Cyber security – how to make your law firm safe

Cyber security – how to make your law firm safe

Cyber security – how to make your law firm safe

The COLPs, partners and practice managers of law firms hardly need reminding of the risks of data loss and the potential financial cost and reputational damage which can arise. Data breaches are regularly reported in the news and the SRA may well be focusing their efforts on cyber security and data protection when visiting law firms.

Here is what you should do about cyber security

There is a lot of information about what you need to do about cyber security but nobody is telling you how to do it ……… until now.

To ensure your firm takes the necessary care of all the personal and confidential data of both your practice and your clients, you need to implement a Cyber Security Management System (CSMS). A CSMS is like the other systems and processes you have in your firm which ensure that all your staff know what they have to do and how to do it so that your client data is looked after and your firm’s reputation is safeguarded.

A CSMS helps you:

  • Set roles and responsibilities
  • Identify and document the risks in your firm, using checklists and workbooks
  • Link your risks to cyber security policies which are tailored to your business
  • Train your staff on your risks and policies
  • Check and document your staff’s understanding of the risks and the training

Hawsons have a proven solution

Hawsons can help with all aspects of cyber security including the provision of a CSMS used by over 70 organisations including ICAS, the Institute of Chartered Accountants in Scotland.  We also provide encryption products, policies, staff training and assessments.

Once your firm implements a CSMS and acts upon its findings you know that if your firm suffers a data breach your documented audit trail will demonstrate that you took all the reasonable steps that you could have done to prevent that breach.

More from our legal sector experts

You can find all of our latest legal sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

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Capital or Revenue expenditure? A brief discussion

Should a client face an enquiry from HMRC into their tax return and accounts, a common area that is reviewed is any deduction that may have been claimed in the accounts for repairs and renewals. This arises because whilst a repair to an asset is an allowable item of expenditure for tax purposes, if the asset is altered, improved or replaced the expenditure is capital expenditure and is not allowable. Capital allowances may or may not be available on this capital expenditure.

Recently, HMRC have published revised guidance in their internal manuals about what they accept is a repair for tax purposes. One point that the guidance focuses on is the concept of the entirety. Over many years there have been a number of court decisions on this area following disagreements between taxpayers and HMRC. In general terms if the entire asset has been replaced this will be treated as capital expenditure, whereas if less than the entire asset has been replaced this will be treated as revenue expenditure and is therefore tax deductible.

The guidance stipulates that what actually forms the asset or the entirety is a question of fact and that the question to decide is whether the asset is a separate distinct asset or if it is part of a bigger asset. For example:

  • Does it look like a separate asset?
  • Is it something that stands apart from other assets?
  • Is it freestanding or is it something that is removable?

Another important test to consider, especially where there has been a lot of work undertaken, is to consider if the character of the asset has changed as a result of the work. In simple terms, is it the same object both before and after the work is undertaken? If it is like for like in that the asset simply does the same job as before then this is an indication that the work is a repair, but if the function or capacity of the asset is altered or improved then it is capital.

The following examples which are based on HMRC updated guidance illustrate these points.

Example 1
Pat is a dairy farmer and the driveway leading to her farm is in a very poor state of repair having been initially created some 30 years ago. The Dairy Company advise Pat that the driveway is causing damage to their milk tanker vehicles and refuse to call at the farm until it is repaired. Pat has the driveway repaired at a cost of some £25,000. The tarmac is removed and the subsurface repaired. It is then re-surfaced with new kerbing added to bring the driveway up to modern standards. Even if the driveway is an asset in its own right the entirety has not been replaced. It has been re-surfaced and the expenditure is allowable for tax purposes as a repair. The drive was not widened nor was its load bearing capacity increased, so no improvement was involved.

 

Example 2
Pedro runs a farm near Clacton-on-Sea and has diversified so that he has a number of chalets that are used as a furnished holiday lettings business. One of the chalets is damaged beyond repair and Pedro replaces it with a new chalet of the same model. As most of the cost is covered by insurance, Pedro only has to spend £3,500.For tax purposes the chalet is an identifiable asset in its own right. Pedro has replaced the asset in its entirety and the expenditure is therefore capital expenditure and is not tax deductible as a repair.

This is an area where the incorrect tax treatment can cause potential difficulties with HMRC and key to a successful outcome is planning in advance and documentary evidence so please do contact us if you are considering carrying out this type of substantial expenditure.

More from our tax experts

You can find all of our latest tax articles and tax resources here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Stephen Charles partner

Stephen Charles is a tax partner at the firm, specialising in corporate and business taxation. For more details and advice, please contact Stephen on [email protected] or 0114 266 7141.[/author_info]

Preparing for your GP CQC Inspection

Preparing for your GP CQC Inspection

New style inspections of GP practices and out-of-hours services at England started in the back end of 2014 and have lead to the first ever ratings of practices, which may be ‘Outstanding’, ‘Good’, ‘Requires Improvement’ or ‘Inadequate’.

Effective April 2015, GP practices will now have to publicly display their ratings, meaning the pressure on achieving the highest ratings is greater than ever.

In this article we look at the four crucial stages of your inspection process; what you should expect and how you should be preparing for your GP CQC inspection.

Prepare before your notice period – what are CQC looking for?

QCQ guidelines state: To get to the heart of people’s experiences of care, the focus of our inspections is on the quality and safety of services, based on the things that matter to people. CQC always ask the following five questions of services:

  • Are they safe?
  • Are they effective?
  • Are they caring?
  • Are they responsive to people’s needs?
  • Are they well-led?

These are the five basic categories that CQC will be looking at in their new approach of GP practice inspections and, within that, CQC will also look at different patient groups:

  • Older people
  • People with long-term conditions
  • Families, children and young people
  • Working age people
  • People whose circumstances may make them vulnerable
  • People experiencing poor mental health

This is CQC’s Key Line of Enquiry.

Using a combination on ‘intelligent monitoring’ (looking at your data and information e.g. patient surveys) and a formal day-long inspection of the surgery, CQC will answer the above five questions in relation to the six patient groups, completing a detailed and clear report on the practice’s rating.

This rating will then publicly be published on the CQC website with a full report detailing all findings.

Tips

  • In order to be fully ready for the QCQ inspection, you need to start making preparations now.
  • Prepare and monitor ongoing records of all complaints and serious incidents. Remember to also keep track of what you did to address these issues, as the CQC will be looking for this when they inspect your files.
  • Ensure all staff files, including details such as training certfificates, DSB checks etc. are fully up-to-date.
  • Think about the ‘Key Lines of Enquiry’ and what CQC will be looking for.
  • CQC will be asking patients various questions, so make sure you have formally reviewed any suggestions patients have put forward. A good idea is to start carrying out systematic surveys, with a documented procedure of how to follow through and review and suggestions made.
  • Previous inspection reports are available on the CQC website and are an invaluable resource. The website also includes the 10 most recently inspected doctors/gps and details on all inspections to date, so is well worth looking at. At the time of writing the latest inspection checks are as follows:

GP practice rating

Use your notice period

  • Two weeks before your inspection you will receive a letter from CQC to confirm your inspection date. The letter will also request various information from you, including your statement of purpose and information on complaints or serious incidents.
  • The lead inspector will also call you to discuss what happens next and make arrangements for your inspection date. This is a good opportunity to understand what staff you will need on the day and book them well in advance.
  • Finally, CQC will send you a selection of comment cards and posters. The comment cards must be distributed to patients to complete, and the posters must be displayed in key areas of the practice to advertise the inspection.

Tips

  • Medical staff will be provided allocated interview times, of which will be discussed in the agenda for the day. These interviews can last anywhere between 20 minutes and 1 hour, so make sure you have made the necessary arrangements to mitigate any disruptions this may have.
  • Speak to patients to ensure they know what is happening and what to expect on the day of the inspection. You should also distribute the comment cards and make patients aware of the the CQC posters, which include details on how to make contact.
  • Speak to all members of staff to ensure they also know what is happening and what to expect on the day of the inspection. Discuss with members of staff what questions they may be asked and offer any support in helping them prepare for the inspection and interviews.

On the day

  • The CQC inspection team will be tailored to your practice, depending on the size of the surgery. It will include a minimum of an inspector and a GP, but may also include a practice manager, practice nurse and an Expert by Experience.
  • The inspection will not only review the policies, procedures and data that the practice has, but also involve interviews will staff and patients.

Tips

  • The inspection team are likely to arrive early, so make sure you and your staff are ready and prepared to start straight away. Make sure everybody knows what to expect.
  • The inspection team will want to speak to as many members of staff and patients of possible, going beyond the prearranged interviews with medical staff, so make sure everyone is prepared.
  • Welcome the inspection team as they arrive by introducing your staff.
  • Take the first meeting time as an opportunity to talk about the practice, where it is performing well, providing context on surrounding areas and any challenges the practice may be facing e.g. a nearby surgery may have recently closed, meaning that there is increasing demand.

After your inspection

  • At the end of the day the inspection team will hold a feedback session, in which they will share their initial thoughts and discuss anything that they have found on the day.
  • Using a combination on ‘intelligent monitoring’ (looking at your data and information e.g. patient surveys) and a formal day-long inspection of the surgery, CQC will complete a detailed and clear report on the practice’s rating.
  • CQC will then send you a draft inspection report, after they have had time to consider their findings. This is sent to the practice to seek clarification on any matters and to give the practice the opportunity to challenge any factual inaccuracies, before being reviewed by quality assurance mechanisms.
  • The final report will then be published on the CQC website.

Tips

  • A good idea is to record the initial end of the day inspection debrief so that you can refer back to it in the future. Make sure you check with the inspection team that this is OK first.
  • The inspection team will provide you with loads of advice on how you can improve certain aspects of your practice; make note of them, or listen back to your recording of the debrief, and take any necessary actions.

In summary

It is important to remember that this proactive approach is not just about preparing for your inspection day, it’s about improving the standards and performance of your practice. The sector is facing challenging times with the redistribution of funding and increasing cost pressures remaining key factors. This is a great opportunity for practice managers to highlight the key areas where their practice can improve and, crucially, implement new policies and procedures to work towards a stronger financial future.

More from our GP practice experts

You can find all of our latest GP practice sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Scott Sanderson

Scott Sanderson Partner

Scott Sanderson began his career with Hawsons and trained as a Chartered Accountant, becoming a partner in 2015, specialising in the healthcare sector and small businesses. For more details and advice, please contact Scott on [email protected] or 0114 266 7141.[/author_info]

Pros and cons of incorporation for solicitors & law firms

Pros and cons of incorporation for solicitors & law firms

The pros and cons of incorporation for solicitors & law firms

The default model for a solicitor practice was historically the partnership structure. However, since the introduction of the Solicitors’ Incorporated Practice Rules in the early 1990s, allowing solicitor practices to incorporate, law firms are now also operating as limited companies and LLPs. The take up by law firms adopting the LLP model in the UK has been particularly impressive. Yet, many solicitors are still unclear on the pros and cons of incorporation and the costs of making the wrong decision for your practice.

Full incorporation can bring benefits to the firm, but there are some disadvantages that must be considered. The structure of your firm and whether it works for you is something only you and your fellow partners can decide. If incorporation is the right route for your firm, Hawsons’ specialist team can help you achieve that status as efficiently as possible.

Limitation of liability

Sole trader/traditional partnership

Liability is unlimited

LLP and Limited company

For LLPs and Limited Companies, liability is limited to:

  • The partner’s capital account plus any unallocated profits; or
  • The share capital in the company

An LLP also has joint and several liability for stamp duty land tax.

Personal liability can still fall on the members/directors if they are proven to have acted negligently.

Banks will often require personal guarantees for borrowing depending on the amounts involved.

Sale of practice

Sole trader/traditional partnership and LLP

Buyers will generally prefer to buy the assets and goodwill because it can mitigate the transfer of potential liabilities. This can happen on the purchase of shares, where a buyer acquires all the assets and liabilities in the company.

Limited company

Conversely, sellers usually prefer to sell shares. This is generally seen as cleaner to the seller and also avoids double tax pitfalls, whereby income is taxed within the company and then again on the individual.

Pension arrangements

Sole trader/traditional partnership and LLP

Limited to a personal pension arrangement (E.g. Stakeholder pension, personal pension or self-invested personal pension).

Limited company

A wider range of pension arrangements are available (E.g. Executive pension plan, small self-administered scheme or a group personal pension plan)

Other pros and cons

This article has given a brief look at the pros and cons of incorporating. For more information on the impacts on:

  • Flexibility
  • Accounts requirements
  • Taxation on profits and owners income
  • Capital gains tax
  • Inheritance tax

For more information on the other pros and cons, please download our free guide.

More from our legal sector experts

You can find all of our latest legal sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Simon Bladen Partner

Simon Bladen is the partner responsible for looking after the firm’s legal clients and has worked at Hawsons throughout his career. For more information or advice on anything covered in this article, please contact Simon on [email protected] or 0114 226 7141.[/author_info]

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Pension wise launched by government

Pension wise launched by government

Pension wise launched by Government

The government has announced the launch of ‘Pension wise’ which will offer free and impartial guidance to people on the new pension freedoms which comes into effect in April.

Economic Secretary to the Treasury Andrea Leadsom has unveiled the name and logo of the new pensions guidance service.

Pension wise will offer free and impartial information and guidance to people with a defined contribution pension approaching retirement and will be available from April 2015 for individuals approaching retirement.

Economic Secretary to the Treasury Andrea Leadsom said:

‘People who have worked hard and saved all their lives will be free to choose what they do with their money from next April.

We want people to be empowered to make informed and confident choices and I’m delighted to announce Pension wise: Your money. Your choice as the brand name for the impartial guidance service we are building.

Pension wise will be a first port of call for people with a defined contribution pension who are approaching retirement. It is a distinctive brand, making it easy for consumers to know where to go for help and guidance.’