Enterprise Small Business Newsletter by Albertgoodman

NOVEMBER 2021

ENTERPRISE BUSINESS &COMMERCIAL NEWSLETTER

albertgoodman.co.uk

welcome This edition of our Enterprise Newsletter has a definite theme... The Future! From the very near future in terms of how to throw a tax efficient Christmas Party to what we hope is the very distant future in terms of needing a will! For everyone’s future and the future of the planet, sustainability is at the top of lots of businesses agendas right now, and our sustainability Partner, Sophie Parkhouse looks at the steps businesses need to take to be more sustainable. Delayed Making Tax Digital for income tax self-assessment is still coming in the not so distant future, so we tell you what you need to know to be prepared. Finally , if you’re interested The Chancellor Rishi Sunak set out his vision for the future of post-pandemic Britain in the Autumn Budget and you can read our full summary here, and on seeing the future, our resident Xero Guru looks at how Xero Analytics can help you do just that! I hope you find the newsletter useful and please don’t hesitate to get in contact with me or any of the authors for further information.

Mike Cahill Partner

ENTERPRISE NE WSLE T TER

CONTENTS 04

Upcoming Tax Deadlines

Wills

Staff Christmas Parties

Is my company trading and why does it matter?

08 - 09 Pension Death Benefits 10 Sustainability 11

Seeing the future with Xero Analytics

12 -13 The EU VAT E-Commerce Package 14

What is a B Corp?

MTD for ITSA is still coming

Guest Article (HR Dept) - Data Collection and Immunisation

Top tips for Xero users ENTERPRISE NE WSLE T TER

UPCOMING TAX DEADLINES NOVEMBER 2021 19th

PAYE/CIS liabilities for month ended 5th November 2021 if paying by cheque. File monthly CIS return.

22nd

PAYE/CIS liabilities for month ended 5th November 2021 if paying electronically.

DECEMBER 2021 1st

Payment of corporation tax liabilities for periods ending 28 February 2021 for small and medium sized companies not liable to pay in instalments.

7th

VAT return and payment for October 2021 quarter (online).

19th

PAYE/CIS liabilities for month ended 5th December 2021 if paying by cheque. File monthly CIS return.

22nd

PAYE/CIS liabilities for month ended 5th December 2021 if paying electronically.

30th

Deadline for electronic filing of self-assessment tax returns for the year ended 5 April 2021 where the tax liability is less than £3,000 and is to be collected by the PAYE code.

JANUARY 2022 1st

Payment of corporation tax liabilities for periods ending 31 March 2021 for small and medium sized companies not liable to pay in instalments.

7th

VAT return and payment for November 2021 quarter (online).

19th

PAYE/CIS liabilities for month ended 5th January 2022 if paying by cheque. File monthly CIS return.

22nd

PAYE/CIS liabilities for month ended 5th January 2022 if paying electronically.

31st

Deadline for electronic filing of self-assessment tax returns for year ended 5 April 2021. Payment of balance of tax due for year to 5th April 2021 and 1st payment on account for 2021/22 tax year.

ENTERPRISE NE WSLE T TER

WILLS During a recent meeting with a new client I asked if they have Wills in place. “Why are you asking?” they replied, “lawyers do Wills, not accountants.” In one sense they are of course correct we don’t draft Wills and leave this to lawyers or other qualified professionals. But often our overall knowledge of a client’s personal and business affairs, as well of inheritance tax, makes us very well placed to help clients decide what they want to go in their Will. But why do you need a Will? Let’s face it, few of us wake up one morning and decide it’s something that must be done today! The main reason for having a Will is to make sure that, should the worst happen, your assets are distributed to those you would like to have them. If you die without a valid Will your assets will be distributed according to the laws of intestacy and these may not produce the result you would have wanted. Even if you have a Will it is important to keep it under regular review to keep it current for developments in your life and the assets you hold. Marriage, divorce, children, windfall gains, business sales, etc may all prompt you to make changes to your Will. You may just decide you don’t like someone anymore!

Alongside your Will you should also consider Lasting Powers of Attorney (both health & welfare and property & financial) and Letters of Wish for any pensions schemes and life insurance policies. It all sounds like a lot but my experience is that most clients are very pleased to have these matters sorted. All take time but having someone who knows your affairs and has been through the process with others, will help to make it as easy as possible. So, whilst it is true that “we don’t do Wills” we can certainly help.

Paul Hake Partner

paul.hake@albertgoodman.co.uk ENTERPRISE NE WSLE T TER

STAFF CHRISTMAS PARTY Having been significantly disrupted last year by Covid-19, no doubt we are all looking forward to a more normal Christmas this year. Many will soon be organising the staff Christmas party, which can present an excellent opportunity to enhance staff morale and motivation, particularly following the recent difficult period. It is good news that the cost of a staff Christmas party can typically be claimed as an allowable business expense. To be exempt, and not have to report anything to HMRC or pay tax and National Insurance, the party (or similar social function) must: • be open to all employees. If your business has more than one location, an annual event that is open to all staff based at one location still counts as exempt. You can also put on separate parties for different departments, provided all employees can attend one of them. • be annual (such as a Christmas party or summer barbecue). • cost £150 or less per person. This limit can cover multiple events, if the combined cost of the events is no more than £150 (VAT inclusive) per head. The total cost of the party is the whole cost of the event, from the start to the end. It includes food, drink, entertainment, taxis home, overnight accommodation, etc. The limit of £150 per head is calculated based on all those attending the function, not just employees. So, if employees can bring guests, the total cost should be divided by the total number of employees and guests attending. While it is hoped events will be in person this year, it is useful to note that this also applies to online or virtual parties.

Typically, the VAT can be claimed in full on staff entertaining costs. However, please note that the definition of employees for VAT purposes does not include partners/spouses of staff or former employees. Therefore, if guests are invited it will be necessary to apportion the relevant costs appropriately. Please also note that if an event is provided only for directors, partners, or sole proprietors, HMRC will not accept that input tax has been incurred for business purposes. You may also be thinking of rewarding staff with a Christmas gift. Presents paid in cash to staff will be taxable as earnings in the normal way (subject to tax and national insurance). The same tax treatment also applies to vouchers exchangeable for cash, with the employee taxed on the full value of the voucher. Vouchers exchangeable for goods and services only (non-cash vouchers) are also taxable and must be reported on the employee’s form P11D. Class 1 national insurance will normally need to be deducted through the payroll. However, you may wish to give employees a seasonal present, such as a turkey, a bottle of wine or box of chocolates. Provided the cost of the gift is ‘trivial’ typically less than £50 a head - the gift will usually not be taxable. Keeping fingers crossed for a happy festive season.

John Coupe

Business Services Senior Manager 06

ENTERPRISE NE WSLE T TER

john.coupe@albertgoodman.co.uk

IS MY COMPANY TRADING AND WHY DOES IT MATTER? A recent flurry of company succession reviews has led to discussions about previous director decisions in relation to excess company cash. I understand that owner managers of private companies with cash in excess of working capital or growth needs, do not always wish to extract the value in full but are equally reluctant to leave it in the bank with today’s dismal interest rates. Choosing alternative investments to provide a better return can seem like a sensible commercial decision, but the negative impact upon various capital tax-based reliefs can outweigh the returns to a significant degree. When tax professionals talk of capital tax-based reliefs, they generally mean those associated with assets on sale, gift or death which can mitigate tax charges or attract the lowest rates of tax . Whether or not a company is trading or holds investment assets, becomes an important area of review at these trigger points in particular. Our tax legislation unhelpfully does not provide a common definition of trading companies and as is the nature of our evolving tax law, uncertainty over future changes is a further risk. Whilst this article focuses on the shareholder and capital tax-based reliefs, trading status can impact a number of other areas of tax legislation. To provide some context for shareholders of private trading companies, I have identified a number of common examples: A trading company owning an investment property. • For larger private trading companies, this may not impact the trading status for Business Asset Disposal Relief or Business Property Relief, but should still be considered. • Dependent upon your shareholding percentage, a restriction can be placed on the availability on Gift Relief (perhaps when transferring shares to the next generation), generally creating a tax charge on direct transfer. Gift Relief associated with trusts are not impacted by this restriction.

A trading company owning a 20% shareholding in another trading company. For Gift Relief and Business Asset Disposal Relief this may not impact the trading status (the latter depending upon your personal shareholding). Business Property Relief can be impacted and should be reviewed closely. Note interests <10% can have an impact on all capital tax-based reliefs. Building up investment activities with one eye on the 50/50 Business Property Relief test. • The majority of capital tax reliefs look to an 80/20 trading/investment test as a starting point. • The 50/50 Business Property Relief test could well be aligned with the 80/20 based tax reliefs. Most tax professionals I have come across do not live to pour water on your commercial ideas. We are largely here to understand the future plans for your company and to outline tax risks and opportunities associated with your business strategy. In my experience, it is more cost effective to take the time to consider your plans with tax professionals before you do them, rather than suffer the cost of undoing them or worse yet not being aware of the impact until it is too late. Once the areas of risk and opportunities have been identified, this then enables you to make informed decisions which very well may include losing particular tax reliefs! If this article raises any concerns, please do get in touch with a member of the AG tax team. Elaine Grose

Senior Tax Manager

elaine.grose@albertgoodman.co.uk ENTERPRISE NE WSLE T TER

PENSION DEATH BENEFITS What happens to my personal pension pot upon my death? A common misconception with pensions is that they cease to exist on death. However, when you die, your personal pension scheme could provide benefits to your financial dependents or your estate. These are known as death benefits. Exactly what benefits your dependents or nominees will receive when you pass away will depend on the type of pension scheme that you have. However, this article is going to focus on the death benefits applicable to Money Purchase pensions. A money purchase scheme (also known as defined contribution) is a scheme where the final value depends on the amount of contributions made by the member, their employer and any third party. the performance of the investments underlying the scheme. Death benefit options When an individual dies with funds in a money purchase pension scheme, the trustees or scheme administrators will normally have discretion over who receives death benefits. It is always sensible for a member to complete a nomination form, as this will give the trustees guidance on who you wanted to benefit from the residual pension. There is a range of ways in which death benefits can be provided for beneficiaries. The choice is not necessarily all or nothing - the same pension pot may provide benefits in different ways. These include: • • • • 08

lump sum income drawdown lifetime annuity dependant’s scheme pension

ENTERPRISE NE WSLE T TER

Whilst legislation dictates the options that are available, the options for individuals may be limited by the scheme rules. For example, not all schemes can facilitate income drawdown and very few defined contribution schemes would allow a dependant’s scheme pension. Therefore, it is extremely important to ensure your pension offers the death benefit flexibility that you would like. Lump sums to individuals Any remaining funds in a money purchase pension on the death of the original member, or a beneficiary who had inherited a pension, may be paid as a lump sum. The amount of the lump sum will be the value of the fund immediately before the date of death. Taxation - lump sum The tax treatment of death benefit lump sums largely depends upon whether the pension scheme member died before or after reaching age 75. Lump sums paid to an individual are generally tax free where the member died before 75. To be tax free the lump sum needs to be: • paid within two years of the scheme administrator becoming aware of the death and • for uncrystallised rights only, within the deceased member’s available lifetime allowance (LTA)*. LTA is the total amount of pension benefits that can be accrued within a pension fund in a tax efficient manner. The current LTA for the 2021/22 tax year is £1,073,100. Any lump sum above the deceased member’s available LTA will face a 55% LTA tax charge. *

If the member was to die post 75, the lump sum is taxable at the beneficiary’s marginal income tax rate. In addition, it is important to consider the wider implications of lump sum death benefits. Whilst pension funds remain invested within the pension wrapper, they sit outside of an individual’s estate for Inheritance Tax purposes. However, once a lump sum death benefit has been paid, the pension wrapper is removed, and the value will form part of the beneficiary’s estate for Inheritance Tax purposes. Inherited drawdown Inherited drawdown is a much more flexible death benefit option that gives the individual much more choice. As per the lump sum option, the amount received on death will be the value of the fund immediately before the date of death. Flexi-access drawdown is one of the ways a beneficiary can use an inherited fund. If chosen, it will allow: • funds to remain in the pension scheme under an arrangement set up for the beneficiary • the beneficiary to draw what they need from this pot at any time until the fund is exhausted, or until the fund is used to buy an annuity • the beneficiary to nominate who they’d like to benefit from any remaining funds when they die. In this way it’s possible for pension savings to pass down through generations Beneficiaries Death benefits in the form of drawdown can be paid to individuals. But it’s not possible to set up drawdown arrangements for other bodies, such as charities or trusts. Ultimately, the scheme administrators will usually have discretion over who benefits, but it’s only possible for a beneficiary to take their funds under drawdown if the scheme in question offers drawdown. Most importantly, there are no age restrictions on who can have a drawdown arrangement or when benefits can be taken from an inherited pension. For example, a beneficiary can make withdrawals from the fund before they attain the minimum retirement age (currently age 55 but increasing to age 57 from 2028). This allows beneficiaries to have full flexibility and control over when and how they decide to use the pension.

Death on or after age 75 Any drawdown payments are taxable on the recipient at their marginal rate. This may mean that the option of lump sum is less attractive and further tax planning may be required to make use of full tax allowances. As the Inherited Pension continues to sit outside of the beneficiary’s estate, beneficiaries may wish to defer drawing any benefits from the pension. This allows them to hold a separate pot of money outside of their estate that can then be further passed on exempt from IHT. Finally, as the taxation of the inherited pot depends on the age at death of the last owner of the fund (i.e. the original member or subsequent beneficiaries) it’s possible for withdrawals from an inherited fund to be taxed differently as it passes to new beneficiaries on successive deaths. Example Jenny dies at age 86, having nominated her son John to receive her flexi-access drawdown fund. As Jenny died after age 75, John is taxed at his marginal rate on any income withdrawals. John sadly dies aged 70, having nominated his daughter Julie to receive the remaining funds. Julie can take withdrawals from the drawdown account tax free as John died before age 75. Summary Pension death benefits can be complicated and not all options may be available within your existing pension contract. Therefore, it is important that members of pension schemes understand the options that are available and ensure that they complete any pension death benefit nomination. If you would like to discuss your Pension Death Benefits with one of our advisers, please get in touch and we will be happy to discuss this in more detail. A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation. The Financial Conduct Authority does not regulate Inheritance Tax Planning or tax advice. **

Taxation - inherited drawdown As per the lump sum death benefit section, the initial tax treatment of a beneficiary’s drawdown depends on the age at the original members death. Death before age 75 If the original member died before age 75, the residual inherited drawdown funds would generally be paid tax free. This means that the beneficiary could decide to draw a regular tax-free income from the pension or draw ad hoc tax-free withdrawals as an when required.

Calum Butt

Financial Planning Consultant

calum.butt@albertgoodman.co.uk ENTERPRISE NE WSLE T TER

SUSTAINABILITY Mandatory sustainability reporting in financial statements is currently only required for large organisations. Smaller entities can make the most of exemptions from carbon reporting at present however they should be mindful that they are not sheltered from the changes in stakeholder choice and the questions which may be asked by those with whom they wish to work. Albert Goodman have launched Sustainability Reporting as part of our standard services having produced Streamlined Energy and Carbon Reports for our clients. These reports set out the scope 1 & scope 2 carbon emissions of a business and also include commentary on the organisations plans to reduce this in the future. Organisations who are starting to consider their impact on the planet and are looking to set Net Zero targets may wish to engage such services, not for the purpose of reporting in their financial statements (although this is always an option!) but to start them off on their carbon reduction journey. Our team can work with you to calculate your current carbon footprint which can then provide a starting benchmark from which you can focus your efforts, and put in place strategic plans, to reduce carbon usage. Not only does this make sense from the perspective of the planet but it also makes good business sense as the less resource used, the less money that is spent. We have a range of support packages available starting with the production of standalone carbon footprint calculations and extending to consultation in the strategic management of carbon and consideration

of wider environmental and social governance and received the following feed-back from a customer who used this new service: Following the introduction of new legislation this year for businesses to prepare a Streamlined energy and carbon report (SECR) alongside their annual accounts, Albert Goodman took a proactive approach to help guide our business through the process of presenting this report. Albert Goodman, led by Sophie Parkhouse provided us with very helpful guidance on how to tackle this report, and all the way, they were on hand to offer help and assistance, which made us feel involved and taken care of, great job! Please get in touch with your usual Albert Goodman contact or Sophie Parkhouse if you would like to discuss this further.

Sophie Parkhouse

Technical Partner

010

ENTERPRISE NE WSLE T TER

sophie.parkhouse@albertgoodman.co.uk

SEEING THE FUTURE WITH XERO ANALYTICS When it comes to your cashflow, looking in to the future can be a difficult and time-consuming task. Similarly, trying to ascertain the detail of your business performance at a glance could leave you wondering where to start or relying on your gut-feel instead. Xero Analytics gives you the tools to solve these problems, in the form of the Short-term Cash Flow report and the Business Snapshot dashboard.

Business Snapshot This dashboard is designed to show your organisation’s financial wellbeing and identify trends in a single snapshot, by comparing the business performance with the last month, quarter, or year.

Short-term Cash Flow The short-term cash flow dashboard projects the amount of cash your business will have in the next 7 or 30 days. This future cash flow projection is based on the existing upcoming sales invocies and supplier bills posted to your Xero account and also takes any repeating invoices or bills in to consideration too. Our top tips to make this proejction as useful to you as possible, is to make sure your bank accounts are fully reconciled; and to add expected dates for the payments of your invoices or bills, if they differ to the due dates.

Business snapshot is a dashboard that shows valuable financial information, such as profitability, income and expenses – presenting the information in a way that’s easy to digest at a glance. With the ‘Analytics Plus’ add-on, the dashboard becomes more flexible as it allows you to use custom date ranges, choose specifically which accounts are included in the calculations and also drill-down in to a metric shown on the dashboard so you can see the underlying transactions.

If you subscribe the ‘Analytics Plus’ add-on, then you will also be able to view the projection for the next 60 or 90 days; include Xero AI’s predicted recurring cash transactions based purely on your historical bank spend money and receive money transactions; and add one-off amounts to the projection dashboard to see the impact on cash flow.

If you’re already up and running in Xero, then you already have access to Xero Analytics – find it under the Business drop-down menu. In fact - the Analytics Plus add-on is also free until 31 January 2022! If you discover anything on your cash flow or snapshot that you would like to discuss; or if you’re not using Xero and are interested in moving your records over - we’re here Tom Hawes to help. Business Services Manager tom.hawes@albertgoodman.co.uk ENTERPRISE NE WSLE T TER

011

THE EU VAT E-COMMERCE PACKAGE From 1 July 2021 the EU has implemented a number of new rules for business supplying goods or services to consumers in the EU. Abolition of low value consignment relief Prior to 1 July 2021 VAT was not payable on goods imported into the EU which have a value of up to €22. This relief has been withdrawn and VAT is now payable on all commercial goods when they arrive in the EU. Import VAT will be calculated using the VAT rate applicable in the EU destination country. Note that, unless the supplier takes responsibility for the VAT, the customer may have to pay import VAT (and possibly duty) before the customer can take delivery of the goods. Broadly, the choices available to the supplier wishing to take responsibility for the VAT are:• Pay the import VAT (and any duty) on behalf of the customer; or • Charge local VAT and pay it to the local tax authority UK businesses selling goods into the EU will have to consider how any VAT is to be paid and how this is communicated to their EU customers. One-Stop Shops The EU will be extending the existing, and introducing new, one-stop shops. These are optional schemes that allow businesses to pay EU VAT on sales to customers in any EU member state on a single return. This avoids having to register and submit returns in a number of EU member states. Once registered for a scheme the VAT due on all eligible supplies within the scope of that scheme must be returned under the scheme. The One-Stop shops are a payment system only, they do not allow VAT on any costs incurred in the EU to be reclaimed. 012

ENTERPRISE NE WSLE T TER

Import One-Stop Shop (IOSS) This portal allows non-EU business who send goods to consumers in the EU to report and pay local VAT. Businesses who have signed up for the IOSS will have to charge VAT on sales at the rate applicable in the customers country. An IOSS return is submitted and the EU VAT is paid on a monthly basis. The IOSS allows goods to be cleared quickly through customs and gives the customer certainty over the price they pay. This could provide a significantly improved customer experience avoiding unexpected VAT payments before goods are delivered. The IOSS can however only be used for consignments which do not exceed €150, this is the value above which duty is payable. For consignments over this value VAT on the import will have to be paid on the individual consignment when the goods arrive in the EU. Non-EU businesses must appoint an EU-based intermediary to use the IOSS unless they are established in a country with which the EU has a VAT mutual assistance agreement, The goods also have to be supplied from that country to the EU. Currently the UK does not have a VAT mutual assistance agreement with the EU so a UK business wishing to use the IOSS system will need to appoint an EU intermediary. Whilst the scheme simplifies administration there will be an added cost, EU intermediaries can be expensive. One-Stop Shop (OSS) The new OSS replaces the current MOSS scheme. The MOSS allowed VAT on the sales of telecommunications, broadcasting and electronic services to consumers, located throughout the EU, to be reported on a single quarterly return. From 1 July 2021 the OSS covers all services supplied to EU consumers by non-EU businesses

where the place of supply of the services is in the EU, e.g. land related services, transport services and catering.

In either of these scenarios the online marketplace is responsible for the payment of EU VAT.

The OSS can also be used to report and pay the VAT due on sales of goods held in one EU member state which are sold to consumers in another member state. There will be a liability to register for VAT in the member state where the goods are held but the OSS should avoid having to register in other member states.

While these rules mean the OMP will deal with the EU VAT businesses do need to consider the UK VAT position. Where a GB business is selling goods to a customer outside the UK and is arranging for those goods to be removed from the UK the sale can be zero-rated in the UK. If so no UK VAT is chargeable.

Under the OSS there is no need to appoint an intermediary to use the scheme. Some EU countries do however require non-EU businesses to appoint a fiscal representative if they wish to register for “VAT” in that particular country.

There are however certain time limits and evidential requirements which must be met for zero-rating to apply. UK businesses do need to be aware of these requirements and ensure they comply with them.

Special Arrangements There is no obligation to use an OSS and there is an alternative optional simplification for the collection of import VAT on goods sold to EU customers on consignments which do not exceed €150. This measure is designed for postal operators, express carriers and similar shippers of low value goods. Under this scheme the carrier collects the VAT from the EU customer and declares and pays this VAT to the relevant EU authority monthly. This system means the carrier will collect VAT from the customer directly.

If the contract with an OMP means the GB business is selling the goods to the OMP they may need to charge VAT on this sale. It is important businesses review their position regarding sales made using an OMP. If you would like Albert Goodman to review your processes speak to your normal contact at Albert Goodman or e-mail Richard who would be happy to assist.

Online Marketplaces From 1 July 2021 online marketplaces and platforms (OMP), such as Amazon, which facilitate supplies of goods in the EU, will become responsible for charging and collecting VAT on behalf of sellers in certain circumstances. These are: • sales of goods imported into the EU with a value up to €150 and/or • sales of goods, of any value, to EU consumers when the goods are located in the EU and the seller is based outside of the EU

Richard Taylor VAT Manager

richard.taylor@albertgoodman.co.uk ENTERPRISE NE WSLE T TER

013

WHAT IS A B CORP? Certified B Corps are a new kind of business that balance purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community and the environment. A B Corp is a business that gives as much consideration to their social and environmental impact as they do to their financial returns. B Corporation certification (assessed by the not-forprofit B Lab) is given to for-profit organisations who achieve at least a minimum score against a set of social and environmental standards. B Corp certification doesn’t change the underlying set up or structure of a business, it will still be for profit business, paying taxes, with shareholders. The idea behind B Corp is to make sure the business is considering it’s impact on the wider community. B Corps have been around in the US since 2007, with brands like Ben & Jerry’s and Patagonia achieving certification. In 2015 the initiative launched in the UK and there are now over 400 B Corporations, including household names: Propercorn, JoJo Maman Bebe, Innocent drinks and Abel & Cole. Why should you consider it? A commitment to the environment and society is increasingly on everyone’s agenda. Environmental, Social and Governance (ESG) is now a key element in company statements. For some, B Corp status could be seen as suppressing agility and restricting the ability to focus on profit. But for others it is an opportunity to achieve competitive advantage, as well as benefiting the wider world. Becoming a B Corp can have obvious benefits; like a positive impact on brand equity and greater recruitment appeal, but there are also some less obvious ones. It can drive performance – in a survey UK B Corps reported an average growth rate significantly higher than the national average. It can improve the saleability of an organisation too. 014

ENTERPRISE NE WSLE T TER

What do I need to do to get certification? B Corporation status can be achieved by receiving accreditation from B Lab (a non-profit organisation). Certification requires a score of at least 80 (out of 200) against 5 areas of impact: Governance, Community, Workers, Environment and Customers. The initial step is to complete an on-line assessment (B Impact Assessment). After completing this assessment, B Lab then assesses and verifies that your score meets the certification standards. As part of this process, you meet virtually with the B Lab team to submit any confidential documentation and to sense check your responses. Certification needs to be renewed every three years and there is an annual fee, which scales with revenue and starts at £1,000. Whilst I appreciate this won’t be for everyone there is a big movement in society towards ESG and for many businesses, this could create a competitive advantage. Even if you don’t want to become fully certified, undertaking an impact assessment is free and could highlight key area’s for improvement within your business, that are simple to implement and may have a positive impact on the environment, your workers, customers, community and who knows, even the all important bottom line! More details can be found about B-Corp assessments and certification at Certified B Corporation

Sharron Quick

Senior Manager

sharron.quick@albertgoodman.co.uk

MTD FOR ITSA IS STILL COMING Following the recent Government announcement, Making tax digital (“MTD”) has been delayed, but is still due to become mandatory for income tax self assessment (“ITSA”) from 6 April 2024. This means the majority of individuals and partnerships will be required to complete quarterly reports of their income to HMRC under MTD. Returns will need to be filed within one month of the quarter end, meaning those with a 5 April year end will file their first MTD return by 5 August 2024. This affects individuals who meet the following criteria: • Sole trade income with turnover exceeding £10,000 • Property landlords with gross rental income (before deducting expenses) exceeding £10,000 • Individuals with a combination of any of the above that takes them over £10,000 of gross income An end of year submission will also be required, where the details submitted in the quarterly reports will be reconciled and adjusted as necessary. The year end filing will also incorporate other sources of income for which quarterly reporting is not required, such as investment portfolio income, pensions and employment income. All returns must be filed using MTD compatible software, with a new points based system for penalties if submissions are made late. This is the latest step of HMRC’s goal to become one of the most digitally advanced tax administrations in the world. MTD for VAT has already been rolled out to most businesses and will become mandatory for all VAT registered businesses from 6 April 2022. MTD for partners in “general partnerships” has been pushed back to April 2025, while the date that remaining partnerships are expected to join remains unconfirmed. It is also currently unclear what will represent a general partnership. While it is not possible to confirm at this point the finer details of how HMRC will operate MTD for ITSA, and that despite the deadline having recently been pushed back again, we still cannot be certain that this will become mandatory on the proposed date, we are working towards ensuring that our clients are ready for online filing by April 2024. We already have experience of

onboarding our VAT clients for MTD and are working with software providers to ensure we have the best solutions to ensure our clients are compliant with MTD for ITSA. We hope this change in reporting will also provide benefits to us and our clients, by having more current business information and being able to identify “real time” financial results. We will be able to offer different levels of service depending on your requirements, from assisting with the year end return right through to a full bookkeeping package and filing all the quarterly returns. We will also be able to offer, in partnership with our software providers, training programs for those who want to use the software solution to undertake the record keeping themselves. We will provide more detail on our offerings in due course. There is an HMRC pilot underway for MTD for ITSA, although the taxpayers that are currently able to use this are limited, with very few individuals satisfying the restricted criteria. Once the scope of the pilot is widened, we will be keen to identify clients to participate so we can test our MTD filing solutions with HMRC’s systems before the reporting becomes mandatory. There is much to think about and, while the deadline seems like it is a long way in the future right now, we will be working with our clients and software providers to identify the solutions and roll these out well in advance of mandatory implementation, to make the transition for you as smooth as possible.

Helen Cross

Senior Manager helen.cross@albertgoodman.co.uk ENTERPRISE NE WSLE T TER

015

GUEST ARTICLE

DATA COLLECTION AND IMMUNISATION Certain businesses have been advised by government to request that visitors and staff “check-in” each time they attend the premises. This includes hospitality and leisure venues, community centres and those providing close contact services. The data collected must comply with UK GDPR, and should only be used to help NHS Track and Trace locate anyone who could have come into close contact with COVID-19. In England, it is no longer a legal requirement to collect this data, much like the wearing of face coverings. However many businesses continue to follow the recommendation. In Scotland and Wales, of course, rules differ, so do seek advice to check that your processes are compliant. At this stage in the pandemic, the vaccination programme is well underway. COVID or Immunity Passports are being issued for fully vaccinated people to travel with less restrictions. They are also expected to be introduced for “high risk” situations in England that attract large crowds. Both data collection and immunisation have been key safety measures for people and businesses. It’s understandable then, that some employers are querying whether they can request and record vaccination status from their employees. For care homes in England, COVID vaccination will be a legal requirement for staff, visiting professionals and tradespeople from 11th November. For other businesses, there is still some ambiguity over the collection of vaccination status and the legalities of a “no jab, no job” policy. 016

ENTERPRISE NE WSLE T TER

So, even if you’re not planning to make vaccinations mandatory in your business, can you ask staff if they have had the vaccine? The ICO (Information Commissioner’s Office) states that, as vaccination status is classed as special category data, use of such data must be clear, necessary, and transparent. In other words, make sure that you really need it and are able to justify this before you collect it. There are risks involved, which a full risk assessment can help you to identify. For starters you’d need to ensure that your methods of data collection are compliant with data protection laws. Employers also have a responsibility to protect their staff from discrimination and should err on the side of caution when recording vaccination status. Some people will not get vaccinated for personal or medical reasons and must not be treated any differently to their vaccinated co-workers. Keep in mind that the pandemic has been a dynamic situation and so there is a chance that official guidance on the matter can change at short notice. If you have questions about keeping your business compliant, get in touch. Newsletter - HR Dept Somerset www.hrdept.co.uk/somerset/

TOP TIPS FOR XERO USERS Our outsourcing department use Xero on a daily basis and have put together a selection of tips. These are simple things that you may not have come across and may help to speed up your regular processing. • You can choose which reports show on the accounting menu. By selecting Accounting > Reports. You can select the star next to each report and this will enable you to select these reports direct from the Accounting drop down menu. • You can move line items within invoices and journals by clicking the box with 6 dots in at the start of the line and dragging it up or down.

• You can customise your dashboard to show the information that you value most. From the dashboard screen, you can scroll to the bottom and select Edit Dashboard. You can then drag tiles to reorganise the layout and you can hide tiles you do not want to see. To add tiles such as key performance indicators / ratios you can go to Accounting > Reports > Business Performance and any tiles you select the blue star on will appear on your dashboard. From the chart of accounts, you can select an account and then ‘add to account watchlist’ to be able to see the specific income and expense code balances from the dashboard.

• Xero can work out the due date on invoices and bills for you. If you put the date of the invoice in and then move into the due date box, you can type +30 and it will calculate the date 30 days from date of invoice and input this for you. You can put any number in there and it will calculate the date for you. • Any boxes that you input amounts in to (Unit price, Quantity etc), you can input calculations directly into the cell and Xero will work it out for you.

• You can set up bank rules to speed up reconciling repetitive transactions that do not have invoices when reconciling your bank. From the reconciliation screen, when reconciling the transaction, you can select Options and then Create Bank Rule. Complete the rule screen and save and in future it will have completed the information for you and all you will have to do is check the allocation and hit OK.

• You can attach original documents (PDF, Excel, Word Etc) within the invoices, bills, journals, spend and receive money transactions. All you must do is select the document icon in the top right corner and upload files. This can help to explain a transaction in future.

Amy Thrower

Outsourcing Manager amy.thrower@albertgoodman.co.uk ENTERPRISE NE WSLE T TER

017

Albert Goodman Chartered Financial Planners is the trading style of Albert Goodman Financial Planning Ltd, which is authorised and regulated by the Financial Conduct Authority.

TAUNTON | BRISTOL | CHARD WESTON-SUPER-MARE | WE YMOUTH | YEOVIL