Launch of the second Let’s Grow Campaign

Let's Grow Fund

I recently attended the celebration / launch of the second Let’s Grow Fund in Durham.

This is a £30 million grant for the North East which is run by The Journal and Evening Gazette and for which details may be found on www.be-group.co.uk.

The grant fund will be run on very similar lines to the first one:

  • A quarterly competition
  • 1 August 2014: first date for Expressions of interest
  • 29 August 2014: first date for the full applications
  • Future dates will be found on the BE Group website

As a trained statistician myself, I find the facts surrounding the first fund make for interesting reading:

  • There were 270 Expressions of interest, 186 of which were considered and 102 awards were made…so two thirds were good enough to be considered and 54% of those were awarded grants.
  • Surprisingly there were very few grants awarded in Northumberland (5%) whilst Teesside arguably got a little less than its fair share (22%).
  • £190m of private sector support was unlocked by the £30m of grants i.e. the grant typically represented 14% of overall investment.
  • 3,700 jobs were created or safeguarded at an average salary of £29,000, which equates to a grant per job of £8,100 and is better value for money than the £10,000 expected originally.

Going forward the best tips from yesterday’s event for anyone considering future applications was:

  • Get advice from your accountants and consult with BE Group throughout the process to increase your chance of your bid being acceptable.
  • Make sure you meet State Aid requirements (check out www.ukassistedareasmap.com) for guidance, or speak to an adviser.
  • Make sure you create or safeguard sustainable jobs without causing loss of jobs elsewhere in the UK.
  • Large companies can only apply for new activities which is a change to the previous rules.
  • Have a watertight argument to support the need for grant assistance.
  • The icing on the cake for the judging committee would be if the grant supported innovation, increased competitiveness or was seen to create apprenticeships.

Sadly the amount available to Teesside SMEs for each grant could be 5% lower than that available in the previous fund due to changes in State Aid regulations, however there is also another option available through Tees Valley Unlimited’s Compass Fund for those businesses.

Let’s Grow is a great source of grant funding for the North East but there are many others available, some of which may fit better. If you have any queries or would like to discuss a grant application or the funding required to go alongside your investment plans then please feel free to contact me.

Author: Steve Plaskitt, Corporate Finance Partner

steve.plaskitt@taitwalker.co.uk                                0191 285 0321

NEW Sage 50 Accounts – Don’t miss out on upgrades before the big price increase!

The release of the new Sage 50 Accounts package takes place on Monday 4th August and, as well as some additional features and functions, there is also going to be a new pricing structure which will result in a substantial increase for like-for-like upgrades, as much as 70% on some of the accounts products.

Don’t miss out on the opportunity to upgrade at the current price!

For the next seven days – until Thursday 31st July – we are giving you the chance to take advantage of the old pricing structure.

Don’t delay ….. Contact Claire Richardson or Leanne Shaftoe on 0191 285 0321 to talk about your Sage.

Annual allowance cut to £10k for retirees

The Government have announced (Mon 21st July) that the annual allowance for pension contributions will be reduced to £10,000 for those who have made use of the new pensions flexibility.

The Treasury confirmed that pensioners will be able to access their pension funds at retirement at their marginal tax rate, cutting the current 55% tax.

Reducing the annual allowance from £40,000 to £10,000 once the new pension freedoms have been used will reduce the risk of people recycling their tax-free lump sum and reinvesting it into a new pension to receive tax relief again.

The new limit will only apply if an individual accesses a defined contribution pension worth more than £10,000. Savers can make withdrawals from three small personal pots and unlimited small occupational pots worth less than £10,000 without being subject to the £10,000 annual allowance on further contributions.

Those who are currently in flexible drawdown with no annual allowance, who have had to secure a £20,000 a year minimum income, will also, be subject to the new £10,000 limit in April 2015.

For individuals in capped drawdown, the new annual allowance of £10,000 will only apply when the individual withdraws more than the capped amount.
The Government said it would be ‘unfair’ to apply the £10,000 annual allowance to this group who did not know they would be subject to the rule when they entered capped drawdown.

Mark Parkinson, Partner at Tait Walker Wealth Management, “The simplest way to reduce the potential for abuse of the tax rules is by reducing the annual allowance for those who have made use of the new pension flexibility”.

Savers with multiple pension pots will be able to access pension flexibility in only one pot and it may be difficult to establish what level of annual allowance applies in some cases.”

For further details of this, or if you have any other pensions enquiry, please contact a member of the Tait Walker Wealth Management team on 0191 285 0321.

Tait Walker Wealth Management is a trading style of Tait Walker Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority.

It’s a draw in the much awaited “White Goods” hearing

The opening gambit of a £60 million VAT claim by Taylor Wimpey (“TW”) was recently published with both parties no further forward.

The claim related to VAT incurred in the period 1973 – 1997 on white goods and carpets installed in new build homes, when such VAT was traditionally “blocked” in the UK. TW argued that the block was unlawful and these goods should be incorporated as part of zero rated supply of a new house and, as such, input should be recoverable.

The preliminary decision considered :

 What was deemed “ordinarily installed”;
 If the sector had been expanded over time;
 Whether there should be a separate supply of goods that attracted VAT or should they be incorporated within the zero-rated house sale.

This case has a long way to go and is destined for the ECJ a number of years down the line, especially as there are a number of similar claims in the wings.

If you are a new house builder and you would like to talk to a VAT specialist regarding submitting a protective VAT claim, please contact Nigel Smith on 0191 2850321 or nigel.smith@taitwalker.co.uk

And, if you would like some good night time reading, the attached link Download decision gives you access to the whole 87 page judgement!

TRUST IN CHARITIES REMAINS HIGH

Trust in charities remains high, according to independent research by Ipsos MORI conducted on behalf of the Charity Commission, the independent regulator of charities in England and Wales.

Charities received a trust score of 6.7 out of 10 overall, in line with previous research findings, showing that public trust and confidence in charities is resilient. Only the police (7.0) and doctors (7.6) are trusted more than charities.

However, the research indicates a shift in public opinion in certain areas, with greater importance being attached to good financial management.

Almost 50% of people cite ‘ensuring a reasonable proportion of donations gets to the end cause’ as the most important factor affecting their trust in charities and the importance of this has risen since the last research in 2012.

The public are interested in whether charities explain what they do, with the majority of people (96%) saying that ‘it is important that charities provide the public with information about how they spend their money’.

Ensuring your charity produces good quality information

The research highlights more than ever the need for good quality information, coming on the back of the Charity Commission research, highlighting that annual accounts being filed late is one of the main reasons why funding bids can fail.

There are a number of common sense steps which can be taken to ensure that the annual accounts are produced to a high quality and on time. Whilst many of these can be achieved in house, one critical step is to choose the right professional advisor.

A further key element is to use the Trustees’ Annual Report as a document to help in future funding bids. Ensure that frequently asked questions (from funders) are covered in the report. It is much more powerful to refer the funder to the answer, proving it has already been thought about, than trying to react to a query raised.

Reporting ‘outcomes’ within the Trustees’ Annual Report rather than the cold hard figures can bring what the charity has achieved to life. Funders are rarely inspired by figures, but can really buy into the charitable outcomes achieved.

Working with a specialist firm of charity accountants can help to present the financial statements in a way that supports income generation. This can be achieved in the presentation of the figures, ensuring that costs are allocated properly between key charitable activities and governance, helping the readers to understand where the money has been spent.

Good charity accounts, with a well written Trustees’ Report, can continue to keep public confidence high. Working together with your charity specialist you can ensure that your accounts help to maximise your fund winning potential.

Please contact Simon Brown or anyone in the Charity Team at Tait Walker on 0191 285 0321 if you would like further information.

The curtain goes up on the new Theatre Tax Relief

Whilst taxes are generally viewed as a necessary business expense, once in a while a new relief comes along which is the exception to the rule. The new Theatre Tax Relief is expected to cost, not generate, the Treasury money.

The relief does have some pitfalls to be aware of, but the government’s aim is to support live theatre productions which should be viewed in a positive light for the industry as a whole. The Treasury is predicting this benefit will be worth up to £15 million annually and comes at a time when public funding is being cut, so it is critical that opportunities to make claims are correctly identified.

These claims then need to be maximised within the framework of the scheme whilst not innocently inflating a claim which may attract unwelcome attention from H M Revenue and Customs.

The Government consultation process earlier this year attracted a large number of well thought out responses. This has led to draft legislation which has tried to encompass a wide variety of live performances at virtually any venue.

There are expected restrictions as to the nature of the performances, mainly to prevent the Government from being seen as supporting productions which may be deemed not to be socially acceptable. One further restriction prevents a claim where the main objective is to make a recording which ensures that television productions are not able to benefit.

As a theatre producer, the knowledge that a production will attract a cash payment from HMRC in relation to the qualifying costs is a valuable piece of information. Whoever is responsible for the finances of the production needs to be aware of a potential claim before the first cost is incurred so the claim can be effectively built up as invoices are received and categorised as qualifying or non-qualifying.

The claim can only be made by a limited company, which may not be the current trading vehicle of the production. The decision may have to made as to whether to transfer the trade to a limited company or accept that the value of the cash refund is insufficient to warrant the change.

Once this decision has been made, it should be re-evaluated at regular intervals to ensure that it is still valid.

Nicola Edmondson is Tax Manager for Tait Walker, providing a wide range of business and financial services to a variety of clients including those in the production of live performances.

Contact Nicola Edmondson (nicola.edmondson@taitwalker.co.uk) or Alastair Wilson (Alastair.wilson@taitwalker.co.uk)

Easy guide to New ISAs

NEW ISAs, which were introduced on 1st July 2014, give savers and investors a more flexible and generous option for building a nest egg.

The tax-free NISAs, announced in the March budget, replace Individual Savings Accounts (ISAs) launched in 1999.

As well as offering a higher annual contribution limit, NISAs allow savers and investors to move their money between cash and stocks and shares accounts more easily. ISA customers will automatically be flipped into a NISA — there is no need to apply for a new product.

What has changed?

The maximum amount that an individual can save in a NISA in the 2014-15 tax year is £15,000. This figure applies to all types of NISA, which means a substantial increase in the amount that can be put away in cash — previously restricted to £5,940.

The £15,000 allowance can be split between cash and stocks and shares in any way, or the whole amount can be put into a cash NISA or a stocks and shares NISA.
Customers will now be able to move money from stocks and shares NISAs into their cash counterparts, as well as the other way round. Previously investors were unable to transfer their tax-free stocks and shares pots into cash.

What are the best cash NISAs available?

The best-buy easy access NISA currently pays 1.75% and is available from Nationwide. However, it is only for the building society’s Flex current account customers and it does not allow transfers in from other ISAs. Halifax’s ISA Online Saver pays 1.5% and accepts transfers in. The minimum investment for both is £1.

Virgin Money has the highest-paying one-year fixed-rate NISA at 1.76%, and the top two-year fix at 2.1%. For a five-year deal, the best rate is 3%, also from Virgin Money.

Can I top up my fixed-rate ISA?

Savers who opened a fixed-rate cash ISA at the start of this tax year may struggle to benefit from the higher NISA limit. Research by the advice website Savings Champion reveals that some fixed-rate accounts will restrict top-up periods to just a few weeks rather than allowing savers to add money until the next tax year starts in April 2015. Remember ….. you are allowed to open only one cash ISA each tax year.

NatWest and RBS will allow top-ups on fixed-rate ISAs only until July 18 on accounts opened between April 4 and May 6.

Clydesdale and Yorkshire banks, and Newcastle building society, will allow top-ups for only one month. Savings Champion has a detailed list of top-up rules on http://www.savingschampion.co.uk/NISA

As with any savings account, it is vital to keep an eye on the rate of interest that you are earning on your cash NISA, and switch if you can do better. If you choose a fixed-rate NISA, there will normally be a penalty for accessing the money before maturity, if you are allowed to access at all.

The Wealth Management team at Tait Walker can advise on all aspects of savings and investments. We will help you to get a clear picture of where you are now, where you want to be, and what it will take to get you there. Speak to a member of our team today on 0191 285 0321.

Tait Walker Wealth Management is a trading style of Tait Walker Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority.

Xero Roadshow

Author, Stuart Moody (Tait Walker)

I’ve just returned from the Xero roadshow in Leeds and I’m totally convinced this is the right product for so many of our clients.

I’ve never been anywhere where I felt so much positivity in one room, clear testimony to the company’s recent accolade as the “Worlds most innovative growth company” awarded by Forbes.

The story of Xero is one of hyper growth and the company are now attracting high calibre internal staff who can obviously see the potential of cloud based accounting packages. Currently there are 3800 certified Xero users of which I am but one. Clearly the growth potential of Xero who now have 50k customers in the SME market is a mere fraction of the UK’s total SME market place which I am led to believe stands at a staggering  5 million entities.

What sets this company apart from the others is that we, as business partners are treated as part of the innovation cycle. We are listened to at just such events as today’s roadshow and I can’t help think that these events are a means not just to get us on board and raise the Xero profile but equally and more importantly where we as the user can influence enhancements to an already brilliant product.

A staggering third of all website hits come from mobile and tablet devices so it’s no wonder our end users now demand a shift away from desktop applications towards cloud based products. An example was given of sitting on the beach reconciling your bank… Is this really what we want? Clearly there is a demand for on the move accounting and the need for information at our fingertips.

Apparently 40% of new Xero customers are coming from businesses that have no existing computerised accounting system. This statistic sounds the death knell of paper bag accounting which can only be a good thing. But conversely the 60% who are switching to Xero must be a worrying statistic for established players in the market.

So what is it that makes Xero so appealing? It’s easy, friendly, cheap, clear and simple to name many superlatives. Your accountant is on hand to assist (24/7!!!???) and is always on the same page with live data and the same software version. If someone had told me 15 years ago as I studied for my ACA accounting would be described as beautiful, I would have laughed… But this is beautiful accounting. Reporting is clean and easily manipulated, it can show what we want, what the client wants and if it looks better with a picture, we can do that as well.

As I boarded the train back to Newcastle after a satisfying day, it was a great comfort to look at my phone and find two new leads both with the same thread…..”I hear you do Xero, please can you call me.”

Stuart.moody@taitwalker.co.uk

Tait Walker are Silver Xero partners and we would be delighted to take your business into the cloud.

VAT Alert – NOVA is here to stay!

Introduced in April last year the Notification of Vehicle Arrivals (NOVA) on line system was introduced to tackle VAT evasion on vehicles brought permanently into the UK. Whilst HMRC had good intentions the measures have proved onerous and the penalty regime is draconian, a number of vehicle importers have innocently fallen foul of the measures.

The problem lies in what is caught by the term “vehicle” and a number of businesses have overlooked NOVA in the belief that their product will not require a DVLA registration. The reporting requirements are a lot broader than first envisaged. Tait Walker has successfully mediated between HMRC and a “sit on lawnmower” importer who had a potential six figure penalty withdrawn. Not only were we successful in having the penalty quashed but we also agreed that the historical catch up exercise could wait until the “bulk notification” process had been finalised. The link to these spreadsheets and the “vehicle” categories can be found below-

  • cars
  • light commercial vehicles
  • heavy commercial vehicles
  • motorcycles
  • motor caravans
  • agricultural tractors
  • construction vehicles, plant and machinery, special purpose vehicles

 

The spreadsheets can be found on the gov.uk website

If you have received a penalty notice from HMRC regarding late submissions or have any concerns regarding NOVA please contact Nigel Smith for an initial free consultation.

 

Born on the 4th of July….no we’re not talking about Independence Day

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Born on the 4th of July…

No. I’m not talking about the film starring Tom Cruise or American Independence Day.

It is of course national employee ownership day in the UK!

This is a UK government inspired event to raise awareness of employee ownership.
Whilst such a scheme may apply to the John Lewis style of company ownership, where all the employees have a stake in the business, it also may inspire those currently in management to organise a management buy out.

The Government has announced a number of facts about the full employee ownership model, including:

• UK employee owned companies have a turnover of around 3% of GDP (over £30 billion) pa.

• There has been a 10% increase in the number of companies converting to employee ownership.

• Employee-owners have higher levels of job satisfaction, feel a greater sense of achievement and job security and are more likely to recommend their workplace than employees in non-employee owned businesses.

• Employee owned businesses operate in a whole range of sectors – though I guess they are most appropriate in professional / consulting environments and where employee high levels of commitment and service are critical to the business. (Isn’t that all businesses?)

Employee ownership as a concept has many tax consequences and so this needs to be carefully planned to maximise the benefits and avoid the pitfalls. Andrew Moorby and Alastair Wilson can help advise on this.

For further information about Employee Ownership Day 2013 you can visit http://www.eoday.co.uk.

For those inspired to explore a management buy out, then please get in touch with Tait Walker – as corporate finance advisers we’ve advised on more MBOs and MBIs then anyone else in the North since 2000 and advised on the North East’s ‘deal of the year’ (Winns Solicitors).

With confidence returning to the economy and funding available for the right deals, now is a good time to seek an MBO.

 

Author: Steve Plaskitt, Corporate Finance Partner

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