In Focus Issue 3

in focus turn your business strategies into reality

issue three: autumn 2014

EXPORT

Trading within Europe

Academies Special Workshops and more

Every day’s a school day business advice

Charity Commission’s guidelines accountancy & audit

Membership of UK200Group

tax advice

Auto enrolment

wealth management

finance

welcome

in this issue welcome to issue three

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Hello and welcome to the third issue of ‘in focus’ magazine - your quarterly guide to growing both your business and your profits.

We’ve had a few changes at Randall & Payne LLP, including saying a partial farewell to our firm’s longest standing team member, who has only ‘semi’ retired, Mike Anthony.

Trading internationally brings additional tax compliance...

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04 news update

The next issue will have news about the Autumn Statement, due in December and it’ll be interesting to see what’s on offer in this government’s last budget before the next election.

Whatever the Autumn Statement brings, we’ll be here to provide information and advice to all our clients, to enable them to plan ahead for business growth, retirement, moving into the world of exports or whatever their next step may be.

In this issue: The end of an era... and a warm welcome.

05 minimum wage

increase

How to ensure you’re prepared

06 the Business

Awards 2014

Make sure you get your tickets!

James Geary (above) joins the tax team

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07 the Growth Hub It opens this October

08 the Patent Box

Could you benefit from Corporation Tax Breaks?

That’s what our partners and in focus magazine deliver: commercially-minded, up to the minute creative solutions to help you grow and develop your business’ full potential.

09 avoiding the

information penalty time bomb Michael Anthony, who retired on 30th June

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contents

business advice accountancy & audit tax advice wealth management financing business startups valuations buyouts debt factoring

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20 Every day’s a school day at our academy workshops

10-11 great exportations

Trading internationally brings additional tax compliance Every day’s a school day, so it’s no surprise that Randall & Payne’s Academies Seminars are always so well attended!

14 academies budget debrief

Information and advice to help with balancing budgets

14 - 15 charitable status - what’s it really worth?

15 the trustees report The legal obligations

16 the right training for business growth Converge case study

Avoiding the information penalty

12 - 13 academies workshop

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18 interest or conflict?

The Charity Commission’s guidelines on conflicts of interest

19 how membership of UK200Group helps

09

R&P focus on standards

20 auto enrolment 06

www.randall-payne.co.uk

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03

business news

news focus turn your business strategies into reality

your guide to what’s new in the world of business...

The end of an era...

Over 100 staff, clients, former staff, family and friends attended a farewell party for Senior Partner, Michael Anthony, who retired on 30th June after 45 years and 44 weeks at R & P.

A champagne reception was held in Mike’s honour at Chargrove House, where a marquee housed the guests and Mike entertained the masses with anecdotes from his early career, through to his appointment as Senior Partner.

An excellent selection of food was provided by The Wiggly Worm, a local charity created by award-winning chef, Rob Rees MBE a special thanks to Rob and his team for feeding us so well.

The partying went on to the early hours, with a Barry Manilow tribute act followed by a disco and karaoke.

Whilst we all wish Mike well in his retirement, Mike will still be a regular in the Randall & Payne office, working alongside Cotswold IFS to help our clients with autoif enrolment.

and a warm welcome to our new corporate tax manager

J

ames Geary joined the tax team at Randall & Payne in August 2014 as a Corporate Tax Manager. He previously worked for Baker Tilly and Bishop Fleming and brings with him a wealth of experience in tax planning for corporate owner-managed businesses.

He will have a particular focus on Research & Development Tax Relief, Patent Box and Capital Allowances, but also has experience in transactions, investigations, remuneration planning, share schemes and Employment Tax. He sits on the Owner Managed Business sub-committee of the Chartered Institute of Taxation, which provides input into submissions to government on proposed tax changes affecting our client customer base. He is also the Chairman of the Severn Valley Branch of the Institute.

James lives in Worcester with his wife Christine and two daughters Callie (9) and Summer (5). His extra-curricular passion is music and he performs in musicals with Worcester Operatic and Dramatic Society, as well as being a part-time church organist. if

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business news

National Minimum Wage Increase how to stop what is great news for low paid workers from proving a headache to your business The National Minimum Wage (NMW) is increasing on 1st October, from £6.31 to £6.50. This equates to the first real-terms rise in six years for more than a million workers.

The pay rise was recommended by the Low Pay Commission (LPC) following consultation with academics, businesses and workers representatives, with this year’s increase of 19p representing a 3% increase 1.1% above the consumer price index’s rate of inflation, which currently sits at 1.9%. For many, this is the first pay rise above the rate of inflation since 2008.

The rate for 18 to 20-year-olds will also go up, but by only 10p, a 2% increase.

Similarly the rate for those aged 16 and 17 will rise 2%, by 7p. Apprentices will earn an extra 5p an hour, again a 2% rise.

The government guidelines state that: ‘A worker on the adult minimum wage rate working a 36-hour week, 52 weeks a year would receive £355 a year more in their pay packet under the new £6.50 per hour minimum wage rate as of October 2014.’ This £355 increase is significant for employees, but also affects employers.

Employers need time to implement the increase and to assess the impact on their payroll. For businesses that pay their employees less than the minimum wage, there can be huge fines. Last year the maximum fine increased from £5,000 to £20,000 and in February this year new legislation came into effect, introducing a fine that could be levied in respect of each underpaid employee.

Her Majesty’s Revenue and Customs

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(HMRC) has revealed figures showing that some companies have had to pay up to £200,000 in fines for underpaying workers.

It is evidently very important to ensure you’re paying your employees correctly. While the government says that ‘the LPC has balanced the need to protect the earnings and jobs of low paid workers against the difficulties faced by employers and businesses, the increased minimum wage will mean increased costs for businesses. For most businesses with employees earning the minimum wage, this increase will mean that prices, or sales, will need to increase to counteract the higher outgoings.

Implementing the change can also be tricky. For small businesses who handle their own accounts or for larger businesses who have many minimum wage employees, there are many complications attached, such as increased National Insurance (NI) contributions, the potential to hit tax thresholds sooner and even student loan repayments, all of which need to be considered when putting up an employee’s pay.

Randall & Payne can provide an outsourced payroll solution and can save you the frustration involved with operating your payroll in-house, as well as ensuring accuracy and compliance with HMRC regulations and even reduce your in-house costs, offsetting the increase in the NMW. We can also carry out a comprehensive PAYE and NI review, ensuring you have no problems in the event of an audit.

If you would like any further information please contact Karen Harries or Danielle Longney in the payroll department of Randall & Payne on 01242 776000. autumn 2014

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business awards 2014

Randall & Payne proudly sponsor the Gloucestershire Business Awards 2014

Gloucester Citizen and Gloucestershire Echo Business Awards 2014Â Finalists Business of the Year sponsored by Randall & Payne George Bence and Sons Ltd, Cheltenham MF Freeman Ltd, Drybrook John Gillman and Sons Electrical Group, Gloucester Malvern Tyres, Gloucester Small Business of the Year sponsored by Bruton Knowles Class People, Cheltenham Gill Fox James, Cheltenham Smart Survey, Tewkesbury

For the third year running, Randall & Payne are the title sponsors of the prestigious Gloucester Citizen and Gloucestershire Echo Business Awards. This year, the 17th annual awards received a record number of entries, with over a hundred companies nominated for the various awards.

The closing date for nominations was the end of July and on the 20th August a panel of judges, including Ian Selwood, Managing Partner of Randall & Payne, revealed the shortlist of finalists.

The categories range from Business of the Year, to the Corporate Social Responsibility Award and Family Business of the Year.

Randall & Payne see these awards an an opportunity to recognise those individuals and companies who are positively contributing to the Gloucestershire business community and hope that they will help to encourage development and growth in the local business sector.

Sponsoring the awards is an investment in Gloucestershire that should help to encourage a high quality of businesses in the county.

Last year’s awards were a great success and the volume of new entries this year means that the competition is fiercer than ever.

The quality of entries has been incredibly high, making picking the finalists in each category a very difficult task. There has also been a far wider range of entries this year, the variety only adding to the complexity of the task of judging. The range of incredible things that businesses in Gloucestershire are doing is astounding and the awards seek to recognise those businesses that are excelling in their respective fields.

The winners will be announced at a presentation dinner at the Centaur at Cheltenham Racecourse on the 2nd of October. A special Lifetime Achievement Award will go to the businessman or woman who has made a lasting contribution to business in Gloucestershire over the last 20 years.

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Family Business of the Year sponsored by Harrison Clark Rickerbys Brasserie Group, Cheltenham Orchard Press Cheltenham Ltd, Tewkesbury Smart Survey Young Business of the Year sponsored by Creed Foodservice Avon Speciality Metals Ltd, Gloucester Green Car Depollution Ltd, Tewkesbury Sherbornes Solicitors LLP, Cheltenham Versarien Technologies Ltd, Mitcheldean Young Business Person of the Year sponsored by Renishaw Lee Moulson, Cheltenham Racecourse Olivia Hutchins, Green Car Depollution Ltd, Tewkesbury Tom Parling, Ocere, Cheltenham Export Award sponsored

by Santander Paragon Laundry, Cheltenham Spirax Sarco, Cheltenham Supergroup PLC, Cheltenham Vero Software, Cheltenham Business Innovation sponsored by University of Gloucestershire RemPods, Stroud Stewart Golf, Kings Stanley Tomcat, Gloucester

Marketing Campaign of the Year sponsored by BusinessWest ADEY Professional Heating Solutions and Target PR, Cheltenham Isaac Partnership and GFirstLEP, Stroud Sprint Media Ltd, Tewkesbury Stewart Golf Ltd, Kings Stanley Best Place to Work Award sponsored by Expectations!

Recruitment Services BAM Agency Ltd, Cheltenham 7 Layer Solutions Ltd, Cheltenham The Warranty Group, Mitcheldean Rising Star of the Year Award sponsored by Gloucestershire College Stephen Hartman, Cheltenham Jake Heath, Cheltenham Corporate Social Responsibility Award sponsored

by Gloucester Quays Outlet Shopping The Cheltenham Chilli Company, Cheltenham Davies and Partners Solicitors, Gloucester Moose Marketing & PR, Gloucester Best Individual Contribution by an Employee Award sponsored by The Warranty Group Laura Fearn, Ellenborough Park Hotel, Cheltenham Laura Holt, GFirst LEP, Gloucester Shannon Haigh, 10 Yetis PR, Gloucester Environmental Business Award sponsored by Printwaste Recycling and Shredding Green Car Depollution Ltd, Tewkesbury Royal Agricultural University, Cirencester Severn, Gloucester

www.randall-payne.co.uk

advertorial - the growth hub

the Growth Hub is coming

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his October The Growth Hub opens its doors as the ‘go to’ place for businesses in Gloucestershire of all sizes, in all sectors, that have ambitions for growth.

An exciting and different concept, based on a unique collaboration between the University of Gloucestershire and GFirst Local Enterprise Partnership, The Growth Hub’s dedicated team of Business Guides and Navigators will offer a range of diagnostic, consultancy and business planning services. By understanding business challenges and aspirations they will work with organisations to identify, implement and achieve their objectives.

Responsive to business and able to connect the latest academic thinking with ambitious local companies, The Growth Hub will offer training and development tailored to business needs, including professional and work-based programmes. Through graduate and student placements they will enable businesses to fill resource and skills gaps, accessing fresh new talent.

and resources. These will include export advice, sector-specialist knowledge, research and product development, support with innovation and business development, resourcing and expansion.

Start ups will be provided with specialist assistance with consultancy and business planning services, including access to finance, local mentors, training, IP and incubation centres which nurture businesses in their early years.

The Growth Hub space has been designed with business in mind, The Growth Hub will be a great place to visit or work for the day. With work-together rooms, great technologies, international connections, Skype pods, drop-in sessions and social space, The Growth Hub place is your space.

To find out more about The Growth Hub and how they can help you develop a business strategy that fits visit www. thegrowthhub.biz

The Growth Hub will also provide a range of support, advice

Every business deserves a strategy that fits Ben Taylor Assistant Chief Executive, Renishaw

Opening this October

Brought to you by

For more information, go to www.thegrowthhub.biz

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autumn 2014

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business news

The Patent Box

Could you benefit from Corporation Tax Breaks? products, income from an exclusive licence of IP or indeed a sale of IP) to pay a reduced Corporation Tax rate of just 10% on profits arising on that income.

The Patent Box was launched in April 2013 as an important part of the Government’s strategy to build a knowledge economy and encourage growth. It is a generous tax relief designed to encourage businesses to retain and exploit their Intellectual Property in the UK. It is, in many ways, the natural evolution of R&D Tax Relief, which has been around since 2000 and provides a cash flow benefit to companies developing new technology. Patent Box provides a cash flow benefit to companies who have developed the technology and are now exploiting it.

The tax relief is being phased in between 2013 and 2017 and will enable UK companies with relevant IP income (whether this is sales of patented

The beauty of the relief is that if just a single important component of a product is patented, potentially sales of the whole product can be claimed in the Patent Box. The savings available mean that it is well worth investigating whether any products or processes can be patented and perhaps means that a rethink is needed where patenting had previously not been pursued on grounds of cost.

benefit assessment to determine the potential savings.

We can also, where appropriate, introduce a high quality patent attorney to review whether the technology could potentially be patented.

For more information please contact James Geary at james.geary@randall-payne.co.uk or on 01242 776000. if

Randall & Payne offer a no obligation meeting to discuss whether the tax relief could apply and, where it appears that it could, can perform an initial

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business news

avoiding the information penalty time bomb Compliance definitely pays where payroll reporting is concerned. Rob Case from Randall & Payne explains all...

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eal Time Information (RTI) became compulsory for most employers in April last year. It was a big change and HMRC and some employers are continuing to learn. RTI requires you to submit payroll information on, or the day before, the day you pay your employees. This is done using a Full Payment Submission (FPS). Your payroll software generates the new reports and submits payroll information online, including details of the amount you paid your employees, deductions such as Income Tax and National Insurance Contributions, and starter and leaver dates if applicable.

Reacting to the concerns of employers, the new in-year late filing and payment penalties are being staggered to give more employers more time to adapt to reporting in real time.

From April 2014, late payment interest will apply to all in-year late payments in respect of 2014/2015 tax year.

For employers with 50 or more staff

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from October 2014 automatic late filing penalties will apply to late FPS’s by reference to the ‘on or before payment’ rule. For employers with less than 50 employees these penalties will apply from March 2015. Additionally, from April 2015, automatic late payment penalties will apply in respect of payments for 2015/2016 tax year.

HMRC’s Director General for Personal Tax, Ruth Owen, said: ‘The introduction of RTI is going extremely well for the majority of employers, but there are still some who need a bit of time to adapt fully to the changes. This additional time will give us the opportunity to ensure that improvements to our internal systems are working, to learn from them and to provide better customer support to employers who need more time to adapt.’

It’s essential to ensure that your payroll provider receives complete payroll information in plenty of time to allow for FPS’s to be submitted before you make

payments to your workers to avoid late filing penalties. You may need to re-assess within your workplace to enable the information to be collated and passed on to your payroll provider for processing. Monthly penalties start at £100 and go up to £400 depending on the number of employees that you have. HMRC will also charge interest on any payments, including penalties, not made by the due date, making failing to meet deadlines potentially costly.

Randall & Payne can help ensure your compliance with all the RTI regulations and provide solutions to any issues you may still have with implementing RTI. Our payroll bureau service can save you money and time and help you with the changes to RTI and PAYE. If you need any help or advice regarding your business’ payroll and RTI, please contact Rob Case at Randall & Payne on: 01242 776000 or at rob.case@randall-payne.co.uk. if

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business news

great exportations!

Trading within Europe brings additional tax compliance requirements

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egular Intrastat forms and EC Sales lists help European Member States statistically track the volume of intra EU sales and there is added complexity in ensuring you get the correct VAT treatment.

This article only covers some of the more relevant and recent points, not all of the implications so if in doubt, you should seek advice.

Place of supply of services.

There is a general rule that if you are providing services to a VAT registered business in another member state that the place of supply for VAT is where the customer belongs.

Ordinarily, to save overseas VAT registration, a mechanism called the ‘reverse charge’ exists so that the Customer accounts for the VAT on their VAT return.

There are certain administration requirements for a Supplier in these circumstances, such as completing EC Sales lists and a reverse charge statement on invoices, but you also need to verify that your customer is VAT registered and also where they belong.

Belonging can be difficult to ascertain.

Some are easy to determine, but you need to question whether the supply is to a UK branch or other UK establishment, which may different to the address you are sending your sales invoice, as this can affect

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whether UK VAT should be charged or not.

Clearly there are certain exceptions to this general rule, such as land based transactions, but it is always worth checking if you have any concern.

A forthcoming change in January 2015 affects the supply of broadcasting, telecommunications or electronically provided services to non vat registered customers (i.e. Consumers). Â Where this is the case, a relevant supplier would need to register for MOSS (Mini One Stop Shop) and account for EU VAT for the relevant tax authority on a special UK VAT return.

This opens up issues in terms of other EU VAT requirements and VAT rates, together with changes to invoices and will be quite a big change to some businesses.

As usual, trading with the EU can bring significant benefits, but an awareness of the tax requirements is always necessary. If there is any doubt speak to Rob Case.

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business news

With the prospect of forms with more pages than a Dickens novel how do you make exporting outside of Europe work for you?

VAT and Imports

Exports

With the Government encouraging trading overseas, an increasing number of Gloucestershire businesses are trading internationally. This has certain taxation implications, mostly with indirect taxes such as VAT and import duty, but also additional reporting requirements. It is therefore important for a business to be vigilant when it comes to obtaining the relevant evidence to support the relevant transactions.

When goods are sent outside of the EC, if all the relevant criteria regarding exporting are met, then the transaction is Zero Rated for VAT (i.e. VAT is charged at 0%). The main requirement is retaining evidence that the goods have indeed been exported. Shipping and transport documents are good evidence, but a trader must be careful to ensure documentation exists to confirm export especially if the goods are collected by their overseas customer.

Import Duty and Import VAT When goods are imported from outside of the European Community, import duty is levied (the amount is dependent upon the exact goods imported). Import VAT is also applied at the relevant UK rate. Ordinarily this Import Duty and VAT must be paid to HMRC before the goods can be released. Often a freight forwarder carries out the import procedure and issues an invoice to the importer for the duty and VAT payable, but this is not sufficient evidence to allow a reclaim of that VAT. HMRC are required to issue a C79 import VAT certificate to the importer, without which the import VAT cannot be claimed as input vat.

Import duty is never reclaimable (although there are certain reliefs available that may be applicable).

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With import VAT potentially being reclaimable and exports sales not carrying VAT, the circumstances exist where a VAT repayment may arise.

We are noting an increased number of VAT visits being carried out by HMRC in these circumstances.

Finally with Foreign Currency translation, extra diligence is required to ensure that the amounts reported on VAT returns are correct. All UK tax and duty must be paid in £ Sterling, accordingly foreign amounts must be converted for tax purposes and there are two general methods that can be used: 1) The exchange rate in place at the date of the transaction; or 2) The use of HMRC average exchanges rates (produced monthly).

Any other method must be separately agreed, but the right method to use will depend upon the individual business. Any error arising from incorrect currency translation could lead to penalties being charged.

Given the increased risk of HMRC enquiry and the requirement to obtain relevant evidence, it is important to make sure your business has the procedures in place to cope. If you have any questions, or would like us to carry out a review then please contact Rob Case.

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Rob Case - head of vat services

Rob heads up Randall & Payne’s VAT services and is a member of the VAT Practitioners Group. He regularly advises businesses in the SME sector and has written the UK200 Group VAT Guide for Academies. He also carries out reviews to ensure our clients are making the best use of the different VAT Accounting Schemes available.

For help and advice contact Rob on 01242 776000 or email rob.case@randall-payne.co.uk

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academies

academies workshop every day’s a school day, so it’s no surprise that Randall & Payne’s Academies Seminars are always so well attended!

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andall & Payne, on a termly basis, present an Academies Seminar, through which a variety of topics and themes are presented to both Governors and staff members of local Academies.

The main topics covered in the recent summer term presentation included the Accounts and Audit process from Randall & Payne’s point of view, coverage of the requirements to be included in a Governors’ Report in an Academy set of accounts and an update of new requirements following publication of the Accounts Direction 2014.

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Accounts and Audit process At Randall & Payne we are conscious of providing a service which gives clarity and transparency, so our presentation began by explaining the process to those that are not necessarily involved in the process directly within the Academy or who may not be finance minded.

For many Governors, the first time that they see the statutory accounts and Auditors report is in advance of the Governors meeting in November or December.

Many are unaware of the processes involved to get to this stage, the responsibilities of the Academy and the Accountants in the various aspects of the accounts, and the work done by the Auditors and how their testing is undertaken.

From reconciliation to risk, a range of topics were covered to explain the ongoing services provided to the Academies in order to meet the 31 December filing deadline of the audited accounts.

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academies Financial Updates from the Accounts Direction 2014 The Accounts Direction is updated on an annual basis, setting out the requirements by the Education Funding Agency (EFA) of what needs to be presented and how in the accounts of an Academy. The update takes account of any changes in accounting standards, best practice and the feedback from the National Audit Office, who audit the EFA accounts. The presentation ran through the relatively minor updates from the Accounts Direction 2014, which included: • Changes in the way that transactions involving land and buildings are disclosed.

• Clarification on fixed asset capitalisation accounting policies.

• Increased disclosure requirements of operating leases.

• Reduced disclosure details of the charitable activity costs.

asset losses, stock losses, cash losses and unrecoverable debts.

•

• Changes to the funding streams that can be included in the carry forward calculation.

Additional disclosure requirements of ex-gratia, compensation payments and non-statutory severance payments to staff.

• Detailed disclosure of gifts made, fixed

• Emphasis on ensuring the related party transactions are disclosed appropriately.

As well as the above, the EFA have given a standard paragraph to include in the accounts in relation to the Local Government Pension Scheme liability, in the event of an Academy closure. The note confirms that the liabilities of the scheme would be met by the Department for Education in the event of such a closure.

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“You seem to be one of few accountants who actually host these workshops/seminars.

We find them very informative so please continue with them” “Very good information, thank you” “good and informative”

Come along to an Academies Seminar!

The Academies seminar in September focussed on preparing and auditing the accounts. If you would like any of the information provided at this seminar, please contact Chris Baldwin or Wendy Burton on 01242 776000.

At Randall & Payne we pride ourselves in sharing our knowledge and helping others. Our Academies Seminars (run termly) are open to all converted Academies, clients or not, so if you are interested in attending, check our website for dates and to complete an expression of interest form.

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academies

academies budget debrief giving academies the support they need to balance their budgets

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ow that the budget forecasts for 2014/15 have been submitted, we thought it would be useful to debrief and suggest way to improve next year.

Areas that caused Academies problems, and where extra input was requested from us, included: - The treatment of capital grants and expenditure. There was complexity when an ACMF grant had been used to fund revenue expenditure such as flat roof or window repairs. The line ‘transfer of capital to revenue’ had to be used here, to move the funding from the capital to the revenue section.

- Problems were encountered where year-end adjustments had not been considered such as accrued income for pupil premium or for ACMF grants recognised in 2013/14 but where cash was to be received in 2014/15.

- Starting earlier would avoid last minute panic & ensure more accurate and carefully prepared return.

To summarise, recommendations to consider for next year are: •

Start earlier.

•

Make sure your nominal coding is linked to the correct BF line, in particular separating out educational and support costs.

•

Consider any year-end adjustments, accruals, depreciation etc.

•

Discuss treatment of capital items with us in advance.

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Why not take our invoice challenge and send us an invoice for us to give you a cost comparison. We think you will be pleasantly surprised.

More and more firms in Gloucestershire are turning to us and we are proud to count Randall and Payne amongst our customers.

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the real value of ‘charitable status’ Corporation Tax IInstead of an annual Corporation Tax Return the less complex CT600E Tax return is completed once every 3-5 years, or when there is a tax liability to pay (see ‘Annual Profits’ below).

Annual Profits Most income generated is exempt from Corporation Tax provided the money is used for charitable purposes. The Academy will only be subject to Corporation Tax on the profits derived from trading income (non-charitable purpose income) where this income exceeds £50,000 in any one year. You may want to consider conducting these activities through a Trading-arm (a subsidiary company which conducts all trading activity) which donates all profits back to the Academy.

Investment Income Exempt from UK tax on most types of investment income, providing the income is used for charitable purposes only.

Land and Property Income Exempt from tax on income received from renting out land or property that it holds for charitable purposes.

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the trustees report

academies The Academies Accounts Direction (AAD) 2013/2014 summarises that the purpose of the Trustees’ report is to ‘describe what the academy trust is trying to do and how it is going about it, demonstrating whether and how the academy trust has achieved its objectives during the year and explaining its plans for the future’.

You need to be taking this overall statement into account throughout your Report.

The Legal Obligations The trustees’ report must meet the requirements for a Director Report under the Companies Act 2006 and the requirements of the trustees report as set out in the Charities Statement of recommended practice (SORP). The business review section of the Directors report has now been removed and replaced by a ‘Strategic Report’. The AAD continues with the Coketown Academy Trust example, with a full set of Reports and Financial Statements included, demonstrating the requirements under the AAD.

Elements of the Trustees Report The Report should cover the following matters:

Reference and administrative details Structure governance and management Objectives and activities Strategic report including: Achievements and performance Key performance Indicators

Going concern Financial review Principal risks and uncertainties Plans for future periods Funds held as custodian trustees on behalf of others (if arises) Disclosure to auditor

Further Guidance Randall & Payne will be providing a template for the Trustees Report as part of our year-end pack. This should be used in conjunction with the AAD and Coketown examples. The AAD lists steering group participants and you may wish to have a look at their 2013 financial statements for ideas. Do talk with us and with other academies you know. Part of our audit checks that the format and sections included in the Report are compliant. We also check that the content is consistent with the financial if statements and our knowledge of the academy.

As both a charity and a company, Academies face a challenge of determining which tax legislation they are to comply with. Once a ChA1 form has been submitted charity tax rules apply. But what difference does this charitable status really make? Jo Harris explains: Value Added Tax (VAT) If you are already VAT Registered the same rules apply for completing VAT returns; charging VAT onto customers and reclaiming VAT on purchases.

However, Academy Schools also have a unique opportunity to reclaim VAT incurred solely for charitable purposes on VAT 126 reclaim form Capital Gains Tax (CGT) On sale of capital items charities are exempt from CGT as long as the proceeds of any sale of investment assets are used solely for charitable purposes.

Employment Tax (ET) Academies are subject to the same rules as far as PAYE, Employee’s NI, Employer’s NI and Annual P11D Expenses & Benefits Forms are concerned, but Small Businesses & Charities (including Academies) are entitled to an annual £2,000 ‘employment allowance’ to reduce their liability for employer’s National Insurance Contributions.

Other taxes Gift Aid Relief Claims Charities can claim back the basic rate tax from HMRC for any individuals who make a donation to the Academy under Gift Aid (as long as they are UK tax payers) increasing the value of the donation by 25% Non-Domestic Property Rates Reduced Local Authority Business Rates available to charities

Stamp Duty Land Tax (SDLT) On purchase of commercial and residential buildings, charities are exempt from Stamp Duty Land Tax as long as the property purchased is to be used solely for charitable purposes.

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www.randall-payne.co.uk

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feature

where great ideas and training converge O n 1 April 2014 Converge brought together its two business divisions, network cabling design and installation and IT Solutions and Support, under a single brand Converge. This was the culmination of 5 years growth which has seen the businesses expand by over 400%.

Martyn Smith MD has overseen this expansion which was achieved through a combination of both organic and acquisitive growth. Whilst there are many challenges facing a rapid growth organisation, the recruitment and retention of key members of staff to add capacity is often one of the biggest issues. “We found that through acquisition and recruitment we had built a strong team, but many had come from different environments and had different approaches to many issues.” says Martyn. “We recognised that we were asking people to undertake new roles and responsibilities as we grew and saw a need to develop their skills in these areas” Converge have been working with Randall & Payne’s Will Abbott, Partner and Head of Business Advisory, throughout this period and naturally

sought advice on this issue.

“We often see businesses promoting their people based on technical skills and experience, but as those individuals move into management and leadership roles, they need a new skill-set” says Will. The Government also recognises this and has made grants available to help SMEs tackle the issue. There is a lot of flexibility in how the business uses these funds and development programmes can be matched to the needs and resources of the individual business.

As Will explains “Having identified the individuals looking for development, we devised a programme that includes group workshops, online training that is available 24/7 and one-to-one sessions to embed learning. A key part of our approach is that individuals work on real issues in the business, so their development has a clear benefit for both themselves and the business” Kevin Slater of Converge, who is part of the Academy, says: “The initial workshop was a great opportunity

to sit down and explore some of the wider issues in the business with colleagues, away from the day-to-day problems we are always facing”

“A big positive is the way the Academy reflects the different experiences and past training of each individual - the online resource centre and one to one sessions are tailored for each of us, as there are bound to be different skills in a group of people” Matt Buckley noted.

Whilst the Converge Leadership Academy is still in its early stages, the business is seeing benefits as the individuals put their new skills into practice. In the words of Bridgette Smith, HR Director, “Everyone comes back from the sessions with renewed enthusiasm and positive comments about the programme, and our investment in their personal development is a great way to demonstrate how much we value our people and their contribution to our continued growth”

if

Converge is a leading provider of IT support and infrastructure services, delivering high quality technical solutions to businesses throughout Gloucestershire, the Midlands and the South West. Let Converge be your Virtual IT Director and help develop your IT stragegy and budget for the future.

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01452 858030 | www.converge.co.uk 16

autumn 2014

www.randall-payne.co.uk

tra t in h

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Contacts Access to Finance • John Barker, Ollie Newbold Business Development, Leadership & Management • Will Abbott Regional Growth Fund • John Barker, Ollie Newbold Tax Reliefs • Tim Watkins, Trish Clements

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autumn 2014

17

feature

interest...

or conflict?

the Charity Commission’s guidelines on conflicts of interest

A

longside recent news that David Cameron’s Big Society Scheme is under investigation by the Charity Commission, the commission has released updated guidelines on conflicts of interest in charities. These guidelines are seemingly obvious, the central points being to identify conflicts of interest, prevent the conflict from affecting decisions and to record the conflict and how it was dealt with. However, for those charities dealing with conflicts of interest, these guidelines are a responsible move by the Charity Commission to encourage and ensure ethical behaviour by trustees.

The guidelines seem as much about self-preservation as about acting in the best interest of the charity, but when highprofile cases of embezzlement and misappropriation of funds dominate the headlines, this is hardly surprising.

way forward that will remove it, or if most or all of your trustees share the conflict of interest.

The third point is simply recording the conflict and how it was dealt with, both for future reference and in case the charity’s ethics ever come into question.

The guidelines are essential reading for anyone involved in charity work and could also benefit anyone wanting to learn about conflicts of interest more generally.

For more information on conflicts of interest, or for advice on dealing with a specific conflict of interest, to ensure you’re acting both within the law as well as ethically, contact Randall & Payne. if

The guidelines give effective advice, breaking the process of dealing with a conflict of interest up into three distinct steps.

The first is to identify conflicts of interest before they take effect.

The responsibility falls mostly on the trustee who is the subject of the conflict, but the guidelines do put a degree of responsibility on the remainder of the trustee body. The document defines a conflict of interest as any situation in which a trustee’s personal interests or loyalties could, or could be seen to, prevent the trustee from making a decision that’s only in the best interests of the charity. The document also includes a brief on how to prepare for future conflicts, recommending that a standing item is put on agendas, giving anyone who suspects or foresees a conflict of interest a chance to speak up.

The bulk of the guidelines concerns the second point, how to prevent a conflict of interest from affecting a decision.

The basic message is that trustees must act in the best interests of the charity.

This requires them to declare the conflict and step back from any decisions that would benefit them.

There are circumstances where the conflict has to be reported and specific situations where it is required to contact the Charity Commission to authorise a decision in advance, for example, if the conflict of interest is serious but there’s no alternative

14

autumn 2018

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feature

how membership of helps R&P focus on standards

T

he UK200Group is the UK’s leading quality assured membership group of independent firms of lawyers, international associates and chartered accountants.

Membership of the UK200Group requires annual independent quality assurance in the form of an audit of various aspects of the company, including the areas of tax procedures and controls, accounts preparation, the firm’s own quality control system, as well as audit work and insolvency.

Accreditation by the UK200Group ensures a consistently efficient and effective service to clients. In general terms, the accreditation requires that all member firms are able to demonstrate full compliance with the ICAEW Practice Assurance Standards.

The UK200Group also has five specialist industry groups, including Agriculture, Healthcare, Charities, Legal, Property and Construction, whose members deliver assistance for specific market sectors. Additionally, the group has introduced an Academies forum, focused on the developing Academy Schools sector. These specialist groups, along with expert panels, give access to a wide pool of knowledge, allowing Randall & Payne to advise clients in any market sector. The UK200Group gives members a broader understanding of businesses and their markets.

If clients have extremely specialist needs, Randall & Payne have the resources necessary to work with

www.randall-payne.co.uk

them to best guide their business.

The community of the UK200Group is one built on mutual support, so Randall & Payne also help other firms in the group, providing them with the specialist knowledge of the Randall & Payne Partners. Partner Will Abbott is a regular contributor to the UK200Group news blog, providing other members with updates and advice on current business issues. The contributions that Randall & Payne make to the group raise their standing among other accounting firms, and give them a strong position in the accounting community. Membership also facilitates excellent networking with other accounting firms and creates a strong professional community that allows a high quality of discussion about the issues that affect professional accounting firms.

to fully, and continually, support it’s clients, wherever their business may take them. It gives the business advice that Randall & Payne provide their clients, reputability and accreditation, allowing clients to have full confidence in the guidance given by the firm.

Additionally, the UK200Group provides technical expertise on subjects such as forensic accounting and dispute resolution, giving Randall & Payne the ability to guide clients with a wide variety of requirements.

if

Randall & Payne’s membership not only enforces high standards, but also gives access to the expertise and international resources of the group, such as membership to the International Association of Practising Accountants, facilitating the highest possible quality of service while maintaining a local base and a client focused approach. This gives Randall & Payne the ability

autumn 2014

19

feature

auto enrolment Never been excited by pensions?

Well, as the government passes more of the responsibility of pensions on to individuals and less on the state, perhaps you should be.

If you are twenty, thirty or forty years away from retirement, this will impact on you.

A

ll businesses in existence from 2012 and with employees from that time, have been given a staging date somewhere between 2014 and 2017, to provide a work place pension for all employees.

You can find out your staging date by going onto The Pensions Regulator’s website www.thepensionsregulator.gov.uk and entering your PAYE reference number.

Randall & Payne have already assisted a number of clients in introducing autoenrolment over the last few months and are now looking to help clients with staging dates of 2015 and later.

Planning is paramount, so here’s a basic plan of action for all employers.

1.

Check out your staging date.

2.

Decide on the scheme you will offer to your employees.

3.

Contact the pension provider to ensure they are prepared to offer the scheme to your employees.

4.

Decide on the software you will use to assist with all the requirements of auto-enrolment.

5.

6.

20

Begin the formal process of notifying your employees about the scheme and assessing who will be eligible.

Assess the costs of the scheme to your business in the first year and over the next two years as the contributions increase.

autumn 2014

7.

Implement auto-enrolment on the staging date.

In their wisdom, the government are insisting that businesses can introduce their own auto enrolment scheme on a non-advisory basis, i.e. they do not need to take advice from a pensions’ specialist, providing they follow the procedures outlined on the government’s website. However, it is likely that most businesses would prefer to get on with their own business and get help to introduce the auto enrolment scheme on their behalf.

R&P have two offerings to assist all businesses in dealing with the governments requirements.

Firstly we can refer you to IFS Employee Benefits LLP (part of IFS Aegis Ltd, based in Stonehouse) who have already negotiated a scheme for Federation of Small Business members in conjunction with Scottish Widows. IFS can provide you with guidance and a helpline from £399.

Secondly, we can offer a full advisory basis to assist with the following: • Prepare a plan of action • Assist with the choice of scheme.

• Advise on software requirements • Provide templates to provide information to employees • Assist with employee presentations • Deal with existing scheme conversions where appropriate • Ongoing help and telephone back up.

For further information or to to discuss how we can help, please contact Oliver Newbold on 01242 776000

if

www.randall-payne.co.uk

spotlight

Race for Life

Russel Byrd (partner) presenting Dr Gill Rouse (LINC Director) with a cheque for funds raised during the time they were R&P’s nominated charity

Some of the more athletic staff took part in the Race for Life event at Cheltenham Race Course on Sunday 29th June and helped to raise an estimated £250,000 - wow!

Well done to Trish Clements, Wendy Burton and Dani Longney who ran 5km and a double well done to Lindsay who ran 10km.

The triumphant trio: Trish, Wendy and Dani.

A

fter two years of supporting LINC, the Cheltenham dedicated to supporting patients and their families affected by leukaemia, lymphoma and other blood cancers, the staff at Randall & Payne have elected Gloucestershire Young Carers as their new ‘charity of the year’.

We’ve enjoyed our association with LINC and will continue to actively promote and support their work. Since becoming our nominated charity we have supported LINC, through fundraising in form of events, to the tune of £5,155.

We look forward to now supporting Gloucestershire Young Carers through 2014/15 and believe the Partners & Staff at R&P will strive to make a equally fantastic fundraising effort.

GYC is a local charity, formed in 1992 with the aim of enabling children and young people to reach their potential and achieve a positive transition to adulthood regardless of family circumstances. GYC supports young carers, enabling them and their families to access support that minimises the physical and emotional impact of caring, and that promotes health and well-being and resilience. For more information please visit http://www.glosyoungcarers.org.uk

to

…and there’s more….

Randall & Payne’s intrepid fundraisers have for many years supported The Rotary Club of Gloucester Severn with their fund raising for CLIC Sargent through the annual Dragon Boat Regatta at Gloucester Docks.

Sunday May 11th was no exception and the Randall & Payne team once again took to the water. However, 2014 was not as usual and we became only the second team in the history of the event to capsize. Undeterred, the valiant crew (bedraggled, wet and cold) boarded a new (and dry!) craft and completed the regatta. Well done all!

At the end of the day a significant amount of money was raised £550 for CLIC Sargent and we have ‘tales to tell’.

R&P racing in boat 5 - spot the difference?

www.randall-payne.co.uk

autumn 2014

Randall & Payne in the community

from

21

!

dates for the diary September 2014 monday

tuesday

wednesday thursday friday

saturday

sunday

1 2 3 4 5 6 7 Corporation tax

VAT filing deadline

payment due date.

New advisory fuel rates come into force

8 9 10 11 12 13 14 Quorum / Business Growth Group meeting

15 16 17 18 19 20 21

22 23 24 25 26 27 28 RePLY / Business event @ Omega Resource Group

29 30

October 2014 monday

tuesday

wednesday thursday friday

saturday

sunday

1 2 3 4 5 Minimum Wage Business increases AWARDS 2014 event

Notify chargeability for Income/Capital Gains Tax if not registered for Self Assessment.

6 7 8 9 10 11 12 VAT filing deadline Grow Gloucestershire Show. Cheltenham 13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30 31 Midnight deadline for paper submission of Self Assessment tax returns.

November 2014 monday

tuesday

wednesday thursday friday

saturday

sunday

1 2

3 4 5 6 7 8 9 VAT filing deadline 10 11 12 13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30 Quorum / Business Growth Group meeting

22

autumn 2014

www.randall-payne.co.uk

tax reference

income tax reliefs 2014/15 Personal allowance born after 5 April 1948 £10,000

‘adjusted net income’ over £100,000.)

born after 5 April 1938 and before 6 April 1948* £10,500 born before 6 April 1938 £10,660 (For higher earners reduce personal allowance by £1 for every £2 of

vehicle benefits

(relief at 10%)* min. amount

£8,165 £3,140

* For people born before April 1948 reduce allowance by £1 for every £2 of adjusted net income over £27,000 to the minimum of the standard Personal Allowances of £10,000.

Blind person allowance

Company cars 2014/15 CO2 emissions (gm/km)

Married couple’s allowance for people born before 6 April 1935 or 75 and over

£2,230

Maximum transferable personal allowance between spouses £1,000

% of cars list price taxed

1-75 5 76-94 11 95 12 100 13 105 14 110 15 115 16 120 17 125 18 130 19 135 20 140 21 145 22 150 23 155 24 160 25 For expenditure incurred on or after 6 April 2013 165 26 (since 1 April 2013 for companies) cars with CO2 170 27 emissions not exceeding 130gm/km (previously 175 28 180 29 160gm/km) p.a. Cars with CO2 emissions over 185 30 130gm/km receive 190 31 an 8% allowance p.a.

195 32 200 33 205 34 210 and more 35 For diesel cars add a 3% supplement but maximum still Cars and vans Rate per mile 35%. For cars registered before Up to 10,000 miles 45p 1st January 1998 the charge is Over 10,000 miles 25p based on engine size.

capital allowances on cars

mileage allowances

Company Vans 2014/15 £3090 Car Fuel Benefit 2014/15 £21,700 x appropriate percentage* *percentage used to calculate the taxable benefit of the car for which the fuel is provided.

Bicycles 20p Motorcycles 24p These indicate the maximum tax free mileage allowance for own vehicle business use. Any excess is taxable.

value added tax

Standard rate 20% Reduced rate 5% Annual Registration Limit - from 1.4.14 (1.4.13 - 31.3.14 £79,000) £81,000 Annual Deregistration Limit - from 1.4.13 (1.4.13 - 31.3.14 £77,000) £79,000

www.randall-payne.co.uk

income tax rates 2014/15 Band £ Rate % 0 - 2,880 10* 0 - 31,865 20** 31,866 - 150,000 40*** Over 150,000 45****

*Only applicable to dividends and savings income. The 10% rate is not available if taxable non-savings income exceeds £2,880. ** Except dividends (10%). *** Except dividends (32.5%). **** Except dividends (42.5% for 2013/14).

Other income taxed first, then savings income and finally dividends.

corporation tax year to 31/3/2015 Profits band

Rate

Small companies rate £0 - £300,000

20%*

Marginal (small companies) rate £300,001 - £1,500,000 21.25%* Main rate Over £1,500,000 Standard fraction

21%* 1/400*

The profits limits are reduced for accounting periods of less than 12 months and for a company with associated companies. *Different rates apply for ring-fenced (broadly oil industry) profit.

pension premiums 2014/15

• Tax relief available for personal contributions: higher of £3,600 (gross) or 100% of relevant earnings.

• Any contributions in excess of £40,000, whether personal or by the employer, may be subject to income tax on the individual.

• Where the £40,000 limit is not fully used it may be possible to carry the unused amount forward for three years.

• Employers will obtain tax relief on employer contributions if they are paid and made ‘wholly and exclusively’.

• Tax relief for large contributions may be spread over several years.

autumn 2014

23

Wish you were here?

Then maybe you need accountants with a different approach!

Over the last five years we’ve helped our clients answer their big questions: • How do I get more value out of my business?

• Am I paying the right amount of tax?

• Where do I want to be in five years?

Whatever your goals and aspirations, we are happy and able to help you achieve them Randall & Payne Quorum allows business leaders to connect and share strategies for growth, while gaining the skills and tools to implement them.

To find out more contact: will.abbott@randall-payne.co.uk

Chargrove House, Shurdington Road, Cheltenham, Glos. GL51 4GA

01242 776000 · www.randall-payne.co.uk

Randall & Payne is a brand name of Randall & Payne LLP. Registered in England & Wales number: OC345710. Chargrove House, Main Road, Shurdington, Cheltenham, Glos. GL51 4GA. Unless otherwise indicated we use the word partner to refer to a member of the LLP. Registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk, under reference number C002244548. A member of the ICAEW Practice Assurance Scheme.