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Britain ‘Open For Business Despite BREXIT Concerns’

A news bite from Norton Folgate.

New research by the Business Growth Fund (BGF) has revealed that business leaders in the Midlands still think Britain is a good place to establish an enterprise, despite concerns regarding Brexit.

Three quarters of respondents to BGF’s latest Growth Climate Index said Britain is a “great place” to start and grow a business, while 41% admitted postponing “key” business decisions in the run up to the EU referendum.

Some 92% expect a short-term dip in economic growth as a result of the vote to leave the EU, while more than half (53%) expect growth to fall in the longer-term.

Gavin Petken, regional director of BGF for the Midlands, said: “Unsurprisingly, the poll highlights the concerns businesses have in regards to future economic uncertainty.

But there is also a strong and clear

message among respondents that the fundamentals that make the UK so attractive to growing businesses have not disappeared.”

Elsewhere, GAA‘s Robert Outram speaks to CAs and other experts in the wake of the Brexit vote to find out what the UK’s future outside of the EU means for business.

Brexit might affect the way the UK adopts international financial reporting standards, according to ICAS, with the possibility that new standards could be adopted directly by the Financial Reporting Council rather than via the EU – with

potential European opt-outs – as at present.

   

The End of The Tax Return – Making Tax Digital before 2020

A quick update from Free Agent.

The government is on a drive in an attempt, in HM Revenue & Customs’ (HMRC’s) words, to “Making Tax Digital by 2020″

One of the biggest implications of Making Tax Digital for small businesses is the eradication of the traditional annual tax return.

This will mean that by 2020 most businesses, self-employed people and landlords will instead be required to keep track of their tax affairs digitally and to update HMRC at least quarterly via their digital tax accounts.

HMRC has said that this doesn’t mean you’ll have to complete a full tax return four times a year; you simply need to provide more regular updates online.

The introduction of a ‘real time’ tax system means that instead of reporting information on tax returns and paying liabilities long after the end of the tax year, you will be able to see a real-time view of your tax affairs and liabilities through your digital accounts.

This, theoretically,  should make it easier to understand how much tax you owe and enable you to budget accordingly.

The question is are you or your business ready for Making Tax Digital?

Great if you’re speaking to your adviser about this already, but if not, give me a call on 01909 512 170. Check the team out http://loftusstowe.co.uk/accounting-services/

Unplanned overdraft fees four times costlier than payday loans

Unauthorised overdrafts are now more expensive than payday loans.

Vulnerable customers are unaware that using unauthorised overdrafts can cost up to 12.5 times more than pay day loans if the period in question is just 24 hours.

The Financial Conduct Authority (FCA) in January 2015 introduced price caps on payday loans, with interest and fees capped at 0.8% per day of  the amount borrowed.

When customers go into the red without permission, the charging structure differs from bank to bank.

At Barclays, the 24 hour costs of this privilege can amount up to £29.75, Santander £67, meanwhile Lloyds, HSBC and TSB can each charge up to £80 .

Solutions to this could be phoning the bank and requesting an extension to the existing overdraft facility in due time or perhaps following a well-structured budget.

Courtesy of Silk & Co. 

Introducing Loftus Stowe Accounting Services

Following our response to requests by a number of clients, for bookkeeping, payroll and accounting services, we incorporated a new company, Loftus Stowe Accounting Services Limited (or “LSASL” as we’ve nicknamed the business internally) in February this year.

Now in it’s sixth months, the accounting business has grown significantly, and has outgrown our current office space, making it necessary to make and announce some changes to our current structure.

Effective today, our colleague Paul Maina will be transferring across to LSASL and will work exclusively within the accounting business, reporting to my co-director: Adeola Okubanjo (“Ade”). The team will be moving into their own offices within our building; The Turbine.

Please join me in belatedly welcoming Ade (pictured to the left) to team Loftus Stowe, and also in congratulating Paul as his move to LSASL comes with a promotion to the role of Assistant Accountant; following his recent successes in his AAT examinations.

From your perspective, not much will change, Paul can still be reached by email at paul@loftusstowe.com and in case you were wondering, Ade’s email address is ade@loftusstowe.com.

If you want to know more about our accounting services please follow this link: http://loftusstowe.co.uk/accounting-services/

Are your children taking their first step into employment?

If so, they may be feeling excited, anxious and they may even feel like

they are prepared.

However, a recent study found that young people are often not prepared or ready for ‘office politics’ when they start their first job. Younger people are increasingly opting to go into apprenticeship schemes, which means they tend to start their career earlier and many of them are not aware or prepared for politics in the workplace.

What does this mean?

It means that a lot of young people who are surrounded by office politics may find it hard to express their opinions and ideas, resulting in them feeling isolated, unsupported and even unhappy.

It’s been suggested that businesses need to put changes in place to ensure that office politics are addressed and the root causes are found, this will then allow for more time to be spent training and motivating the younger generation that are joining their business.

Although it’s been shown young people may not be prepared for office politics, the research did find out that they are well prepared to the other core areas of workplace skills such as management skills, career development opportunities and being prepared for working hours. Not only that, a refreshing part of the study showed that these people felt they were prepared and well informed on how to talk to their bosses.

So although you may be feeling more unprepared, anxious and worried for them starting their career – you should feel comfortable knowing they are well aware of the core areas expected of them!

For more advice or guidance on HR matters, contact us on 01909 512 120.

Buy-to-let stamp duty rules hit parents trying to help children buy a house

In the race to getting onto the property ladder, parents are putting their names on mortgage applications with the aim to help their children buy a house.

Unaware parents sometimes do not realise this will increase the Stamp Duty Land Tax (‘stamp duty’) by a whopping 3%, in addition to the normal rate of stamp duty that would be payable.

This extra layer of expense was introduced this April 2016 by the government as a deterrent aimed at penalising mostly buy-to-let landlords and giving first time buyers a better chance of buying a property.

This has proved problematic for anyone buying a second home because an additional residential property now attracts that extra 3% in stamp duty.

In the past, parents would have acted as guarantors and not become part owners of a property however, guarantor mortgages are now rare.

This has led to parents taking out a joint mortgages with their child which now acts as a platform that increases the range of mortgage options available because even with a big deposit saved, first time buyers may not necessarily have the salary to support a large mortgage.

However, parents from a comfortable financial background who simply want to give their children money towards a house will not invoke the extra stamp duty penalty.

On the other hand parents from a less privileged financial position have limited options and now face the additional 3% cost in stamp duty, in the attempt to assist their children get onto the property ladder.

Can a workplace ban employees wearing religious symbols?

It may seem a funny question, but in the case Achbita (A) and another v G4S Secure Solicitons NV (G4S), this was the case.

A worked as a receptionist for G4S, who had a unwritten policy of religious and ideological neutrality due to the broad range of clients they have in public and private sectors.

Back in June 2006, G4S implemented a dress code which prohibited employees from ‘wearing any visible signs of their political, philosophical or religious beliefs and/or from giving expression to any ritual arising from them’.

This meant that A was no longer able to wear her Islamic headscarf to work, however, in April 2006 A had informed the G4S her intentions to wear her headscarf at work which then resulted her being dismissed for breaching the policy.

G4S was taken to the European Court of Justice (ECJ) for direct and indirect discrimination against religion or belief.

The Advocate General has provided the following opinion on the case:

  • The policy banning wearing visible religious symbols affects all employees equally and wasn’t based on stereotypes or prejudice against one or other religions or beliefs;
  • G4S’s dress code was appropriate and necessary for achieving their objectives, which couldn’t be achieved by a more lenient approach.

Although this opinion has been given, the ECJ does not have to follow this opinion – however in most cases, it does follow the Advocate General’s opinion.

VAT Crisis When Buying A Business?

According to Accounting Web here is information about avoiding a VAT crisis when buying a business.

The transaction of buying whole or part of a business may be treated as a “transfer of going concern” (TOGC) for VAT purposes, in which case the seller doesn’t charge VAT on the sale of the business.

Exempt Business

If TOGC conditions are met by a business sale then the proceeds are outside the scope of VAT, i.e. the seller is not making either a supply of goods or services.

The TOGC applies when the seller is VAT registered, and also the buyer is VAT registered or liable to be registered at the time of the transfer.

The problem

A VAT registered business owner with a portfolio of mixed assets (some registered for VAT and others VAT exempt), may decide to sell a VAT exempt asset, meaning the buyer will only make exempt sales when operating the VAT Exempt asset – the issue is the buyer will be unable to register for VAT.

In this situation the seller does not treat the sale of the VAT exempt asset as TOGC – this is because the sale doesn’t meet the TOGC conditions, which state the buyer should be VAT registered or liable to be registered at the time of the transfer.

However, ‘goodwill’ transferred is standard rated if the TOGC rules do not apply because the buyer is paying for benefits such as customer contacts, trading name, business location, staff etc., which have a value.

Common areas of difficulty: transfer of a wholly exempt business

A VAT registered company which has both exempt and taxable businesses, may transfer the wholly exempt part of the business as a going concern.

If the buyer does not carry on VAT taxable business in his/her portfolio then, he/she will not be a taxable person.

However, if the taxable person conditions for the TOGC provisions to apply are not met, the sale of the VAT exempt asset will be a supply (for VAT purposes).

Where the assets are goods with no input tax deductible (because they were directly attributed to a wholly exempt activity) their supply is exempt. However, if the assets (VAT exempt) provide services, and the buyer of the asset does not meet the TOGC conditions, then the asset transfer will be Vatable.

In this instance, the charge for goodwill will be a standard rated supply by the seller to the purchaser who does not meet the TOGC conditions .

Planning point

If a goodwill payment is high, the buyer of the VAT Exempt asset perhaps may choose to provide Vatable or zero-rated supplies within the VAT Exempt business he/she is acquiring.

The buyer could then register for VAT on a voluntary basis and become a taxable person to meet the TOGC condition. This is a win situation whereby, the seller will not charge VAT as long as the buyer has his/her VAT number before the date he buys the business.

Femi Ogunshakin Managing Director
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