SME tax corner – the good, the bad & the Autumn Statement

SME tax corner – the good, the bad & the Autumn Statement

Welcome to our fourth edition of the SME tax corner.

In this month’s SME tax corner we look at what’s changed in the world of tax for small businesses.

Good: R&D claims made easier for SMEs

The recently published government plan to improve access to R&D highlights the need for more SME companies to understand what relief is available and how the process of claiming tax relief works. Recent changes to R&D scheme rates have increased the relief available so a clear understanding is needed to ensure that companies are aware of how the tax rules work.

This announcement comes after R&D tax claims from SMEs increased by 23%. Since the introduction of this generous tax relief over 120,000 claims have now been made (from SMEs and large businesses), amounting to over £11.4bn in tax relief claimed.

Following consultation, the government has announced that a voluntary Advanced Assurance scheme for small businesses making their first claim is being introduced from November 2015. Successful applicants will receive assurance that HMRC will allow their first three years of R&D tax relief claims without further enquiry. In addition, there will be new bespoke guidance aimed at smaller companies and more direct communication between HMRC and companies that are already claiming, or thinking about claiming, R&D tax relief.

There are a number of areas in this briefing where you may need specific advice depending on the circumstances of R&D activities and expenditure so please do not hesitate to contact us.

Bad: Is it time to say bye to buy-to-lets?

Following a summer Budget which brought big tax changes for buy-to-let landlords, in the shape of a restriction in the amount of income tax relief landlords can claim on residential property mortgage interest costs and the removal of the wear and tear allowance, landlords were concerned about what year’s Autumn Statement might bring.

Landlords may have been expecting further changes, but the new measures announced by the Chancellor will come as a big shock and could eat away at already falling buy-to-let profits. The introduction of a new 3% Stamp Duty Land Tax surcharge on new buy-to-let profits could see a landlord’s stamp duty tax bill rise by as much as 1000%.

In this article we look at the big buy-to-let tax changes, including more details on the changes from the summer Budget and last week’s Autumn Statement, and what they could be for landlords and investors.

Autumn Statement: A good Autumn Statement for SMEs?

Last week the Chancellor delivered his latest Autumn Statement. In a year which has already seen big changes to the small businesses– including, most notably, the introduction of the new National Living Wage – small business owners concerned about what this year’s Autumn Statement might bring.

However, the Chancellor announced some good news for small business owners, including the extension of the small business rate relief scheme for another year and no further changes to Entrepreneurs’ Relief. We have prepared a summary article of the key things small businesses need to consider following this year’s Autumn Statement in which Scott Sanderson, Partner at Hawsons, comments: “On first look the 2015 Autumn Statement had very little to shout about for small businesses; however, looking more closely, there is scope for optimism following some of the announcements.”

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.

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]

Agriculture update for UK farmers – November 2015

Agriculture update for UK farmers – November 2015

Welcome to our third agriculture update for UK farmers.

Please do register for our agriculture newsletter if you would like to receive the agriculture update each month, along with our quarterly agriculture newsletter and topical sector developments.

Autumn statement agricultural review

The Chancellor, George Osborne, last week delivered his 2015 Autumn Statement. The Autumn Statement did not bring much news for the agriculture sector, however, there was an important announcement regarding DEFRA.

We have prepared an agriculture Autumn Statement 2015 review here.

Supermarket price wars crippling farming industry

Although an increase in output (milk production from April to mid-October 2015 had grown to 732m litres above the long-term average) has resulted in increased dairy price competition, the ongoing supermarket price wars, in particular, have left many dairy farmers on the brink of closing. Dairy producers are now receiving just 60-70% of break-even milk price of 28-30p per litre and, according to The Dairy Group, are facing a total loss of 4.1p per litre in 2015/16.

The NFU Horticulture and Potato Board have also reported that supermarket price wars are pushing UK vegetable and fruit growers to cut production whilst imports reach record levels. The value of UK field vegetable production fell 14% between 2010 and 2014 and outdoor cropped areas fell by 7,000ha. The volume of imported fruit and vegetables to the UK increased by 664,000t between the same dates.

Grants available to farmers

A funding pot of £24m is available through Local Enterprise Partnerships for business development, food processing and small-scale tourism initiatives. Grants of £35k to £140k are available. One new job is required per £30k of grant.

Other agriculture news…

  • The RPA has said it remains on track to make full BPS payments as early as possible in the payment window with the “majority before the end of December and the vast by the end of January 2016”.
  • HM Government is facing a legal challenge over changes to Feed in Tariffs (FITS). A DECC spokesman said a pre-action protocol letter had been received.
  • In England 30,000 farmers (35%) are expected to receive it (Basic Payment Scheme) in their bank accounts by 1 December. A further 15% are then to be paid by the end of December and the final 50% by the end of January. Those not expecting to be paid by January should be written to.
  • HMRC has confirmed that Renewable Heat Incentives (RHI) payments on a domestic scheme are tax exempt where part of the heat is for non-domestic purposes e.g. home office or workshop.
  • DEFRA’s 25-year Food and Farming Plan is being drawn-up by ministers and industry representatives and will be published next year. DEFRA, however, appears to have agreed a reduction in its budget ahead of the comprehensive spending review. A budget reduction of 8% over the next four years is expected.
  • Three of the UK’s environmental bodies have launched legal action against DEFRA, accusing the government of failing to protect rivers and wetlands from agricultural pollution.
  • Pig farmers share of the retail price of pork has fallen to 34%, the lowest level for 11 years. Farmgate prices are 16% lower than October 2014.
  • A leaked letter obtained by the Ecologist magazine from Amber Rudd, Energy Secretary, has said that the UK is likely to miss its renewable energy target of 15% by 2020. 11.5% is the current estimate according to the leaked letter.
  • The annual Game Fair will be held in 2016 at Ragely Hall, Warwickshire, after new backers were found.
  • Sugar beet quotas will come to an end in 2017 and growers are being asked to consider pricing options. Options may include 1) an annual price negotiation in advance, set 9 months before planting (the current position) 2) a market derived price link under which growers could benefit from changes in world sugar prices with perhaps an agreed minimum 3) pricing determined under longer contracts than one season, offering growers more stability.

More from our agriculture experts

You can find all of our latest agriculture 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.

Martin Wilmott is a partner at Hawsons

Martin Wilmott acts as lead engagement partner for a wide range of corporate and non-corporate clients in the Doncaster office, especially in the Legal and professional, agricultural, transport, property and construction, manufacturing, healthcare and hospitality sectors. For more information or advice on anything covered in this article please contact Martin on [email protected] or 01302 367 262.

Approval of changes to the SRA Accounts Rules granted

Approval of changes to the SRA Accounts Rules granted

Approval of changes to the SRA Accounts Rules granted

You may remember some of our previous articles regarding the changes to the SRA Accounts Rules following the announcement in May 2014 that the regulatory body were reviewing the requirement for all firms of solicitors who hold client money to submit an annual accountant’s report.

Following that review, the SRA proposed that the significant changes to the SRA Accounts Rules would be implemented using a three-phrase approach of regulatory reform, which commenced in October 2014.

We discussed Phase Two, the relaxation of Reporting Accountants’ requirements, in detail when the initial plans were announced in July 2015. Those changes to SRA Accounts Rules were, however, subject to approval.

We run SRA Accounts Rules training courses. Find out the details here.

Rule 39 vs Rule 38

That approval has now been granted, meaning that these further changes to the SRA Accounts Rules (Phase Two) will take effect for accounting periods ending on or after 1 November 2015. In short, Rule 39 has been removed and replaced by an amended Rule 38.

The amended Rule 38 brings changes to the SRA Accounts Rules that will be welcome news for the majority of UK law firms, as accountants will now be encouraged to exercise their professional judgment, to provide a more risk-focused, audit style approach to reporting. Rule 38 will also see changes that may benefit smaller law firms, through additional exemption in regards to the requirement to have an external accountant’s report.

This means that in the future there are likely to be far fewer qualified reports.

What will the changes to SRA Accounts Rules mean?

This announcement is the latest step in the process of simplifying the SRA Accounts Rules, moving away from the obligatory ‘one size fits all’ process and towards proportionate and targeted regulation.

The SRA has acknowledged that Rule 39 was prescriptive and now, with an amended Rule 38, is encouraging the use of professional judgement rather than mandatory regulation. Both of the key changes arising from this approval – the relaxation of regulatory burden on smaller law firms who are relatively low risk and the requirement for accountants to exercise professional judgement in their reporting – will be welcome news for the sector.

Of particular benefit to law firms will be the greater emphasis on accountants exercising their professional judgement which will give greater scope when deciding what to report on. This change, along with the removal of the need to qualify reports for trivial breaches of the accounting rules, will give accountants the flexibility to assess the risks to client money, giving law firms greater value for money. You should now start talking to your accountant about what these latest changes may mean for your law firm moving forward. Overall the changes to SRA Account Rules, which are a fundamental reconsideration of the rules as a whole, bring welcome news. Further changes to SRA Accounts Rules are also planned and remain in the pipeline. We will keep you updated with ongoing developments.

SRA Accounts Rules training courses

The Hawsons specialist legal sector team provide in-house SRA Accounts Rules training courses – including a detailed overview of all 52 rules – for law firms of all sizes across the UK. Our SRA Accounts Rules training courses are suitable for all fee earning staff, compliance/risk officers, accounts and finance staff and practice managers working within a law firm.

Given the significance of recent developments and proposed changes to the current SRA Accounts Rules, it is important that you stay up-to-date with the rules, including common breaches and how to avoid them.

Find out the details of our SRA Accounts Rules training courses here.

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]

Free initial meeting

Solicitor Newsletter Sign-Up

Agriculture Autumn Statement 2015 review

Agriculture Autumn Statement 2015 review

Agriculture Autumn Statement 2015 review 

On 25 November, the Chancellor delivered his latest Autumn Statement. In a year which has already seen the two Budgets and a General Election, and on the back of a volatile market and erratic weather conditions, agricultural businesses were perhaps uncertain about what this year’s Autumn Statement might bring. There were also strong rumours that the Chancellor’s comprehensive spending might see the disbandment of DEFRA, so that will undoubtedly be a key focus for the sector.

In this article we summarise the key points arising from the Autumn Statement and focus specifically on what the changes may mean for the agriculture sector.

In summary (general):

  • Tax credit cuts scrapped all together
  • £12bn in targeted welfare savings to be delivered in full
  • Small business rate relief to be extended for one more year
  • NHS to receive £10bn more funding a year in real terms by 2020
  • Basic state pension will rise by £3.35 to £119.30 a week
  • New 3% surcharge on stamp duty for buy-to-let properties and second homes from April 2016
  • Doubling of housing budget to £2bn a year
  • Capital funding of transport projects to rise by 50%
  • Increased devolution with 26 new or expanded Enterprise Zones announced
  • Transport (37%), environment (15%) and energy (22%) departments all face funding cuts 

Read our in-depth Autumn Statement 2015 key details and summary

 

Autumn Statement 2015

In summary (agriculture specific):

 

  • DEFRA to face 15% cut in funding; much less than the anticipated 30%
  • Government to continue to prioritise funding for flood defences
  • DEFRA to reduce administrative budgets by 26% by 2019-20

More from our agriculture experts

You can find all of our latest agriculture 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.

Martin Wilmott is a partner at Hawsons

Martin Wilmott acts as lead engagement partner for a wide range of corporate and non-corporate clients in the Doncaster office, especially in the Legal and professional, agricultural, transport, property and construction, manufacturing, healthcare and hospitality sectors. For more information or advice on anything covered in this article please contact Martin on [email protected] or 01302 367 262.

Transport & logistics Autumn Statement 2015 review

Transport & logistics Autumn Statement 2015 review

Transport & Logistics Autumn Statement 2015 review

On 25 November, the Chancellor delivered his latest Autumn Statement. In a year which has already seen the government commit to investing in the sector, transport & logistics firms were perhaps quite positive about what this year’s Autumn Statement might bring. A spending review for UK transportation was promised as a key focus, with capital funding for additional transport projects forecast to increase.

In this article we summarise the key points arising from the Autumn Statement and focus specifically on what the changes may mean for the transport & logistics sector.

In summary (general):

  • Tax credit cuts scrapped all together
  • £12bn in targeted welfare savings to be delivered in full
  • Small business rate relief to be extended for one more year
  • NHS to receive £10bn more funding a year in real terms by 2020
  • Basic state pension will rise by £3.35 to £119.30 a week
  • New 3% surcharge on stamp duty for buy-to-let properties and second homes from April 2016
  • Doubling of housing budget to £2bn a year
  • Capital funding of transport projects to rise by 50%
  • Increased devolution with 26 new or expanded Enterprise Zones announced
  • Transport (37%), environment (15%) and energy (22%) departments all face funding cuts 

Read our in-depth Autumn Statement 2015 key details and summary

 

Autumn Statement 2015

In summary (transport & logistics specific):

 

  • Capital funding of transportation projects to increase by 50%
  • London to get £11bn investment in transportation infrastructure
  • 37% cut in Department for Transport operating budget
  • Pressing ahead with construction of HS2 beginning this Parliament
  • Continued devolution of transport powers to mayor-led city regions (e.g. Sheffield City Region)
  • Largest road investment since 1970s
  • Highways England given £15 billion for better roads
  • Permanent national pothole fund announced
Autumn Statement transport & logistics impact

Transport infrastructure – biggest investments in decades

Paul Wormald, Partner at Hawsons, commented: “Overall, this year’s Autumn Statement and spending review brings good news to the transport & logistics sector. As the sector is arguably the linchpin of the British economy, investing in transport is critical to our long-term economic growth. This significant additional capital funding for our road and rail networks is therefore absolutely essential and is indicative of the Northern Powerhouse. Although it must be noted that many of the big transport infrastructure projects the Chancellor spoke about had already been announced. Nevertheless, it is good to see ongoing commitment and the green light given to press ahead with plans.”

“How will the big cut for the Department for Transport – actually the biggest of all government departments – impact the delivery of these transport projects? That is a question many will be asking after the department’s operational budget was slashed by over a third.”

Transport Secretary, Patrick McLoughlin said: “This settlement is a great boost for the future of Britain. Faced with difficult decisions on the public finances we could have rolled back our ambition on transport. Instead, we are choosing to invest for the future by increasing capital investment in Britain’s transport network by 50% to £61 billion over this Parliament. This will support jobs, enable economic growth and bring our country closer together.”


Other impacts

Paul Wormald, Partner at Hawsons, commented on other possible transport & logistics implications from the 2015 Autumn Statement: “Out of the other key announcements from this year’s Autumn Statement it was good news for the smaller transport & logistics firm. The extension of the small business rate relief for another year and the introduction of an apprenticeship levy are both welcome announcements. Of course, with the apprenticeship levy, larger business will be the big losers. In conjunction with the forthcoming burden of the new National Living Wage, wage costs are rising significantly, and without much notice.”

“One of the other issues, which was hidden away in the details, was the government’s decision to ‘explore the sale’ of its 49% shareholding in NATS (National Air Traffic Control Service). We will have to wait and see for further details on this, but a sale looks increasingly likely.”


For more information

More from our transport and logistics experts

You can find all of our latest transport and logistics 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.

Paul Wormald is a partner at Hawsons, working in the Doncaster office. He worked previously with two national firms of Chartered Accountants prior to joining Hawsons in 2001. For more information or advice on anything covered in this article, please contact Paul on [email protected] or 01302 367 262.[/author_info]