Time To Pay – Update

HM Revenue & Customs’ Time to Pay (TTP) scheme is under scrutiny once again. This time, it has emerged that the taxman has been agreeing multi-million pound TTP arrangements without requiring businesses to undertake independent reviews to check their viability.

Earlier this month, HM Revenue & Customs released its figures on TTP arrangements, and an analysis of the data by industry publication Accountancy Age showed that 140 high-value arrangements (over £100,000 a year) worth £45m were made in June, at an average of £321,000 each. This compares with an average of around £180,000 to £200,000 in each of the previous 15 months.

HM Revenue & Customs has stated that a small number of very high-value arrangements made in June skewed the figures and, if it were not for these, the average would be similar to other months. Research showed that these arrangements would have to be collectively worth around £17m to skew the June average figures to this extent.

Back in 2009, Alistair Darling announced in the Pre-Budget Report that HMRC would require businesses applying for TTP for debts of £1m or over to provide an independent business review (IBR) supporting their request. This involves the businesses appointing insolvency practitioners to review their long-term viability – but a freedom of information request has shown that no IBRs were carried out in June, and only six had been carried out in total between January 2010 and June 2011.

Senior Partner Paul Carvell comments: “HMRC has claimed that an IBR is not always required in £1m+ cases, because each TTP request is considered on its own individual merits and circumstances. However, in light of the taxman’s recent reluctance to agree TTP arrangements with so many struggling businesses, this seems rather an odd situation. It would appear that, for a few large-scale enterprises with outstanding tax liabilities, HMRC is prepared to be more lenient. When you contrast this with the declining number of TTP arrangements made for smaller sums, one has to wonder whether it’s one rule for bigger companies and another for SMEs.”

Do You Need The Info2Grow?

Helping local businesses gain access to vital information is the plan behind ‘Info2Grow’, a new initiative from Stewart Fletcher & Barrett, Lloyds TSB Commercial and Nuneaton-based solicitors Tustain Jones, in association with Nuneaton & Bedworth Borough Council. The event is also being supported by the Chamber of Commerce and the Federation of Small Businesses.

The aim of Info2Grow is to provide invaluable advice for businesses who are looking to progress to the next stage in their development, but who are encountering some barriers to achieving the growth they hoped for. Topics covered will include finance, employment, marketing and risk management (amongst many others), and there will be an extensive Q&A session where attendees can quiz the advisers about specific problems they may be facing. The event will be held at The Chase, Higham Lane, Nuneaton on November 10th, and will run from 4.30pm until 7pm.

Senior partner Paul Carvell explained: “This event presents a unique opportunity to directly access advice from a cross-section of business experts on how you can take your business to the next level. We hope that this initiative will prove to be the kick-start that many local businesses need to take their operations to the next level.”

As well as Paul Carvell, advisers will include Alan Ison (Lloyds TSB Commercial), Adrian Young (Federation of Small Businesses), Jo Darling (HR – Stewart Fletcher & Barrett Group) and Peter Tustain (Tustain Jones Solicitors), and experts in areas such as wealth management and business start-ups will also be in attendance.

Alan Ison commented: “At Lloyds TSB Commercial, we are proud of our record in helping businesses cope in a tough economic climate, and I believe an event like Info2Grow will provide a valuable resource for the local business community.”

Anybody interested in coming along can fill in the online form at www.sfb.uk.com, or email tracy.johnson@sfb.uk.com.

State Pension Age Set To Rise

It has been reported that the government will bring forward an increase in the state pension age to 67 under radical plans designed to prolong the working life of millions of people aged 50 and under. Ministers are already pushing controversial changes through parliament to raise the age at which men and women can claim a pension to 66 by 2020. Now, as the government moves to keep up with ever-increasing life expectancy, the retirement age could rise to 67 as early as 2026 – which would affect 8.1 million people in their 40s who would otherwise have expected to retire at 66.

Pensions Minister Steve Webb has stated that further moves are necessary, and that the coalition government will discard the former administration’s timetable, under which the pension age was to be increased to 67 in 2036 and 68 by 2046. He has described the timescales for 67 and 68 as ‘too slow’, and explained: “If it is 67 in the mid-2030s we will be going backwards in terms of share of your life in retirement. I mean the problem would be worse than 20 years before.”

Martin Lindsey, Director of Stewart Fletcher & Barrett Wealth Management, notes: “It has become clear that more needs to be done to avoid a major pensions crisis. With average life expectancy rising by, on average, two and a half years every decade, it is not surprising that some tough decisions have to be made, and quickly. Obviously this is a worrying issue that affects many millions of people, and any increase to the state pension age needs to be handled in such a way as to ensure that people have enough time to plan for the change.”

 

If you would like some advice or help with pensions, retirement or planning for your future, call SF&B now on 02476 384171.

New Faces!

Long-established local accountancy practice Stewart Fletcher & Barrett has welcomed three new faces on board over the past few weeks. Paige Howitt, Amy Lloyd and Jordan Doherty are now part of the team at SF&B’s Nuneaton office on Manor Court Road, and are looking forward to developing their careers with the flourishing firm.

18 year old Paige is very happy with her new role: “I have always wanted a career and to work in a profession rather than a job. Accountancy allows you to achieve measurable goals – and there is a lot to learn, so to have the support of colleagues, managers and partners is great.”

Amy Lloyd, 21, concurs: “Since I joined Stewart Fletcher & Barrett I’ve been made to feel really welcome, and I’m looking forward to getting all of my accountancy qualifications under my belt.”

Jordan Doherty, 18, says: “I’ve always liked numbers and accountancy is a good profession to get into. On top of that, everybody here is nice and helpful, so I’m really pleased to be part of the team.”

Senior partner Paul Carvell explains: “These appointments have been made in order to help us keep pace with the amount of new business we have been winning recently. Paige, Amy and Jordan all demonstrated excellent potential at interview stage, and we will be supporting them every step of the way along their journey to become fully fledged accountants.”

Help Cut Red Tape

Bogged down by bureaucracy? Floundering in a sea of forms? If you’re a business owner, red tape can present a frustrating set of hoops to jump through. However, a new government initiative aims to reduce this burden by opening up a dialogue with business people to discover which regulations are working and which aren’t, as well as what should be scrapped, simplified or done differently.

The Red Tape Challenge aims to get rid of some of the 21,000 rules that the government believes are holding back businesses. Every few weeks regulations relating to a specific sector will be published on the website (see address at bottom of article), along with general regulations that relate to all sectors, such as those on equality or health and safety. People are then free to visit the site and pass comment. Their thoughts will be collated by officials and ministers will then have three months to decide which regulations they will scrap. The process will run from April 2011 until April 2013.

Small firms in particular are struggling with the problem of excessive regulation, and a new Chambers of Commerce report found that a significant proportion would employ more staff if this was reduced – which would ease the burden on the economy and help to lift the country out of recession. The survey says that employment legislation, such as pension requirements, dismissal rules and sickness absence rules, deter sole traders from taking on their first employee.

Paul Carvell, senior partner at Stewart Fletcher & Barrett and incumbent chair of the north branch of Coventry & Warwickshire Chamber of Commerce, comments: “This scheme represents exactly the type of two-way discourse that I have long argued for in talks with MPs and the business community. It is an extremely positive step forward, and I for one welcome it and urge business owners to get involved and make their voices heard.”

Help cut pointless rules and regulations by telling the government what YOU want to see changed: http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/

HMRC In Gobsmacking New Blunder

In a development straight out of a Seventies sitcom, H M Revenue & Customs has failed to send out around half a million tax reminders – because it ran out of paper.

The farcical development may amuse many, but it means those people may have forgotten to pay their final demands by last Sunday’s deadline. In mitigation, though, the taxman has stated that taxpayers who have not received a reminder have 30 days to pay from the date it is finally delivered.

Four times more people than last year owe money on bills that should have been paid in January. They were expected to pay the money owed by July 31, but HMRC did not order enough paper for reminder letters.

An insider has been quoted as saying: “It is a shambles. They have literally run out of paper to send out the reminder letters.” Red-faced revenue bosses admitted the gaffe at the end of last week, and there has been speculation that staff cuts are to blame.

A spokesman for Revenue and Customs said: “We very much regret any inconvenience.” The statements will now be sent out “as soon as possible,” so anyone who is worried that they have not yet received one can rest assured that it IS the taxman’s fault, and they will still have time to pay.

Thank goodness for that – if anyone else’s business was run like this it wouldn’t last two days…

Entrepreneurs vs. Accountants

As an entrepreneur, you probably have an entirely different mindset to most accountants. You have to consider all aspects of the broader picture, while your accountant is most likely to be concerned with highly specific details. Your business is your baby, but often it can feel like you are just another set of accounts to them. How can they possibly understand where you are coming from when your concerns are so different from theirs?

When you start to work with a particular accountancy firm, you are beginning a relationship that will – hopefully – be mutually beneficial. If it is to work, then there must be sufficient understanding and empathy between the two parties, and trust must be established over time. In order to achieve this, communication is the key. In other words, your accountant should be someone you feel you can talk to.

While many accountants consider the human element of their service offering to be less important, a good one will realise that building a successful relationship with a client requires effective two-way communication. On their part, they will happily take the time to explain anything you don’t understand, rather than jealously guarding their specialist knowledge as if it were so much gold dust.

At Stewart Fletcher & Barrett, we understand that business is about more than just the money – it’s about people, and product, and passion too. You and your business have your own unique and specific needs, and we make it our business to understand them. To get the ball rolling, call us for an initial chat on 02476 384171.

PAYE Tolerance Level Slashed

People who have underpaid due to PAYE errors will soon find themselves being chased up for smaller sums, as H M Revenue & Customs is to slash the current £300 ‘tolerance’ level to £50.

When it was introduced last year, the National Insurance & PAYE System (NPS) led to a huge number of errors for 2008-09 and 2009-10, which have affected an estimated 15 million people. As a consequence, HMRC agreed to write off the debts of taxpayers who owed less than £300. Now, however, this is set to change, as the taxman has announced that this sum will be reduced to £50 for the estimated 1.2 million people who underpaid tax in 2010-11.

An HMRC spokesman said: “We’ve used a tolerance since PAYE was introduced to achieve a balance between the costs of sending out tax calculations for relatively small amounts of tax with the cost of that work to the taxpayer. The six-fold increase to £300 was always intended as a temporary measure while we reconciled two years at one time. That work is now complete so it’s only right that we return the threshold to its normal level.”

Because of this, taxpayers are likely to see more and more P800 tax calculations being issued, which could be problematic for employers operating weekly or multi week payrolls who have processed a week 53, 54 or 56, as the Revenue’s new computer system does not recognise these additional weeks – and can therefore make no additional allowance for the underpayment of tax.

The announcement is also likely to hit vulnerable groups hard. For example, some pensioners on low incomes, who may have had their payments written off in the previous two years, will find they will have to pay the accrued limit. However, HMRC insists that there are schemes in place to help those who may encounter difficulties in paying – despite its decreasing leniency in such situations.

If you would like more information about how this could affect you, call one of our experts now on 02476 384171.

No More Time To Pay?

Business who are struggling to pay the taxman have been dealt a severe blow by the news that there has been a huge increase in the number of ‘Time to Pay’ (TTP) arrangements being rejected by HM Revenue & Customs.

According to recent figures released by HMRC, 3,390 TTP requests were refused in the first three months of 2011, compared to 2,440 in the same period in 2009 and 2,360 in 2010.

Only 32,900 requests were agreed in the first quarter of this year, compared with 82,000 in 2009 and 57,800 in 2010.

HMRC said that the scheme “continues to be available to help companies address short-term cash flow difficulties that result in an inability to pay their tax in full and on time”. It also claimed that the criteria determining whether arrangements were agreed or rejected had not changed in any way.

However, many professionals (including ourselves) see this as yet another sign of HMRC’s tough new approach towards individuals and businesses who are already struggling in a harsh economic climate. Even requests with secure guarantees are being turned down, and deals are being restricted to payments within three months. Those who have not previously had a TTP arrangement in place are far more likely to have a request accepted than companies that have already been subject to one.

If you are worried about any difficulties with tax payments, it is a good idea to have a plan in place. Talk to one of our experts to find out how we can help you with this. http://www.sfb.uk.com/

Bribery Act – Be Prepared

Do you have a clear and effective anti-bribery policy in place? If not, whether your business is big or small, you’d be best advised to look at this as a matter of urgency, as the new Bribery Act came into force as of 1st July this year!

This legislation represents one of the biggest changes to UK laws regarding business and commerce for decades, and getting it wrong could end up costing you a lot more than you bargained for – as the maximum penalty for bribery will rise from 7 to 10 years imprisonment, and/or an unlimited fine. However, if a company can demonstrate that it has adequate procedures in place for the prevention of bribery, the fact that it is using its best endeavours to comply with the law will offer a good degree of protection.

The Bribery Act replaces existing anti-corruption rules, and introduces a new corporate offence of ‘failure to prevent’ bribery. This means companies that cannot demonstrate that they have implemented adequate procedures to prevent corrupt practices could be exposed to unlimited fines as well as other collateral consequences, such as debarment from government business.
This is yet another layer of red tape for beleaguered businesses to negotiate, but once again there is no excuse for not knowing it. Stewart Fletcher & Barrett is committed to trying to get the message across to government that red tape is ruining businesses. Indeed, senior partner Paul Carvell has raised these concerns with MPs, and a new government initiative aimed at cutting red tape has been launched.

He explains: “What you need to know is that the definition of what constitutes bribery is actually far wider than ever before, and encompasses things that may have previously appeared innocuous. It is vital for businesses to realise that bribery is a lot more than just a legal issue – it demands a holistic approach that includes ensuring you have the right processes, controls and company culture. Unfortunately, this is likely to represent yet another cost to businesses.”

If you would like to find out how we can help you minimise that cost, call us on 02476 384171.

To add your voice to the government initiative, visit the website: http://www.redtapechallenge.cabinetoffice.gov.uk/home/index/