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Practice News

6 April 2017 - What's changing in the new tax year?

Today marks the beginning of the new tax year, and new rates and regulations are to be introduced.  So how will this affect you?

Personal taxes
The income tax personal allowance (how much you can make without paying any income tax) is to increase to £11,500, and the threshold for the 40% higher rate of income tax is to increase to £45,000 (£43,000 in Scotland).  The Government is committed to raising the income tax personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament (May 2020).  It is worth noting that the personal allowance is withdrawn for incomes over £100,000, and the High Income Child Benefit Charge remains in place for those earning more than £50,000.

Capital Gains Tax
The Capital Gains Tax annual exemption threshold is being increased to £11,300.

Inheritance taxes
The threshold for inheritance tax is currently frozen at £325,000 until April 2018.  Coming into effect is a policy announced in George Osborne's July 2015 Budget Statement, which details a tax-free allowance for inheritance tax on family homes, starting at £850,000 this year and rising by £50,000 until it reaches £1million.  Once the estate is worth over £2million, the £1million tax-free allowance is gradually tapered away.  However, all residential property indirectly held through an offshore structure will be liable to inheritance tax. 

Individual savings accounts (ISAs)
The maximum limit of payment into an ISA will jump from £15,240 to £20,000 for the 2017-2018 tax year.  A newly-introduced Lifetime ISA will allow under-40s to save up to £4,000 per year, with a 25% bonus from the government to fund first-time property purchase or to save for retirement.

Tax avoidance
In an effort to combat aggressive tax avoidance schemes, the Government is bringing in the serial tax avoider's regime.  Individuals using schemes that are defeated by HMRC after today, 6 April 2017, will be liable to sanctions such as penalties, restrictions to direct tax relief or public 'naming-and-shaming'.  It's more important than ever before to ensure that your assets are not held in an inappropriate or artificial scheme. 

If you'd like to speak to any of our expert advisers about changes to personal or business tax structures, please call us now.

21 March 2017 - Making Tax Digital - PENALTIES!

Well with less than 12 months to go before the biggest shake up in the UK tax system for a long time we still only know a few high level concepts and theories - Making Tax Digital.

And yet, today HMRC has issued a long dicsussion document on how the penalty regime will work under Making Tax Digital! So they are getting their ducks in a row but surely they are in the wrong order? Come on HMRC tell us what the detailed rules are please before you tell us what the penalties are!

In summary this is what they have issued today:

For the worst offenders, those who essentially keep no financial records at all, the potential fine could be up to £3,000.

The more regular fines for late submission have not been set. Currently there is a £100 fine for a late self assessment submission.

Unlike the current penalty system which issues penalties as soon as a filing deadline is late, one of the proposals is that the fines for Making Tax Digital would operate on a tiered points-based system.

The government has already confirmed that taxpayers will be given a minimum period of 12 months from when they become subject to quarterly reporting before the new late submission penalty comes into effect.

This is meant to give people time to get used to the new reporting requirements which will administrative time and costs to businesses, and mark a radical change in the current annual reporting requirements.

The consultation document does not set out the size of the fines, although the draft Finance Bill 2017 issued today stated that fines would be capped at £3,000 for partners or persons not complying with quarterly reporting.

Following preliminary discussions, HMRC has set out three options for the penalty regime, one based on the initial plan to operate a points-based model, although this has now been tweaked so that the points are allocated per tax, not across the whole tax regime as frequently different parts of a business are responsible for reporting different taxes so this could lead to excessive penalties.

The options under consideration are a points-based system, annual HMRC automated IT compliance review or a suspended penalties system.

Meanwhile we wait to see what the detailed rules are for compliance.....

22 February 2017 - 65% of SME Businesses Not Ready for Tax Digitalisation

Deans is a member of the UK200Group (http://www.uk200group.co.uk/), the UK’s leading membership association of independent chartered accountancy and law firms, which has published the results of a survey showing that 65% of its members’ SME business clients do not currently use software to manage their accounts. These businesses will be forced to adapt significantly in order to use software to comply with HMRC’s ‘Making Tax Digital’ project, which aims to see businesses reporting tax digitally by 2018.

The UK200Group is in a unique position to collect this data, with a nationwide membership of over 150 accountancy and law firm offices, who service a total of around 150,000 SME clients.

The findings of the UK200Group’s survey are as follows:

Bookkeeping method:

  • Shoebox - 16%
  • Manual records - 23%
  • Spreadsheets - 27%
  • Software - 35% 

Of the businesses surveyed by the UK200Group’s members, only 35% already use software, such as Sage, Xero or Kashflow. Although they are not yet reporting tax quarterly – as they will have to do by 2018 – the transition should not be too expensive or time-consuming for these businesses.

A further 27% use computers for their bookkeeping, but will need to change their systems. This may mean retraining staff, but not to the extent of the 23% who are used to manual record-keeping, who will need to train a member of staff to input data into a new software system.

However, the greatest shock will come to the 16% of business owners who use the ‘shoebox method’ – they do nothing to record business transactions and their accountant fills in the detail prior to their tax return each year.

The ‘shoebox method’ users will have to learn how to keep records, invest in software and then spend time inputting the data they collect into the software.

Making Tax Digital represents the single most significant change to the UK’s system of taxation in recent times, and many smaller business clients are simply not ready for it.
The change to quarterly reporting will require all businesses to change their habits, but over half of the firms surveyed are also going to have to change the systems they use to record data.

If HMRC remains committed to having businesses report and pay their tax digitally by 2018, small businesses have only a short period of time to update their systems.

While there will be a chance for accountants to check their clients’ tax accounts, the new onus on live-time data input will mean that many SME owners will have to learn, or train a member of staff, how to use accounting software to keep HMRC up-to-date.

The UK200Group views Making Tax Digital as the key issue for SMEs in the next few years, and as such has set up a Digitalisation Taskforce to ensure that it can assist business owners with the transition to digital tax accounts and reporting.

The concern is that the new pressures on tax reporting will hit small businesses harder than they hit larger businesses, as smaller firms are less likely to have accounting software and an appointed finance director to oversee it.

In November, the UK200Group issued a recommendation document to HMRC, suggesting changes to the current plan for digitalisation. The conclusion found the following points:

• The timescale for implementation is too short for full consideration and resolution of the issues.
• The principle of Self-Assessment, and the HMRC-taxpayer relationship, will be fundamentally changed.
• HMRC do not seem to understand how accounts are prepared and used by businesses. They seem to regard tax as the primary purpose of accounts, and to seek to alter GAAP for the convenience of HMRC and MTD without regard to the needs of other users of accounts.
• Taxpayers’ appetite to engage with MTD is small, and the proposals seem to offer few benefits to off-set the costs.
• Taxpayers’ ability to engage has been overestimated, and the cost and difficulty of overcoming the obstacles has been understated.

Key recommendations from the UK200Group:

Digital Tax Accounts be set up now, providing:

• A central place for a taxpayer to see the information HMRC currently possesses about them.
• A mechanism for providing HMRC with information simply and automatically (reducing the need for phone calls and letters).
• HMRC should consult on the future design of the tax system. Changes in the rights and responsibilities of various parties, and in particular new obligations on taxpayers, should not be introduced until:
o That consultation is complete.
o The necessary technology has been tested over a full compliance cycle (one year of interim reporting plus the end of year procedures).
• Simplifications of accounting should be optional, for tax purposes only.
• Clear benefits for taxpayers should be identified, incorporated, and publicised.
In conclusion, businesses using software are almost there, and the only major difference will be quarterly, rather than annual, reporting. Those using Excel spreadsheets will need to upgrade their systems but already have experience of computer input. Even if a business is still keeping manual records, that experience of record-keeping will be transferrable, although digitalisation may cause some pain.

For any business owner relying on the ‘shoebox method’, our advice is to take the next step and start using software. You are going to have to change your reporting style because by 2018 your accountant won’t be able to accept your paper receipts for a tax return.

If you’d like to know more about how tax digitalisation will affect you and your business, speak to one of the Deans team. 
 

23 January 2017 - Theresa May has set out 12 objectives for the UK's negotiations to exit the EU

She said that the UK cannot remain within the European single market as staying in it would result in ‘not leaving the EU at all’. Instead she wants to ensure a ‘big free trade deal’ with Europe, despite admitting that she has not yet worked out how the UK will achieve this.

In a surprise announcement May revealed that government will put the final Brexit deal down to a vote in Parliament, despite previously fighting this decision.

May’s 12 objectives are as follows:

1. Certainty

May confirmed that she recognised how important certainty was, moving forward through the process, for businesses, the public sector and everyone else in the UK.

2. Control of laws

The European Court of Justice will cease to be the jurisidiction that governs the UK and in future laws will be made in Westminster, Edinburgh, Cardiff and Belfast. Laws will be interpreted in courts in the UK not in Luxembourg, which is the case now.

3. Securing the union

May stressed the importance of union but the UK government must take back responsibility and will have control over foreign affairs. She mentioned taking into consideration Scotland’s Brexit plans.

4. Maintain common travel area with Ireland

The UK has always had a special relationship with Ireland and it is important that the UK works with Ireland to retain the border.

5. Immigration control

May said: ‘We will have control of the number of people coming to Britain from the EU.

‘Controlled immigration can bring benefits to businesses but when the numbers get too high then public support for the system falters.’

6. Rights of EU nationals

The rights of EU citizens in the UK and UK citizens in Europe must be established and resolved as soon as possible.

7. Workers' rights

Workers' rights currently under EU law will be kept and built upon.

8. Global Britain

May said: ‘ 23 June was the moment that we chose to build a truly global Britain…the result of the referendum was not a decision to turn inward and retreat from the world.’

The UK will still reach out to the allies across the globe and will continue to build relationships.

9. Leave the single market

If the UK is not part of the single market then it does not have to make any contributions to the EU. May wants to have a customs union agreement with the EU.

10. Science

The UK should aim to stay one of the leaders of science and innovative advances.

11. Terrorism

The UK will continue to work with Europe on defence and foreign policy saying the response cannot be ‘to cooperate less but to cooperate more’. Intelligence and information will continue to be shared in order to beat terrorism and ‘threats to common security’.

12. Transitional phase

There will be a phased implementation of Brexit to allow businesses time to plan and prepare.

In her speech May said: ‘ I want Britain to be a country that reaches beyond the borders of Europe’, while stating, ‘we are leaving the European Union, we are not leaving Europe.’

23 January 2017 - Update on Making Tax Digital from HMRC

We have an update from HMRC. They have responded to the Treasury Committee call for a delay to MTD.

HMRC say they are committed to having Making Tax Digital fully operational by 2020, with the pilot scheme to run from April 2017 until April 2018.

The current plan is to start quarterly reporting from April 2018 for landlords and self-employed, with micro businesses next to come online. We are concerned that HMRC seem to be relying on the smallest taxpayers to test the system. Many of which don't have computers!

Last week, the Treasury Committee criticised HMRC in a 50-page report, which called for a delay to the project’s implementation. The introduction of the entire Making Tax Digital project should be pushed back ‘until at least 2019/20, possibly later’, the committee said.

In particular, the committee called for more substantive and wide-ranging pilot schemes, highlighting that while HMRC had undertaken pilots of its own, businesses participating do so at HMRC’s invitation. The committee harbours concerns that such an invitation-only model may undermine the value of information collected as businesses which could be adversely affected are more likely to decline.

Software developers have also been invited to participate in the pilots, by asking their clients to sign up to trials. Again, this is arbitrary and it is difficult to tell how many businesses have actually signed up.

In the first six months of 2017, testing is scheduled for digital reporting of income from letting property, while participating taxpayers are to report additional sources of income through their digital tax accounts.

An HMRC spokesperson said: ‘Many businesses find it hard to get their tax bills right. Making Tax Digital will modernise the tax system, helping them get their tax bills right with the least administrative burden.

‘We’ve consulted business at every step and have already made changes as a result to exempt the smallest businesses and pilot the programme with hundreds of thousands before it is rolled out.

‘We welcome the committee’s support for the digitisation of the tax system, and will consider its recommendations carefully.’

Watch this space...

12 January 2017 - What Challenges and Opportunities Face Farmers in 2017?

As 2016 came to a close, our thoughts inevitably turned to the year ahead and what it holds. There are few who, at the start of the year, expected to finish 2016 with Britain set to leave the EU and Donald Trump elected as President of the US. But what does 2017 hold, in particular for those working in the agriculture sector?

As we start a new year, UK farmers will now start to look at what could face them in 2017. With many possible outcomes affecting Britain as a result of Brexit, there is a lot of uncertainty as to how these will affect agriculture in the coming years.

Brexit
The ‘Brexit boost’ for agriculture caused by the weakening of sterling is predicted to lead to an increase in farm profits this year and next.

It is estimated that farming income for the 2016 calendar year will be higher than those seen in 2015, and a further improvement is expected for 2017 for many farming sectors.

Uncertainty about what terms and agreement that Britain will leave the EU in are expected to delay any possible investment from other countries in the EU. Similarly, will they purchase from the UK? This will all depend upon what trade agreements can be established and whether the UK will still be allowed to stay in the free market. It has been suggested that the UK may import more food from developing countries in an attempt to sweeten EU leaders. However, EU leaders don’t want other countries to follow Britain out of the EU so may not look to give UK farmers too good a deal.

There is also concern for farming subsidies, which are paid by the EU, as some of the money put aside for farmers may be diverted to other areas by the government, such as to the NHS.

The prices of wheat and barley are expected to rise over the next year, but farmers are told not to rely on this lasting into the distant future due to current increases mainly being due to a drop in the pound.

The fluctuations in sterling may have a positive effect on export sales, milk prices and subsidy payments but are likely to have a negative effect in terms of expenses such as feed, fertiliser and fuel costs.

Milk prices
UK milk prices fell from an average 33.94p per litre February 2014 to an average farm-gate price of just under 20p per litre in June 2016. There have been signs of recovery since then, and a number of UK milk processors have announced gradual price increases.

Milk production in the UK has also declined in recent months with September 2016 production (of approximately 1,050 million litres) down by about 100 million litres compared to 12 months earlier. As a result, milk prices are expected to continue to rise over the coming year, as processors become short of milk.

Forward planning
In a potentially volatile market, it is essential that farmers are planning ahead in order that they are able to cope with the uncertainties in the market and a good business plan can play a big part in ensuring future success.

Profit isn’t cash and cash is king, as has been demonstrated by the difficult times we are now hopefully coming through.

If you’d like to talk to one of our advisers about how to ensure your farm is well-prepared for the year ahead, call or email us today. 

24 October 2016 - National Minimum Wage: How Does the Increase Affect You?

As the National Minimum Wage for young people in the UK has been increased by the government, we look at what the changes mean for employers, and some of the common mistakes made by business owners.

Firstly, what is the difference between the National Minimum Wage and the National Living Wage?

Very little – just that the National Living Wage applies to working people over the age of 25, whereas the National Minimum Wage concerns the earnings of those who are 24 and younger.

The new minimum wage rates are as follows:

• £6.95 per hour for workers aged 21 – 24
• £5.55 per hour for workers aged 18 – 20
• £4.00 per hour for workers under the age of 18 who have finished compulsory education
• £3.40 per hour for apprentices under 19 years old, or in the first year of their apprenticeship
One issue that can be easily avoided is a lack of information about wages for apprentices.

Small, owner-managed businesses have sometimes seen an apprenticeship scheme as a great way of giving a young person a start to their career, taking on young talent and paying a relatively low wage for the trouble.

When taking on an apprentice, many don’t realise that the minimum wage for an apprentice can rise significantly after one year, depending on age. If the apprentice is aged 16 when taken on, they can be paid the apprenticeship minimum wage until they turn 19. However, if the apprentice is 19 when taken on, after a year of employment they would be entitled to £5.55 per hour, the minimum wage for workers aged 18 to 20.

Another fact which is often overlooked by business owners who take on an apprentice is that the apprentice must be paid for time spent training or studying for a relevant qualification, whether while at work or at a training organisation.

There are risks associated with underpayment of employees: there are knock-on effects such as a potential loss of motivation and productivity, and difficulty in hiring new workers and retaining existing ones. Furthermore, there is potential for the firm’s reputation to be damaged, especially by the government, which has the right to ‘name and shame’ those who underpay their staff.

If you’d like to discuss the National Minimum Wage changes, how to ensure that your business is conforming to regulations, or assistance on future wage planning, please feel free to speak to one of the Deans team.

5 September 2016 - Workplace Pension Auto-Enrolment

Did you know that the law states that employees must be able to obtain a Workplace Pension when working for an organisation in the UK?  The first question that needs to be answered is 'Who is entitled to a Workplace Pension?'

Any employee aged between 22 and the State Pension age, whose income is more than £10,000 a year within the UK, is entitled to a Workplace Pension.  Automatic enrolment began in October 2012, starting with larger employers.  Over a period of six years, medium and small sized employers are joining the automatic enrolment.

When employers enrol on behalf of employees onto a Pension Scheme, the first thing to do is to make sure they send contact information to The Pension Regulator.  These details should be for the most senior person within a company or organisation for example, a Chief Executive Officer or Managing Director.

Step two is to stage a date.  This is when the new automatic enrolment duties come into force for a particular business.  It is dependent on whether enrolment of the staff is necessary in terms of eligibility for a pension and also the number of staff working for the company.  The next Staging Date deadline is Thursday 1 September 2016 and employers are well advised to be prepared ahead of this day.

It is important to make sure that employers do not take action to jeopardise employees from enrolling in the pension scheme.
 
There are many penalties for those who do not comply with a Workplace Pension.  There is a fixed penalty notice which is set at £400 as well as other penalties that vary in the size of the fine according to the number of employees within an organisation.  These penalties include:

• An escalating penalty (ranging from £50 to £10,000 per day depending on number of staff)
• A civil penalty (ranging from £5,000 to £50,000 on an individual or the business itself bases)
• Prohibited Recruitment Conduct Penalty Notice (ranging from £1,000 to £5,000 depending on number of staff)
The Workplace Pension enrolment requires a significant level of information in order to register employees.  You will have to give:

• Company/Business name
• Contact details for the business owner
• The number of employees and a list of employees with their key information
• Director identification documents (UK driving licence/UK passport)
• Planned employee groups and company contributions.
Once you have auto-enrolled the appropriate employees in your organisation, a submission of a declaration of compliance to The Pensions Regulator must be undertaken.

Incidentally, auto-enrolment duties to the Workplace Pension do not apply if you are a Sole Trader, with no other staff.

If you would like to know more about how to enrol your staff to a workplace pension scheme, one of Deans' business advisors would be more than happy to help. Call or email us now.

5 September 2016 - Late Payments: The Difference between Small and Large Firms

Recently, we published an article entitled Late Payments: How to Claim Interest, and we thought it might be appropriate to go into some more detail about situations in which claiming late payment is not the best tactic. 

You may be aware of the supplier's right to claim interest in the case of non-payment from a customer, and the steps of communication that can make this simple right a powerful tool for incentivising timely payment.

However, for larger customers, who don't tend to have the same issues with cashflow, the motivation for late payment is unlikely to be that they simply don't have enough money in the bank this month, or that there is a queue of creditors to work through before they can pay your invoice.

Key to managing relationships with larger business customers is understanding how they work.  Big businesses do not generally have to schedule their payments to suppliers to fit in with payments coming in – they won't be waiting for their customers to pay them before they can address your invoices.  Instead, there is more likely to be a fixed system in place, and your invoice goes through this system before payments come out of the other end. 

In this situation, it can be more effective to try to understand the system and work out how to make sure your invoices are dealt with promptly, rather than charging interest to a customer who, due to their size, may be key to your business's success.  Are your invoices clear?  Are they being sent to the right person within the customer's company? Crucially, do you have a purchase order reference?

The problem that many smaller business owners have is that a) they often don't look at the terms of business well enough, and b) they aren't aware of the importance of getting the right documentation to the right people at the right time.

If you would like to learn more about improving your cashflow, one of Deans' business advisers would be more than happy to help.  Call or email us now to discuss further.


13 April 2016 - Businesses need to make productivity a priority to improve growth

Deans has said that recent official figures show that the UK has a problem with encouraging productivity in the workplace.

The latest figures released by the Office for National Statistics shows that UK productivity fell by 1.2 per cent in the last quarter of 2015.

The biggest decline was in the manufacturing sector, where output per hour fell by two per cent. The service sector also experience a decline of 0.7 per cent per hour, yet this figure was still 1.1 per cent higher than a year earlier.

Richard Stonier at Stafford based accountant Deans said that productivity is a key element of business growth, but added that businesses across the UK were struggling to improve productivity.

"For the last few years, productivity in the UK has been severely in decline. It is often the case in the businesses that we speak to that workers feel they should be earning more for the work they do," said Richard.

"And yet many businesses find it hard to justify increasing wages without demonstrable benefits in productivity, leaving many owners in a Catch 22 situation."

Richard added that productivity wasn't the only sign of a successful business and that other factors had a part to play, but said that some businesses could be doing more to improve processes and the work environment to make employees more productive.

"It is hard to admit it when you're running a company, but sometimes owners and managers could do with some professional help. This shouldn't be viewed as an admission of defeat, but more as an investment in future success," concluded Richard.

To find out more about Deans' business advice services, please call us.


05 April 2016 - Deans sends warning to businesses not paying the new National Living Wage 

Stafford based accountants Deans is reminding businesses that the penalties for not paying the new National Living Wage and the minimum wage have gone up from the start of this month.

Whilst the majority of businesses will have focused on making sure their employees are being paid the correct statutory wage, many may not have realised that failing to do so now carries much harsher penalties than before.

Under the changes that have come into force businesses can now be fined 200 per cent of the total underpayment, while pay reference periods that began before 1 April 2016 will still face the previous 100 per cent penalty.

This means business could be fined between minimum payments of £100 up to a maximum payment of £20,000.

This payment applies to each worker who has been underpaid, not the total payment for all workers.

In the most serious cases of non-compliance with the national minimum wage legislation a business owner may be criminally prosecuted by HM Revenue & Customs (HMRC). The potential penalty on conviction is an unlimited fine.

HMRC has also taken a more active role in recent years of naming and shaming the worst offenders, regardless of their size, which could have a significant impact on a business's reputation.

Richard Stonier, Partner at Deans, said: "I suspect the majority of businesses have prepared their payroll to ensure that workers over the age of 25 are now receiving the new National Living Wage of £7.20 an hour."

"However, there may still be some out there that haven't done this and it is essential that this is rectified immediately to ensure they are not penalised or prosecuted."

"An effective and carefully managed payroll system can prevent a business ever being penalised and seeking professional advice on setting up such a solution could pay dividends in the long run."

Richard added that the National Living Wage is set to go up incrementally to £9 an hour by 2020 and that the national minimum wage for those between the ages of 21 – 24 is also due to go up by 25p to £6.95 this October along with the wages of 18 – 20 which will go from £5.30 to £5.55 per hour.

If you would like assistance with your payroll Deans can help. To find out how, please contact us.


21 March 2016 - Business owners may need to settle their debts, says Deans

Deans is encouraging business owners and shareholders to consider paying back loans they may have received from their company following the government's announcement to increase tax rates on advances.

The move to tax loans to participators at a higher rate was announced by the Chancellor in his main speech to Parliament.  From April 2016, the rate of tax payable by a company on any balances lent by it to an individual participator or related unincorporated business will increase from 25 per cent to 32.5 per cent.

This tax payment is designed to ensure that the Treasury receives the same amount that it would receive had it been paid out by dividend to a higher rate taxpayer instead but is repayable to the company when the advance is repaid.

This new measure is intended to mirror the effective higher rate of income tax on dividends which comes into force on 6 April 2016.

Under these changes the way dividends are taxed will change and the 10 per cent tax credit currently available to taxpayers will be abolished to be replaced by a flat rate personal dividend allowance of £5,000.

Any dividends received in excess of this allowance will be taxed at 7.5 per cent if dividend income is within the standard rate (20 per cent) band; 32.5 per cent if dividend income is within the higher rate (40 per cent) band and 38.1 per cent if dividend income is within the additional rate (45 per cent) band.

Richard Stonier, Partner at Deans, said: "First the Chancellor came after dividends and now he has decided that it is time to tackle loans to owners, which effectively means any form of remuneration not linked to a salary will now be penalised.

"While I appreciate that the government can lose out on national insurance contributions when payments are made by way of dividend, the use of dividends is an essential tool to help businesses limit their monthly costs. This way smaller businesses can pay basic salaries to their director shareholders and pay additional dividends to them when profits are available."

Richard added that this latest Budget made it clear that the government feels businesses should only pay staff and owners through a traditional salary.

He said that changes to loans to participator rules, dividend taxation and HM Revenue & Customs' attitude to salary sacrifices highlights the government's attitude towards tax-efficient remuneration. In this regard the government is seeing any loss of national insurance contributions by the utilisation of these reward systems, even if commercially justified, are tax avoidance.

If you would like to know more about Deans, please contact us.


17 March 2016 - Budget 2016
Deans say the Budget is a step in the right direction for SMEs, but has a sting in the tale for some

Stafford based accountancy firm Deans has today said that the Chancellor's latest Budget Statement is on the whole positive for SMEs, but that caution should be applied to certain elements.

George Osborne set out from the start of his Budget statement to show that he is on the side of the small business owner by quickly announcing changes to the Business Rates Threshold.

From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates. This relief is currently only available to businesses that occupy a property with a rateable value of £6,000 or less.

However, the new threshold will mean that a tapered rate of relief will be available for properties with a rateable value of £15,000, meaning 600,000 businesses will pay no rates at all.

On the back of this Mr Osborne also announced that from April 2016, the higher rate of Capital Gains Tax (CGT) will be cut from 28 per cent to 20 per cent and the basic rate from 18 per cent to 10 per cent. These moves will be particularly beneficial to those wishing to sell their business.

Entrepreneurs' relief will also be extended to long term investors in unlisted companies, providing them with a 10 per cent rate of CGT for gains on newly issued shares in unlisted companies purchased on or after 17 March 2016, provided they are held for a minimum of three years from 6 April 2016, and subject to a separate lifetime limit of £10 million of gain. This will be extremely beneficial for businesses seeking outside investment and also helpful to those wishing to sell their business.
 
The Chancellor also announced that corporation tax will be cut to 17 per cent by 2020, which represents a helpful saving for companies. He also announced changes that will reduce commercial Stamp Duty Land Tax for the majority of SMEs buying new property and proposed a new micro entity tax exemption, which in particular will help online hobby traders and small traders who may not have previously declared their income.

Richard Stonier, Partner at UK200Group member firm Deans, said: "For small businesses and their owners this is a relatively well rounded and positive Budget, but there are a few things that they need to consider that have not been so openly publicised by the Chancellor.

"One of the groups likely to be most upset by the Budget is buy-to-let investors, who have already been battered by the Chancellor's previous statements."

Richard pointed out that while the majority of businesses would benefit from the cuts to CGT, buy-to-let investors will still pay the current rates of 28 per cent and 18 per cent. 

He also said that businesses needed to be cautious about how they lent money to their owners, as the loans to participators tax rate will be increased from 25 per cent to 32.5 per cent in April 2016, affecting loans, advances and arrangements made on or after 6 April 2016.

This follows on from changes to tax on dividends announced in the Autumn Statement, which have increased tax liabilities for company owners when they share in the profits, with effect from April 2016.

Richard added: "While there are a number of big ticket items that will excite SMEs there are things in the Budget that need to be treated with care.

"The government's approach appears to be quite stealthy and businesses need to be aware of the changes made outside of the main headlines. In the majority of cases it might be best to seek professional advice."

If you would like advice on any of the subjects raised in the Budget Statement, please contact us.


14 March 2016 - Deans says apprentices make a big difference at SMEs

With businesses up and down the country celebrating Apprenticeship Week accountants Deans say small businesses continue to benefit from their efforts.

Government figures show that apprentices contribute more than £34 billion every year to the UK economy.

In order to support this growth in apprenticeships the government will introduce the apprenticeship levy from April 2017, which will seek to raise £2.5 billion for training in England by effectively taxing businesses with a payroll of more than £3 million.

This funding from this levy will then be made available to all employers with apprentices, regardless of their size, to assist with their training.

It is hoped that this money will help to upskill the UK's workforce and bolster the growth of businesses across the UK.

Richard Stonier, Partner at Stafford based Deans, said: "Only two per cent of businesses will have to pay the new apprenticeship levy, while the vast majority of small to medium-sized enterprises will benefit from the funding it provides.

"Apprentices have an extremely important part to play in this country's economic growth and many SMEs are successfully using the scheme to take on new apprentices when in normal circumstances they might struggle to finance the extra post

"With skilled workers increasingly in short supply, businesses across the country could benefit from an apprentice." However in some areas where employment is already high the problem is attracting young people onto apprenticeship programmes where they are often seeing the pay as low without full consideration of the benefits and costs of the underlying training.

For more information please contact us.


10 March 2016 - Owners and shareholders need to be ready for the change to dividends

Accountants Deans are encouraging business owners and shareholders to reassess their position on dividends ahead of changes to the way they are taxed next month.

At present there are considerable savings to be made in National Insurance contributions if a minimal amount is paid as salary and any balance of a remuneration package is paid as dividends.

From 6 April 2016, the way dividends are being taxed will change and the 10 per cent tax credit currently available to taxpayers will be abolished.

Instead, each individual will have available a flat rate dividend allowance of £5,000. Any dividends received in excess of this allowance will be taxed as follows:

• 7.5 per cent if dividend income is within the standard rate (20 per cent) band
• 32.5 per cent if dividend income is within the higher rate (40 per cent) band
• 38.1 per cent if dividend income is within the additional rate (45 per cent) band
These changes are likely to have a direct impact on the overall savings in NIC and income tax that can be achieved by those who receive dividends and some people may find it beneficial to reassess their remuneration policy.

Last week, the House of Lords Economic Affairs Committee said that HM Revenue & Customs (HMRC) had poorly communicated these changes and that the changes were complex, confusing to the majority of tax payers. 

In light of this, Deans is worried that some people may still be caught out by the changes and might end up paying more in tax than they need to.

Richard Stonier, Partner at Stafford based accountants Deans, said: "It would seem that HMRC have done a poor job of communicating the changes to dividends to taxpayers and there are likely to be many people out there who are in the dark about how this will affect their affairs.

"These changes represent a significant change to the rules and those who are not aware or don't understand the changes need to act quickly to get the help they need."

Dividend recipients also needed to be aware that HMRC had amended the tax codes of many owners, directors and shareholders to "code out" an estimated amount, added Richard.

The deduction in the PAYE code will be labelled 'dividend tax', as part of HMRC's goal to move the payment of tax forward. 
"To work out whether the deduction for "dividend tax" is approximately correct the estimate for your total income tax liability for 2016/17 will need to be checked, including funds received through savings and investments," said Richard.
"Failing to get your PAYE code correct could have a significant effect on the amount of tax you pay in the following year, so ensuring that it is right is vital. Those who are unsure should seek professional assistance to help them with their dividend affairs."

If you would like help to make sense of the changes to dividends then our team at Deans can help. To find out more, please contact us.


29 February 2016 - Are you ready for the National Living Wage?

With just a month left before the new National Living Wage is introduced, Stafford based accountants Deans are encouraging employers to get the correct payroll processes in place.

From 1 April 2016 employees over the age of 25 who are currently earning the minimum wage rate of £6.70 per hour will see a 50p increase in their pay, bringing it to £7.20 per hour.

The average full-time worker in this pay bracket, working 35 hours a week, will see their pay packets rise by more than £900 a year. 

This rate looks set to increase further over the next four years, eventually reaching £9 per hour by 2020.

This significant increase in workers' pay is likely to have a substantial impact on business's wage costs and is also likely to place an additional burden on their payroll systems.

Richard Stonier, Partner at Deans, said: "Paying your employees the correct wage is extremely important.

"Failing to pay the correct wage will not only create animosity amongst your workforce, but could also land you with a hefty fine and lead you to be named and shamed by the Department for Business, Innovation and Skills, which could do significant reputational damage to your firm.

"It is inevitable that this new wage increase will have a significant effect on your business's profits in the months and years to come, so now is the time to assess where savings can be made within your company."

Richard added that certain industries such as the care sector, retail and hospitability, which employ a large number of low paid staff, would be affected most by the changes and would need to consider what actions need to be taken to ensure their ongoing success.

If you would like to know more about Deans' range of payroll and accountancy services, please contact us.

 

24 February 2016 - Plan now for the end of the tax year

Deans is reminding individuals to use all the tax reliefs and allowances available to them before the current tax year ends on 5 April 2016 in order to minimise liabilities.

According to Richard Stonier, Partner at Stafford based Deans, there are a number of investment and tax planning ideas that should be considered.

For example, if you have adult children who are planning to buy a home, you might consider gifting funds so that they can invest in the new help-to-buy ISA. This new ISA is available to first time buyers over the age of 16. Savings of up to £200 per month attract a 25 per cent tax free bonus from the Government, providing £3,000 cashback on a maximum saving of £12,000. On the subject of ISAs, have you used your maximum annual investment of £15,240? Or has £4,080 been invested in a Junior ISA or Child Trust Fund for any child under the age of 18?

Richard also reminds pensioners that from 6 April 2016, tax relief will be restricted for 45 per cent taxpayers. However, there are transitional rules that may give you the opportunity to make extra pension contributions and claim full tax relief.

"The Lifetime Allowance (LTA) reduced from £1.5 million to £1.25 million in 2014 will reduce to £1 million on 5 April 2017. If this is likely to affect you, I suggest you take advice as there are ways of protecting your funds if you act now," said Richard.

Business owners are also prompted to seek advice because from 6 April 2016, Dividend Tax Credit will be abolished and replaced by a new Dividend Tax Allowance of £5,000 a year. 

As Richard explains: "The new rates of tax on dividend income above the allowance will be 7.5 per cent (up from 0 per cent) for basic rate taxpayers, 32.5 per cent (up from 25 per cent) for higher rate taxpayers and 38.1 per cent (up from 30.56 per cent) for additional rate taxpayers. These changes to dividend taxation will impact on the overall tax rates for owner-managers, in particular, those who have traditionally extracted their income by way of a low salary and a much larger dividend."

However, the income tax position is only part of the picture because for most owner-managed businesses, the overall tax costs (including the corporation tax position) will need to be considered. The overall tax cost of extracting a dividend will increase from approximately 20 per cent to 26 per cent for a basic rate taxpayer, 40 per cent to 46 per cent for a higher rate taxpayer and from 45 per cent to 50.5 per cent for an additional rate taxpayer.

"If you have cash in your business which you wish to extract in the form of dividends ahead of the 1 April deadline you need to get in touch with us now to ensure you don't miss out," said Richard, adding: "If you would like professional advice on anything discussed here, or dedicated advice tailored to your circumstances, please contact us.


15 February 2016 - Don't ignore the taxman's demands, says Deans

Stafford based accountants Deans is warning businesses not to ignore accelerated payment notices (APNs) from HM Revenue & Customs (HMRC), after the department revealed that it raised more than £2 billion from the scheme in 2015.

APNs were introduced in 2014 to recover disputed tax and HMRC can issue notices to demand tax that it believes it is owed.

Taxpayers who receive an APN have 90 days to pay HMRC the outstanding tax, but can only receive the amount back if they can prove in a tribunal that the disputed amount is not due.

Figures from 2014 and 2015 show that HMRC have an 80 per cent success rate when APN cases go to court.

Richard Stonier, Partner at Deans, said: "Ignoring an APN and hoping it will go away is simply not an option. Failing to pay within the 90 days will only lead to more significant penalties being issued on top of the tax owed.

"While HMRC does have a high success rate, in around 20 per cent of cases people have been able to prove that the amount of tax due is either less or doesn't exist at all and they have had their money refunded."

Richard added that careful tax planning could help to eliminate the chance of ever receiving an APN and encouraged businesses and individuals to seek professional help if they were unsure about their own financial affairs.

If you would like to know more about Deans' range of tax compliance and planning services, please contact us.


10 February 2016 - Call for transparency in SME lending

Deans is backing a call for more transparency in the marketing of financial products to the SME sector.

It follows a campaign by Growth Street – a provider of finance to small businesses – which states that unlike in consumer lending, there is no requirement to advertise an annual percentage rate (APR) to enable businesses to compare deals.

As the Chief Executive of Growth Street explained, commercial finance offered to limited companies was outside the scope of the Financial Conduct Authority (FCA) and so goes unregulated.

Richard Stonier, Partner at Stafford-based Deans, said: "Clearly more needs to be done to help small companies because these are the businesses of tomorrow.

"Obtaining finance is crucial for SMEs if they are to grow and improve the UK's productivity and contribute to the economic recovery, so I would like to see more information made available for firms wishing to grow and create jobs. If SMEs are misled, it could have an effect on their profitability, growth prospects, and employment.

"At Deans, we are passionate about helping small businesses and would be delighted to discuss the services we can offer to corporate clients."  

If your SME requires advice about obtaining finance, please contact us.


02 February 2016 - Get to grips with your company accounts, says Deans

Businesses are being warned by accountants Deans to prepare their company accounts on time as new data shows that businesses in the UK have already been fined more than £65 million since April last year.

The figures released by Companies House show that between April and December 2015 more than 140,000 penalties were issued to businesses.

In comparison the whole of the 2014/15 financial year saw nearly 179,000 penalties issued, totalling fines of around £84 million.

Late filing penalties were initially introduced more than 20 years ago to encourage directors to file their accounts and report on time.

All companies – large or small, trading or non-trading – must send their annual accounts at the end of their financial year.

If accounts are late a penalty is automatically imposed, starting at £150 for a private company whose accounts are not more than one month late, up to £1,500 if they are more than six months late.

Public companies are subject to much higher fines of £750 for accounts that are not more than one month late and up to £7,500 if it is more than six months beyond the deadline.

Businesses can appeal against penalties and so far this year around 24,000 appeals have been lodged, of which 4,427 were not collected due to discretion and 641 that were cancelled outright.

Richard Stonier, Partner at Stafford based accountants Deans, said: "Every business in the UK, whether trading or not, must submit their annual accounts on time. Failing to provide them to Companies House will lead to an automatic penalty, which will only grow larger with time.

"While there is always the possibility to appeal, the majority of penalties are not cancelled and any appeal will place an additional financial and administrative burden on your business. Often the easiest option is to appoint a professional who can help you collate your accounts and submit them on time."

If you would like assistance completing your annual company accounts, please contact us.


25 January 2016 - Nearly half of SMEs are scared about currency markets

Deans, based in Stafford, is warning that the growth and profitability of internationally-trading SMEs could be affected by volatile exchange rates.

Citing research by foreign exchange service providers World First, Deans explains that the nationwide survey of more than 1,000 senior decision makers at UK-based SMEs that make cross-border payments, found that although 83 per cent of SMEs operating in the manufacturing industry fear that currency volatility from the EU referendum will impact their business, 35 per cent are failing to take any notice of foreign exchange markets. Furthermore, 37 per cent do not see the importance of having a currency strategy.

The research also revealed the extent to which manufacturing SMEs remain exposed to currency fluctuations, with 47 per cent admitting they have been caught out by a sudden movement in exchange rates and one fifth having been severely impacted by market volatility.

Richard Stonier, Partner at Deans said: "The findings demonstrate a lack of appreciation on how important the exchange rate is and how its movements impact business. Of those surveyed, 43 per cent admitted that they did not fully understand and 49 per cent said that that currency markets 'scare' them.

"Having a proper currency strategy in place could improve profitability for SMEs because failing to manage exposure to fluctuations will always impact the bottom line."

He added: "While there is a lack of clarity about the exact timings of the EU referendum, SMEs should take the initiative to help mitigate the risks of currency volatility by seeking professional advice."

To find out how Deans can benefit SMEs involved in international trading, please contact us.

 

18 January 2016 - Deans encourages investors to seek out HMRC seal of approval

Stafford based accountants Deans is encouraging people using the Seed Enterprise Investment Scheme (SEIS) to check the credentials of start-ups before investing in them.

The SEIS was created to encourage individuals and other businesses to invest in new enterprise and entrepreneurship in return for tax incentives.

Under the scheme, individuals can invest a maximum of £100,000 in a single tax year, which can be spread over a number of companies.

In return they can receive up to 50 per cent tax relief in the tax year the investment is made, regardless of their marginal rate.

Investors also benefit from 100 per cent capital gains tax relief on the growth of the value of SEIS shares and loss relief should the SEIS start-up fail.

However, investors are being warned by Deans to avoid businesses that lack advance approval from HM Revenue & Customs (HMRC).

HMRC runs a pre-approval service that looks at tax compliance for SEIS companies and investigates a business's share structure, qualifying trade and how money raised from SEIS will be spent.

Once granted by HMRC, investors can then trust that the company will deliver the promised tax breaks – providing the rules are not broken during the 36 month investment term.

However, pre-approval is not compulsory and many start-ups fail to submit their plans to HMRC, leaving investors at risk of not receiving the benefits promised if the SEIS rules are not met by the start-up company.

Richard Stonier, Partner at Deans, said: "Investors taking advantage of the tax arrangements surrounding the SEIS need to be careful when investing their money.

"Not all firms have been vetted by HMRC and those that have not, may be unable to provide the tax benefits promised under the scheme. Checking they have HMRC's seal of approval is vital to guarantee the success of your investment."

Richard also added that businesses seeking investment through the scheme should apply for accreditation from HMRC. He said: "While pre-approval is not compulsory, completing the process could give investors more confidence to invest in your business. 

"The process to be granted approval can be somewhat time-consuming, but the benefits could be massive and with the right professional help a lot of the burden can be taken away."

If you would like to know more about the benefits of SEIS or any other Government-backed tax incentivised investment scheme, please contact us.

 

14 January 2016 - Avoid a penalty and plan ahead for staff pensions

Deans is reminding small businesses that they face large fines for not adhering to new staff pension rules.

Around half a million UK employers with fewer than 30 employees will be required to enrol eligible staff into a pension – and start paying into it – this year. All employers have been given an automatic enrolment date, called a 'staging date', and this is the date by which they must ensure workers are signed up.

But Deans fears that many SMEs won't give themselves enough time. As a result, many of Britain's businesses could be subject to fixed penalties of £400, daily fines of £50 to £500, and even prosecution.

Richard Stonier, Partner, at Stafford-based Deans said: "Employers should start planning around one year before their staging date, and I would recommend that they visit our website for guidance.

"It is all too easy to put it off but this is an issue that cannot be overlooked. There will be thousands of employers needing to meet their workplace pension duties in 2016 and so it makes sense to approach a trusted firm for advice in plenty of time. We don't want to see anyone pay a fine that could be avoided by simply planning ahead."

For more information about how Deans can help your SME with staff pensions, please contact us.

  

21 December 2015 - Businesses should make strong cash flow their New Year's resolution

Businesses need to prioritise cash flow in 2016 to ensure stability and help drive growth, according to Stafford based accountants Deans.

Cash flow refers to the net amount of cash and cash-equivalents moving into and out of a business and having healthy cash flow is an important part of a business's survivability.

Many small-to-medium businesses will face new cash flow issues in the New Year with the introduction of the National Living Wage (NLW), which will see the minimum wage rise to £7.20 per hour for employees over the age of 25 from April.

Some companies will also face the additional payroll costs associated with the on-going auto-enrolment scheme for workplace pensions, but businesses will benefit from new rules on benefits-in-kind.

Under the new rules employers will be exempt from paying income tax and national insurance contributions on benefits worth less than £50 that are provided to employees.

However, many businesses are likely to continue to struggle with late payments from customers, despite new rules from the Government that will enforce shorter and stricter payment periods.

Richard Stonier, Partner at Deans, said: "All businesses should be aware of their current cash flow situation and should also have some idea of their future cash flow.

"Businesses are likely to see costs go up next year, especially with the introduction of the NLW, which could affect the health of a business's cash flow.

Richard added that profitable and seemingly successful businesses had failed because cash flow had suffered and they weren't able to pay outstanding bills on time.

"Speaking with an accountant could be extremely beneficial to businesses concerned about cash flow," said Richard.

"Most firms will be able to help you forecast future cash flow and manage current costs and payments to ensure your business's cash reserve remains healthy."

If you would like to know more about our range of cash flow and budgeting services, please contact us.

  

14 December 2015 - Christmas comes second to work for SME owners 

Deans has commented on news that, according to Zurich's latest SME Risk Index, 49 per cent of the UK's small business owners worked on Christmas Day last year.

The research indicated the challenges of achieving a work-life balance, with a further nine per cent having admitted to missing their child's nativity play and 13 per cent having missed the Christmas party.

Furthermore, the research went on to show that 14 per cent of decision makers have not taken any annual leave this year, whilst 18 per cent have not had more than 10 days off this year.

Richard Stonier, Partner at Stafford based Deans said: "Missing big events and not taking holiday days shows the pressure that many small firms are under." Richard went on to say that Deans can assist SMEs with a number of tasks that they may be trying to undertake on their own.

"This is a very busy time of the year for everyone, especially SMEs. In gearing up for Christmas, there are so many things to deal with, such as payroll, the self-assessment tax return, and the implications of auto-enrolment," said Richard. "I hope that everyone gets to enjoy the holidays and that's why I'd like to remind SME owners that Deans can help you with your backlog. We can pick up the pieces and help your business to run smoothly throughout the festive season and into 2016.

"At Deans, we understand the pressures faced by SMEs and so we want to help business owners to achieve a healthy work-life balance and put Christmas back on the calendar," concluded Richard. 

To find out what Deans can do for you, please contact us.


08 December 2015 - Tax return should be top of people's Christmas list, says Deans

At this time of year most people's focus will be on buying presents, putting up decorations and preparing the Christmas dinner, but Stafford based accountants Deans says people need to remember the self-assessment tax return deadline.

Taxpayers who are required to complete self-assessment tax returns have until midnight on 31 January 2016 to submit them online to HM Revenue and Customs (HMRC).

Failure to send your tax return and pay any outstanding tax could lead to severe penalties, starting with a £100 automatic fine that will be applied to all online tax returns if they are late by just one day.

Any tax returns still outstanding three months after the deadline will be subject to a fine of £10 per day for each day the tax return is due, up to a maximum of 90 days.

Any return that is six months late will be subject to an automatic fine of £300 or five per cent of the tax due, whichever is the higher. For returns that are 12 months late, another £300 fine or five per cent of the tax due will be added.

Any tax outstanding during this period will also be subject to interest on the amount due; meaning that the longer a return is left the larger the final tax bill will be.

Richard Stonier, Partner at Deans, said: "Every year thousands of people fall foul of HMRC's strict deadlines for self-assessment tax returns, but it doesn't have to be like this.

"At Deans we understand that people are busy at this time of year, so it pays to get a helping hand with your tax return. Contacting an accountant isn't always costly and it could save you hundreds of pounds in penalties."

Richard added that while the deadline was short there was still time for individuals to conduct tax planning in order to minimise their liabilities.

"It is never too late to speak to a tax adviser about opportunities to reduce your tax bill. There are a number of HMRC-approved tax reliefs on offer that some people may not be aware of or believe that they are not entitled to," said Richard.

"In most cases a quick discussion with a tax professional will give you a better idea of whether you are paying too much tax."

If you would like assistance with your tax return or would like to see if you could minimise your liabilities, please contact us.


30 November 2015 - A welcome boost for SME funding

The government's move to introduce flexibility for replacement capital within Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes, as revealed in the recent Autumn Statement, has been welcomed by Stafford based Deans, which claims it is a boost for small business funding.

Replacement capital is finance that has previously been provided to a business but has been returned to the funder. Until now, EIS funding has not been allowed to replace that capital. However, the news that replacement capital may now be allowed within EIS and VCT regulations, subject to state aid approval, brings the UK in line with the EU.

Richard Stonier, Partner at Deans said: "Replacement capital was not allowed under the original UK scheme regulations, but it is allowed under the overarching Global Block Exemption Regulations that govern tax-advantaged venture capital schemes in the EU.

"This is an anomaly that looks like it will be rectified, although it's likely to be next year when the details are finalised. When it is though, the UK will be on a level playing field with the rest of the EU, which is going to be beneficial for the economy and strengthen the finance that is available to businesses."

The move is likely to allow 50 per cent of any investment to be in the form of replacement capital up to a maximum of £5 million, limited to half of this figure in any rolling 12 month period.

"I think that this news could result in a new source of funding for SMEs as well as giving private investors greater flexibility over the companies they invest in," said Richard.

If you would like more information, please contact us.


26 November 2015 - SMEs will benefit from Autumn Statement

Stafford based accountancy firm Deans has today welcomed measures announced in the Autumn Statement that are set to benefit SMEs and ensure their success, but fears for individuals buying a second home.

Recognising the financial burdens faced by SMEs, Chancellor George Osborne announced that the Small Business Rate Relief (SBRR) in England will be extended until April 2017. This means that around 405,000 of the smallest businesses will continue to receive 100% relief from business rates, with a further 200,000 benefiting from tapering relief.

In addition, SMEs should be able to access finance more easily following news that the government plans for Experian, Equifax and CreditSafe to receive SME credit information from designated banks and provide equal access to this information to all financial providers.

Finally, for SMEs looking to take on an apprentice, George Osborne declared that small businesses will continue to receive support. First mentioned in the 2015 Summer Budget, the apprenticeship levy, which will be introduced in April 2017, aims to raise £3bn a year and will be set at 0.5% of the payroll bill. However, as there will be a £15,000 allowance, only around 2% of UK employers will pay it. The policy plans to redress the shortfall of skills in the British economy – which the Chancellor said is, "one of the enduring weakness of the British economy" – and create three million apprenticeship positions by 2020.

However, a new stamp duty rate for people buying homes as buy-to-let properties and second homes will be 3% higher than normal stamp duty. 

Richard Stonier, Partner at UK200Group member firm Deans, said: Today's Autumn Statement has shown that the government sees the importance of SMEs for this country's economy. By promoting competition for SME credit and encouraging more apprentices to start work, as well as extending the Small Business Rate Relief, the Chancellor has shown that he is committed to supporting the UK's SMEs.

"The rise in stamp duty for buyers of buy-to-let properties and second homes will affect our clients as there are a great many scenarios that mean individuals could be affected. I would urge anyone that is unsure of their situation to contact me for advice."

If you would like advice on any of the subjects raised in the Autumn Statement, please contact us.


25 November 2015 - HMRC has set its sights on the affluent

Stafford based accountancy firm Deans is warning those with high incomes to get their tax affairs in order as HM Revenue & Customs bolsters its Affluent Unit.

HM Revenue & Customs (HMRC) has announced this week that it has doubled the number of inspectors trawling through the tax files of individuals earning £150,000 or more.

The so-called 'Affluent Unit', which concentrates on people who earn enough to pay the 45 per cent additional-rate tax, has increased its headcount by 54 per cent in two years, from 213 in 2012/2013 to 327 in 2014/2015.

Before now, the taxman has mainly investigated 'high net worth' individuals who earn £1 million or more.

However, Deans believe the increase in the number of tax investigators may indicate that they are now turning their attention to those further down the income scale.

Richard Stonier, Partner at Deans, said: "This growth in the Affluent Unit reflects HMRCs drive to improve revenue collection across the board.

"We have seen that this unit is especially interested in those owning property in the UK and abroad or who use offshore bank accounts. Individuals that have filed self-assessment returns late or anyone who has previously invested in a scheme devised to reduce tax bills may also be a target.

"Anyone concerned that they might be the subject of a tax investigation now or in the future should contact a professional who can act on their behalf to minimise any potential penalties."

For more information please contact us.


17 November 2015 - HMRC's failings will not go unanswered

Deans is reminding people that HM Revenue & Customs (HMRC) could be forced to waive or reduce penalties for taxpayers who filed returns late or incorrectly because the tax authority did not answer their telephone calls.

Ministers have condemned HMRC for its customer service after an official report claimed that half of all calls received in the first six months of the year – totalling 12 million – were not answered.

HMRC commented: "We work very much on a case-by-case basis but if you phoned us and couldn't get through we would take that into account. We know our customer service hasn't been as good as it should be so we have moved a further 3,000 people into them and things are getting better."

Richard Stonier at Stafford based Deans said: "This really is a turnaround and shows that HMRC have accepted their poor service is not acceptable. The deadline for submitting online self-assessment tax returns is 31 January 2016 but this date should not be looked upon with complacency. Fines may still be issued for anyone that submits a late return.

"Deans can take away the anxiety of self-assessment and allow you to focus on doing what you do best; running your business."

For guidance and support with self-assessment tax returns, please us.


10 November 2015 - Deans encourages businesses and home owners to consider capital gains tax when selling up

Stafford based accountancy firm Deans is encouraging business and home owners to give greater consideration to capital gains tax (CGT) when selling.

The message comes after new figures show that the amount of CGT being collected by the government is growing at a rate of 43 per cent per year; one of the fastest areas of revenue growth for the Treasury.

According to the latest government figures, in 2013-14 the total amount of CGT collected rose to £5.5 billion; up from £3.4 billion in 2012-13.

The increase is believed to be due to further rises in the value of shares and property, as well as an increase in turnover for investments subject to CGT. In recent years HM Revenue & Customs (HMRC) has also become more vigilant in identifying those who have a liability through various targeted campaigns.

Basic-rate taxpayers pay CGT at a rate of 18 per cent, while higher and additional-rate taxpayers pay a rate of 28 per cent, which is offset by an annual CGT allowance. This is currently £11,100 for individuals and £5,500 for trusts.

Richard Stonier, Partner at Deans, said: "The increase in CGT is not surprising considering the increase in the value of property and shares, stricter monitoring by HMRC and a number of other changes that have contributed to a larger tax take.

"However, there are still options available to individuals and businesses who wish to reduce their CGT tax bill, including schemes such as entrepreneur's tax relief which is available to some companies."

Richard added that it was important that individuals and businesses sought professional advice to reduce their tax liabilities, as there could be savings to be made.

For more information please contact us.


03 November 2015 - Insolvency fees rise but the number of insolvencies drop

Deans is reminding SMEs that revised fees for bankruptcies and company insolvencies will come into force on 16 November 2015.

Fees and charges are reviewed annually and the revised fee structure ensures that the cost of insolvency processes is paid for by those who use them.

The company winding up deposit – which needs to be paid to the Department of Enterprise, Trade and Investment – is set to rise by eight per cent to £1,350, whilst the company winding up administration fee will climb by five per cent to £2,520.

Richard Stonier, Partner, at Deans, said: "These changes will be subject to Parliamentary scrutiny, but the rise in fees is disappointing for SMEs. However, it is promising to learn that according to the latest figures from the Insolvency Service, there has been a fall in the number of company insolvencies in England and Wales over the last quarter.

"Some 3,539 companies entered insolvency in Q3 2015; a drop of more than ten per cent compared to Q3 2014. The decrease in compulsory liquidations mark a drop to the lowest level since 1989. In fact, the estimated liquidation rate in the 12 months ending Q3 2015 was less than half of one per cent of active companies, which is the lowest level since comparable records began in 1984.

"However, if you're an SME owner that is worried about bankruptcy, insolvency and the associated fees, talk to an expert."

To find out more please contact us.


29 October 2015 - Are your legacy affairs in order?

Deans is warning people that they could face higher inheritance tax (IHT) bills than they expected, after new research shows a significant increase in payments to the Treasury.

Recent analysis of HM Revenue and Customs' (HMRC's) tax figures for 2012/2013 has revealed that the cost of passing on wealth to the next generation had increased by three per cent in one year.

During this period – the latest for which figures are available – the British population paid more than £3 billion to the Treasury in IHT, while the average death tax bill rose almost £5,000 in a year to £170,000, despite the fact that only 17,900 (six per cent) of the 280,000 estates reviewed, actually ended up paying IHT.

Richard Stonier, Partner at Deans, said: "As house prices continue to rise, more and more people are finding themselves liable to IHT, particularly those with more than one property or a property in a high-value area. 

"However, all of this could be set to change following new IHT rules due to be introduced from April 2017."

Under the new rules, announced in the Chancellor's Summer Budget, individuals will be entitled to a family home allowance, in addition to their existing individual £325,000 IHT allowance.

This new allowance will be phased in over the coming years and will allow married couples or those in civil partnerships to pass on a property worth up to £1m tax free by 2020/21.

"People need to start thinking now about how this new allowance will affect their legacy planning and they should consult a professional to ensure that they are able to make the most of the upcoming changes," added Richard.

For more information please contact us.


26 October 2015 - Get ready for payroll changes

Deans is reminding clients that PAYE legislation is changing from 5 April 2016, so employers who intend to or are already payrolling benefits and expenses must register with HMRC using the new online Payrolling Benefits in Kind (PBIK) service. In addition, from next April, employers who use the service and already payroll benefits and expenses won't have to report them on a P11D.

Employers must align their payroll software and register to payroll using the new service by 5 April 2016. They will not be able to register after this date for the 2016/2017 tax year as HMRC is unable to process changes in-year.

HMRC adds that all payroll benefits and expenses need to be included when employers report their payroll information in a Full Payment Submission (FPS). In addition, P11D (b) forms must still be completed, including the total benefits and expenses provided, whether or not they have been put through the payroll. However, if employers payroll car and fuel benefits, they must not complete P46 (Car) forms as they are deducting the tax at source that is due on these benefits.

Richard Stonier, Partner at Deans said: "All of these changes coming in from next April can be very confusing for an SME owner and so I would suggest that if you're unsure about payroll changes, you seek professional advice. At Deans, we can handle your payroll duties so that it is one less thing for you to worry about. Let PBIK be our headache, not yours!"

For more information please contact us.


01 October 2015 - Do not bury your head in the sand...

Stafford – based accountants Deans is urging business not to be complacent if they receive accelerated payment notices (APNs), after new figures reveal that the government has collected more than £1 billion through their use.

HM Revenue & Customs (HMRC) recently announced that it has collected more than a billion pound using APNs, since it was granted the new powers in 2014/15.

Under the accelerated payment rules, HMRC is able to make taxpayers pay disputed tax in advance, rather than waiting for the outcome of a tax tribunal ruling.

Once an APN is received taxpayers have 90 days to pay the outstanding tax, whether they feel it is due or not or face additional penalties. If the taxpayer wins the case the money is reimbursed to them with interest.

During the first year HMRC issued more than 10,000 notices to businesses or individuals who had used a disclosable scheme under the Disclosure of Tax Avoidance Schemes (DOTAS) rules.

Richard Stonier, Partner at Deans, said: ""Receiving an APN should not be taken lightly, as it can have a serious effect on the liquidity and reputation of you and your business.

"The fact that HMRC have collected more than £1 billion, shows that they are serious when it comes to potential tax avoidance."

Earlier this year, it was revealed in HMRC's annual report on tax avoidance, that of the £596m received from APNs during 2014/15, some £28m was refunded after legal challenges.

"While many of those targeted by these new powers may have legitimately avoided paying tax, there will be some individuals and business who have been unfairly targeted and this is evident in the number of refunds already issued by HMRC," added Richard.  "Seeking professional advice sooner rather than later is critical."

For more information please contact us.


25 September 2015 - Time to embrace Pensions Auto Enrolment

Deans has responded to a Chartered Institute of Payroll Professional survey which states that more than a third of workers reaching the end of their working lives are not planning financially for their retirement.

At a time when auto-enrolment is very much at the forefront of SME owners' minds, 36 per cent of individuals aged 51-60 admitted to having no pension provision. Meanwhile, two-thirds of 20-24 year-olds surveyed also confessed to having no pension plans, with 30 per cent of all survey respondents fearing that their final pension pot is unlikely to be enough to live on when they do come to retire.

Richard Stonier, Partner at Deans said: "I would hope that most people are thinking about their future, but these results show that a great many towards the end of their working lives are not planning for their retirement.

"This should act as a wake-up call for SMEs to look at their automatic enrolment staging date and evaluate the role that payroll plays within their organisations. Auto-enrolment is here to stay and will not go away by ignoring it.

"Small employers should therefore be embracing auto-enrolment and promoting the virtues of it to their staff. After all, the survey revealed that 55 per cent of employees feel saving for the future through payroll is a good idea."

If you would like more information please contact us.


17 September 2015 - New EU ruling on travel time

Stafford based Chartered Accountants Deans is warning businesses to  be aware of a new European court ruling which has clarified that travelling time to and from work could itself be classed as work.

In a landmark ruling, the European Court of Justice has said that time spent to and from first and last appointments by workers without a fixed office should be regarded as working time and that wages should be paid in relation to this.

Within most businesses this time has not previously been considered as work and it means that firms operating without a fixed office may be in breach of EU working time regulations.

Failing to meet these regulations could see an employer brought before the Health and Safety Executive in the UK, which could lead to improvement notices being issued. Subsequent failure to comply can lead to unlimited fines and imprisonment.

Richard Stonier, Partner at Deans, said: "This new ruling represents a significant change to the current Working Time Regulations and could have a number of implications on a business, ranging from additional wage costs for travelling time to fines or even imprisonment for those who fail to meet its requirements.

"While some business owners may not be happy with this new measure it is important that they comply with it, or face the prospect of an investigation that could have a significant effect on them and their business."

Richard added that this new ruling is most likely to affect care businesses, sales representatives and tradesmen who begin and end their working day at home.

"Speaking to a professional regarding your responsibilities as an employer in regards to the Working Time Regulations could save you a lot of problems further down the line," added Richard.

For further information please contact us.


08 September 2015 - SMEs are looking to grow

Stafford-based Deans has welcomed news that growing a business is top of the agenda for 34 per cent of SMEs. That's according to research from Close Brothers Asset Finance.

The quarterly survey of UK SME owners and senior management from a range of sectors also revealed that more than half of firms have already experienced growth in the last 12 months, while a further 37 per cent expect their business to expand during the next year.

Richard Stonier, Partner at Deans said: "It's great to see that so many SMEs appear to be experiencing the benefits of an improving financial climate."

The results also highlighted that a significant number of firms are planning to recruit, with 43 per cent hoping to take on new staff within the next year.

Richard added: "Naturally, firms need to expand their team as they grow organically but the challenge often lies in how they manage this growth. It's important that firms seek professional advice to help with obtaining funding.

"I would urge any business owners looking at expanding to ensure that they assess their plans and evaluate all of the financial options available to help them find an appropriate solution to fit their needs. At Deans, my team and I can assist with a range of issues affecting SMEs and we can also handle the payroll. This allows SME owners to get back to doing what they do best; running their business and growing their enterprise."

If you would like more information please contact us.


07 September 2015 - SMEs encouraged to seek Government Contracts

The government has announced that it is aiming to increase its spending with small and medium-size enterprises (SMEs) to a third by 2020, and Stafford-based Deans are encouraging businesses to get involved.

The most recent public expenditure figures show that from 2013 to 2014, the government spent £11.4 billion of its budget with SMEs – equivalent to 26 per cent of its total spend during that period.

This taken into context with its new target of 33 per cent by 2020 would mean that an extra £3 billion per year will be spent with SMEs, either directly or through the supply chain.

Richard Stonier, Partner at Deans, said: "Businesses really need to wake up to the idea of working with the government. While the competition may be difficult, the pay-off can be very rewarding.

"Most small business owners seem to share the view that working with Government means more red tape and scrutiny, and well this can sometimes be the case; the positives often far outweigh the negatives."

Richard added: "Businesses considering seeking a government contract should seek professional advice from a properly qualified accountant, who cannot only give guidance on submitting a tender, but can also prepare a company's accounts in line with the strict guidelines associated with public expenditure."

For further information please contact us.


24 August 2015 - Invoice Financing for SMEs

There has been a lot of publicity recently on the availability of finance for small to medium sized enterprises (SMEs), particularly focusing on traditional bank loans or equity investments.

However, as Deans notes, there are other forms of business funding which should also be considered as an alternative source of money for firms.

Invoice finance is a solution that is being increasingly used by companies to deal with late payments whilst also improving cashflow. This is where a finance provider pays an agreed proportion (usually 80-85 per cent) of approved invoices to the company on receipt of a copy of the invoice. The balance (minus a small charge) is paid upon client payment.

Richard Stonier, Partner at Stafford-based Deans said: "With the economy growing, there has been a surge in demand for working capital in the SME sector that has created lots of opportunities for more invoice financing. Despite this, its current use is relatively low compared to 'traditional' sources of lending. In fact, only around 43,000 SMEs out of a total of nearly five million in the UK are currently using invoice finance.

"Whilst invoice financing is available from the banks and independent providers, one of the major problems is that there is a general lack of awareness by SMEs of the advantages of utilising this source of funding."

For more information please contact us.


12 August 2015 - More SMEs to be affected by Auto-Enrolment

Deans is warning that SMEs are likely to struggle to budget for auto-enrolment.

Recent data from The Pensions Regulator has revealed that approximately half a million more businesses will have to enrol than previously anticipated and will face higher employment bills as they set-up their pensions.

Apparently, around 1.8m small and micro employers will need to meet their pension duties over the next three years, compared to the previous estimate of 1.3m. Under the new regulations, employers must contribute at least one per cent of eligible employees' qualifying earnings, rising to two per cent in October 2017 and then three per cent a year after that. However, these contributions are not subject to National Insurance (NI) and they can be offset against business profits for tax purposes.

In addition to the employer's contribution employee's will also be required to make contributions which many employee's see as an extra deduction being made by their employer and it is essential that businesses communicate clearly and at an early stage with their employees to avoid any negative feelings.

But as well as the financial implications this will have for SMEs, businesses could be hit with further costs if they fail to comply with their duties as an employer. If a scheme has not been established by its staging date, the cost could escalate, with fixed penalty fines ranging from £50 to £2,500 a day.

Richard Stonier, Partner at Deans said: "It is important to remember that the contributions must be paid into your scheme at each pay reference date. I would therefore advise SME owners to calculate how much they are likely to have to pay in contributions at each date, and set their budget accordingly.

"Deans can help by providing payroll services as well as sound financial advice for SMEs. Receiving help can reduce the cost of auto-enrolment for your business by ensuring that you're compliant and avoid financial penalties," concluded Richard. 


12 August 2015 - Owners of Personal Service Companies could face stricter tax rules

Deans is warning individuals who run a personal service company (PSC) that they could face higher tax bills in the future as HM Revenues & Customs (HMRC) looks to re-evaluate its tax rules.

The Stafford based Chartered Accountancy practice has said that HMRC have put forward a proposal to amend Intermediaries Legislation, which could have a serious effect on freelancers.

The legislation – often referred to as IR35 – was introduced in 2000 and aims to tackle 'disguised employment'.

It requires individuals working through an intermediary to pay broadly the same tax and National Insurance Contributions as any other employee, where they would have been providing the same services directly.

This mainly refers to personal service companies, which are enterprises where people provide their services usually through their own company.

In HMRC's latest discussion document they say there is a "growing body of evidence which suggests there is significant non-compliance with the current rules."

They point to the fact that the number of those paying tax under IR35 has remained fairly static, while the number of PSCs has increased dramatically from 200,000 PSCs in 2011-12 to 265,000 in 2012/13 – a number that is expected to continue to grow.

HMRC officials estimate that during 2015, the cost of non-compliance regarding IR35 will total a staggering £430m.

Richard Stonier, Partner at Deans, said: "While HMRC are only currently consulting on this issue, it shows that this is an area of particular interest for them and one that is likely to be targeted within the next few years.

"IR35 legislation can be quite complex and can add an additional burden to the running of you businesses, while you are trying to focus on building a reputation and deal with your clients requirements.  For some individuals it may be best to seek professional help."

Those who take on employees from a PSC also need to be aware of the proposals, says Richard, as one of the measures put forward by HMRC would make it a requirement of employers to declare a person's employment where they felt IR35 rules may apply.

"While this still remains a proposal on paper, there are a number of indications which suggest that this could be the way that HMRC intends to monitor PSCs in future," added Richard. "This could create an additional regulatory burden for businesses and it is an issue that they will need to monitor."

If you would like help with IR35 legislation or you are interested in setting up a personal service company, please contact us.


20 July 2015 - An end to FRSSE

Stafford based Deans has welcomed news that the Financial Reporting Council (FRC) has issued a number of changes with the aim of simplifying the reporting of company accounts.

FRSSE is no more and according to the FRC, the changes – which are effective from 1 January 2016 – are largely in response to the implementation of the new EU Accounting Directive. They include:

• A new standard – FRS 105; the Financial Reporting Standard applicable to the Micro-entities Regime
• A new section – 1A Small Entities of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland

The FRC has also published an Overview of the Financial Reporting Framework, which describes the framework applicable for accounting periods beginning on or after 1 January 2016 and includes key differences between the FRSSE and the new requirements set out in FRS 105 and section 1A of FRS 102.

Richard Stonier, Partner at Deans, said: "These changes to accounting standards will have a positive impact upon small businesses. I believe that they will effectively cut red tape for small companies. They also respond to the new legal framework for disclosure in small company reporting, providing guidance for applying it and improving transparency relating to financial instruments.

"In addition, they play a role in improving the cost-effective reduced disclosure framework for listed groups by permitting International Financial Reporting Standards-based presentation requirements in subsidiaries' financial statements," Richard added.

The FRC added that it expects to issue revised editions of FRS 100, Application of Financial Reporting Requirements, FRS 101, Reduced Disclosure Framework, and FRS 102, in September.

If you would further information please contact us.


13 July 2015 - Small Businesses need to take advantage of the Annual Investment Allowance

Deans is encouraging small businesses to take full advantage of the half a million pound Annual Investment Allowance (AIA) available to them now before the rate drops at the start of next year.

This warning, from the firm of Stafford based Chartered Accountants, comes following the Chancellor's Summer Budget statement in which he set the AIA at £200,000 for the life of the current Parliament from January 2016.

This amount is higher than the previous limit of £25,000, which was due to come into force at the start of next year, but is still less than half the amount of the current £500,000 limit.

The Allowance is designed to encourage investment by deducting the full value of an item that qualifies for (AIA) from a business's pre-tax profits.

It applies to all plant and machinery equipment bought by a company, which includes alterations to existing buildings to install other plant and machinery and integral features, such as lifts, escalators and air-conditioning and air cooling systems.

Richard Stonier, Partner at Deans, said: "While the chancellor may be hailing this as a victory for SMEs, there is no getting away from the fact that the allowance is still going down, even if it is not at such a drastic rate.

"In order to make the most of the current allowance, businesses need to act now and submit any applications ahead of the deadline at the start of next year. Failing to do this could see them miss out on thousands of pounds of potential investment money."

For more information please contact us.


09 July 2015 - The Summer Budget

Stafford based accountancy firm Deans fears that measures introduced in the Chancellor's Summer Budget will affect the profit margins of SMEs.

George Osborne's seventh Budget – the first of this Conservative Government – heralded a decrease in Corporation Tax but saw a rise in dividend taxes.

Richard Stonier, Partner at the UK200Group Deans said: "SMEs will see significant changes to dividend taxation from April 2016, which will impact on the overall tax rates and the effective tax rates on extracting profits.

"Furthermore, the introduction of the National Living Wage is going to be a big cost for SMEs. Even though it has been marginally offset by an increase in the employment allowance, the effect of paying higher wages – which is a fixed overhead – will ultimately be smaller profits," added Richard.

In a bid to create what George Osborne called "a permanent change to incentivise investment", the Annual Investment Allowance will no longer fall to £25,000, but will be frozen at £200,000 from 1 January 2016. However, Richard notes that the temporary £500,000 limit was set to expire on 31 December 2015, but will now be a permanent relief available at a reduced rate of £200,000. "It is a shame that the Chancellor didn't choose to keep the Annual Investment Allowance at the current level and show a true commitment to boosting productivity for SMEs for the rest of the parliament."

For more information, please us.


07 July 2015 - Business Confidence Remains High

Stafford based Deans has commented on news that, according to the latest Business in Britain report from Lloyds Bank, overall business confidence remains strong and stable.

This positive attitude is largely underpinned by companies' expectations of an improvement in exports, as well as an anticipated increase in investment levels.

The twice-yearly Lloyds Bank report gathers the views of 1,500 UK companies – predominantly small to medium sized businesses, or SMEs – and tracks the overall balance of opinion on a range of important performance and confidence measures.

The report's overall key confidence index, which looks at businesses sentiment over the coming six months, has remained stable at 43 per cent compared with January 2015. Although the latest reading is down from the survey's high of 53 per cent recorded 12 months ago, it remains above the long-term average reading of 23 per cent. Expectations of employment growth and a resurgent export market suggest strong economic prospects for the second half of the year.

Richard Stonier, Partner at Deans said: "Some 29 per cent of the firms surveyed said that weaker UK demand poses the greatest threat to their business in the next six months. This could explain why firms expect to increase their sales in global markets."

The net balance of exporters expecting an increase in total exports across the globe has risen to 46 per cent. This has been boosted by firms' intentions to export to growing regions such as the Middle East and Africa. In particular, the increase in total exports has been driven by the number of exporters expecting an increase in trade with Europe in the next six months.

"Business confidence has remained relatively strong with encouraging expectations for sales, orders and profits for the rest of the year," noted Richard. "This has been underlined by a bounce back in exports to Europe as well as companies' intentions to grow their presence further on the international stage. However, we'll be keeping an eye on how the situation in Greece affects British SMEs," they concluded.

For further details please contact us.


22 June 2015 - Company Administration

Deans says that SMEs should get back to doing what they do best

UK SMEs are spending over 600,000 hours a year on company administration rather than core business activities.

That's according to research carried out for the British Insurance Brokers' Association (BIBA) which reveals that a significant number of SME leaders perform a lot of tasks outside their job descriptions, instead of outsourcing these to specialists.

The Populus-conducted survey of 500 directors, senior managers and owners of British businesses with between 10 and 249 employees, says that 26 per cent of SME leaders deal with IT issues, which costs them on average 52 hours a year. Most time consuming of all was HR, which costs 23 per cent of SMEs more than 60 hours per year.

Richard Stonier, Partner, at Deans said: "This research shows that an astonishing amount of time is being wasted conducting tasks when SME leaders could be serving their customers and generating income. If we scale this up for the UK's 5.2 million SMEs, then around 624,000 hours are wasted each week on non-business critical tasks.

"Frequently, SME leaders are handling tasks that fall outside their specialist knowledge, but this is where Deans can help. We can assist SMEs with issues such as payroll services and HR and can provide advice on tax, auto-enrolment and financing," added Richard.

Deans can take an holistic approach to the needs of your SME and advise on how you can focus on running your business. If you would like more information, please contact us. 


15 June 2015 - More UK Start-Ups survive first year than European counterparts

Stafford based Deans has commented on a recent study that shows more of Britain' start-ups are surviving their first year of business than their European peers.

The research conducted by Rosseau Associates highlights that of the 234,000 UK businesses launched in 2011, 93 per cent of start-ups survived their first year of business. This compares to an average survival rate of 83 per cent across Europe.

Britain's start-up scene has enjoyed considerably more robust health than Europe's other major economies of France (79 per cent) and Germany (78 per cent), and has experienced the strongest economic growth in Europe as a whole.

Richard Stonier, Partner at Deans said: "This is very encouraging news for Britain's SMEs and shows that we really are leading the way. Despite the tough economic conditions of recent years, the recession appears to have created innovation and entrepreneurs, so Britain's start-ups are clearly flourishing. Add to that the recent Enterprise Bill and perhaps we will see an even higher survival rate in the coming years.

"Business Secretary Sajid Javid said last month that small businesses are 'Britain's engine room' and at Deans, we're proud to be able to assist SMEs and offer a range of
services for business owners."

If you would like advice on how to grow your business and achieve success, please contact us.


03 June 2015 - What does the Queen's Speech mean for SMEs?

Stafford based Deans has commented on what the Queen's Speech means for local small and medium enterprises (SMEs).

Speaking at The State opening of Parliament on 27 May, the Queen announced a number of initiatives to stabilise the UK economy, including lower regulations for SMEs alongside a freeze on tax rises for the next five years.

She said: "Legislation will be brought forward to help achieve full employment and provide more people with the security of a job. Measures will also be introduced to reduce regulation on small businesses so they can create jobs. Legislation will be brought forward to ensure people working 30 hours a week on the National Minimum Wage do not pay income tax, and to ensure there are no rises in Income Tax rates, Value Added Tax or National Insurance for the next five years."

Richard Stonier, Partner, at Deans said: "I am pleased to see that the Government is maintaining a focus on small businesses. There is a need to cut red tape and address key issues, such as the billions of pounds owed to small businesses in overdue payments. Furthermore, it is encouraging to see that measures will be introduced that allow SMEs to create jobs in our region."

The Queen's Speech also revealed that future increases in the income tax personal allowance will be linked to rises in the national minimum wage. For adults, the national minimum wage is due to rise by three per cent in October and Chancellor of the Exchequer George Osborne has said that it will increase from £6.50 to £8.00 by 2020. The personal allowance is currently £10,600 but this is due to rise to £12,500 by 2020. As a result, the government is promising that no one working for 30 hours a week on the national minimum wage will pay tax.

"This change will have implications on employers with staff that are paid the national minimum wage," added Richard. "To ensure that SMEs are complying with the law, it is important that they have their payroll services in order. However, this can be outsourced to Deans, alleviating the worries of business owners."

For further information please contact us.


27 May 2015 - Businesses reminded to hand out P60s by the end of the month

Stafford based Chartered Accountants are reminding business owners to provide all of their employees with a P60 form before the deadline at the end of May.

All employers must provide any employee, who was in their employment on the last day of the tax year (5 April), with a P60 certificate by 31 May 2015 at the latest.

A P60 certificate should summarise each employee's total pay and deductions for the last year, and can be provided in paper or electronic form.

For some businesses P60 certificates will be produced automatically by their payroll system, but for others it may be their responsibility to provide employees with a form. If payroll software does not automatically produce P60 forms businesses can order copies directly from HM Revenue & Customs (HMRC).

Failure to provide an employer with a P60 could lead to your business being investigated by HMRC and in serious cases could lead to a fine.

Richard Stonier, Partner at Deans, said: "Unlike other deadlines set by HMRC, the cut off date for sending P60 forms to employees does not entail an automatic penalty fine.

"However, P60 forms are an important part of an individual's tax documentation for the year and can affect their ability to claim benefits, reclaim overpaid tax and even buy a house.

"I would encourage all business owners to ensure that their employees receive a P60 form before the deadline, in order to avoid any potential problems further down the line."

If you would like help with managing your business's payroll service, please contact us.


12 May 2015 - Businesses need to be aware of escalating Auto Enrolment Fines

A number of businesses who have failed to sign staff up to a workplace pension scheme have been hit with escalating fines by the Pensions regulator for the first time and Richard Stonier, Partner at Deans is warning other firms not to get caught out.

Under current workplace pension rules, all employers with at least one member of staff have to undertake certain duties, including enrolling those who are eligible into a workplace pension scheme and contributing towards it. 

Under this process, known as auto-enrolment, businesses must meet certain requirements by their set staging date, which is based upon the number of people they employ.

Those that miss their staging date are initially sent a statutory notice reminding them to comply however, those who persistently and deliberately refuse to comply, or who breach workplace pension rules, could face a fixed penalty notice of £400.

Failure to pay this fixed penalty notice could lead to a series of escalating fines, with a prescribed daily rate of £50 to £10,000, depending on the number of staff the business employs.

Richard at the Stafford based accountancy firm,  said: "So far the Pensions Regulator has only handed out escalating penalty notices to four firms, but this number is likely to increase as more staging dates pass.

"All businesses in the UK with at least one employee are expected to create a workplace pension scheme for their employees by the end of 2018 and most will already be aware of their staging dates, if it has not already passed.

"Failing to enrol staff into a workplace pension carries with it the prospect of hefty fines that could have a significant impact on you and your company."

Richard added that firms need to take penalty notices seriously as the Pensions Regulator has confirmed that they will take civil action through the courts to recover penalties and will prosecute employers who deliberately and wilfully fail to comply with their duties.

If you are concerned about auto-enrolment or have been issued a penalty notice then it is important you consult an accountant sooner rather than later to ensure you do not incur any serious fines.

For more information please contact us.


07 May 2015 - Are you ready for FRS102?

Stafford based accountancy firm Deans is reminding small and medium-sized enterprises (SMEs) that a new accounting standard could affect their financial affairs.

Richard Stonier, Partner at Deans said: "The proposed changes of the new UK GAAP [Generally accepted accounting principles], known as FRS102, will align the requirements of FRS102, which is generally used by smaller firms, with those of the relevant International Financial Reporting Standard; as used by larger organisations."

The Financial Reporting Council (FRC) said the changes were needed as the complexity of the existing rules had led to 'potential unintended consequences' which meant that they were not only more arduous to apply, but they could also result in 'inappropriate accounting outcomes'.

The FRC has launched a consultation on amendments to accounting standard FRS102 in a bid to simplify rules surrounding share and share option awards for smaller firms. In its draft, called FRED61, the FRC has set out amendments to the standard, which deals with share-based payment transactions with cash alternatives. The FRC is looking to make the changes for accounting periods beginning on or after 1 January 2015. When a business adopts FRS 102, comparative accounts for the year prior to conversion will also be needed. The comment period on this proposal closes on 1 June 2015.

For more information please contact us.


29 April 2015 - SMEs face barriers to growth

Deans has reacted to news that 46 per cent of SME owners believe that a lack of access to skilled workers is the main obstacle to growing their business. The figure comes from research conducted by the British Insurance Brokers' Association (BIBA) and Populus in which 500 directors, senior leaders and SME owners were polled.

A similar number (43 per cent) believe that cutting so-called 'red tape' would be the quickest way to stimulate growth among mid-market businesses.

For smaller companies – those with 10-49 employees – access to credit is a wide concern, with 26 per cent citing this as the biggest barrier to expansion.

"It's disappointing that so many SME owners feel that there are barriers in their way," commented Richard Stonier, Partner, at Deans.

According to the BIBA and Populus survey, the biggest barriers to growth are:
• Lack of talent/skills: 46 per cent
• Red tape: 43 per cent
• Rising supplier costs: 36 per cent
• Lack of tax breaks for small business: 24 per cent
• Lack of business opportunities/sufficient network: 23 per cent
• Availability of credit: 23 per cent
• Knowledge of overseas markets: 13 per cent
• Protective overseas markets: 11 per cent
• Lack of cost-effective transport: 10 per cent

"One of the biggest obstacles to growth is a lack of effectively skilled staff, so more needs to be done to encourage SMEs to take on apprentices.

"Interestingly, availability of credit is seen as a barrier for nearly a quarter of those polled. Clearly, banks need to review their lending policies," added Richard. 

Deans, based in Stafford, is experienced at assisting SMEs and can offer a range of services to help owners facing any of the problems highlighted in the survey. For more details, please contact us.


20 April 2015 - Is Your Self-Assessment Tax return Still Outstanding?

Deans is reminding people that if they still haven't submitted their self-assessment tax returns, additional fines will soon be charged.

From 1 May, people that have yet to send HM Revenue & Customs (HMRC) their returns will incur a five per cent or £300 penalty if their 2013-14 paper self-assessment form is outstanding. Daily penalties of £10 per day for a maximum of 90 days will commence from the same date if an online self-assessment return is outstanding.

Figures from HMRC issued in February showed that more than 890,000 people failed to return their self-assessment tax returns in time for this year's online deadline of 31 January 2015. These people will have received a £100 late filing penalty but if a return is more than three months late, daily penalties of £10 per day, up to a maximum of £900, are charged.

If you leave it longer and a return is not filed within six months, an additional penalty of £300 or five per cent of the tax due for the tax year is applied, depending whichever is greater. This adds up to a total of at least £1,300 due, even if it is discovered that you do not owe any tax at all.

A further penalty will be issued if the return is not filed within 12 months; although at this point HMRC can regard a case as being more serious and a higher penalty of up to 100 per cent of the tax due can be issued.

Richard Stonier, Partner at Deans, said: "If you feel unable to complete and file your return or are worried about potential errors in the return you wish to send then the best step may be to seek professional help. By speaking with an accountant you can ensure your documents are accurate, removing unnecessary stress and anxiety.

"Failing to file your tax return on time can have large implications for you and your business, but with professional help, the late-filing fines can be kept to a minimum," said Richard.

For more information please contact us.


08 April 2015 - How will the pension reforms affect you?

New pension freedoms for over 55s that were introduced at the start of the month represent the biggest shake-up to pensions in a generation. Although the reforms will change the way we save and spend before and during retirement, Stafford-based firm Deans is warning people not to be too hasty.

For the first time, savers will be able to take up to 100 per cent of their pension as cash, allowing them to spend their retirement funds as they like. Most are expected to use the cash to meet daily living costs while some may choose to withdraw a lump sum and buy cars, holidays or home improvements.

Richard Stonier, Partner at Deans said: "The best option may be to wait before trying to access your money. The new tax year is likely to bring a rush of requests under these new rules, so there will invariably be a delay involved. However, and most importantly, taking your pension over a number of years instead of withdrawing it all at once will reduce your tax bill."

Nonetheless, this poses a problem because it is difficult to know how long you will need to withdraw a pension.

"Poor investment performance could mean that the capital is used faster than you planned and if this happens, your withdrawals will need to be reassessed to give you as much of the capital as possible for future years," added Richard.

For more information please contact us.


31 March 2015 - Changes to Tax Efficient Schemes

Stafford-based accountants Deans are reminding individuals that a number of tax-efficient investment schemes will be changing soon.

The reminder comes after the Chancellor, George Osborne, announced a number of changes to venture capital trusts (VCT) and enterprise investment schemes (EIS) during this year's Budget.

Under the reforms, EIS or VCT investment will be made subject to state aid rules and will require firms to be less than 12 years old when receiving their first funding from investors, except where the investment would lead to a substantial change in the firm's activity, or where the total investment represents more than 50 per cent of turnover averaged over the preceding five years.

The Budget also included a £15m cap on total investment received under tax-advantaged venture capital schemes, which increases to £20m for knowledge-intensive businesses that have up to 499 employees.

The new rules also remove the requirement that 70 per cent of seed enterprise investment scheme (SEIS) money must be spent before EIS or VCT funding can be raised, while firms who have benefitted from substantial subsidies for renewable energies will be excluded from receiving funding from EIS, VCT or SEIS investment.

Richard Stonier, Partner at Deans, said: "The Budget has had a very mixed response from businesses up and down the country and this is certainly one thing that may cause concern for some individuals.

"UK businesses and investors have both greatly benefited from EIS, VCT and SEIS schemes, but these new rules will complicate the matter for many and cause concern among firms who hoped to get funding, but who may now not be able to receive it.

"Anyone who is worried about what the changes will mean for them, their investment or business should contact a professional who can put their affairs in order."

The legislation will not be retrospective so it will not affect existing investments in VCTs and EIS and will be implemented from the date of state aid clearance.

For more information please contact us.


19 March 2015 - Budget Response - SMEs recognised for their contribution

Stafford-based firm Deans has welcomed measures introduced in the Chancellor's Budget to help the self-employed and SMEs.

Recognising the contributions made by micro-businesses in terms of UK wealth and reducing the number of unemployed, this final Budget of the current Parliament, delivered 50 days before the next General Election, offered two key benefits. SMEs make up around 99 per cent of Britain's private sector businesses and it was noted by the Chancellor that unemployment is continually decreasing as it is set to fall from 5.7 per cent to 5.3 per cent at the end of the year. This is lower than the Office for Budget Responsibility (OBR) forecast issued last December stating that it would be 5.4 per cent.

Richard Stonier, Partner at the UK200Group firm Deans said: "I am encouraged that SMEs and the self-employed have been recognised for their efforts in supporting the growing economy and creating jobs. Taking the 'Google Tax' forward will help level the playing field: sensible reform of business rates (if it happens) would be a further helpful step. Closing tax loopholes used by very few and focussing help on the majority of businesses which just get on with their business and pay their tax is the right priority. We like the commitment to keep Investment Allowance above £25,000 but would have liked to have seen a definite commitment to a known figure..."

Richard added that SMEs, start-ups and the self-employed should seek professional advice with tax matters. "I urge business owners to carefully study the details of this Budget and contact us to see how they can personally benefit."

For more information, please contact us.


17 March 2015 - Be Prepared for changes to Prompt Payment Discounts

Stafford-based Deans is reminding business owners that HM Revenue & Customs (HMRC) has announced the rules surrounding VAT declaration on prompt payment discounts (PPDs) are changing from 1 April 2015.

PPDs offer a reduction to the price of goods and services between a supplier and customer if the customer pays promptly. This is to encourage customers to pay after an invoice has been issued and ahead of the date that the full payment is due.

Under the current rules, suppliers offering a PPD are to charge and account for VAT on the discounted price, even if the full price (the undiscounted amount) is subsequently paid. This means that customers receiving PPD offers may only recover as input tax the VAT stated on the original invoice.

However, under the new rules due to come into force at the start of next month, suppliers must account for VAT on the amount they actually receive, while customers may recover the amount of VAT that is actually paid to the supplier.

Richard Stonier, at Deans said: "Companies who supply broadcasting and telecommunication services underwent similar changes in May last year so this is a subject we've been watching closely.

"The only problem is that under the new rules, the initial invoice will not necessarily show the correct VAT figure because you do not know whether the customer has qualified for the discount. HMRC has given some guidance and say that you can either issue a credit note and replacement invoice or issue a 'one time only invoice'. This means that the invoice shows VAT on the maximum price, but the customer has to claim only the level of VAT equal to what they end up paying under the discount terms." 

For further details please contact us.


16 March 2015 - Last Chance for Business Rates Rebate

Owners of farm diversification businesses and other business owners who think they are paying incorrect business rates need to get a claim in before 1 April. 

Government changes will prevent business owners who have paid too much in business rates from receiving rebates backdated to 2010.  Business owners therefore should make a claim before 1 April to prevent the loss of potential rebate income. 

For example a business owner of a commercial property with a rental value of £100,000 in 2010 would pay business rates of about £50,000 / year.  If this is deemed to be too high and a successful appeal is made to reduce the rateable value to say £80,000 then the annual rates saving would be £10,000.  A backdated claim to 2010 would give a rebate of £50,000 in total. 

The next date set for the government to rebase rateable values is 1 April 2015 which is why the opportunity to claim back to 2010 will expire then. 

 

10 March 2015 - Employers to Reveal Gender Pay Gap

Richard Stonier, at Stafford-based Deans is reminding companies that employ more than 250 people that they will soon have to reveal differences between average pay for male and female workers under a change to a law passing through Parliament.

Large firms that do not comply with the new rules could face fines of up to £5,000. At present, five firms have published gender pay figures under the current, voluntary approach.

The issue will be debated in the House of Lords, with the government tabling an amendment to the Small Business Bill. The bill is likely to come into force within the next 12 months.

"This is great news and a step towards the equality we've all been seeking," said Richard. "It's disappointing that a gender pay gap still exists and so I'm hoping that soon, it won't just be large firms that have to declare the salaries of male and female staff, but all firms."

For further details please contact us.


2 March 2015 - Employers Reminded about the Change in Rules to PAYE Information

Stafford-based accountants Deans is reminding businesses that they will no longer be automatically penalised for failing to file PAYE information under new changes to the legislation.

Under the new rules HM Revenue & Customs (HMRC) has said that they will not impose PAYE filing penalties for short delays of up to three days and that they will now review late payment penalties on a risk-assessed basis, rather than issue automatic on the spot fines.

Deadlines for businesses will remain the same and they will still be expected to file on, or before, each payment date. The new rules will come into effect from 6 March 2015 and are seen as a more lenient approach than that held in the past by the department.

Richard Stonier, from Deans, said: "This will be a welcome break to businesses who have been worrying about potential penalties following the introduction of the new scheme.

"This leniency marks a significant change in HMRC's approach to PAYE penalties, but businesses should still be mindful of their requirement to file information within their deadline.

"Those who have already received an in-year late filing penalty for period 6 October 2014 until 5 January 2015 and were three days late or less should file an appeal immediately as they may be entitled to a refund," added Richard.

HMRC will also be closing around 15,000 PAYE schemes which have not filed a report since April 2013 and which appeared to have ceased. Those schemes affected will be contacted prior to their closure on 6 March by HMRC and given advice about the changes and the impact it will have on their business.

For further details please contact us.


25 February 2015 - TTIP of the Iceberg?

The future of the UK's SMEs could be threatened if the Transatlantic Trade and Investment Partnership (TTIP) is introduced. That's the warning from Richard Stonier, at Stafford-based Deans who goes on to argue that TTIP will have a huge impact on UK companies.

"TTIP would bring benefits to big business, but SMEs seem set to lose out," added Richard. "A huge majority of UK firms are SMEs and they have been behind the economy's growth for a long time. At the last Autumn Statement, the Government recognised this and rewarded them with a raft of measures designed to help. Now, their very existence could be hanging in the balance."

The aim of TTIP is to create a free market on both sides of the Atlantic and remove regulations, but a good many of these currently work in favour of SMEs. The European Commission's Centre for Economic Policy Research has said that the agreement will boost EU economic output by 0.5 per cent by 2027. Export predictions are slightly more positive and put growth at 5–10 per cent over a 10–20 year period. "However, given the current rapid rate of growth among SMEs, it's hard to see why such a potentially disruptive move is a necessary intervention," said Richard.

"If you're a small business in Europe that creates products adhering to EU rules, you may well find that under TTIP, your products are more expensive to produce than their US equivalents, due to their use of cheaper labour and materials that are not permitted under EU legislation," commented Richard. "If some of the EU's regulations are scrapped, a lot of US products that were previously banned are likely to flood the market and undercut prices."

A further problem for SMEs is the damage that TTIP could cause to local and home-grown businesses. In the UK, some councils operate schemes that aim to strengthen communities and help small local suppliers. In fact, the government recently pledged support to smaller businesses by setting a target for 25 per cent of its supplier contracts to be fulfilled by SMEs by May 2015. However, these arrangements would be deemed illegal under TTIP; further compromising the growth prospects of the UK's SMEs.

For further details please contact us.


16 February 2015 - Have you checked for Fraud and Error?

Stafford-based accountancy firm Deans is warning businesses to check their accounts regularly to identify errors and fraudulent acts that could potentially harm their business.

It comes after a new report produced by the Centre for Counter Fraud Studies at the University of Portsmouth uncovered an increase in the amount of fraud and error found within UK businesses and the public sector during the last year.

Their research revealed that these mistakes cost organisations more than £98.6 billion a year in turnover. It also discovered that losses from these activities as a percentage of annual expenditure increased by 18 per cent from 2010/11 to 2012/13.

The report's figures are based upon valid loss measurement exercises, which estimate fraud in an organisation by checking one type of its expenditure for fraud and extrapolating it across the other areas of the business.

Richard Stonier from Deans, said: "Fraudulent actions and errors can easily be missed within a busy business, but failing to spot them and rectify the problem could soon eat into profits and turnover."

"This report highlights what a significant issue this is in the UK and with many small and medium-sized enterprises already facing issues with late payments; this is the last thing they need.

"However, by ensuring you have a robust set of accounts and a monitoring system in place you can identify problems and deal with them quickly."

Richard added that many firms needed to create a culture that made reporting fraud and errors in the workplace second nature. He also recommended introducing tougher internal guidelines to reduce complacency and prevent mistakes from happening in the future.

For further details please contact us.


10 February 2015 - Did you Forget to File your Return On Time?

Stafford–based accountants Deans are warning people who filed their tax returns late to be prepared for fines and to deal with them quickly before they become a bigger issue.

The latest figures from HM Revenue & Customs (HMRC) showed that more than 890,000 failed to return their self-assessment tax returns in time for this year's online deadline of 31 January 2015.  These people will soon be receiving a £100 late filing penalty.  But the fines do not stop there and failing to file your tax return in the coming months could lead to bigger penalties further down the line.  If your return is more than three months late you will be automatically charged daily penalties of £10 per day, up to a maximum of £900.

If you leave it longer and a return is not filed within six months an additional penalty of £300 or 5 per cent of the tax due for the tax year is applied, depending whichever is greater.  This adds up to a total of at least £1,300 due, even if it is discovered that you do not owe any tax at all.  A similar fine will be issued again if the return is not filed within 12 months, however, at this point HMRC can regard a case as being more serious and a higher penalty of up to 100 per cent of the tax due can be issued.

Richard Stonier, from Deans, is warning people who have not filed their self-assessment to do so now to avoid further penalties in the future.  "Failing to file your tax return on time can have large implications for you and your business," said Richard.  "Not only is there an immediate fine of £100 to pay, but there is also the prospect of larger fines further down the line.  Now is the time to act, don't leave it any later and run the risk of accumulating fines that could damage you or your business."

Richard added that he recognised the pressures that running a business can have on an individual's life; making tax returns a low priority.  Deans is calling on those still with outstanding tax returns to seek help to make sure further penalties are avoided.

For further details please contact us.


03 February 2015 - Check your Tax Code

Stafford-based accountants Deans is warning that up to three million people that have more than one source of income potentially face backdated tax bills of £2,000 per year because of errors made by HM Revenue & Customs (HMRC).

Among those most likely to be affected are veterans who draw a military pension and have taken a civilian job after leaving the Armed Forces. Pensioners with two pensions and those who work part-time after retirement are also likely to be hit.

Richard Stonier, from Deans noted that problems typically arise because tax offices across Britain are failing to share information about taxpayers' incomes. "Often when people have two sources of income, whether that's from pensions, PAYE employment or a mixture of the two, there are two tax codes issued by separate HMRC offices because each acts on the information given to them by an employer, pension provider or the taxpayer. The mistakes are discovered by HMRC years later, leading to unexpected tax demands," said Richard.

For more information or if you would like us to check your coding notice please contact us.


26 January 2015 - Look out for unofficial HMRC emails

Stafford based accountants Deans is warning people to be aware of fraudulent emails and imitation HM Revenue & Customs (HMRC) websites as the 31 January deadline for self-assessment tax returns looms.

The number of so-called 'phishing' emails – correspondence designed to acquire sensitive information such as passwords and credit card details – is likely to increase as scammers look to prey on unsuspecting taxpayers. Purporting to come from HMRC, they often demand payment or claim that a refund is due.

Richard Stonier from Deans said: "HMRC will never inform you about a tax rebate or penalty by email, so if you receive one of these messages, report it immediately by forwarding the message to: phishing@hmrc.gsi.gov.uk.

"Also, be suspicious of emails that request personal or payment information such as usernames, passwords, bank or card details, and messages that use a vague non-specific greeting, such as 'Dear customer'."

As well as phishing emails, copycat websites exist that outwardly appear to be official and part of a Government service. However, there is a risk that if you use one of these sites, you could end up paying for services that you could get for free by using the official service.

"People should be very careful about which website they are on before providing their personal information," added Richard.

For more information please contact us.


21 January 2015 - Self Assessment Deadline Looms.....

With only a week left until the deadline for self-assessment tax returns Stafford-based accountants Deans is reminding people to get their documents filed on time.

It comes after new data released by HM Revenue & Customs (HMRC) revealed that young men aged between 18 and 20 were the worst offenders for returning tax returns on time in 2013, while individuals in London were the most likely to file their return late.

The figures, taken from last year's findings, also indicated that the over-65s were the most likely to get their returns in on time and that women were generally better than men.

According to HMRCs latest data 6.45 million returns have already been submitted ahead of the deadline at the end of the month, with another 4.5 million still outstanding.  All tax returns, whether paper or online, must include all details of taxable income, and any capital gains if appropriate, as well as any taxable allowances or reliefs incurred during that tax year.

Failing to file your return on time carries with it significant fines, which include an immediate fine of £100 for not submitting before the deadline.  After this penalties can quickly escalate and leaving it longer than three months could see £10 a day added to the fine, up to a maximum of £900.

The same rules apply if your return is incomplete when sent and you are found to owe tax.  On this occasion you may also have to pay interest on top of any fine.

Richard Stonier, from Deans, said: "As the research from HMRC shows, young men are the worst offenders, but regardless of your sex, age or occupation filing a tax return is something that is best done on time.  Although there is only a week left to file your return, it is never too late to act."

"If you feel unable to complete and file your return or are worried about potential errors in the return you wish to send then the best step maybe to seek professional help. By speaking with an accountant you can ensure your documents are accurate and delivered on time, removing the stress and fear of fines."

Richard added that those who continually find themselves in a panic to get their returns in on time should consider preparing them earlier and either submitting them on paper, before the 31 October deadline, or have them prepared well in advance so they can be easily uploaded online.

For more information please contact us.


16 January 2015 - HMRC Clamps Down on Horse-box Owners

Stafford based accountants Deans is warning horsebox owners that they are set to be the subject of an HM Revenue & Customs (HMRC) investigation, as it continues its clampdown on tax evasion.

HMRC apparently suspects that some farmers and rural business owners are buying horseboxes through their company and either falsely claiming the cost as a business expense for tax purposes, or failing to declare personal use of the horsebox and paying tax on it as a 'benefit in kind'.

Thanks to the department's Connect computer system, HMRC officials can now identify discrepancies between an individual or company's official tax records and information from third party sources.

Richard Stonier, from Deans said: "Underpaid tax relating to horseboxes may seem to be a mere drop in the ocean but HMRC is focussing its attention on these high value assets.

"It shows how determined HMRC is to capture every mistake made in tax returns. Without the correct documentation, even owners of horseboxes who have done nothing wrong could find themselves on the receiving end of a lengthy and uncomfortable tax investigation. As 31 January approaches, the deadline self-assessment tax returns, it is important to get your tax affairs in order."

For more information please contact us.


22 December 2014 - SMEs need to be prepared for 2015

Stafford - based accountants Deans is advising SMEs to keep an eye out for sudden changes to the economic climate next year that could potentially damage their trading figures.

The Office of National Statistics (ONS) has released new figures showing that retail sales volumes rose by 6.4 per cent in 2014; the highest year-on-year increase since May 2004.

This culminated in higher than expected results in November where figures rose by 1.6 per cent; significantly more than the 0.4 per cent predicted. This was seen by many as a result of the successful 'Black Friday' sales on 28 November.

However, another significant factor in the increase in sales is the fall in inflation, which hit a 12-year-low of one per cent last month, according to the most recent Consumer Price Index.

For the majority of individuals this has led to a rise in their real-terms wages, which have lagged behind the increasing cost of living since the recession started and has prompted many to spend more at the shops.

The main reason for this sudden fall in inflation is credited to the tumbling price of oil, which has seen crude fall below $60 a barrel. However, Richard Stonier, from Deans, is advising SMEs to be on the lookout for sudden changes in the price of oil, which could cause inflation to suddenly rise, sparking an increase in interest rates.

Richard said: "While many people will be enjoying the freedom of having more buying power, there is a danger that a sudden increase in fuel prices will drive inflation up, forcing the Bank of England to trigger an increase in interest rates.

"This could be potentially damaging to SMEs that aren't prepared to meet a fall in demand or experience increased costs following an interest rate hike."

An interest rate increase is expected at some point in the New Year, but whether this will be triggered by changes to inflation is yet to be seen.

Richard added: "Businesses need to prepare themselves for sudden changes in Britain's economic climate. In order to do this, SMEs need to be adaptable and ready to deal with any challenges 2015 might throw at them."


16 December 2014 - Solicitors to be Targeted by HMRC

Stafford - based accountants Deans is warning solicitors that they have become the latest group of professionals to be targeted by HM Revenue & Customs (HMRC).

As the tax authority seeks to crack down on non-payment, it is increasingly looking at more professions.

Those wishing to take part in the voluntary tax disclosure scheme must notify HMRC by next March and pay any tax that is owed by 9 June 2015.

HMRC says that by doing this, individuals will have a number of guarantees, including the ability to spread tax payments over a period rather than paying in one lump sum.

If an individual has made a careless mistake with their tax, they will only pay for a maximum of six years, irrespective of how far behind the person is with their tax affairs. However, if an individual chooses not to disclose key information and HMRC finds that they are behind with their tax, it has the power to go back up to 20 years and may conduct a criminal investigation.

Previously, other sector-focused crackdowns have focused on dentists, doctors and most recently, landlords. Since 2007, these initiatives have collected nearly £600 million in tax, according to HMRC.

Richard Stonier, from Deans said: "It is imperative that not only solicitors, but anybody who is in doubt about their tax affairs seeks advice. Establishing a dialogue with the authorities is always looked on far more favourably by HMRC than individuals that take no action and bury their head in the sand."


08 December 2014 - HMRC Cuts Advisory Fuel Rates

Stafford – based chartered accountants Deans wants to remind businesses that advisory fuel rates for company cars have changed.

Each quarter H M Revenue & Customs (HMRC) posts a list of advisory fuel rates (AFR) on its website, basing its calculations on the latest trends in prices at the pump. The AFR is then used by companies to claim back tax on business mileage for company cars or to reimburse private mileage to individuals using their own car for business use.

This quarter, HMRC has taken the decision to cut AFRs by 1p for diesel cars with engines larger than 2,000cc and petrol vehicles with engines over 2,000cc, along with those that have motors of 1,400cc and smaller. New values shown in table below:

 Engine size  Petrol  LPG
 1400cc or less  13p (14p)  9p (9p)
 1401cc to 2000cc  16p (16p)  11p (11p)
 Over 2000cc  23p (24p)  16p (16p)
     
 Engine size  Diesel  
 1600cc or less  11p (11p)   
 1601cc to 2000cc  13p (13p)   
 Over 2000cc  16p (17p)  
 
This new rate is effective from 1 December 2014 and leaves the other rates for other vehicles unchanged.

It is believed that this cut to the AFR is a response to the sharp decline in prices at the pump, which has seen average fuel prices drop to 121.18p for petrol and 126.11p for diesel, according to the government’s latest weekly road fuel price index.

These falling prices have occurred as a result of a slump in the world’s crude oil prices that have been driven by a surge in US shale gas and higher than expected levels of production in the Middle East – causing crude oil prices to fall to $73 a barrel.  While most of this saving is yet to be passed on to the average motorist it has resulted in prices falling. This, along with a freeze on fuel duty announced in the latest Autumn Statement, means that the burden of fuel costs has been somewhat alleviated in recent months.

Richard Stonier, from Deans, said: “For a lot of firms the price of fuel has had a significant impact on their business in recent years and this change to AFR, along with the freeze on fuel duty, will certainly be welcomed by the majority of companies.  It is good to see that HMRC is altering its AFR based upon actual fuel prices and shows that they are taking an active interest in what is happening.  While not every motorist will benefit, it will certainly be a nice early Christmas present for all businesses and individuals who claim back tax on business mileage.”

Richard added: “Companies need to keep in mind that the price of crude oil remains unpredictable and they should prepare themselves for a rise or fall in future.”

04 December 2014 - Autumn Statement

Stafford-based firm, Deans has welcomed measures introduced in the Chancellor's Autumn Statement to help SMEs.

Recognising that SMEs make the biggest contribution to the creation of jobs and wealth in the UK this final Autumn Statement of the current Parliament ahead of the election in May 2015 includes a number of measures particularly relevant to them.  These include an increase (to 230%) in the tax relief for expenditure on qualifying research and development work; extending the abolition of the NIC "jobs tax" to apprentices under 25; providing further finance both for the British Business Bank's Enterprise Capital Funds programme (£400m) and for the Enterprise Finance Guarantee scheme (£500m).

High street retailers will also benefit from a business rate discount that rises from £1,000 to £1,500 (with a full review of the structure of business rates promised by 2016); a £45m package will be made available for first time exporters; and there will also be tax relief available for businesses in flooded areas.

Richard Stonier at the UK200Group firm Deans said that he was encouraged by the plans to support businesses, especially those on the high street. "The move to increase the business rates discount is very pleasing to see in this Autumn Statement. Business rates are particularly problematic for retailers who are fighting for business against online retailers, so this is most definitely welcomed."

Richard added that businesses should seek professional advice with tax planning. "We urge business owners to carefully study the details of George Osborne's Autumn Statement and contact us to see how they can personally benefit."

02 December 2014 - Warning to keep HMRC Guidance copy as defence

Stafford – based chartered accountants Deans are warning anyone relying on HM Revenue and Customs (HMRC) guidance published online to keep printouts or screengrabs to protect them in case they are subject to an investigation.

The warning has been issued following complaints that information migrated from HMRC and other government department websites to the new gov.uk website has been simplified and abridged – often with incomplete or misleading advice.

Richard Stonier, from Deans, said: "Anyone who has looked something up on gov.uk and then acted on the information, or decided they don't need to do anything based on what they have read, are recommended to have proof of the guidance they relied on in the event of a dispute with HMRC.

"While HMRC will amend guidance as soon as it is aware it is incorrect, this is of no use to someone who has relied on any incorrect information given, especially if they are unaware that this guidance has subsequently been amended.

"Therefore to prove beyond doubt what the guidelines said at the time it was relied on, taking screenshots or printing-out the guidance and date-stamping them is important for evidential purposes."

In two legal cases, judges have stated that if the tax authority has made a clear and unambiguous statement on a matter, then any person acting on that information should be able to rely on it.

Richard added: "Our advice to every taxpayer is simple, before making any decision or relying on HMRC guidance, speak to a qualified accountant."


26 November 2014 - Small Employers Warned on RTI Penalties

Stafford – based chartered accountants Deans are warning small employers they could face penalties if they fail to submit payroll details under the new Real Time Information (RTI) system.

Under RTI, employers must report the amount of money paid to staff either on weekly or monthly basis. It was introduced in a bid to ensure changes to employees' status are updated quicker and more easily.

RTI penalties came into force on 6 October for employers with more than 50 employees, and will be from 6 March 2015 for employers with fewer than 50 employees.

Employers will face a penalty if their Full Payment Submission (FPS) is late, they don't send the expected number of FPSs or they don't send an Employer Payment Summary (EPS) when they didn't pay any employees in a tax month.

Penalties won't be charged if an employer is new and sent their first FPS within 30 days of paying an employee, or if it's an employer's first failure in the tax year to send a report in on time (this doesn't apply to employers with fewer than 50 employees for the tax year 2014-15).

Penalties differ depending on how many employees a firm has. For one to nine employees the monthly penalty is £100, employers with 10 to 49 employees face a £200 monthly fine, those with 50 to 249 face a £300 a month penalty while employers with 250 or more employees face a £400 fine.

Employers who file their FPSs more than three months late will be charged an additional penalty of 5% of the tax and National Insurance that they should have reported.

Richard Stonier, from Deans, said: "Small employers need to be wary that even if they have not paid employees in a tax month, and think they have nothing to tell the RTI system, they can still get caught out with penalties.

"If neither a FPS nor EPS is submitted, HMRC will raise a specified charge based on previous PAYE submissions; this may be significantly more than the actual PAYE payment figure, so it is crucial that employers submit RTI returns accurately and on time.

"In addition, be aware that if employers run more than one PAYE scheme, they can be charged penalties for each.

"Interest is also charged if penalties are not paid within 30 days of getting a penalty notice by HMRC. The first penalty notices for tax year 2014 to 2015 will be issued in January 2015."

For information on RTI penalties or payroll in general please contact us.

27 October 2014 - HMRC Fake Tax refund Warning

Stafford based chartered accountants Deans are warning people to be on the lookout for fake tax refund emails, after a reported 70% increase in the past six months.

HM Revenue and Customs (HMRC) says it has received reports of almost 75,000 fraudulent "phishing" emails between April and September.

Richard Stonier, partner at Deans, said: "The fake emails often promise a tax refund, and ask for the recipient's personal details, including their name, address, date of birth, bank and credit card details – including passwords and their mother's maiden name.

"However once this information is provided there is no tax refund, and unfortunately money is stolen from the victim's bank account and their details are sold on to other criminal gangs, which can lead to identity theft.

"HMRC will never contact taxpayers about tax refunds through emails, and always through the post."

Anybody who receives such an email is being advised to forward it to HMRC at phishing@hmrc.gsi.gov.uk, and then delete it.

HMRC says it is working closely to tackle the problem and has worked closely with other law enforcement agencies to close down more than 4,000 websites responsible for sending out the emails in the last six months.


20 October 2014 - 55% Pensions Tax on Death Scrapped

Stafford based chartered accountants Deans say that the Government's plans to scrap the 55% tax rate levied on unused contribution pensions assets that are passed on death could benefit inheritance tax (IHT) planning.
From April 2015, pension savers will be able to nominate a beneficiary to inherit their pension if they die. If they die before the age of 75, there will be no tax to pay on the inherited pension cash and if death occurs at 75 or above, the person inheriting the pension money will pay only their own marginal, or highest, rate of income tax.
Richard Stonier, partner at Deans, said: "The new rules are likely to have very significant financial planning implications, particularly as a means to avoid inheritance tax (IHT).
"With the 55 per cent tax rate abolished, putting surplus cash into a pension is likely to become more attractive as a way to reduce inheritance tax bills, particularly as rising house prices push the value of an increasing number of estates above the £325,000 threshold at which IHT become payable at 40 per cent.
"Up to the age of 75, passing on a pension will carry no tax liability – whereas other assets, like money in shares or savings accounts – will be liable for IHT. Currently any assets worth more than £325,000 are taxed at 40% when passed on.
"Even pensioners beyond the age of 75 with defined contribution pension assets are only likely to pay 20% income tax on the money they receive from a pension fund – far less than IHT.
"It means more pensioners are likely to put as much as they can into a pension pot up to the lifetime limit of £1.25 million."
It is likely that the announcement will bring tax benefits to around 320,000 people who retire each year with defined contribution pension savings.
For more information on the proposed pensions changes and inheritance tax planning please contact us.

29 September 2014 - Taxpayers warned over e-mail scam

Stafford based chartered accountants Deans are warning taxpayers to be vigilant about another HMRC email scam suggesting that they have been removed from self-assessment.

This email purports to come from HM Revenue and Customs and includes the tax authority's green logo. The email tells the recipient that as of September 20 they are "no longer eligible for a Tax Return", and asks them to renew their details by submitting form.

Coming from a non-official email address revn222@ipodnanouk.com, and containing spelling errors, poor wording and layout, it should suggest to recipients that it is fake. However it is understood that a number of taxpayers have been taken in and clicked on the link.

Richard Stonier, partner at Deans, said: "HMRC will never contact people and ask them to hand over personal information by email, so people should be vigilant of suspicious looking emails. Many of the scam emails purporting to come from HMRC are not as obvious as this example.

"Handing over such information could result in money being stolen from victims' banks accounts, but also their personal details could be sold on to organised criminal gangs, potentially leading to identity theft.

"HMRC is urging anyone who may have received an email such as this to avoid clicking on links or opening attachments and forwarding such emails onto HMRC before deleting them."

If anybody receives a suspicious email they should forward it to phishing@hmrc.gsi.gov.uk.

For more information about tax scams and how to prepared, please contact us.

16 September 2014 - HMRC Postpones RTI Late Filing Penalties for Small Firms

Stafford based chartered accountants Deans are advising businesses that HM Revenue and Customs (HMRC) has announced that firms with 49 or fewer staff will be exempt from RTI late filing penalties until March 2015.

HMRC's Real Time Information (RTI) initiative originally required all employers to provide information about tax and National Insurance deductions every time they paid an employee, rather than annually, by October this year.

However after many small businesses complained they were not ready to implement RTI, HMRC decided to postpone penalties until next year.

Richard Stonier, partner at Deans, said: "HMRC's announcement means that until March 2015, small businesses will be allowed to submit PAYE information on a monthly basis.

"However while small firms have been given a period of grace, we would still recommend they get into the habit of submitting information to HMRC on or before payments so they do not fall foul of penalties from March 2015.

"Small business should ensure that they have the mechanisms in place to be RTI compliant now before it's too late.

"It is also worth reminding employers with more than 50 employees that they will still be fined if they file PAYE returns late after the October 6 deadline."

In announcing the deferral of penalties for small firms, Ruth Owen, HMRC's director-general for personal tax, said: "We know from our experience of rolling out of RTI that to ensure a smooth transition for our customers it's best to introduce changes in stages. This will allow us to update our systems and enhance our guidance and customer support as needed.

"We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach mean they have a little more time to comply with the new arrangements before facing a penalty."

For more information on complying with Real Time Information requirements, please contact us.

8 September 2014 - Online Traders Warned after E-Bay Seller Jailed for Tax Fraud

Stafford based chartered accountants Deans are warning online traders that they must disclose their earnings to HMRC, following a recent prosecution of an eBay trader.

John Woolfenden from Manchester has been jailed for two years for evading £300,000 in tax following an HMRC investigation.

Woolfenden sold CDs, DVDs and console games via eBay and other auction sites such as Play.com and Playtrade using the name "Globalworldentertainments", but never declared his self-employed status or sales for tax purposes.

When Woolfenden's house was raided by HMRC in May 2013, officers found the house has been set-up as an online trading base, with boxes piled high in spare rooms and even the shower.

Forensic accountants from HMRC found that £1.3 million had passed through various bank accounts over a six year period. Some money had also been laundered through American bank accounts.

Richard Stonier, partner at Deans, said: "People operating online trading activities as pseudo-businesses should take this prosecution as a warning of the consequences of not declaring their income to the relevant tax authorities.

"Individuals who sell things online to make a profit, and do so often or regularly, will be considered as 'traders' by HMRC, and will need to register with the tax authority for self-assessment.

"HMRC is likely to start an investigation particularly if you register as a business seller on an internet auction site and do not declare your income to them.

"By speaking to a trusted accountant online traders can get the advice they need to ensure they are tax compliant."

Woolfenden was investigated as a result of HMRC's e-Marketplaces campaign to tackle undeclared tax and income from online trading. While this closed in September 2012, the department says that it is continuing to use the data gathered during the campaign to identify people who should have come forward but did not do so.

For more information or help registering for self-assessment, please contact us.

 

2 September 2014 - 4m workers not enrolled in work placed pension

Stafford based chartered accountancy firm Deans says many people are under-saving for retirement, after data revealed that nearly 4.5 million people were not enrolled in a workplace pension scheme.

Figures from the Pensions Regulator show that while four million workers are now in an automatic workplace pension plan, with compliance by more than 21,000 employers, there are still 4,443,000 workers who have not been enrolled.

The regulator revealed that 4,032,000 eligible jobholders have been automatically enrolled, 8.6 million workers were already members of a qualifying scheme and 423,000 eligible jobholders have had the defined benefit or hybrid scheme transitional arrangement applied to them.

The figures are also missing the nearly 4.5 million self-employed in the UK who don't enjoy the benefits of auto-enrolment.

Richard Stonier, partner at Deans, said: "The DWP recently produced analysis which showed that 11.9 million people are under-saving for retirement, and it is understood that people should be saving at least 12% of their salary a year to a pension to enjoy a comfortable retirement.

"Meanwhile employers need to find out urgently their auto enrolment staging date. An employer's staging date is set in law, and they must file a declaration of compliance five months after this date.

"Many thousands of employers have already completed their auto-enrolment duties, while the pensions regulator have begun the process of writing to hundreds of thousands of small employers informing them when they need to be ready to meet their new workplace pension duties."

Employees looking for pensions advice, or employers seeking help on auto enrolment compliance should contact Ed Marshall at our office for more information.

 

1 September 2014 - Self Assessment Guidance on the move

Stafford based chartered accountants Deans are reminding self-employed individuals that HMRC is moving self-assessment guidance to the GOV.UK website.

The transition of the guidance started on 21 August, meaning that anyone trying to access self-assessment guidance on the HMRC website will be automatically redirected to the new page on GOV.UK

Anything that is no longer needed will be available on the National Archives site.

HMRC's existing online services - the ones individuals need to sign into, such as self- assessment, and Corporation Tax, won't change as a result of transition. But taxpayers will now need to access them from GOV.UK.

Richard Stonier, partner at Deans, said: "This transition to GOV.UK is part of the Government Digital Strategy to centralise all government websites.

"However while self-assessment guidance will move to GOV.UK, taxpayers need to be aware that tax returns and notes won't be moving to GOV.UK at the same time as the self-assessment guidance goes over. Instead taxpayers will be linked back to the HMRC website until they're ready for transition over to GOV.UK.

"In addition to the transition, the current HMRC branding will be dropped and there will be some changes to how the online services look.

"HMRC state their aim is that the work should have no impact on the taxpayer, and they should not need to do anything but start using the guidance on GOV.UK.

"The main problem may come when, or if, HMRC move over their self-assessment tax returns, and this is something that taxpayers will need to be aware of before the next self-assessment tax deadline."

For more information or help with your self-assessment tax return, please contact us.

 

15 August 2014 - HMRC: Judge, Jury & Executioner

Stafford based chartered accountants, Deans, are warning that there are very difficult times ahead for tax planners. On top of recent changes such as the GAAR or General Anti-Abuse Rule, the Finance Bill 2014 provides HM Revenues & Customs (HMRC) with tools to combat the promotion of aggressive tax schemes by firms referred to by HMRC as 'high risk promoters'.

These provisions will impose severe restrictions on those who continue to promote abusive tax schemes despite warnings from the government and HMRC that such activities must stop.

For users of schemes the government has already made clear that it will resort to retrospective changes in tax law to defeat the continued use of tax schemes, as was the case in 2012 and 2013 in respect of SDLT schemes.

As part of the latest crackdown, many taxpayers who have used schemes in the past that were disclosed under DOTAS will soon start to receive 'advance payment notices' (APNs) requiring upfront payment of any tax affected by the scheme. 

Richard Stonier, partner at Deans, said: "This raises concerns that HMRC will, in future, be able to act as judge, jury and executioner. It is easy to conclude that the combination of these rules will kill off what remains of the more aggressive end of the tax planning market and all in all the future for anyone labelled by HMRC as a 'high risk promoter' looks bleak.

"This is especially so since it appears relatively easy to breach at least some of what is referred to as the 'threshold conditions' in the high risk promoter rules. Such conditions include, for example an adverse GAAR panel opinion being given or non-compliance (in HMRC's opinion) with DOTAS and the Code of Practice for Banks.

"Where a promoter falls foul of one or more of these threshold conditions HMRC can issue what is referred to as a 'conduct notice' allowing HMRC to impose behavioural conditions on the promoter that must be met if the promoter is to avoid even more severe action."

HMRC will decide what conditions should apply and judge whether the conditions have or have not been met. A breach of the conduct conditions will allow HMRC to issue a 'monitoring notice' and only at this stage is any independent oversight built into the rules, as HMRC will be able to issue a monitoring notice only with the permission of a tribunal judge.

"Promoters subject to such a notice will be required to publicise that they are a monitored promoter and failing to do so could mean a penalty of up to £1m, in effect 'naming and shaming' the promoter," added Richard.

This clamp down on schemes highlights the need for individuals and businesses to seek long-term tax planning advice rather than being sold the quick fixes often offered by the scheme promoters.

For more information on APNs or any other tax issue, please contact us.

 

1 August 2014 - Update from DEFRA on the environmental measures within the Common Agricultural Policy (CAP) reform

CAP is undergoing reform with the single payment scheme being replaced by the basic payment scheme (BPS) from 2015.

To qualify for BPS the individual will need to meet the "active farmer" test, have at least 5 hectares of eligible land and for established farmers have at least five BPS entitlements.

The Department for Environment, Food and Rural Affairs (DEFRA) have now announced further decisions and clarification in respect of environmental matters and "greening".

Three greening measures will make up 30% of the CAP payments which claimants will need to comply with in order to receive this element of the payment.  However, given that the greening regulations are mandatory failure to comply with them could result in penalties as well as loss of the 30%.

Greening

The three elements to the greening measurements which will be required from 2015 are crop diversification; ecological focus areas; and the maintenance of permanent grassland at a national level.

Crop diversification

Compliance is required on the following basis:
- Farms with more than 30 hectares of eligible arable land will need to grow at least three crops (with the main crop being no more than 75%; and the two main crops no more than 95% of the land).
- Farms with between 10 to 30 hectares of eligible arable land will have to grow at least two crops (with the main crop being no more than 75% of the land).
- Farms with less than 10 hectares of eligible arable land do not have to comply with the crop diversification regulations.

Permanent crops are not classed as arable, although multi annual crops will be.  Temporary grass also counts as a crop and DEFRA have confirmed that winter and spring varieties can be counted as two separate crops.

Different species count as different crops, but any crops contained within one sub-species is likely to count as one crop giving particular issues for some farms (for example Brassica growers where broccoli, cauliflower and cabbage all fall under one sub-species).  It is understood that DEFRA is being asked to provide further level of detail in this respect.

Ecological Focus Areas (EFA)

Farmers with more than 15 hectares arable land are required to provide 5% of their arable area as an EFA.  DEFRA have now announced that they will make the following options available to farms which can count towards EFA's:
- buffer strips;
- hedges (note that payment delays could be experienced due to mapping requirements if claims are not submitted as early as possible);
- catch crops and cover crops;
- nitrogen fixing crops (with the broadest possible range of crops qualifying with details to be published shortly); and
- land lying fallow (permitted to sow with environmental seed mixes such as pollen, nectar and wild bird seed mix).

Subject to ongoing negotiations, further EFA options may be added to the list in future years.

Permanent grassland

The level of permanent grassland in relation to the agricultural area will continue to be maintained at a national level.  If the level of grassland falls below 5% of that recorded in 2015, it must be reinstated.

Further development

It is likely that there will be further developments and clarification on some of the finer points of detail under the CAP reform. Further details can be found on CAP reform generally at the DEFRA website gov.uk/defra.


 

28 July 2014 - New State Pension Proposals

Stafford based chartered accountancy firm Deans are warning pensioners that the government has set out plans to reduce the annual state pension deferral rate from 10.4% to 5.8%.

Pensioners can choose to defer claiming their state pension when they reach state pension age, and when they do claim it they may get extra state pension.

Currently deferred state pensions increase by 1% for every five weeks a claim is put off. This is equivalent to 10.4% for every full year a claim is deferred.

However under draft regulations set out by the government, when the new state pension is introduced in April 2016, the deferred state pension will increase by 1% for every nine weeks it is not claimed, or 5.8% for the whole year.

Richard Stonier, partner at Deans, said: "These draft regulations are quite a big step change and could have significant consequences for people who were thinking about deferring their state pensions.

"With interest rates likely to increase, the deferral rate will start to look like less good value, and pensioners may want to reconsider whether deferring is the right thing to do.

"There are also tax implications that need to be considered when someone is contemplating deferring or not. Personal circumstances need to be taken into account such as the rate of income tax which they would pay if they received their state pension now, their personal wealth and even their health.

"We would urge anybody considering whether to defer their state pension to speak to a trusted independent adviser."

For more information on pensions, wealth management or tax planning, contact Ed Marshall at Deans.

 

23 July 2014 - HMRC Raids

Stafford based chartered accountants Deans are warning individuals that HM Revenue and Customs (HMRC) is increasing its raids on properties to catch tax evaders.

According to recent research HMRC has increased its number of unannounced searches by 12% for the year up to March 2014.

Data obtained found that 500 property raids were carried out by HMRC in the past 12 months, up from 445 raids in 2012/13, and more than triple the number of raids conducted between 2008 and 2011.

Researchers say the large jump in property raids is down to HMRC's sustained campaign to increase prosecutions for tax evasion. HMRC's target is to prosecute 1,165 people for tax evasion in 2014-15, five times more than its 2010 target of 250 prosecutions.

Richard Stonier, partner at Deans, said: "The government has set HMRC ambitious targets to clamp down on tax evasion and one of the tools in its armoury is property raids.

"Property raids have increased significantly, and more suspects are being arrested as the tax authority keeps up with its criminal prosecutions target.

"As well as targeting the very biggest suspected tax evaders, HMRC is also casting its net wider, targeting middle class professionals, like solicitors and bankers.

"With property raids expected to jump even further, and the introduction of a new "strict liability" offence of failing to disclose offshore income, now is the time to contact a trusted accountant if you feel you could be subject of an HMRC investigation."

For more information on HMRC tax investigations, please contact Richard Stonier for a free consultation.

 

7 July 2014 - VAT Filings

Stafford based chartered accountants Deans are informing businesses that HM Revenue and Customs (HMRC) will now allow VAT returns to be filed over the telephone in "exceptional circumstances."

Following a technical consultation this spring, businesses will be able to file over the phone when they do not have access to online filing options due to broadband issues or disability.

Richard Stonier, partner at Deans, said: "HMRC has confirmed in its response document to the consultation that amendments to the legislation of VAT will allow an alternative form of filing where taxpayers who satisfy certain criteria will not be required to file their VAT returns using the electronic return system.

"The response document says that while it will make improvements to its telephone filing service, businesses will only be approved to use the system if they can prove that it is not reasonably practical for them to file online – a requirement for all other VAT-registered business.

"HMRC say that by amending the VAT legislation this satisfies feedback to the consultation, where respondents supported the proposal to extend exemptions to online filing and the retention of an appeal service for refused exemptions."

HMRC put out the consultation after losing the First Tier Tribunal case of LH Bishop Electric Co Ltd and Others v HMRC Commissioners.

In the Bishop case the judge found that requirement breached the human rights of those who were unable to file online because they were computer illiterate due to age, or had a disability that made using a computer accurately very difficult or painful, or they lived too remotely for a reliable internet connection.

Richard Stonier added: "Whether businesses are filing over the telephone or online, we would urge them to seek specialist advice from a VAT accountant."

For more information on VAT filing requirements, please contact Deans.

 

1st November 2013

Dean Statham has rebranded to Deans. But then, having been established by George Dean in the 1880's, the name is not so much new as a return to our roots. Come and see us at our newly refurbished offices.

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