Hawsons Chartered Accountants was founded in the city of Sheffield in 1854 – more than 25 years before the creation of the Institute of Chartered Accountants in England and Wales – by Alfred Allott and John Hewett.
Hawsons remains one of the longest-standing independent firms of chartered accountants in the UK. One of the main reasons why clients choose Hawsons is not just because of our experience and expertise in accountancy but the high-quality advice and service our team delivers.
Our mission is to provide our clients with service of the highest quality and value in a professional, friendly, and responsive manner, to assist them to develop their business, to develop the maximum potential of our people and thereby be the leading independent practice in the area.
Our unrivalled history demonstrates that through many periods of change, we have evolved as a business to ensure we continue to remain relevant to our clients, providing them with the quality and breadth of service they need. Clients understand that irrespective of how small they are when they become a client or how large they will grow, Hawsons will always be there for them.
Our belief in long-term client relationships is why we offer all prospective clients a free initial meeting so we can really get to know you and your business and you can get to know us.
Chris Hill, Senior Partner at Hawsons, said on the firm’s development: “We’re proud of our extensive history and the success we’ve achieved since we were founded in Sheffield 165 years ago. To have reached such an age and still be going strong is a great feat. Despite our company’s growth and expansion into other areas across the UK, we’ve stayed true to our philosophy that no matter what size or sector, every business we work with will always receive the same high standard of advice and service from our team.”
If you are looking for an expert accountant book your free initial meeting with us here.
If you would like to find out more about us visit our website here.
Inheritance tax is a tax on the estate of someone who has died, and with property prices continuing to rise along with the recent introduction of the residence nil rate band (RNRB), the number of people that will become liable for inheritance tax will only increase. In this article, we look at a few key things that you need to know regarding inheritance tax.
Reviewing your Will
It is often thought that having a will in place can reduce your inheritance tax liability. In actual fact, the main function of a will is to state who will inherit your assets. With legislation continuously changing, it is recommended that you check your will frequently, maybe even as regularly as every four to five years. This reduces the chance of something in the legislation changing and having to pay unnecessary tax.
Joint tenancies are very common nowadays, and both tenants have equal rights to the property. But what happens if one of the tenants dies? Everything is passed on to the surviving tenant with zero inheritance tax and, for this instance, the nil rate band (NRB) and residence nil rate band (RNRB) are also passed over. This means that the new tapering rules will apply if the estate is worth more than £2m following the death of the second tenant and if it is worth more than £2.2m (as of 2017) the full RNRB allowance will be lost.
Frozen nil rate band
If the value of an estate is below the current NRB of £325,000, there’s usually no tax to pay. Married couples and civil partners can have a joint allowance of £650,000, but any assets above these two figures come with a tax of 40%. HMRC has frozen the NRB, which was set in 2009, until April 2021 and therefore as assets continue to rise between now and 2021, people will continue to own estates that are worth more than the £325,000 limit. This means that they will be held liable for inheritance tax.
There can be exemptions for example, on the first death when the estate passes to a spouse/civil partner, there would usually be no tax to pay. Gifts to charity do not incur inheritance tax and if they exceed 10% of the value of your estate, it could reduce your inheritance tax rate from 40% to 36%.
The NRB and RNRB are transferable
As the heading says, both the NRB and the RNRB are transferable between married couples and civil partners. This means that the unused percentage of the RNRB or the NRB can be transferred from the estate of one spouse to the other and then claimed back upon the second death.
Multiple homes don’t qualify
In order to qualify for the RNRB relief, you can only elect one residential property. The only people who can elect the appropriate estate are the personal representatives of the estate. Buy-to-let properties, as well as any other properties that have never been their main home are excluded.
Property will be treated individually
Property is an area that will eat into the NRB, or in some cases, exceed it. However, families are aware of this and causes them to give or ‘gift’ the property to their children. This could reduce their liability to inheritance tax but, as a consequence, remove security and control of owning a home and could be considered as a gift with reservation. As a result of this, the new RNRB has been be introduced by the government and will be phased in over a four-year period, starting from the 2017/18 tax year. This will be available to everyone. Regardless of whether the child is step, foster, adopted or linear descendants upon death, the RNRB is only available when the main residence is passed over to children.
Nigel Smith, Director of Hawsons Wealth Management Limited, had this to say: “Inheritance Tax is a voluntary tax. You can plan to effectively reduce your inheritance tax payable upon death.”
In 1994, the Government launched a scheme called ‘The Enterprise Investment Scheme’ or EIS for short, and this scheme was created in order to encourage individuals to invest in companies that were in the early stage of their lifespan. It was regarded as an alternative source of funding to more customary sources of capital.
Investing in any company comes with its risks, but it could be said that there are more risks associated with investing in a company that has only just been set up. This is why tax breaks are available in order to balance that risk, while also rewarding the investment. Since its introduction, over 24,000 companies have received investment and as a result of the scheme, over £14.2bn has been raised. Over £1.8bn was raised under the EIS in 2016 alone, according to the HRMC & National Statistics Report back in October.
What are the tax benefits to EIS investors?
EIS offer a number of favourable tax incentives due to the extra risk that comes with investing in smaller businesses, and these are:
30% upfront income tax relief – increased from 20% in April 2011 to a maximum £1m investment in any tax year and shares are held for a minimum of three years. This means you could have a maximum tax reduction of £300,000 in any one tax year (providing you had the tax liability to cover this amount). The tax relief is set against the year the shares are purchased.
After two years you can claim 100% inheritance tax relief;
100% capital gains deferral for the life of the investment;
Tax-free growth and;
How can I access EIS companies?
Prospective investors can either invest in an EIS ‘fund’ or in single companies. An EIS fund is actually a Portfolio Service usually via a discretionary fund manager. It consists of a manager, who has expertise in EIS or unquoted companies, using their knowledge to select a portfolio of EIS qualifying companies. There are multiple different investment strategies available covering multiple sectors.
Natasha Fathers, Independent Financial Adviser at Hawsons, had this to say: “With the introduction of the tapered annual allowance on pension funding for clients who are high earners; alternative investments such as EIS are definitely forming a greater part of our discussions around financial planning.”
Natasha has achieved Chartered status and is a senior member of the team at Hawsons Wealth Management. You can contact her or the team at [email protected] or 0114 2296557.
According to HMRC figures released last month, over 230,000 people have used the new pension rules, introduced one year ago, to access over £4.3bn in pensions saving.
Since the pension flexibility rules took effect from 6 April 2015:
232,000 individuals have accessed their money flexibly;
Over £4.3bn flexibly accessed through 516,000 payments;
In the most recent quarter, 74,000 individuals withdrew £820m, and;
In the previous quarter, 67,000 individuals withdrew £800m.
The figures above are taken from information voluntarily reported to HMRC by pension scheme administrators from 6 April 2015 to 31 March 2016. It is not mandatory for scheme administrators to flag these up as pension flexibility payments until April 2016. HMRC statistics cover ‘flexible payments’, which means partial or full withdrawal of the pension pot, taking money from a flexible drawdown account, or buying a flexible annuity.
The new pension rules in summary
In April 2015, the private pension world underwent unprecedented changes as the government introduced significant new pension rules to give people the ability to access their private pensions savings how and when they want. The new rules came into effect just over a year ago and were/are, on the whole, beneficial for most savers.
The principle changes were:
No need to take an annuity on retirement or at age 75;
The potential for people aged 55 or above to withdraw all or part of their pension fund;
Monies taken will be part tax-free cash with the balance treated as income;
Ability to pass on pension funds to any beneficiary on death, and;
Take partial benefits from pension funds.
The 2015 changes were the biggest shake up to UK pensions ever and, although mainly beneficial, they brought with them a number of complexities and new considerations for savers to make.
Understanding the pensions system can sometimes be a detailed and complex process, particularly when you are thinking about how you can make the most of the new pensions rules.
How we can help
The changes have given savers greater simplicity, choice and flexibility, making pensions a more attractive option for saving than ever before. The changes have also opened up exciting tax planning opportunities, both in regards income tax and inheritance tax. We recommend that you take your time to understand your options following the changes, and seek sound and proactive independent financial advice as what you decide now will affect the rest of your life.
If you would like advice on the new pensions rules, including your tax implications, please contact us.
If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.
The law on workplace pensions has changed with the recent onset of auto enrolment. There are hundreds of thousands of smaller companies across the UK approaching their staging date, and between now and April 2017 millions of workers will be automatically enrolled into a workplace pension. Auto enrolment is the law and you must act now. As an employer, you’re responsible for enrolling all eligible employees into your scheme (and contributing to it), providing they meet certain criteria.
We would advise you start talking to your pension adviser as soon as possible, preferably with more than nine months to your staging date (ideally twelve), to build a timescale and agenda to make sure it all falls in to place. Those that wait may face bigger costs.
Costs (including fines) will soon build up…
A key point to note here is that pension solutions are not necessarily free and some of the large insurance companies will charge employers a service fee to have their pension scheme. The ability of pension providers to provide solutions is becoming a real issue of capacity and if you delay your auto enrolment preparations you will likely be charged a more expensive service fee. The difference in fees can be quite high.
Watch out for big fines too. The Pension Regulator is clamping down on businesses who fail to comply so any delay is risky. Regardless of their size, firms can be fined £400, with the possibility of further escalating fines.
Free auto enrolment seminars – be fine, not fined!
The law on workplace pensions has changed, but there are still many cloudy areas surrounding the regulation, particularly eligible employees and employer duties. We would therefore like to invite you to one of our seminars on preparing for auto enrolment, by Erica Dietsch, Independent Financial Adviser at Hawsons Wealth Management Limited.
Does my existing scheme meet minimum criteria?
Are there enough schemes left for me?
Will I be able to get a scheme at short notice?
I am a new business, when is my staging date?
What if I am a sole director, do I have duties?
What if I do not have any staff?
If you have any questions regarding auto enrolment, including those mentioned above, then please come to one of our free seminars in September and October – Sheffield (29 September) – Doncaster (1 October) – Northampton (8 October).
The seminars will provide an overview of auto enrolment and employer duties, covering who the new law applies to and what you need to do as an employer. You will also have the opportunity to ask our Hawsons Wealth Management Limited experts any additional questions.
Hawsons is one of the longest standing firms of independent chartered accountants in England
Formed in December 1854, Hawsons celebrates 160 years of providing expert advice to businesses of all types and sizes. Our clients know that irrespective of how small they are when they become a client or how large they grow; Hawsons will always be there for them.
With around 100 staff across three offices in Sheffield, Doncaster and Northampton, Hawsons provides the breadth of expertise of some of the largest firms of accountants. Just as importantly, Hawsons also provides the highest quality of service and personal delivery of a local independent firm that is increasingly sought after by today’s successful business owners.
Speaking about this momentous year for the firm, Martyn Weatherall, Senior Partner said:
“We’re proud of our extensive history and the success we’ve achieved since we were founded in Sheffield 160 years ago. Especially with the difficult economic circumstances of recent years, to have reached such an age and still be going strong is a great feat. Despite our company’s growth and expansion into other areas across the UK, we’ve stayed true to our philosophy that no matter what size or sector, every business we work with will always receive the same high standard of advice and service from our team.”
The firm’s history
Richard Frost, Partner at Hawsons, has prepared the following summary of the firm’s history:
George Hawson was four years old when the firm that now bears his name was founded.
At the age of 16 he was teaching at his old school, Ashley House in Worksop and planning a career in the Ministry of the Church of England. However, a serious illness persuaded him that he needed to adopt a less strenuous vocation …. accountancy. He enrolled as a clerk to Alfred Allott who had built up what The Accountant magazine described as “one of the most important practices in the North of England”.
In 1854, over a quarter of a century before the creation of the Institute of Chartered Accountants in England and Wales, at a time when Sheffield had more straw hat makers than accountants, Allott left the employment of The Sheffield and Hallamshire Bank after 13½ years, the directors recording in the bank’s minutes “the high opinion they entertain of his ability, industry and conduct”.
He set up as a public accountant with John Hewett who advertised in The Sheffield Independent in late December 1854:
“Gentlemen – I beg respectfully to inform you that I have taken into partnership Mr Alfred Allott … whose business qualities, urbanity and manners, strict integrity and extensive commercial experience peculiarly qualify him for the position of Public Accountant and Confidential Agent”.
And so, as Hewett and Allott, the firm began in Central Chambers in Sheffield High Street, in December 1854.
(Above) The Chamber
Over the next 20 years Sheffield grew more rapidly than any other town in the country on the back of its burgeoning steel and engineering industries, fuelled by local coal and serviced by developing railways. And whilst Hewett left to become the first company secretary of John Brown & Co when it incorporated in 1864, the practice continued to develop.
By the early 1870s Alfred Allott was a widely known and respected figure. He was the auditor of the Midland Railway and was a specialist in the financing of railways and collieries; called in to investigate the affairs of the Scottish Caledonian Railway when it ran into trouble. With the introduction of limited liability he promoted many local publicly quoted companies – Midland Iron Company; Truswell’s Brewery; Samuel Fox; Davy Brothers; Joseph Rodgers; William Cooke, Brown Bayley and Dixon; Joseph Peace and Sheffield Forge and Rolling Mills to name but a few.
Elected to the Town Council in 1867 he became one of twelve Alderman in 1873 and was put forward as a local parliamentary candidate for the Liberal party. He sat on the School Board and was prominent in the local Congregational Church providing land and funds for the building of several chapels.
But this highly respected establishment figure, like many of his era, could not resist risk. Besides his accountancy practice, he owned a colliery at Pitsmoor, Renishaw Iron Works at Eckington, the Newbridge Iron Ore Company in Northamptonshire and a mine in Cornwall. And then he borrowed to invest £132,000 – many millions in today’s money – in land in far away Tennessee and Georgia, in the USA. He had hoped to exploit the land for its mineral wealth, but a prolonged worldwide slump followed, and in November 1876 Allott went bust.
This is where George Hawson came in; with Allott resigning from his accountancy practice with his then partners Thomas Hadfield and John Kidner and Hawson appointed partner in his place.
In an age where scandal meant ruin, surprisingly bankruptcy often attracted sympathy, perhaps because it happened to so many around that time, including the Lord Mayor. Within months Allott returned to the partnership and the firm moved to what were described as ‘sumptuous’ premises at Hartshead in 1878, where it was to stay until 1970. He was the first President of the Sheffield Institute of Accountants in 1877 and, three years later, a founder council member of the National Institute. By then he had moved to London, and by 1882, with Thomas Hadfield having set up on his own and John Kidner having moved to Northampton, Hawson was the sole partner remaining.
Mergers in Sheffield, Doncaster and Northampton
Hawson’s son Grafton joined the practice and when George retired in 1919, aged 69, Grafton merged firstly with Edgar Jenkinson and in 1926 with Hubert Nicholson. Subsequent mergers with long established Sheffield firms, A. Leslie Wing & Co. in 1946 and Hubert Smith in 1963 set the foundations for the current Sheffield office. In 1986 the firm moved to Northampton by joining up with Dutton & Co, and in 1990 merged with Harold Moon & Taylor in Doncaster. The latest merger took place just over a year ago with another long established and well known Sheffield firm, Holmes Widlake.