In Focus Issue 5

in focus turn your business strategies into reality

issue five: spring 2015

Patent Box:

Are the rules still up in the air?

Budget Day Special

PLUS! News, reviews and highlights of the pre-election Budget...

Farm land diversification business advice

Is growth within your grasp?

accountancy & audit

Getting the right prescription tax advice

Will this Budget help you?

wealth management

finance

welcome

in this issue welcome to issue five Hello and welcome to the fifth issue of in focus magazine – your quarterly guide to growing both your business and your profits.

In this, our Budget Day issue, we look at the pre-election budget and how it will affect you, your family and your business.

We also take an in-depth look at the patent box and where it’s going as well as the latest agricultural news.

Featured are two case studies showing Randall & Payne helping local businesses grow and Will Abbott takes you through why a prescription might not be right for your business.

08

20 - 21 In this issue:

04 staff news Celebrating CPD!

05 agricultural news

How camping can increase income.

06 - 07 tax news

James Geary and Trish Clements give an update on corporate and personal tax news.

08 - 09 patent box

What difference will the new modifications make?

04

What doesn’t change is what Randall & Payne and in focus magazine deliver: up to the minute creative solutions and expert advice to help grow your business and develop your full potential.

02

spring 2015

09

www.randall-payne.co.uk

contents

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

06 18

10-13 budget review

14 - 15

The highlights of our budget event and how it affects you.

14 - 15 does your business need a check-up?

Mr Abbott will see you now...

The importance of getting the right advice.

16 business advisory

Your guide to progressing through the 4 stages of the business lifecycle.

17 academies news

A report on the academies pensions seminar.

18 the life-changing effect of a spider in the room

Author Nikki Owen tells why she came to R&P for help.

20 - 21 Stonehouse focus Tile Trader

22 tax reference www.randall-payne.co.uk

16 Do you know where you’re going to...? spring 2015

03

R&P update

news focus turn your business strategies into reality

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

Staff News

Studying with Randall & Payne continues beyond initial success!

Every year we try to appoint trainees to study for AAT, ACA and ACCA qualifications and are always pleasantly surprised by the quality of applicants who apply. We are never more pleased than when our recruited trainees excel in their studies and choose to continue on to the next level.

Lindsay Collins qualified as an AAT in 2012 and, taking time off from study, Lindsay put into practice the knowledge earned from study to gain experience of accounts processes within the firm.

Lindsay then decided in 2014 that the time was right to resume her study and is now going on towards achieving her ACCA.

Lily Bull knew early on in her studies that the prospect of progressing within Randall & Payne was possible and the training opportunities offered would allow her to develop further. She qualified as AAT in 2014 and is continuing her development by going on to study ACCA. As Lily says “I wanted to better myself and being part of the Randall & Payne Apprenticeship programme allows me to do that. The experience and support I get from my colleagues and Managers gave me the encouragement I needed to take the next step”.

Taken on as part of our 2012 trainee scheme, Nathan Smith and Ben Burch shone during the recruitment process and we knew they would easily fit into Randall & Payne’s team. It was a pleasure to celebrate them both passing the AAT qualifications with ease and positively supporting their desire to continue their growth. They are now both continuing their development by going on to study for their ACA qualification.

Every member of Randall & Payne staff is considered an asset by the Senior Leadership team of Randall & Payne, but there is something a bit special about watching a person develop within the business and continue to thrive and excel.

If you would like to join the Randall & Payne Team, either on our Trainees scheme or as an experienced member of staff please check out our website www.randall –payne.co.uk/jobs for career opportunities.

if

04

spring 2015

www.randall-payne.co.uk

agriculture

Farm incomes boosted by campsite bookings

The number of campsite bookings taken by farms increased by 85% in 2014 compared with 2013, according to data provided by outdoor accommodation specialist Pitchup.com.

The data reveals that over 18,500 campsite bookings were recorded at farms across the UK and Ireland in 2014. The average farm campsite received £6,461 in total for the year, with the most successful receiving £29,000. This is more than the net income of the average farm, which is £28,000 according to the Department for Environment, Food and Rural Affairs (Defra).

Farm incomes have dropped by 26% since 1995, according to Pitchup.com, which has led many farmers to seek diversification

opportunities to make their business more financially viable.

Commenting on the opportunity presented by campsites, Pitchup. com founder Dan Yates said: “The set-up and running of a farmbased campsite is a relatively simple process and many farms could see their income rise dramatically.”

According to figures published by VisitEngland.com, a total of around £2.4 billion is spent by British people each year on domestic camping and caravanning trips.

The figures also reveal that British people taking domestic holidays at campsites or caravan sites spend 25% more nights away on average than those staying in hotels.

Farmers wishing to set up a campsite should ensure they contact their local authority, to find out whether they require a campsite licence and whether planning permission is required.

For tax advice for other income streams please contact Tim Watkins on 01242 776000. if

Care needed when negotiating with mobile network operators

Landowners should be careful when negotiating lease terms with mobile network operators (MNOs), who will ‘undoubtedly’ be reviewing their leasing arrangements in light of the Government’s plans to help eliminate poor rural network coverage, according to property specialists Strutt and Parker.

In November 2014, the Department for Culture, Media & Sport (DCMS) launched a consultation on various legislative proposals to reduce partial ‘mobile not spots’, meaning locations covered by just one or two of the four main MNOs operating in the UK (EE, O2, Three and Vodafone). The following month, Culture Secretary Sajid Javid confirmed that these companies had entered into a binding deal with the DCMS that includes an agreement to spend £5 billion collectively on improving mobile infrastructure by 2017.

Speaking to the Farmers Guardian, Strutt and Parker’s Head of Telecoms Robert Paul claimed that MNOs often quote ‘modernisation’ when making demands of landowners and force them to sign new agreements by threatening decommissioning and loss of income. He pointed out that they are only obliged to concede where the modernisation work is required by law, adding “landowners are often unaware of their rights when it comes to dealing with telecoms.” Mr Paul continued: “Landowners may be under the impression there is an obligation for them to permit access or provide additional ground space to operators, although this is not always the case.” if

For more information visit our website www.randall-payne.co.uk

spring 2015

05

tax news

Tax News

...with James Geary and Trish Clements

Compensation or redress payments to businesses We have all seen advertisements in the media and had endless marketing calls from companies claiming to be able to win thousands of pounds for you out of mis-sold financial products. Randall & Payne’s Corporate Tax Manager, James Geary, is seeing an increasing number of these kinds of payments being received by our clients.

In terms of a receipt by an individual which is not connected with a business, these kinds of payments are not generally taxable (for example, mis-sold PPI insurance with your private mortgage, or personal injury claims). However, in a business scenario, the situation is far from straightforward. These often relate to mis-sold hedging products or interest rate swaps, but there are other kinds of compensation receipts and redress payments too.

The default position with a receipt of compensation for a business is that the amount is fully taxable as trading income.

This can result in Corporation Tax charges at what will soon

be a single rate of 20% or, for unincorporated businesses, much higher rates of Income Tax and National Insurance.

However, the situation is far from clear cut and we would urge all recipients of such payments not to simply accept that the amounts are taxable without further research. With some businesses receiving sums approaching, or in excess of £100,000, the potential tax is significant and it is worth making sure of your ground.

There may be ways to mitigate or even eliminate the tax charge – in some situations a concessionary treatment might completely exempt the amount

from tax, or in other situations, where there is an underlying asset, (such as a property), businesses may be able to use some of the Capital Gains base cost of the property to reduce the immediate tax liability. In the case of business property, it might be possible to roll the gain over into the acquisition of new business assets, even though the property itself has not been sold.

If you, or someone you know, has received a compensation sum in connection with their business, please contact James Geary on 01242 776000.

Randall and Payne have been invaluable. James Geary identified that the substantial online applications we were developing might be eligible for R&D tax relief - something we were not aware of.

James helped with our application and we have had a sizeable tax refund. It has also helped us plan our next steps in development in the knowledge that they too should receive similar relief.

We would recommend that any organisation with considerable spend on technical development should contact Randall & Payne to see if they too could qualify.

Steve Wills, Director, Customer Insight Solutions

06

spring 2015

www.randall-payne.co.uk

tax news

Make the most of end of tax year savings

That period between submitting your end of year tax return (hopefully well before the 31st January deadline!) and the end of the tax year is an ideal time to ensure you are maximising the potential opportunities which exist to optimise your tax position, but crucially these require action before 5th April.

When you read this article will determine your action. However, we recommend that our clients review their position every year and we will be more than happy to plan for 2015/16 with you.

Personal Tax Planning: key things to consider before 5th April: Income levels If you are potentially liable to higher rates of tax, or if you receive Child Benefit but you (or your partner) have income over £50,000, there may be scope to reduce your taxable income level by making personal pension payments or gift aid donations.

Individual Savings Accounts (ISAs) If you have savings, have you made full use of your ISA allowance for the year to invest money in a tax free wrapper?

Under New ISAs you can invest up to £15,000 per tax year now.

Capital Gains Tax If you have made no gains this year but have investments, consider realising some gains to use your Annual Exemption. You can realise tax free gains of up to £11,000 this year (£22,000 as a couple).

It may also be possible for spouses and civil partners to move income-producing assets between each other in order to optimise the overall position as a couple.

if

This list is by no means exhaustive, so please give Trish Clements, Private Client Tax Manager a call for more information on 01242 776000.

www.randall-payne.co.uk

spring 2015

07

tax news

Patent Box: where are we going?

We are less than two years into the new Patent Box regime and UK companies are still adjusting to this tax relief as it phases in. However, it has been established for a few months now that the scheme is under review and will, at some stage, be modified. It is not yet known what the “New Patent Box” will look like in the UK, but we do know the internationally agreed modifications which will need to feature in the new system.

So what exactly was the problem with the existing Patent Box regime?

What is likely to change?

And is there anything UK companies should be considering at this stage to ensure they are well placed to benefit?

The problem The UK Patent Box in its current form rewards companies that are retaining and exploiting patents within the UK. There is a requirement that the company passes a “development test” and this is designed to ensure that only companies that have made a substantive contribution to the development of the technology can benefit from the relief.

The problem is that the rules in their current form make it possible for UK companies to benefit even where the development work

08

spring 2015

is not carried out within the UK. So for multinational groups, the related R&D work could be carried out in another country, with the ultimate trading taking place within the UK due to the beneficial tax regime.

Germany were one of the principal opponents of this structure, amongst others, making the point that this could encourage artificial shifting of profits in multinationals and give a competitive advantage to the UK over other economies.

www.randall-payne.co.uk

tax news The “nexus” approach

What does this mean for UK SME companies?

While we do not yet know exactly what a revised UK Patent Box regime will look like, the reports that have come out do give us some detail about particular features which will need to form part of that regime.

The review stipulates that the UK regime (and indeed other countries’) must close to new applicants by 30 June 2016, and companies already claiming must switch to the revised system by 30 June 2021.

It is a requirement of the new system that, for a company which does everything on shore in the UK, the formulaic approach can result in 100% of income qualifying. So, in theory, a pure UK company carrying out R&D, registering the patent and then trading profitably from the technology should still qualify for Patent Box relief on all its profits from that technology, as now.

This will be the case even if R&D is outsourced to subcontractors offshore, unless those subcontractors are connected.

The tax benefits of the new system will be calculated in a similar way, but the amount of qualifying intellectual property (IP) income (which is either income from licence or sale of patents, damages, or just sales of products or services in which the patented technology is inherent) must now be calculated by reference to the R&D expenditure that created the IP. So where a company has incurred R&D expenditure, very broadly they need to establish how much of that cost was expended within the UK and how much was not – the appropriate proportion of the income therefore qualifies for relief.

Following a more recent modification to these guidelines, it may also be possible for the rules to allow for an uplift of up to 30% on qualifying expenditure in calculating this proportion.

The test is cumulative – meaning that the company must retain records right back to when the R&D work first started.

The objective of all this is to ensure that there is a direct “nexus” between the income qualifying for tax benefits and the expenditure which has contributed to that income.

Where a company buys a patent and then further develops the technology, the situation will be a little more complex as the costs of acquisition are not qualifying (although if there is a 30% uplift this will mitigate the effect of this exclusion). Therefore the company will need to track all its development costs along with the original acquisition costs to determine the proportion of income each year which qualifies. The qualifying proportion should increase over time as the acquisition costs become more historic and the development costs increase annually.

However, companies which are part of a multinational group, for example with an overseas parent company, will need to carefully consider the impact of the revised system and plan where they carry out their R&D work in order to ensure benefits can be maximised. In these situations it may be beneficial to try to ensure qualification for the existing regime before it closes its doors, so that they can potentially benefit for five years.

Although the requirement is for closure to new applicants by 30 June 2016 – the UK may choose to apply an earlier date, so nothing is guaranteed.

In summary As explained above, it is clear that purely UK companies ought not to be affected by any changes, and on the face of it this is good news. However it is unfortunately not unusual for such innocent parties to get caught in the crossfire when rules change to block more abusive tax practices, and therefore we will need to wait for details of the new UK regime before we can be sure of this.

It is to be hoped that there will be a proper period of consultation on the new UK system before implementation, which we will be watching closely.

If you think you could benefit from the Patent Box, or would like advice on changes to the scheme, contact our Corporate Tax Manager, James Geary on 01242 776000.

www.randall-payne.co.uk

if spring 2015

09

the budget

How will this Budget affect you, your business and your family?

Randall & Payne were joined at Kingsholm Rugby Club by some of Gloucestershire’s business leaders, to discuss the impact of this Budget on local businesses and the local economy.

Part of the day included a panel made up of a trio of the county’s most influential business leaders, David Owen of GFirst LEP, Renishaw’s Head of Communications Chris Pockett & Simon Tothill, Director of Robert Hitchins Ltd, as well as two representatives from Randall & Payne, Partner Will Abbott and James Geary, our Corporate Tax Manager. As questions were put to the floor and answered via an interactive voting system, the panel discussed the budget’s impact on Gloucestershire’s business landscape.

While the main concern for our attendees was the impact that the budget would have on businesses, as Steve Barnett, Joint Managing Director of Glevum Security, observed

“This was essentially a party political broadcast for the Conservatives. It was an election budget rather than a business budget. There was very little for businesses to grasp hold of”.

The focus of the budget was firmly planted on individuals rather than businesses, giving far more measures that affect personal finances than affect business finances.

The Chancellor of the Exchequer opened with remarks about how far the economy has come. These were quickly refuted by the Leader of the Opposition once he had his turn to talk, but the Conservative’s based much of their speech on the strength of their performance leading up to the budget. The figures he gave stated that the national economy grew 2.6% in 2014, faster than any other advanced economy, but falling short of the 3% promised in December.

10

spring 2015

Employment was another staple of the budget, with the opening remarks predicting a fall in the jobless rate of 5.3%. Ian Mortimer of recruitment agency First Base, spoke about how the budget looks to affect expanding businesses in the county,

“I found the budget to be generally positive if lacking in some substance and detail.

The positives included the commitment to further increase personal allowance up to £11,000. It’s a great incentive for people to get back into the workplace, particularly for temporary workers and people with multiple jobs. Investment in growth, despite the vague details, is positive in terms of employment.

A growing economy with tax incentives makes businesses much more likely to take on additional employees. I also like the clampdown on umbrella tax avoidance schemes. For us that’s very positive, as it’s a tax loophole that doesn’t always benefit employees”.

Living standards, although quickly rebutted by the Leader of the Opposition as inaccurate, were also front and centre for the Chancellor who claimed households are an average of £900 better off in the last 5 years.

The Conservative’s focus on voters followed through to include measures that allowed the Chancellor to use catchphrases such as ‘£10 off a tank with the Tories’, their phrase to encapsulate frozen petrol duty, overriding September’s planned increase.

www.randall-payne.co.uk

the budget

Steve Barnett, Joint Managing Director of Glevum Security expanded on the Conservative’s apparent election push

“They were really getting a foot through the door for election day. £6.70 minimum wage is good, frozen tobacco tax, alcohol tax reductions, its all helps get people voting.

Abolishing the tax return is basically the Chancellor saying ‘come and vote for us’.

After the election I’m expecting a second ‘real’ budget for businesses”.

Abolishing the tax return is a popular move that seeks to make life easier, particularly for the self employed.

While there was talk in the media before the speech about abolishing paper tax returns, this is a significant step further. It will be interesting to see how they propose to manage a transition, especially if they are going to introduce complicated measures such as the savings allowance, which by its nature would require a reporting mechanism, especially for those for whom collection of tax via the PAYE system is not an option.

Although there are still some fears over online-only submissions, particularly for those with limited internet access, the move still simplifies tax for a huge number of people. Many were hoping for a simplification, or even unification, of tax and National Insurance contributions.

Instead personal allowance was increased, while NICs lag behind.

There were some changes to pensions and savings.

ISAs will become more flexible, giving savers the ability to take money in and out without impacting their annual subscription limit, providing (presumably) the annual balance does not increase over the limit. Additionally the pension lifetime pot was reduced from £1.25m to £1m and pensioners were given far greater access to their annuities. “It’s a big year for pensions” explained John Moss, a Chartered Finanacial Planner with IFS Cotswold Financial Planning, “More freedom to cash in annuities is great, we welcome the freedom, but people should act with caution to avoid large tax bills. There’s a much greater need for advice with pensions and planning for retirement”. This reduction will take place from 6 April 2016, although the annual contribution limit of £40,000 will not be reduced. As with previous reductions in the lifetime allowance, a form of transitional protection will be available for those whose funds already exceed this sum.

In addition, “Help to Buy” ISAs will be introduced to help first time buyers onto the property ladder. An individual can save up to £200 per month towards a first home in such an account and the government will contribute an additional £50, up to a maximum contribution of £3,000. The facility is available on home purchase of up to £450,000 in London and up to £250,000 outside London.

Class 2 National Insurance was already moving to self assessment from 2015-16, but the government will now consult on abolishing it altogether. They will also reform Class 4 to bring in a link to contributory state benefits.

The latter is long overdue as Class 4 has not had a link to state benefits at all for many years.

www.randall-payne.co.uk

spring 2015

11

the budget

A new allowance will be introduced from 6 April 2016 to remove tax on up to £1,000 of savings income for basic rate tax payers and £500 for higher rate tax payers.

No allowance will apply to additional rate tax payers (income over £150,000).

Serial tax avoiders are being greeted with legislation to bring tougher measures against those who persistently enter into tax avoidance schemes which do not work.

This will include an additional surcharge and naming and shaming provisions.

It remains to be seen how HMRC will administer this, based on a number of factors - there will need to be automated transfer of information from banks (which will help HMRC to pick up non-declarers), presumably a cessation of the requirement for banks to deduct 20% Income Tax at source, but principally, what happens with tax payers who are not receiving any income under PAYE? HMRC have stated that tax due on savings income over these limits will be collected via PAYE deductions from employment or pension income, but not all tax payers have income of this type. If the annual return is also to be abolished, what other reporting mechanisms will there be?

Chris Pockett, Head of Communications at specialist engineering firm Renishaw, described the budget as “Full of interesting things for the engineering sector, tempered by disappointment in the failure to deal with annual investment allowance, which limits the investing ability of engineering businesses”. There is good news in a single 20% rate of Corporation Tax from 1 April 2015. The government has announced an intention for this single rate to also apply for the year commencing 1 April 2016.

Regarding agriculture the period over which farmers and market gardeners can average their profits for tax purposes will be extended from two to five years. This is a welcome measure which enables farmers to make use of all their tax allowances to compensate them for the fact their trading results can be very volatile, due to various uncontrollable factors such as the weather.

In addition proposals are due that will enable HMRC to issue “Conduct Notices” to promoters of tax avoidance schemes, in an effort to bring tougher regulation and control to high risk promoters.

12

spring 2015

Additionally following the recent consultation the government will proceed with a voluntary advanced assurance scheme for small business making their first claim from Autumn 2015. This measure is long overdue and will be of particular help to small start-up businesses who are developing products but have not yet completed an accounting year to make a claim. The scheme will enable them to agree that the relief applies and the methodology for calculating the tax credits.

This will be very helpful when they come to raise finance in that they have advanced approval of a cash stream from R&D Tax Credits.

www.randall-payne.co.uk

the budget There will also be further work to improve awareness and take up following the consultation. In our response we suggested that HMRC should work more closely with other government bodies that are involved in or advise on funding, such as Local Enterprise Partnerships, Chambers of Commerce, Manufacturing Advisory Service, Innovate UK and other local public bodies. This suggestion has also been included in the input from the Chartered Institute of Taxation. It is to be hoped that the government heed this feedback.

As part of the international review on “Base Erosion and Profit Shifting” (BEPS) project, a review of all Patent Box regimes has been carried out. We already know that all existing regimes (including the UK’s) must be closed to new entrants from June 2016, and the replacement must meet certain criteria to ensure that the relief relates to patents for which the R&D was carried out in the same jurisdiction. We were hoping to see something on the shape of the proposed UK “New Patent Box” in the Budget but this is still awaited.

We are not expecting New Patent Box to leave purely UK companies that have carried out R&D in the UK in any worse position than they are already. Indeed, the BEPS review stipulates that the formula adopted should enable full relief to be obtained where all the conditions are met. However, the existing Patent Box remains open for the time being, so companies exploiting patented products, components or processes in their businesses should review eligibility at an early stage with a view to being able to elect in to the existing Patent Box before it closes. It is likely that these companies will have the flexibility to be able to move to the New Patent Box when they like, if this proves to be more beneficial.

The VAT registration threshold will increase from £81,000 to £82,000, and the deregistration threshold will increase from £79,000 to £80,000.

The budget day is, as many have observed, only half the picture. Various things are being rushed through or skimmed over without having any depth or detail behind them. Post-election should give a clearer image of the entirety of the budget.

If in the meantime you need advice on how the budget will affect you, or your business, call Randall & Payne today on 01242 766000.

Our panel voted on key issues and the results were...

67% of Gloucstershire’s business leaders were ‘quite confident’ that the budget would support economic growth but only 3% of them thought that the measure fully supported businesses trading internationally and only 3% felt that the manufacturing industry was being fully supported. www.randall-payne.co.uk

A raffle at the event raised £555 for Gloucester Young Carers, enough to send two young carers to a year’s worth of support sessions.

spring 2015

13

business advice

Why a Prescription May NOT Fix Your Business…

Welcome to Will Abbott’s business clinic...

We have seen strong demand for business strategy work since the start of 2015.

I am still trying to work out if it’s New Year’s resolutions, stronger confidence or some other reason entirely. What I am aware of is the increasing number of providers offering similar services and therefore the increasing difficulty for business owners to make the right choice. Where we are seeing success is in our dynamic approach to developing strategy as opposed to more prescriptive alternatives.

Many Problems – One Solution

Some Problems – Some Solutions

With this approach the adviser often has only one tool or business model that they are familiar with. The issue for the business is that the adviser will invariably sell their solution as being the one to solve your problem, whatever that happens to be. Tools, such as the Business Model Canvas or the Balanced Scorecard, are powerful when used appropriately to deal with the right problem at the right time. They are not a panacea for all ills. You might think of these as “False Hope” solutions. You now have a great business model and feel full of energy and hope.

But how do you make the real changes to the business to reflect the new model?

These advisers are more sophisticated and have developed a list of common business problems and lists of common solutions. As a business owner you can choose a problem to fix and choose a solution, or be guided by your adviser.

Specialists can also suffer a little from myopia.

If you chose a marketing company that has a website specialism, chances are the solution will involve a new website. Same rules for specialist consultants. Of course these advisers are fantastic once you really know that is the solution you need.

14

spring 2015

Although there is a wider choice there is limited research or probing into the issue lest an unknown problem should arise, for which a list of solutions is not available. The adviser will steer you towards a common problem and use the list of possible solutions to build credibility. If the chosen solution does not produce the result you desire, you can try again. A true “Trial and Error” approach.

At Least You Tried Both of these approaches will often deliver a result of some kind. This stems from the simple fact that they will lead you to change something or try something different, which invariably produces a different result.

www.randall-payne.co.uk

business advice Many Problems – Many solutions The medical analogy is a powerful one. Think of the last time you visited your GP. How long was spent analysing your symptoms and diagnosing the underlying causes, compared with the time spent deciding on the solution and writing the prescription? It would not be far away to say a 90-10 split. Many approaches are at best the exact opposite – 10% diagnosing and 90% solution.

What we have learnt is that the best approach invests much more time in diagnosing, but this is a dangerous time for the adviser.

It needs someone with experience who is comfortable with ambiguity; someone who is confident enough to walk into a room and deal with whatever confronts them. It needs someone with a toolkit that can be used to diagnose the real underlying causes and then solve a multitude of problems.

We call this facilitation and it is based on having multiple ways to diagnose problems and their causes and multiple ways to develop a solution. It is not an out of the bag solution, and can deliver significant return on investment with costs which are comparable to the alternatives.

Alternative Remedies I would suggest some simple questions: 1. Does the provider challenge your perception of the problem or just accept it?

2. How quickly do they jump to a solution?

3. To what extent are past problems and known solutions referred to?

4. Will they fix the problem or help you develop the skills to do so?

A Fit Business I have talked before about volatility and constant change in the business world. The antidote is agility.

Having a dynamic approach to problem solving, spending time fixing causes not symptoms and developing those skills in your teams all contribute to a healthy business. It is both challenging and inspiring for the facilitator, the client and the team members. It truly is the best medicine.

Get Well Soon!

For more information on business strategy, business performance and how to give your business a shot in the arm, contact Will Abbott or John Barker at Randall & Payne’s Business Advisory Team on 01242 776000.

www.randall-payne.co.uk

if spring 2015

15

business advice

BUSINESS ADVISORY Your guide to progressing through the 4 key stages of the business lifecycle

IMPROVE

INVEST

GROW

EXIT

The stages:

How we help:

There are always areas in a business that can be improved.

For example, restructuring in order to improve efficiency and profitability, understanding which parts of the business generate good profitability and which parts actively erode it, putting strong credit control policies in place, making sure you are top of the list for payment and identifying areas of wastage.

• High level strategic planning with groups, managers, teams and individuals.

• Accredited business and executive coaching.

• Access to Government subsidised strategic advice.

• Focus on dealing with real issues to drive growth and profit.

As a result of moving through the improvement stage, the business should enjoy greater profitability, cash generation and efficiency.

As such, this makes the business much more ‘bankable’. In turn, financing asset purchases and investing in staff development and, potentially Research & Development, becomes easier, thus allowing the business to ‘gear up’ for growth.

•

•

•

Proven track record of obtaining significant levels of grant funding for financing projects.

In-house expertise of a Chartered Banker so projects are presented in a ‘bank friendly’ manner.

Strong links to alternative funding options where bank funding is not possible or not appropriate.

•

Breadth and depth of key contacts within the Corporate Finance industry to identify ‘on target’ acquisition possibilities.

•

•

Understanding of how to minimise risk in an acquisition through careful planning of Due Diligence assignments.

Knowledge and experience of structuring acquisitions that meets purchasers’needs.

•

Experience of preparing businesses for transfer or sale to make them sustainable and/or an attractive proposition.

The next step for the business is to capitalise on the hard work that has already been undertaken. This may be achieved through growth by acquisition or organic growth. One of the key issues at this stage is to ensure that growth is productive, i.e. you are not simply buying additional turnover, but growth delivers on the bottom line.

Finally, after all your hard work, you may be thinking about retirement.

You will therefore have to prepare the business for sale, or for you leaving someone else to manage the day-to-day activity, which means ensuring that the business ticks all the right boxes to make this happen correctly. Once the business is in the best position to achieve the maximum sale price, or effective handover, exit should be considered.

• Access to a huge resource of ‘routes to sale’.

• Experience in guiding identified successors to ensure an effective succession.

• Access to our expert Tax Team

if

For more information, contact Will Abbott or John Barker on our Business Advisory Team on 01242 776000.

16

spring 2015

www.randall-payne.co.uk

academies news

Academies Pensions Seminar, in association with In February the R&P Academies team hosted their latest Academy seminar, the topic this time being pensions and, in particular, the Local Government Pension Scheme (LGPS).

• FRS17 figures and what they mean • Managing cash deficits (and cash funding vs FRS17 accounting) • Issues on the horizon (Single State Pension, FRS102, etc)

This is currently a hot topic as, across the board, the completion of the Financial Statements for the year ended 31 August 2014 showed increasing contribution rates together with increasing scheme deficits.

Probably the most important part of the presentation was the explanation of the FRS17 accounting reports which create the significant liabilities in the Academies’ Balance Sheets, and how this contrasts with the liabilites on the cash funding basis.

This highlighted the difference between the accounts reporting, showing a larger deficit and the cost requirements to be met

Pensions are a difficult area, particularly with regard to those like the LGPS which are defined as benefit schemes that involve changing contributions. Simply put, a moving asset pot and a moving liability. There are many factors that contribute to these movements, some within an Academy’s control but many outside of its control.

As a consequence we invited Douglas Green of Hymans Robertson LLP, who provide Actuarial services to many pension funds including Gloucestershire County Council and are the lead authority for Gloucestershire based Academies, to present to an audience of Business Managers, Bursars and Academy staff.

The presentation which lasted for 2 hours led by Douglas was very interactive and audience led to ensure sufficient understanding based around the framework of:

Combining past service liabilities and assets FRS17 deficit (on balance sheet)

Actives

Past service funding deficit (to be met by cash conts)

Deferreds

Pensioners

• Background to LGPS (brief) • Some key actuarial basics

Liabilities: FRS17 basis

Liabilities: Funding basis

Assets

The feedback from the session included comments such as “A really helpful presentation, presented in a form that was understandable” and “finally understand LGPS deficit”. Proving that whilst the LGPS accounting and disclosure is a complicated area and often a cause of concern for the management and Governors of Academies, it can be brought back to basics in a way that enables those concerns to be addressed and to an understanding of how the actions that an Academy makes can have a direct impact on its contributions and liability. As the Randall & Payne Academies team also attended this Seminar and received the benefit of Douglas’ presentation please feel free to contact your Academy specialist if you need advice.

Our seminars are run termly and are open to all Academies, check our website for when dates are announced. if For more information on the services provided by our Academies Team please contact rob.stokes@randall-payne.co.uk or call Rob on 01242 776000. www.randall-payne.co.uk

spring 2015

17

case study

Local author Nikki Owen talks about her relationship with Randall & Payne

With her international debut novel out around the world from June 4th this year, author Nikki Owen is busy! Born in Dublin and now settled in Gloucestershire with her husband, David Owen, Chief Executive of GFirst, and their two, nearly teenage children, for Nikki life has moved fast.

Once she began to secure multiple book deals around the world for her trilogy – including being optioned for a major TV series by NBC Universal – Nikki knew that, financially, she was going to require not only excellent advice, but advice from someone she could trust. Step forward Trish Clements of Randall and Payne.

And we always have a chat, which is so nice, because it puts you at ease, makes you feel, well, part of a team, a family. One who cares.”

Trish Clements, Private Client Tax Manger of Randall & Payne also agrees that working with Nikki is a pleasure. “Nikki’s endless energy and enthusiasm is inspiring. I enjoy meeting and chatting with her. It is much easier to work with a client when you get to know about them and Nikki is so easy to talk to. I always look forward to our ‘catch ups’.”

Says Nikki, “My career as an author had taken off faster than I expected, which is amazing, yet I knew I needed to ensure my tax was in order, make certain that I was doing everything in the most efficient, correct way. When Randall and Payne were recommended to me, that’s when I met Trish. And she has just been fantastic.”

Taking advice from Trish and the team at Randall and Payne, Nikki has been able to carry on working on her novels safe in the knowledge that all her accounts are being well looked after.

“Having a team of people available to me has been such a benefit,” Nikki says. “VAT advice, payroll assistance, not to mention Trish’s help with explaining the options available to me to manage my income well. Being an author, I’m all about the words, so having someone who can explain something as complicated as tax to me so I can actually understand it all is a huge relief – and that’s exactly what Trish does.

If, like Nikki , you would like to talk to us about your tax requirements feel free to call Trish on 01242 776000 or email trish.clements@randall-payne.co.uk and arrange a call back.

18

spring 2015

www.randall-payne.co.uk

advertisements Engage with target audiences Create brand equity Increase business profit The Isaac Partnership is here to help when you need that extra marketing brainpower, with no waffle and just straight talking advice. We have over 15 years experience in building strategies and delivering rich marketing content for print, web and social media channels.

Our clients benefit from our award-winning ‘one stop shop’ agency approach, allowing a continued level of both creativity and service, all under one roof.

Our national media partners include:

Call 01453 840369 to set up an initial consultation.

Our offices are one minute from Junction 13 of the M5. www.isaacpartnership.co.uk SocialMedia #isaac4design All rights reserved for our collective media partners: Google and the Google logo are registered trademarks of Google Inc.; Sky logo is a registered trademark of Sky UK Limited © 2015; ExterionMedia logo is a registered trademark of ExterionMedia Group; Clear Channel is a registered trademark of Clear Channel Communications, Inc.

THE

GREENWAY HOTEL AND SPA

Located on the outskirts of Cheltenham, The Greenway is a 16th Century luxury Elizabethan manor house hotel and spa. The 21 bedroom hotel, with its warm Cotswold stone exterior is the picture of English country charm and lies in eight acres of stunning grounds with views over the rolling Cotswold Hills.

The Elan Spa at The Greenway Hotel and Spa is an oasis of relaxation. Facilities include a hydrotherapy pool, state-of-theart fitness suite, sauna, steam room and sanarium, a Kubel Dusche, al fresco hot-tub and the fabulous Champagne Nail Bar. Shurdington, Cheltenham, GL51 4UG T: 01242 862352 E: info@thegreenway.co.uk www.thegreenwayhotelandspa.com /thegreenwayhotel

@greenwayhotel

Randal & Payne Master 169x110 .indd 1

www.randall-payne.co.uk

AA SMALL HOTEL GROUP OF THE YEAR 2014 - 2015

16/03/2015 10:21:04

spring 2015

19

case study

Tile Trader Case Study How Randall & Payne are helping this Stonehousebased business grow, prosper and auto-enrol Between it’s business parks, industrial estates and thriving town centre, Stonehouse is home to a range of Gloucestershire’s largest and furthest reaching businesses.

One of these is Tile Trader, who have recently experienced rapid expansion. Their move into larger premises secured them the accolade of largest tile showroom in Gloucestershire.

At 750 square metres, with a

showroom featuring 4 kitchens, 35 bathrooms and dozens of tile displays.

Their recent success can partially be attributed to their business relationship with Randall & Payne. Providing far more services than accountancy alone, Randall & Payne supported Tile Trader with everything from day-to-day bookkeeping to business advice covering sales and profit

improvement as well as tax planning.

“We’ve been with Randall & Payne for about 10 years now” explained Dave Jones, owner of Tile Trader, “They deal with all our finances, corporation tax and end of year stuff. They’re good as gold”. Tile Trader has experienced over 60% growth in turnover since taking on Randall & Payne and continue to work with them today.

Dave and Gail Jones in their tile showroom

20 20

spring 2015

www.randall-payne.co.uk

spotlight “We’re currently working on preparing Tile Trader for autoenrolment, the new compulsory workplace pension initiative,” explains Will Abbott, Partner at Randall & Payne. “We’re also looking at making use of the Government’s Growth Voucher scheme to plan the next steps in the businesses expansion.”

“We’ve got some competition in Stroud now so we’re looking into using the scheme to do some advertising” continues Dave “We’re currently working in the Honda factory up in Swindon installing in their showroom and we’re looking at expanding our catalogue to include a new range of budget tiles.” if

Stonehouse focus...

Stonehouse, with it’s close proximity to the motorway, is fast becoming home to a number of the county’s largest businesses.

With easy access to Gloucester, Cheltenham and Stroud,

what do all these businesses have in common?

Allan Webb Ltd C&G Services Lister Communications Stroud Saddlery Sartorius Stedim The Isaac Partnership Schlumberger EESI Group

They all operate from Stonehouse

www.randall-payne.co.uk

Stonehouse’s central location make it an attractive base for businesses operating throughout the county.

Central to Stonehouse’s business landscape are its business estates. Next door neighbours Bond’s Mill & Stonehouse Business Park are the largest of these, collectively housing a mass of exciting businesses covering a range of industries.

Housing large businesses is nothing new for Stonehouse.

In the 17th and 18th centuries Stonehouse was home to a thriving woollen industry, first producing large quantities of wool, and later as textiles experts.

Its close proximity to the railway, canal and river, meant that even when the woollen industry declined, Stonehouse remained a hub of thriving businesses

including the Stonehouse Brick & Tile Company and, during the Second World War, Hoffman’s and Sperry Gyroscope.

The town has not compromised it’s beauty to accommodate industry. Surrounded by unblemished countryside, St Cyr’s church is one of the oldest buildings in Stonehouse, dating back to the 14th century.

The bustling high street contains a number of historic buildings, including the old brick post if office, built in 1933.

spring 2015

21 21

!

dates for the diary march 2015 monday

tuesday

wednesday thursday friday

saturday

sunday

2 3 4 5 6 7 8 VAT filing and Self Assessment payment deadline

tax for 2013/2014 paid after this date incurs 5% surcharge

9 10 11 12 13 14 15 Mothering Sunday

St Patrick’s Day BUDGET DAY File monthly 16 17 18 19 20 21 22 PAYE & Class 1 NIC Payments

CIS Return.

Final FPS RTI Payment

Inheritance Tax 23 24 25 26 27 28 29 Seminar

Submit National 30 31 non-domestic rates (NNDR) on-line form

april 2015 monday tuesday wednesday thursday friday saturday sunday 2014/15 tax Good Friday 1 2 3 4 5 year end.

Easter Monday VAT filing and 6 7 8 9 10 11 12 payment deadline Personal allowances increased to £10600 EC sales list 13 14 15 16 17 18 19 File monthly CIS Return.

Final FPS RTI Payment

deadline for monthly paper returns

20

21

22 PAYE

& Class 1 NIC Payments

23

24

25

26

saturday

sunday

RePLY 27 28 29 30 Business event @ Personal Best

may 2015 monday

tuesday

wednesday thursday friday

1 2 3 Due date for CT for SMEs with 31 July ‘14 year ends

May Bank Holiday 4 5 6 7 8 9 10 VAT filing and payment deadline

11 12 13 14 15 16 17

File monthly 18 19 20 21 22 23 24 PAYE & Class 1 CIS Return.

Final FPS RTI Payment

NIC Payments

Spring Bank

Submit EOYC 25 26 27 28 29 30 31 Holiday

22

of Teachers Pension Audit* Academies accounts to be submitted** *may be audited pre-submission or alternatively by 30/09/15 **for New Academies opened at 31/3/15 that did not prepare financial statements at 31/8/14

spring 2015

www.randall-payne.co.uk

tax reference

income tax reliefs 2015/16 Personal allowance born after 5 April 1948 £10,600

‘adjusted net income’ over £100,000.)

born after 5 April 1938 and before 6 April 1948* £10,600 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

£8,355 £3,220

* 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 £10,600.

Blind person allowance

Company cars 2015/16 CO2 emissions (gm/km)

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

£2,290

Maximum transferable personal allowance between spouses £1,060

% of cars list price taxed

1-50 5 51-75 9 76-94 13 95 14 100 15 105 16 110 17 115 18 120 19 125 20 130 21 135 22 140 23 145 24 150 25 155 26 For expenditure incurred on or after 6 April 2013 160 27 (since 1 April 2013 for companies) cars with CO2 165 28 emissions not exceeding 130gm/km (previously 170 29 175 30 160gm/km) receive an 18% allowance p.a.

180 31 Cars with CO2 emissions over 130gm/km 185 32 receive an 8% allowance p.a.

190 33 195 34 200 35 205 36 210 and more 37

capital allowances on cars

mileage allowances

For diesel cars add a 3% supplement but maximum still 37%. For cars registered before 1st January 1998 the charge is based on engine size.

Company Vans 2015/16 £3150 Car Fuel Benefit 2015/16 £22,100 x appropriate percentage* *percentage used to calculate the taxable benefit of the car for which the fuel is provided.

Cars and vans Rate per mile Up to 10,000 miles 45p Over 10,000 miles 25p Bicycles 20p Motorcycles 24p These indicate the maximum tax free mileage allowance for own vehicle business use. Any excess is taxable.

corporation tax year to 31/3/2016 Profits band Rate Now unified at a flat rate at 20%* *Different rates apply for ring-fenced (broadly oil industry) profit.

www.randall-payne.co.uk

income tax rates 2015/16 Band £ Rate % 0 - 5,000 10* 0 - 31,785 20** 31,786 - 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 £5,000. ** Except dividends (10%). *** Except dividends (32.5%). **** Except dividends (37.5%).

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

value added tax Standard rate

20%

Reduced rate

5%

Annual Registration Limit: from 1.4.15 (1.4.14 - 31.3.15 £81,000) £82,000 Annual Deregistration Limit: from 1.4.15 (1.4.14 - 31.3.15 £79,000) £80,000 No change to the Flat rate scheme/ Cash account limits

pension premiums 2015/16

• 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.

spring 2015

23

A good accountant provides more than just a set of accounts

You can’t manage what you can’t measure, making the quality of management information critical to deliver the best possible basis for decision-making to business managers.

Key management information needs to be relevant and timely to be of real use, so that financial risks can be managed effectively, Randall & Payne specialise in providing the right information at the right time, turning the figures into something people can understand, enabling you to run your business more effectively,

For more information about how we can help your business, call

01242 776000 OR VISIT

www.randall-payne.co.uk