Digital account timeline overview HMRC h

Digital account timeline overview

HMRC has revealed how it plans to introduce digital tax accounts over the course of the 2015/16 tax year.

First announced in Budget 2015, news that HMRC wants digital accounts to replace traditional annual tax accounts created much debate.

Now, further details of what this transitional process will look have been provided by HMRC:

July – September 2015 – business tax accounts, PAYE update services and married couple’s allowance
October – December 2015 – personal tax accounts for self-assessment and tax credits
January – March 2016 – calculating re-payments for national insurance and PAYE.

HMRC wants to introduce digital tax accounts in order to simplify the process for everyone involved.
Benefits of digital tax accounts

The cost benefits of HMRC running more of its processes through its own IT systems will be a 24% saving on its £800 million annual IT budget by 2020/21.

But HMRC also wants to stress a number of other key benefits to taxpayers:

view and manage their information
pay tax without having to provide HMRC information it already has
digital tax accounts can potentially be linked to business accounting software
simpler and clearer personalised support.

If you wish to discuss how we might be able to help with your tax and accounting affairs please contact us on 020 7330 0000.

Six tips for a successful product launch

Six tips for a successful product launch

Whether you are launching a new product from an existing business, or your product is your new business, it is all too easy to get it wrong and fall at the first hurdle. According to some studies, as many as 65% of products launched by established companies fail, so it is vital to prepare properly when introducing something brand new into the marketplace.

Here are six tips for giving your brilliant idea the best chance of success…

1. Set product launch goals
It may seem obvious, but it is a common trap to launch a new product in a fairly haphazard way, without thinking clearly about what you’re trying to achieve. Consider what will constitute success for your product launch and set goals accordingly. You may want to take into account such things as product awareness, leads, affiliations or partnerships with third parties who will market your product, and, of course, sales.

2. Have a clear target market in mind
Very few products have universal appeal. Ask yourself: ‘Who will buy this?’ and ‘How much would they be willing to pay for it?’ Outline the profile of your ideal customer, or your most likely customer, and make sure that all your pricing, marketing and advertising efforts are geared towards them. It rarely pays to simply list the supposed benefits of a product and ‘blanket’ market, hoping for the best. And if you can’t answer those questions at all, it might be time to go back to the drawing board!

3. Define your Unique Selling Proposition (USP)
Once you have identified your target customer, ensure that you can justify why they should choose your product over a rival that already exists. What problem are you solving that they currently face? What need do they have that is currently unmet? Crystallise the benefits of your product by answering these questions, and make that the central message in your marketing.

4. Make sure the marketing message is clear
Confused customers don’t part with their money. Although you may understand the product and its benefits perfectly, are you sure that the same is true for the uninitiated? Try out your marketing messages on a layperson who knows nothing about the product you’ve been developing. Can they easily grasp what your product is for? If not, re-draft until they can, before your launch.

5. Make sure the product is ready
Although perfectionism is to be avoided if it prevents anything getting done – and at some point you do need to hit the button – you must equally make sure that your product is fully tested and ready to roll before you launch. The history of business is littered with examples of products that were launched before they were ready, with disastrous results.

6. Be prepared for success
You may spend so much time worrying about failure and working to get your launch right that you neglect to put the systems in place to cope should you have a runaway hit on your hands. Many businesses have run into logistical, staffing and cashflow difficulties because they suddenly find they have a deluge of orders that they can’t realistically meet. Look on the bright side, and make sure you’re ready for a winner!

We can advise on all areas of business life – not just on your accounts and tax position. Contact us to discuss how we can help you.

5 ways to make your business more produc

5 ways to make your business more productive

While it’s essential that government takes measures to improve the productivity of the economy as a whole, there are several ways business owners can improve the efficiency of their business:

introducing new technology such as cloud computing, accounting software and high-speed broadband

making your employees feel valued is crucial to maintaining a happy and productive workforce. Provide regular constructive feedback and introduce incentives

owners of small businesses don’t have the time or expertise to micromanage every task. Trust your teams and delegate the jobs that you are unable to do

think about the essential processes involved in running your business. How can these be improved?

investing in training will advance the skills of your employees and result in a more efficient and capable workforce.

If you would like to talk to us about improving the efficiency of your business please telephone us on 020 7330 0000.

Changes affecting non-domiciled taxpayer

Changes affecting non-domiciled taxpayers

In his July Budget announcement the Chancellor announced a number of important changes to the tax treatment of individuals who are resident but not domiciled in the UK. Such individuals currently benefit from a number of tax advantages such as exemption from UK inheritance tax (IHT) on assets situated outside the UK and in some cases only being taxed on overseas income and gains if those amounts are remitted to the UK.

From April 2017, IHT will be payable on all UK residential property owned by non-domiciles, regardless of their residence status for tax purposes, including property held indirectly through an offshore structure.

From April 2017, individuals who are born in the UK to parents who are domiciled here, will no longer be able to claim non-domicile status whilst they are resident in the UK.

The government will also legislate so that from April 2017 anybody who has been resident in the UK for more than 15 of the past 20 tax years will be deemed to be domiciled in the UK for all tax purposes. This is being reduced from the current 17 year deemed domicile rule for IHT.

If the Chancellor’s announcement has had an impact on your affairs please join us at our complimentary Non-domicile/Residency seminar on 17 September 2015, further details on our website.

Victor Dauppe, Tax Partner

No one quite knew what to expect in the

No one quite knew what to expect in the first budget by a majority Conservative government for almost 20 years.

In his seventh Budget Statement as chancellor, George Osborne promised a ‘big budget for a country with big ambitions’.

As predicted there were details on how the government will fulfil its pre-election goals of reducing welfare spending by £12 billion and changing the inheritance tax nil-rate band structure.

There were also some surprises such as the compulsory introduction of the national living wage from April 2016 and a reduction in corporation tax.

The Chancellor also gave an update on the wider economic picture using figures from the Office for Budget Responsibility (OBR). Growth for 2014 was 3% (up from the forecast of 2.6% in March) and is expected to be 2.4% in 2015 thanks to stronger private consumption and investment.

This is the second year in a row that the UK is forecast to have the strongest economic growth of any major advanced economy.

The OBR predicts that a million more jobs will be created by the end of the Parliament.

The deficit is forecast to be 3.7% of GDP in 2015 and will fall by around 1% each year until 2019 when there will be a small budget surplus of 0.4%.

Despite the continued growth in the UK, Osborne warned that the ‘global economic risks are rising’, pinpointing slowing growth in the USA and China as examples.

The following report summarises the announcements made by Chancellor George Osborne during the Summer Budget on Wednesday 8 July 2015.

Important information

The way in which tax charges (or tax relief, as appropriate) are applied depends upon individual circumstances and may be subject to change in the future. The information in this report is based upon our understanding of the Summer Budget 2015, in respect of which specific implementation details may change when the final legislation and supporting documentation are published.

This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any investment decisions based upon its content.

Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information.

At a glance

The measures announced in Summer Budget 2015 include:

Corporation tax
The corporation tax rate will be cut to 19% in 2017 and 18% in 2020. Payment dates for large companies will be brought forward.

National living wage
A compulsory wage for over 25s of £7.20 an hour will be introduced in 2016, rising to over £9 in 2020.

Dividend tax credit will be replaced by an annual tax-free allowance of £5,000. Tax rates of 7.5% and 32.5% will be set for basic rate and higher rate taxpayers on income from dividends.

Annual investment allowance
The allowance will be£200,000 from 1 January 2016.

National insurance
The employment allowance will rise from £2,000 to £3,000 from April 2016.

An apprenticeship levy will be introduced for large companies to help fund training.

Personal allowance
The personal allowance will rise from £10,600 to £11,000 from April 2016. The higher rate threshold will increase to £43,000 from April 2016.

Inheritance tax
A £175,000 transferable threshold for residential property passed to children and grandchildren will be phased in from 2017.

Property tax
Mortgage interest rate relief on buy-to-let property will be restricted to the basic rate of income tax. This will be phased in over 4 years starting in April 2017.

Rent-a-room relief
Rent-a-room relief will rise to £7,500 a year from April 2016.

The permanent non-domicile tax status will be abolished from April 2017.

Pension contributions tax relief for additional rate taxpayers will be tapered to a minimum of £10,000 a year from April 2016.

Working parents with…

Pensions under attack, act before 8 July!

With the 8 July Summer Budget fast approaching there has been much speculation surrounding tax relief on pension contributions, particularly for higher earners.

During their 2015 election campaign The Conservative party unveiled plans to reduce tax relief on pensions for anyone earning more than £150,000. With only a few weeks left until the 8 July Summer Budget the time left to make contributions under the current rules is running out!

Under current rules tax relief of up to 45% is available on pension contributions and there is an annual contribution allowance of £40,000.

We cannot predict what the Chancellor might announce on 8 July and neither can we predict the timing of any potential changes.

If you are a high-earner with income over £150,000 and interested in making pension contributions here are a few things you may want to consider:

Bring forward any planned or regular monthly contributions before 8 July 2015.

Contribute the maximum you can afford (out of disposable income) into your pension before 8 July 2015.

This article has been written for the general interest of our clients and contacts and is correct at the time of going to print. We recommend that you always seek professional advice and no responsibility for loss occasioned to any person acting  or refraining from acting as a result of material in this publication can be accepted

Improving Cashflow

More than any other factor, a business is defined by the balance between the money coming in and the money going out over any period of time. Ideally, the scales should be tipped in favour of the former, but the reality of the business environment is often more complicated.

When you start a business, it’s easy to concentrate your efforts into getting sales. Whether you are selling a product or a service, gaining your first order or making your first sale is incredibly exciting. It provides tangible proof that you made the right decision to set up your enterprise.

However, as many people discover, making a sale can seem like the easy part.

Getting paid for that sale is where problems often start and where cash flow – or rather lack of it – comes in.

What is cashflow?

Cashflow is the movement of money into or out of your business. If more money is going out, or due to go out, than you have available, then you have a cashflow problem. There could be a number of reasons for this: it could be down to mismanagement or poor buying decisions but in many cases it can be attributed to not being paid on time.

Knowledge about cashflow and an awareness of how it works as part of a company’s day-to-day operations is important for anyone in business, not just those who are starting out. Even if your business has been up and running for some time there is always opportunity to pick up new advice and tips on how to spot customers who may cause you problems, the right and wrong way to chase payment and, most crucially, what to do if the scales tip dramatically out of your favour.

Get in touch today to talk about your cashflow.

Defining late payment

Unless you have agreed when you’ll be paid, a payment becomes late 30 days after the customer receives the invoice or you provide the goods or service (if this is later).

You can claim interest and debt recovery costs if you experience late payment.

Need action now?

If like many small businesses, you’re relying on a payment coming in to pay your VAT bill or wages and it fails to materialise, what can you do?

Before considering legal action, check that you have done nothing to reduce the likelihood of being paid.

A surprising number of businesses open themselves up to being taken advantage of by not being able to confirm any of the following:

  • your invoices are in the right name and contain all the information the customer needs
  • do you have proof of delivery or a signed order for services?
  • does the customer have the funds to pay you?
  • have you got a record of all your orders and invoices?

Another crucial point is to ask for a purchase order number. Many people don’t because they haven’t used them before. This is particularly true of creative businesses that have grown over time. The days of a gentleman’s agreement or a handshake are long gone if you want to guarantee that you will get paid.

The next area to look at is the methods of payment you accept. While some businesses have leapt at the opportunity to use technology to ensure they get paid, others have yet to do so.

Do your invoices include your online banking details?

Do you accept credit or debit cards as payments?

If your business is too small to justify the costs of having permanent chip + pin terminals, with the ongoing merchant fees, have you looked into using companies that use mobile card payment systems?

Contact us today to discuss your cashflow planning.

Check your prospects

Is that great order you’re hoping to get likely to turn into a bad debt? There are a number of ways you can become proactive about your cashflow rather than reactive.

Before you accept an order from a new contact, check them out on the Companies House register.

Checking out a sole trader is more difficult, but asking for a VAT registration number or proof of business insurance or membership certificate from a trade or professional body can help. In addition, online reviews, LinkedIn details and other social media sites can give you a feeling for that person. You may not feel like you are in a position to be picking and choosing your clients and customers, but there is a virtue to exercising a little bit of caution that can save a whole lot of pain later on.

Check your own vulnerability

When you’re busy getting business in, it’s sometimes hard to take a step back to see if your business is under threat from lack of cashflow.

The following are some of the symptoms that could indicate it’s time to take stock:

  • running out of working capital
  • relying on your overdraft
  • finding it difficult to pay salaries each month
  • not paying your tax, rent or other regular costs
  • a lack of profitability.

Time for a check-up?

If you recognise this it would certainly be worth asking us for help before the symptoms become terminal or public knowledge. We can help you get your internal processes in order and advise you on any external action you can take in order to tip the scales back into your favour.

Talk to one of our experts today about your options.

Prompt payment code

The Prompt Payment Code is a government initiative administered by the Chartered Institute of Credit Management. It is designed to encourage, promote and set an example of best practice between organisations and their suppliers. Companies that sign up for it undertake to:

  • pay suppliers on time
  • give clear guidance to suppliers
  • encourage good practice.

Following industry feedback, the code is in the process of being strengthened and is now asking signatories to pay their suppliers within 30 days as the norm.