Retail Autumn Statement 2016 review

Retail Autumn Statement 2016 review

Retail Autumn Statement 2016 review

Philip Hammond presented what was to be his first and the last Autumn Statement on Wednesday 23rd November as he announced that going forward the budget will be in the Autumn with a Spring Statement replacing the current one.

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

In Summary (general):

  • the government reaffirming the objectives to raise the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament.
  • reduction of the Money Purchase Annual Allowance from £10,000 to £4,000.
  • Insurance Premium Tax to rise from 10% to 12% from June 2017.
  • tax and National Insurance advantages of salary sacrifice schemes to be removed.
  • anti-avoidance measures for the VAT Flat Rate Scheme.

In addition the Chancellor announced the following pay and welfare measures:

  • National Living Wage to rise from £7.20 an hour to £7.50 from April 2017.
  • Universal Credit taper rate to be cut from 65% to 63% from April 2017.

In the March Budget the government announced various proposals, many of which have been subject to consultation with interested parties.

In summary (retail specific)

 

  • National Living Wage set to increase by 30p to £7.50 per hour from April 2017.
  • Corporation Tax to fall to 17% by 2020.
  • Benefits offered by the Salary Sacrifice Scheme are to be restricted from April 2017.
  • £6.7bn package to reduce business rates.
  • £400m investment to help small business finance.
  • Productivity Investment Fund worth up to £23bn.
Autumn Statement Retail Impact

National Minimum Wage to rise


Pete Wilmer, retail specialist and Partner at Hawsons, had this to say: “This year, the Chancellor announced a couple of things that will directly affect the retail sector. The first being the restrictions on tax-free benefits for the Salary Sacrifice Scheme, this will impact retailers who use this scheme to attract and retain employees. Therefore, companies will have to make a decision between keeping the schemes and offsetting the cost themselves, or remove the schemes completely and risk upsetting key employees.”

“The National Living Wage is also set to be increased by 30p to £7.50 per hour from April 2017. This wasn’t unexpected, but some retailers may struggle to implement the new Living Wage.”

“On a more positive note, a Productivity Investment Fund worth up to £23bn to focus on innovation and infrastructure is definitely good news for the sector, as is the £6.7bn package to reduce business rates and the £400m investment to help small business finance.”

“Overall, a mixed reaction to the Autumn Statement, with potential issues arising from the restrictions on the Salary Sacrifice Scheme and the increase to the National Living Wage. However, some good news with the Productivity Investment Fund, reduction in business rates and the investment to help small business finance.”


For more information 

More from our retail experts

You can find all of our latest retail 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.

Pete Wilmer partner

Pete Wilmer heads up the firm's Corporate Finance service offering. Having worked in the corporate finance arena for many years with a national accountancy practice and with a major corporate bank, Pete has a wealth of experience and a track record of delivering first-class outcomes for clients. You can contact Pete at [email protected] or 0114 266 7141. [/author_info]

Stephen Allender joins Hawsons

Stephen Allender joins Hawsons

Stephen Allender Joins Hawsons

Hawsons are pleased to announce that Stephen Allender has joined the firm as a Senior Tax Manager.

Stephen is a Chartered Tax Advisor and member of the Association of Taxation Technicians. He has worked in tax since 1997 having gained a wealth of experience working for top 20 firms and in-house for a leading global law firm. Stephen specialises in giving advice for all areas of taxation, including corporate, personal, capital gains, inheritance tax and pensions.

Stephen will work primarily from the firm’s Sheffield office, but will also assist clients in Doncaster.

Stephen said: “I’m really excited to join Hawsons and look forward to working with clients from around the Yorkshire area on all aspects of taxation.”

Stephen Allender is a Senior Tax manager at the firm. He advises on all areas of taxation, including corporate, personal, capital gains, inheritance and pensions. For more details and advice, please contact Stephen on [email protected] or 0114 266 7141.

Charity Autumn Statement 2016 review

Charity Autumn Statement 2016 review

Charity Autumn Statement 2016 review

Philip Hammond presented what was to be his first and the last Autumn Statement on Wednesday 23rd November as he announced that going forward the budget will be in the Autumn with a Sprint Statement replacing the current one.

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

In Summary (general):

  • the government reaffirming the objectives to raise the personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament.
  • reduction of the Money Purchase Annual Allowance from £10,000 to £4,000.
  • Insurance Premium Tax to rise from 10% to 12% from June 2017.
  • tax and National Insurance advantages of salary sacrifice schemes to be removed.
  • anti-avoidance measures for the VAT Flat Rate Scheme.

In addition the Chancellor announced the following pay and welfare measures:

  • National Living Wage to rise from £7.20 an hour to £7.50 from April 2017.
  • Universal Credit taper rate to be cut from 65% to 63% from April 2017.

In the March Budget the government announced various proposals, many of which have been subject to consultation with interested parties. Draft legislation relating to many of these areas will be published on 5 December and some of the details may change as a result.

In summary (charity specific)
  • Repeat of the way gift aid is run which should provide an extra £60m for the charity sector by in the next five years, and £125m extra for museums and galleries.
  • Government remains committed to spending 0.7% of GDP on overseas aid. However, the bleak economic outlook means that sum could fall by £80m in 2017/18 and by £210m in 2018/19
  • Increase in National Living Wage from £7.20 to £7.50 an hour from April 2017
  • £3m from tampon tax will be given to women’s charities by Comic Relief
  • Firms who are fined breaking Libor rules will provide £102m for armed forces charities – including the Defence and National Rehabilitation Centre at Stanford Hall.
Autumn Statement Charity Impact

Charity sector largely overlooked?


Simon Bladen, Charity Partner at Hawsons, had this to say: “I think overall the Autumn Statement was somewhat of a non-event for charities. Although there were some interesting proposals in a Statement which largely focused on infrastructure and transport. I truly hope that devolving greater power to local authorities will at least have some positive impact on the sector.”

“Unfortunately, the increase to the National Living Wage could push up costs for some charities for no additional return. Overall charities play a very important role in building the economy and I think sooner or later we need to see a response acknowledging that fact.”

Caron Bradshaw, Chief Executive of the Charity Finance Group, said this: “We have seen tens of billions promised in infrastructure spending, business rate cuts and personal tax cuts. Most of this has been financed by greater levels of borrowing. There isn’t a lack of money, there is simply a lack of political will to support the valuable work of our sector.”


For more information

More from our charity experts

You can find all of our latest charity 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]

Fundraising Regulator Levy

Fundraising Regulator Levy

Fundraising Regulator Levy

You may or may not have heard of the new regulator in the charity sector.  The Fundraising Regulator (FR) came into being in July 2016 and is now responsible for the Code of Fundraising Practice.

This code sets out the standards expected of fundraising organisations across the UK.  The regulator is responsible for keeping the code up to date and also investigating complaints against a charity’s fundraising activities. The FR is a voluntary, independent regulator in England and Wales. Charities with headquarters in Scotland are committed to self-regulation for fundraising and are instead overseen by an Independent Panel which the charity regulator in Scotland oversee.

In order to fund the FR, there is a new levy on a number of fundraising organisations along with a registration fee system.

Letters from the FR to those organisations subject to the levy started to land in the autumn of 2016 and this may have been a shock to many charities.

How is the Levy Calculated?

The levy calculation is based on data from the Annual Returns made to the Charity Commission for the year ended 31 December 2014.  If your charity is an exempt charity, a flat rate levy is due to be charged instead.

The amount charged is based on bandings determined by the level of spend on generating voluntary income.  All charities with a spend over £100,000 per the 2014 Annual Return are being included in the levy and will automatically be sent a letter closely followed by an invoice, requesting payment within 30 days.  The amount of the levy ranges from £150 to £15,000 depending on how much was spent on generating voluntary income. Exempt charities are charged a flat rate of £1,000 per annum.

The levy is a fixed rate for three years and will be paid annually. In 2017 and 2018, the invoices are expected in the month of June.

Do you have to pay it?

The levy is voluntary but it you want to be registered with the FR, you will have to pay it.  Registration with the FR will entitle charities to use the FR logo to show donors that they have signed up to the code of practice.  This replaces the previous Fundraising Standards Board (FRSB) tick-mark. The charity name will also be published on the FR website and the FR note that this will act as a public sign of commitment to good practice.

So, while you do not have to pay it, you do need to consider what message it sends to your donors if you are not registered with the Regulator. The government has reserved powers in the Charities (Protection and Social Investment) Act 2016 to enforce payment of the levy if necessary.

What if you haven’t received a letter?

If your spend on generating voluntary income was below £100,000 on your 2014 annual return, you will not be subject to the levy and hence will not automatically receive a letter and invoice from the FR.  You can however register with the regulator voluntarily.  The registration fee is £50.  The registration scheme is due to open in the winter of 2016 but you can sign up to receive updates about the work of the FR on their website.

What other things are the FR doing?

The FR has recently concluded a consultation into launching a Fundraising Preference Service.  The scheme is intended to work in a similar way to the mail preference service where people can register to ‘opt out’ of fundraising communications from charities.  The proposal is that these ‘opt outs’ could be specific to telephone calls, mail, fundraising communications or all communications.

The final arrangements will be published soon and will impact how you communicate with your donors in the future.

How can we help you?

We will continue to keep you updated on developments in the charity sector and particularly regarding the work of the FR.

If you have any specific questions over the Fundraising Levy, registering with the FR or the Fundraising Preference service, please do get in touch with us.

More from our charity experts

You can find all of our latest charity 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]

Contactless payment popularity rises

Contactless payment popularity rises

Contactless payment popularity rises 

Contactless payment cards were introduced to the UK in 2007 and initially, the public were reluctant to accept them. Fast forward almost 10 years and one in every five card payments people make is contactless. It was in 2016 when contactless cards really started to gain popularity and this is shown when the first six months of spending in 2016 surpassed the amount of spending for the whole of 2015.

In June of this year, payments made using contactless cards accounted for 18% of total UK spending. According to industry data and taking into account the current growth rate, growth will have most likely surpassed 20% at this present time. This is in stark contrast to October last year when the figure was at just 10%

When contactless card payments were first introduced, it remained largely in just coffee shops and sandwich chains, but with the surge in popularity has moved way beyond that.

Although contactless payments are seen as a more convenient (and easier) way to pay, there are many people who still worry about falling victim to fraud. The worry stems from the fact that you don’t need a pin to make any payments, so if a potential fraudster manages to get hold of someones card, all they need to do is place the card on to a card reading machine and they could potentially steal your details and pay for goods.

However, fraud on contactless devices remains relatively low with £2.8m of losses in 2015 which is equivalent to just 3.6p in every £100 spent using contactless cards.

Facts and figures

According to the UK Cards Association, between the 1st January and 30th June this year, around £9.27bn was spent using contactless cards. This amount easily surpasses that of 2015, which was a total spend of £7.75bn. In early September, it emerged that the use of contactless payments has now overtaken cheques.

Less than one-third (31%) of Brits used cheques in the three months up to April whereas contactless debit and credit cards were used by 39%. As many as 97% used cash during this period, according to research from Mintel.

Maximum spend limit increased

The maximum spend for a contactless payment was £20. However, this rose on the 1st September last year to £30. This was viewed as an important move because data showed that the average spend in Supermarkets was worth just over £25 so, with the maximum spend increasing, it encouraged the big retailers to get more involved.

However, it is surprising to know that the average amount of money spent per transaction is still below £10 with October last year recording an average of £7.72 and £8.60 recorded in May and June this year. Other countries such as Australia and Canada have a maximum limit of $100 (£57) and $100 (£58) respectively, although there are no current plans to increase the maximum limit here in the UK.

Banks and retailers

Although HSBC supply contactless debit cards, they don’t supply contactless credit cards and the reason is unknown. Similarly, Nationwide have more than five million debit cards that support contactless payments, but also do not supply contactless credit cards. However, they will be offering contactless credit cards to its customer base anytime now.

Supermarkets have also embraced the technology, with big chain Tesco adopting contactless payment machines which makes paying much more convenient for a lot of consumers.

This is in contrast to John Lewis, however, who says they are not planning on using the technology in any of its 46 locations because the average value of transactions exceeds the maximum spend of £30. Although its Waitrose stores did launch the technology back in 2012.

Demographics

Data issued by both Barclaycard and Nationwide have differing opinions, with Barclaycard saying that the contactless cards are most popular with the over 60’s and have now surpassed the 18 to 25 year-olds. However, data published by Nationwide suggests something a little different, by saying over 55’s are “the most wary” when it comes to making payments with contactless cards.

Only 45% of over 55’s have taken up the new technology compared to the 25 to 34 year olds, whose number stands at 70% for the total amount of take-up.

Almost four in 10 of all card transactions under £30 in London are made by contactless cards, which makes it the leading city in the country in terms of contactless payments, according to Barclaycard. Meanwhile, just over half of all Brits now use contactless cards.

Pete Wilmer partner

Pete Wilmer heads up the firm's Corporate Finance service offering. Having worked in the corporate finance arena for many years with a national accountancy practice and with a major corporate bank, Pete has a wealth of experience and a track record of delivering first-class outcomes for clients. You can contact Pete at [email protected] or 0114 266 7141. [/author_info]