Auto enrolment and ‘director only’ companies

Many ‘director only’ companies may be completely exempt from auto enrolment duties. The Pension Regulator has now revised its procedures for claiming exemption. There is an online submission process and, apparently, email and letter notifications will no longer be processed.

‘If your company receives a letter which includes a staging date and you believe that automatic enrolment duties don’t apply to it, because they are a director only company, the employer needs to let The Pension Regulator know at https://automation.thepensionsregulator.gov.uk/notanemployer‘.

If you need assistance in this area please contact Andrew Cowe, Senior Tax Manager.

Stuart Adam, Thomas Coombs

An end to FRSSE

Leeds based Thomas Coombs has welcomed news that the Financial Reporting Council (FRC) has issued a number of changes with the aim of simplifying the reporting of company accounts.

FRSSE is no more and according to the FRC, the changes – which are effective from 1 January 2016 – are largely in response to the implementation of the new EU Accounting Directive. They include:

  •  A new standard – FRS 105; the Financial Reporting Standard applicable to the Micro-entities Regime
  • A new section – 1A Small Entities of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland

The FRC has also published an Overview of the Financial Reporting Framework, which describes the framework applicable for accounting periods beginning on or after 1 January 2016 and includes key differences between the FRSSE and the new requirements set out in FRS 105 and section 1A of FRS 102.

Stuart Adam, Partner at Thomas Coombs, said: “These changes to accounting standards will have a positive impact upon small businesses. I believe that they will effectively cut red tape for small companies. They also respond to the new legal framework for disclosure in small company reporting, providing guidance for applying it and improving transparency relating to financial instruments.

“In addition, they play a role in improving the cost-effective reduced disclosure framework for listed groups by permitting International Financial Reporting Standards-based presentation requirements in subsidiaries’ financial statements,” Stuart Adam added.

The FRC added that it expects to issue revised editions of FRS 100, Application of Financial Reporting Requirements, FRS 101, Reduced Disclosure Framework, and FRS 102, in September.

If you would further information please contact Stuart Adam.

Small businesses need to take advantage of the Annual Investment Allowance now, says Thomas Coombs

Thomas Coombs is encouraging small businesses to take full advantage of the half a million pound Annual Investment Allowance (AIA) available to them now before the rate drops at the start of next year.

This warning, from the firm of Leeds-based Chartered Accountants, comes following the Chancellor’s Summer Budget statement in which he set the AIA at £200,000 for the life of the current Parliament from January 2016.

This amount is higher than the previous limit of £25,000, which was due to come into force at the start of next year, but is still less than half the amount of the current £500,000 limit.

The Allowance is designed to encourage investment by deducting the full value of an item that qualifies for (AIA) from a business’s pre-tax profits.

It applies to all plant and machinery equipment bought by a company, which includes alterations to existing buildings to install other plant and machinery and integral features, such as lifts, escalators and air-conditioning and air cooling systems.

Andrew Cowe, Senior Tax Manager at Thomas Coombs, said: “While the chancellor may be hailing this as a victory for SMEs, there is no getting away from the fact that the allowance is still going down, even if it is not at such a drastic rate.

“In order to make the most of the current allowance, businesses need to act now and submit any applications ahead of the deadline at the start of next year. Failing to do this could see them miss out on thousands of pounds of potential investment money.”

For more information please contact Andrew Cowe.

Budget 2015; SMEs could see smaller profits after Summer Budget

Leeds-based accountancy firm Thomas Coombs fears that measures introduced in the Chancellor’s Summer Budget will affect the profit margins of SMEs.

George Osborne’s seventh Budget – the first of this Conservative Government – heralded a decrease in Corporation Tax but saw a rise in dividend taxes.

Christopher Darwin, Partner at the UK200Group firm Thomas Coombs said: “SMEs will see significant changes to dividend taxation from April 2016, which will impact on the overall tax rates and the effective tax rates on extracting profits.

“Furthermore, the introduction of the National Living Wage is going to be a big cost for SMEs. Even though it has been marginally offset by an increase in the employment allowance, the effect of paying higher wages – which is a fixed overhead – will ultimately be smaller profits,” added Christopher Darwin.

In a bid to create what George Osborne called “a permanent change to incentivise investment”, the Annual Investment Allowance will no longer fall to £25,000, but will be frozen at £200,000 from 1 January 2016. However, Christopher Darwin notes that the temporary £500,000 limit was set to expire on 31 December 2015, but will now be a permanent relief available at a reduced rate of £200,000. “It is a shame that the Chancellor didn’t choose to keep the Annual Investment Allowance at the current level and show a true commitment to boosting productivity for SMEs for the rest of the parliament.”

For more information, please contact Christopher Darwin.

Business confidence remains high

Leeds based Thomas Coombs has commented on news that, according to the latest Business in Britain report from Lloyds Bank, overall business confidence remains strong and stable.

This positive attitude is largely underpinned by companies’ expectations of an improvement in exports, as well as an anticipated increase in investment levels.

The twice-yearly Lloyds Bank report gathers the views of 1,500 UK companies – predominantly small to medium sized businesses, or SMEs – and tracks the overall balance of opinion on a range of important performance and confidence measures.

The report’s overall key confidence index, which looks at businesses sentiment over the coming six months, has remained stable at 43 per cent compared with January 2015. Although the latest reading is down from the survey’s high of 53 per cent recorded 12 months ago, it remains above the long-term average reading of 23 per cent. Expectations of employment growth and a resurgent export market suggest strong economic prospects for the second half of the year.

Christopher Darwin, Partner at Thomas Coombs said: “Some 29 per cent of the firms surveyed said that weaker UK demand poses the greatest threat to their business in the next six months. This could explain why firms expect to increase their sales in global markets.”

The net balance of exporters expecting an increase in total exports across the globe has risen to 46 per cent. This has been boosted by firms’ intentions to export to growing regions such as the Middle East and Africa. In particular, the increase in total exports has been driven by the number of exporters expecting an increase in trade with Europe in the next six months.

“Business confidence has remained relatively strong with encouraging expectations for sales, orders and profits for the rest of the year,” noted Christopher Darwin “This has been underlined by a bounce back in exports to Europe as well as companies’ intentions to grow their presence further on the international stage. However, we’ll be keeping an eye on how the situation in Greece affects British SMEs,” they concluded.

For further details contact Christopher Darwin

THOMAS COOMBS CHARITY (WY-SME) INDEX: June 2015 Update

We are proud to report on the latest Thomas Coombs Charity (WY-SME) Index update. The specialist charity accountants within our practice have constructed this index from available data on West Yorkshire based registered charities which meet the criteria of a small or medium sized enterprise.

These charities represent a Yorkshire powerhouse of third sector activity with a combined income of £0.7 Billion and £1.0 Billion of assets.

Since March 2015 a significant proportion of the financial records of charities comprising the index have been updated. The index is now comprised of 863 charities.

Of the 143 charities filing a change in income there was an aggregate 2.7% fall in annual income. This clearly shows that the austerity conditions within the West Yorkshire charity sector are still firmly with us.

There is a wealth of information within the database. If you wish to receive more detailed benchmarking analysis with reference to your charity please do not hesitate to contact Christopher Darwin as the head of our charities department on 0113 2449512 or charities@thomascoombs.com

 

Thomas Coombs

July 2015 Monthly Technical Update

AUDIT & ACCOUNTING UPDATE

 

Charity SORP consultation opensThe Joint-SORP making body is consulting on three matters that affect the 2015 versions of the Charities SORPs.

  • The FRC consultation on amendments to FRS 102 for periods commencing on or after 1 January 2016;
  • The planned removal of the FRSSE; and
  • A revised definition of ‘larger charity’ in the SORPs.

Proposals include bringing small charities that are required to prepare accruals accounts into the scope of SORP 2015 (FRS 102). It is proposed, however, that the requirement to prepare a statement of cash flows will only be mandatory for larger charities. The definition of a larger charity (proposed as gross income exceeding £500,000 UK / €500,000 ROI) is also being consulted on.

The consultation is open until 18 September 2015. For more information and detail of how to respond to the consultation, click here.

 

TAXATION

 

Telegraph reveals HMRC amnesty for late filing penaltiesAccording to the Telegraph, up to 890,000 people who filed late tax returns have been given an amnesty over the £100 fine for missing the deadline.  To read more, please click here.HMRC have now sought to clarify their position.

 

RTI late filing penaltiesIn addition, HMRC are also taking a risk-based approach to penalties for late RTI returns. Read the news story here.

 

HMRC issue guidance on APNsHMRC have released guidance on follower notices and accelerated payments.

 

Changes to the advisory fuel rates from 1 June 2015

Engine size Petrol – amount per mile
1400cc or less 12p (11p)
1401cc to 2000cc 14p (13p)
Over 2000cc 21p (20p)

 

Engine size Diesel – amount per mile
1600cc or less 10p (9p)
1601cc to 2000cc 12p (11p)
Over 2000cc 14p (14p)

 

Engine size LPG – amount per mile
1400cc or less 8p (8p)
1401cc to 2000cc 9p (10p)
Over 2000cc 14p (14p)

Hybrid cars are treated as either petrol or diesel cars for this purpose.

For more information, click here.

 

LATEST BLOGS FROM OUR TECHNICAL PARTNER MERCIA GROUP

 

Difficulties with Business Property ReliefBy Mark Morton
A New Register Required for Every Limited CompanyBy Andrew Güntert
Investment PropertiesSo what is the big deal with FRS 102 and Investment Properties?Can I get away with using depreciated cost model?

By Jenny Faulkner