additional guidance prior to the launch. Where more than one product is used to keep digital records, these must be digitally linked.

This is defined as a transfer or exchange of data between products and could include importing and exporting files, linking cells in spreadsheets and uploading and downloading files.

These links between products must be in place by 31 March 2020, except for businesses who have secured a deferral from HMRC which have until 30 September 2020.

Regardless of where they are in their digital compliance and software upgrades, businesses should still aim to pay their VAT on time.

To discuss any aspect of MTD and how it affects you and your business please contact me on 01772 430000.

Cloud accounting – how we can help

Cloud accounting software is changing the way that businesses operate their bookkeeping functions.

With the imminent introduction of Making Tax Digital (MTD) it is important to consider whether this software could assist your business, not only allowing you to file your VAT returns but also enabling you to take advantage of numerous efficiency and cost saving benefits.

At WNJ, we have a dedicated team that can help and advise you and who are all cloud accounting specialists. We work closely with expert providers; Xero, Sage, QuickBooks and FreeAgent to give our clients the best solutions that suit their individual accounting needs.

We will set you up and train you to use all of the functions with confidence. And we can also provide a full or partial outsourced book keeping service.

To discuss cloud accounting benefits and determine which provider would be best suit your business, please call me on 01772 430000.

The advantages of going digital

HMRC’s vision to digitalise the UK tax system is nearly upon us as VAT registered businesses with turnover above £85,000 will be required to use compatible software to maintain their records and to update the taxman quarterly, starting from April.

It may seem like a minefield but help is available when it comes to digital tax advice – and making sure you have the systems and processes to meet the challenge and the switch-over can even help when it comes to running your business.

Whilst much of the press and media coverage has been highlighting the cost to small business of this new legislation, here at WNJ we believe that for many businesses it will be the catalyst to a new age where the legislation is forcing changes which will in a relatively short period of time allow savings in time and money.

Whilst there are many different accounting software solutions, here at WNJ we have ensured that our dedicated Cloud Accounting team have the expertise to show business owners how the use of appropriate software will reap these benefits.

A good accounting solution allows easy invoicing, including quotes, estimates and statements – all you need to do business and get paid. You can track what you’re owed so you can see how much each customer owes at -a-glance and chase overdue balances. And it allows you to bank securely and accurately. It is also time-saving, bank transactions effortlessly flow into software and can be automatically matched to your invoices.

The available software also produces reports such as profit and loss, balance sheet, trial balance, and more – these are ‘clever reports’ that empower business decisions.
It also takes care of VAT when it comes to calculating and submitting returns, giving confidence with compliance. And it’s functions include the ability to produce cashflow forecasts that will allow businesses to plan ahead.

Access to invoicing and expenses apps mean you can work at the office, at home or on-the-go on your computer, tablet, and phone – whenever you need it. And the package can also help speed up sales and purchases, and calculate profit.

There are free webinars available for clients to get the most out of the software and we are always happy to help clients with queries and problem solving.

WNJ has hosted a number of seminars already and plan more over the next year to give clients a further insight into the potential benefits and capabilities of Cloud Accounting.

To discuss the software available and any aspects of the government’s digital tax drive, please call me on 01772 430000.

Making Tax Digital – The Facts

Tax Digital is a key part of government plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.

There’s now just a few weeks to go until HMRC’s digital platform will be mandatory for the filing of all business VAT returns – and as the countdown continues the government says the project is “on track”.

HMRC’s ambition is to become “one of the most digitally advanced tax administrations in the world”.

Here are some key facts about the MTD switch and what you need to do to ensure you meet the taxman’s deadline:

• Making Tax Digital relates to changes introduced by HMRC, for businesses in terms of the way accounting records are kept.
• If you run a VAT-registered business with a taxable turnover above the VAT registration threshold – currently £85,000- you are required to keep digital VAT business records and send returns using Making Tax Digital (MTD)-compatible software.
• The vast majority of businesses will need to do this for VAT periods starting on or after April 1st.

When will the MTD changes impact my business?

MTD Impact

wdt_ID Usual Quarter End MTD filing for VAT Quarters
2 March/June/Sept/Dec 2019 1st April - 30th June 2019
3 Jan/Apr/July/Oct 2019 1st May - 31st July 2019
4 Feb/May/Aug/Nov 2019 1st June - 31st August 2019

VAT registered businesses with a taxable turnover below the VAT threshold can also sign up for MTD for VAT voluntarily.
If your taxable turnover drops below the VAT registration threshold at any point after April 1 you are still required to continue to keep digital records and send HMRC your VAT returns using MTD-compatible software unless you de-register from VAT or if you are exempt from MTD for VAT.

HMRC is encouraging businesses with a taxable turnover below the VAT threshold to sign up so they can also benefit from MTD.

To discuss any issues regarding the HMRC’s MTD plans and how we can help you meet the deadline, please contact me on 01772 430 000.

A FreeAgent boost for small business

Wallwork Nelson & Johnson (WNJ) is now an accredited partner of FreeAgent, with its MTD compliant software.

If you are a Royal Bank of Scotland or Natwest business customer, the good news is that FreeAgent is available as part of your business banking offering.

FreeAgent is cloud accounting software that makes it incredibly easy for you to regularly upload expenses, review bank transactions and save time on your daily processing.
Winner of the Software Excellence 2017 award for SME Accounts/Bookkeeping, FreeAgent also integrates with our processes so we have full visibility.

To view a demonstration on YouTube, please click this icon.

If you would like further information about FreeAgent, please contact me on 01772 430000.

Turning ideas into business

A project based at the University of Central Lancashire (UCLan) is working to ensure that innovative businesses can take their great ideas and turn them into profits.

Launched five years ago The Innovation Clinic exists to support Lancashire businesses in the development of new products and services.

WNJ has referred a number of its clients looking to develop their ideas to the programme.

Its aim is to reduce failure rates of new product development as well as promote a successful innovation culture in Lancashire.

And it is having success, helping businesses in sectors from engineering to sports equipment to bring new products to market.

Its team brings together extensive industry and academic expertise, state of the art facilities and technology to provide fully funded and tailored support.

And it is available at any stage of the development process – from initial concept and market research right through to launch.

The programme is part-funded by the European Regional Development fund (ERDF) and works closely with Boost, Lancashire’s Business Growth Hub.

To qualify for the programme your business or new business idea must be based in the county, employ fewer than 250 full time people and have an annual turnover below £40 million and/or an annual balance sheet total of less than £35m.

Iain Martin (pictured), who helped set up the programme, says: “We work with people to understand the potential of a product before they commit to the expense of opening up tooling, developing prototypes and awarding production contracts.”

The team also works with businesses researching and testing products as part of the innovation journey – that may mean validating their benefits and usability as well as measuring performance.

Along the way there is support when it comes to developing materials and prototypes as well as product design concepts, brand development and market strategy advice.

Iain adds: “Having an idea is one thing; that idea being good is another thing and actually being able to roll that good idea out in a commercially viable way is yet another.

“What we do is sit down and work with the business at any stage of the process. For instance, we’ll help them to sense check their idea, to really evaluate if it is any good and also if there is a market demand for it.”

To discuss if you could benefit from the programme contact me on please contact me on 01772 430000.

Email: innovationclinic@uclan.ac.uk or call Carl on 01772 892703 and Rory on 01772 892707 for more information.

Do you still qualify for entrepreneurs’ relief?

The good news is Entrepreneurs’ Relief remains an attractive proposition for many business owners as they look to sell all or part of their company.

The less good news is the changes to the system announced in Chancellor Philip Hammond’s recent Budget, which could impact on their qualification for the scheme.

Two additional tests have been introduced – which means business owners will need to review their situation to ensure that they still qualify.

Entrepreneurs’ Relief (ER) reduces the capital gains tax rate for higher rate taxpayers from 20 per cent to 10 per cent when selling or disposing of all or part of a business.

The aim of the changes is to tighten up the scheme and to ensure that the relief is going to genuine entrepreneurs. There were fears that the scheme could be scrapped, but the Chancellor announced his commitment to continuing ER.

However, the first immediate change, announced by the Chancellor at the end of October, means that entrepreneurs selling their shares or business will have had to have been a qualifying owner for two years to benefit – previously it was one year.

Secondly, from April next year, the qualifying conditions for ER are set to be tightened even further.

To qualify the company has to be an individual’s personal business. That definition has been expanded, so that the shareholder must now be entitled to five per cent of the distributable profits and five per cent of the assets available for distribution to equity shareholders in a winding up.

That is in addition to the present qualifications which stress the shareholder has to hold at least five per cent of the ordinary share capital and that their shareholding entitles them to at least five per cent of voting rights.

In many cases these additions to the rules may have no impact – but if your company has ‘alphabet shares’ – giving directors discretion to declare dividends on one class of shares but not others – there may be an impact.

To discuss these changes and any tax issues please contact me on 01772 430000.

Broadband help is here – but be quick!

SMEs are being urged to take advantage of a £2,500 voucher scheme to help install high-speed broadband or risk missing out.

More than 7,000 businesses across the UK are reported to have taken up the government’s £67m Gigabit Broadband Voucher Scheme and have used the cash to cut the cost of installing fibre-optic cables.

Now the government is warning that the scheme, originally expected to be open until March 2021, has been so popular that the money is set to run out a year early.

Take up has been particularly high in the North West of England and Yorkshire, according to reports.

Gigabit vouchers can be used by small businesses and the local communities surrounding them to contribute to the installation cost of a gigabit-capable connection.

And to make sure that as many businesses and homes can benefit the maximum value of the voucher has now been reduced from £3,000 to £2,500.

Businesses can claim the cash against the cost of connection either individually or as part of a group project. And residents can benefit from the scheme with a voucher worth £500 as part of a group project.

The government believes the reduction in the maximum amount will encourage neighbouring businesses to “pool” their vouchers.

A spokesman said: “This will enable the scheme to reach more properties without the need for any additional funding.

“We expect more than 1,000 additional businesses and homes to benefit as a result of this change.”

The scheme is operated by the Department for Digital, Culture, Media and Sport (DCMS) and looks to support the government’s goal to provide ‘nationwide full fibre broadband coverage by 2033’.

DCMS says it will be carefully monitoring take-up following this change to the scheme rules to determine whether there are locations in which a higher voucher value would be justified.

Minister for Digital Margot James is urging businesses to take advantage, saying: “These vouchers provide practical and immediate help to firms struggling with slow broadband speeds. I encourage small businesses around the UK to apply now.”

With the clock counting down towards the start of Making Tax Digital (MTD) for VAT in April 2019, high-speed broadband access is set to become increasingly important.

But it’s not only for MTD – high-speed broadband is seen as vital in helping SMEs develop and grow in the digital age.

Mike Cherry, who is chairman of the Blackpool-headquartered Federation of Small Businesses (FSB) said: “Access to good broadband is vital for small businesses across the UK.

“With the clock ticking on this scheme it’s important small businesses don’t delay if they want to apply for funding.

More information on the Gigabit Voucher Scheme, including details on how businesses can apply can be found at https://gigabitvoucher.culture.gov.uk/