At last, this outdated and bizarre “slab” tax structure has been overhauled by the Chancellor in yesterday’s Autumn Statement.

Before….

MC910217016 150x150 AS 2014: Making Sense of SDLTPreviously,when you purchased a residential property you would have been subjected to Stamp Duty Land Tax (SDLT) at 1% on the entire purchase price if it was between £125,000 and £250,000, at 3% on properties priced at £250,001 to £500,000 and 4% if the price was over £500,000.  More hefty rates apply once you are dealing in properties over £1m.

After….

Today (4th December 2014), we have a banded tax structure more akin to income tax.

Up to £125,000 the SDLT the rate is still 0% but then buyers will pay at 2% on the portion up to £250,000.  The value above £250,000 and below £925,000 will attract 5%, then 10% up to £1.5m and 12% over that.

So….

Simply put, when buying your first home or even a modest family home, this change wont have much impact financially, but exceed the current £250,000 threshold and the savings can be substantial.  Buy yourself a mansion and you’ll be wondering why you didn’t do it yesterday!

Purchase Price £120,000 £249,999 £250,001 £300,000
Old SDLT £0 £2,500 £7,500 £9,000
New SDLT £0 £2,500 £2,500 £5,000

George Osborne claims that 98% of buyers will pay less under the new structure.

A bigger impact in the future?

For me, this change is not just about updating the tax system and helping the average home owner, this is a fundamental shift that I think will have a major impact on the property market.

Until now, there has been a false ceiling price because a buyer offering to pay £250,001 would pay £5,000 more SDLT than someone offering £249,999.

thumbs up 150x150 AS 2014: Making Sense of SDLTWithout this ridiculous slab tax system, more freedom to offer a true market price will prevail. The true forces of supply and demand can start to work their magic and those who wish to develop their family home currently worth around £240k can do so knowing that they don’t have to cap their potential payback at £250k.

Hallelujah for common sense; not something I can say very often when talking about tax!

Paul Broadhead, head of mortgage policy at the Building Societies Association agrees that it will “smooth out the crazy tax jumps buyers have suffered around the top of each band”

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

I am a great believer in focusing on things in life I can control, or at least influence.  I have never understood friends and colleagues whose mood on a Monday morning reflects the results of their beloved football club that weekend.  They are investing emotional energy in to something that they have no influence at all over.

I am sure there is more to sport that I simply don’t understand and I accept it has entertainment value and that personal time to unwind is crucial; but imagine what you could achieve if your time, money and emotions were invested in YOU?  Your behaviour is something you can control.

Why?

decision cube 150x150 If you can’t control, influence.  If you can’t influence…….Life is a continuous flow of decisions, and very few of us have the privilege of time on our hands.

I have often heard it said that “we all have the same 24 hours in each day” so why is it some of us manage that time better than others?  Why are some of us so much more successful than others?  I don’t know, I am not a consultant in that field, but I do know that by giving things I cannot control very little priority I can focus on choices that deliver happiness, success and personal satisfaction.

Private

In my personal life this can be simple things such as lying on my youngest son’s bed helping him to colour in a cartoon character or reading a story.  It can be teaching my eldest son tricks to help him develop his confidence with Maths, or sitting on the side-line of a cold and wet Rugby pitch each Sunday morning.  I know that this investment in bonding with them and developing their characters will provide the family with happiness for many years to come.

Work

In business, this focus on what I can control can be seen in my communication with my team and my attention to managing my network of clients, professional contacts and networking colleagues.  I also invest in a coach who ensures that I am accountable to my own goals and helps me to improve sales techniques, time management challenges and dealing with difficult people.

KPIs 150x150 If you can’t control, influence.  If you can’t influence…….Of course traditional KPI’s (key performance indicators) such as margins, productivity, sales budgets, customer payment trends and improving customer satisfaction should be at the heart of any business owners agenda, but these are only of use if (perhaps with the help of their accountant or business coach) they can find ways to positively influence the results they achieve, otherwise they are simply a way of benchmarking your success (and failures).  You see, without focus on the areas you can personally control, monitoring KPI’s can actually be demotivating or even destructive.  You may inadvertently find yourself using external forces such as the economic climate as an excuse for not meeting your targets.

priorities 150x150 If you can’t control, influence.  If you can’t influence…….So…..

What could you focus on that would influence your success or that of your family in the short term and long term?

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

Despite a severe lack of resources, the HMRC task force responsible for seeking out landlords that do not declare income from property, is gaining momentum in Cambridgeshire.

Significant exposure

In the last few weeks, I have seen a couple of incidences where HMRC have given landlords a chance to declare all via their online disclosure process, in the hope that they can recover some of what they estimate to be £500m of unpaid tax.  The Council of Mortgage Lenders suggest that there are more than 1.5 million buy-to-let mortgages in the UK, so the potential is significant.

The let property campaign cleverly uses other sources of data to select and then contact investors where a self-assessment record is not present, for example Council Tax records, Stamp Duty Land Tax returns, lending data and regular bankings.

tax return 150x150 HMRCs Let Property Campaign buildsReal life

In the examples I have personally seen in the past few weeks, the taxpayers have been naïve to the fact that they should have been declaring citing reasons such as HMRC’s website being misleading, professionals that help acquire properties not giving advice and negative cash flow suggesting that there was not any income to declare.  Unfortunately ignorance is not a great defence and when it comes to taxation it certainly isn’t bliss.

I have written about the dangers of relying on the HMRC website before.

The latter reason of negative cash flow (expenses exceeding income) is a common one, but cash outflow does not always equal a tax allowable deduction. For example if you have a repayment mortgage (as opposed to an interest only loan) then you will be paying back capital.  Only the cost of finance, i.e. the interest element is allowable for tax.

Also, making a loss is not a reason for not recording your property transactions on a Tax Return, as losses could come in handy in  later years when you do turn a profit.

Need help?

If you are worried about properly disclosing your property investment to HMRC, please give me a call on 01480 426500 for a free, no obligation consultation.

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

 

home blessing 150x150 Majority of young adults dont own their home, or aspire toRecently I have been discussing with local lettings expert Terry Lucking, how the rental market may change as a result of an increasing supply of rental houses and a growing number of older first time buyers many of which have been renters with less impetus to buy a property than their parents.

Supply and demand or just a change in attitude?

Research from LV= shows over half (52%) of adults in the UK aged under 36 live in a home they don’t own.

What’s more, new research from protection specialist LV= shows that this trend is likely to continue as the younger generation’s attitude to renting is changing.

42% of renters aged between 20 and 35 are completely happy to rent for ten years or more and claim that it’s not important to them whether they ever end up owning their own place.

New generation thinking

LV=’s research figures indicate that a significant shift in attitudes to renting is taking place. Whereas nearly all of the previous generation of Brits polled (those now aged between 55 and 75) saw owning their own property as the ‘ultimate goal’ (93%), only a third (33%) of people under 35 now feel the same way.

In line with this, half of all renters (43%) no longer see bricks and mortar as a sign of success, and almost three quarters (70%) say the notion that it’s in some way shameful to never own a property is completely out of date.

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

After a considerable consultation period the Statement of Recommended Practice (SORP) for Charities 2005 has been replaced, with TWO new Charity SORPS!  These will need to be applied to accounting periods beginning on or after 1st January 2015.

Two Versions

between two options 151889594 150x150 New Charity SORPs publishedThe first is for medium and large entities and will be referred to as the FRS102 SORP, after the accounting standard which has recently been introduced to bring the UK more in line with international accounting standards (IFRS).

The second, FRSSE SORP is based on pre-FRS102 requirements and can only be used by small entities as defined by the Companies Act 2006 i.e. it meets two of the following three criteria:

  • Income less than £6.5m
  • Assets less than £3.26m, and
  • Fewer than 50 employees.

These thresholds have recently been increased in the EU, so it is expected that they will increase in the UK too, in the near future.

Like using FRSSE for commercial enterprises, the FRSSE version of the SORP will require less disclosure, for example, it provides exemption from publishing cash flow statements and computing present values of long term intercompany balances.

Key changes

Lord Hodgson 116x150 New Charity SORPs publishedHowever the main purpose of updating the SORP was to provide guidance to Charities on how to apply UK accounting standards and to increase transparency of results, primarily as a result of Lord Hodgson’s review of the effectiveness of Charities in 2012.

Other than there now being two versions and both being split up in to “easy to read” modules, the key message as you might expect, is transparency and even more emphasis on impact reporting.

Other key points for those preparing the financial statements of charities to look out for are:

  • Holiday pay should be accrued for (FRS102 only)
  • If possible, income from donated goods should be valued
  • The definition of heritage assets has changed
  • Any grants to institutions must be disclosed
  • Related parties now include employees
  • The Trustees Report must be clear about reserves policies and state why they are held.
  • All Trustees must be listed, regardless of number

Finally, elements of the SoFA have been withdrawn, for example the governance costs category in the name of simplicity and others renamed such as “voluntary income” will now be shown as “income from donations and legacies”.  I am not sure this really provides any clarity, and most will chose to provide additional information in a note to the accounts instead.

Toni May2014 150x150 New Charity SORPs publishedMore guidance

If you need more assistance there are some useful help sheets at http://www.charitysorp.org/ or of course you can call me on 01480 426500.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

In December 2011, extra-statutory concession B47 (AKA the “renewals allowance”) was abolished,  but it was unclear as to whether this change only related to furnished property.

property taxes icon Allowable expenses against rental income: Are you entitled to a 10% tax deduction?After being pressed for clarification, HMRC published guidance in May 2014.

Previously….

Up to 5th April 2013, anyone letting a qualifying property had the option of either taking a deduction against rental income for the actual cost of replacing furniture and appliances (but not the initial purchase of either category) within the property; or making a claim for the 10% wear and tear allowance against rental income if it was furnished.

 

Now….

1355743123 065652c3e8 m Allowable expenses against rental income: Are you entitled to a 10% tax deduction?How your expenditure is treated will depend on whether it is in respect of

i.   Plant: items that are relatively large and durable;

ii.  Tools of the trade:  such as crockery and cutlery, bed linen and cushions but not carpets, sofas, beds and free-standing cookers and fridges;

iii. Repairs: of the asset in its entirety.

This change has caused a lot of confusion and many have argued that there is still too much ambiguity.

Time for a change of strategy?

Landlords may now decide that it is worth investing in a few white goods and some beds to make the let furnished so that the 10% allowance is available to them.  This would certainly be beneficial where rent yield is high such as city centre locations and a no brainer where HMOs/student lets are concerned.

GH logo notag 150x114 Allowable expenses against rental income: Are you entitled to a 10% tax deduction?More information…

MLRL Allowable expenses against rental income: Are you entitled to a 10% tax deduction?

If you are unsure about what you can claim for, or would like to know more about how your property can qualify for a deduction equal to 10% of rents received, George Hay are teaming up with local lettings experts, Maxine Lester Residential Lettings to deliver a free seminar in the Autumn.  This event will be by invitation only and with limited places; if you want to be certain of an invite, contact Tania Fullalove on 01480 494939 to register for regular lettings news.

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

Risks and Rewards

SocMed icons A quick guide to creating a social media policy for your business

Social media can be a massive asset to business.

Not just in the obvious ways for marketing your brand or for connecting with your customers, but in unexpected ways; in how it creates a sense of collegiate identity for your staff even a “personality” for your business.

 

Under control?

But nothing is free or without risk. Social media means that publishing a document or making a post on a site is not the end of the conversation, as it would be with more traditional forms of media. Instead it is the beginning of the conversation and what’s really worrying its not in your control. At all. Also it is everywhere. For businesses to control what happened on a PC’s was easy. But social media is everywhere, on all sorts of devices.

10 years ago you might have sat in a meeting that was tedious, but your correspondence afterwards would be professional and action orientated. Now we can know the location, have an update in the meeting or even a dreaded selfie. LOL! innocentface#

Drafting your policy

So when your considering drafting a policy to protect your business here are some key considerations.

Do:

  • Your policy should encourage appropriate use of social media.
  • It should ensure that individuals understand they are responsible for what they publish on social media
  • Prohibit employees from using social media in ways that may damage the company.
  • Provide training on the appropriate use of social media and advise them that you will monitor for compliance.

drunk selfie A quick guide to creating a social media policy for your businessDo not:

  • Allow employees to disclose or misuse confidential or company information.
  • Permit employees to use social media to harass colleagues.
  • Impose unnecessary restrictions on employee use of social media.

Narrative of a Social Media Policy

Communicate clearly on the company expectations for employee use of social media.

Detail in either a stand-alone social media policy or through a section in your employee handbook. Use the statement to remind employees that social media activity is not necessarily private and that the employer can discipline employees or conduct that breaches in the social media arena, just as in other arenas.

Also that online conduct that is harmful to the company can amount to misconduct or even gross misconduct.

The policy statement should consider the following areas:

  • Use of company IT resources;
  • Disclosure of company intellectual property or confidential information;
  • Protection of third-party intellectual property;
  • Protection from harassment, discrimination or bullying of other employees;
  • Negative comments about the company, its employees, business contacts or competitors.

Management considerations for effective implementation

  1. Train employees. HR or line management should detail there is employee monitoring and enforcement of the various company policies, restrictions, guidelines and contract provisions relating to social media. All action taken by the company is done in compliance with employees’ privacy rights.
  2. Avoid imposing unnecessary restrictions. Disproportionate restrictions can undermine employee morale and invite non-compliance, without real benefit to the company in terms of protecting its property, reputation or employees.

 

Richard Hughes 240x300 A quick guide to creating a social media policy for your businessThis straight forward, but important guidance was kindly provided by Richard Hughes.  His company, Click HR Limited advises, coaches and provides training through professional pragmatic HR advice.  You can contact him to discuss your social media policy challenges by email or by calling 01604 289650.

ClickHR Logo sm2 A quick guide to creating a social media policy for your business

 

 

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

The introduction of compulsory registration of all churches regardless of the excepted status has been delayed once again.

Compulsory Registration

The Charities Act 2006 (and now s.30 of the 2011 Act) stated that Churches would no longer be able to avoid registering with the Charities Commission and publishing their accounts in the public domain; but implementation of the new ruling seems to be a moveable feast.

The already extended deadline of 31st March 2014 is in the dim and distant past and a recent amendment to the Charities (Exception from Registration) Regulations 1996 suggests that the Commission will suggest giving further grace until at least 2021.

5511559120 f1d017c615 m Churches avoid additional regulation for a little longerWhat is an Excepted Church?

A charitable church is required to register with the Charity Commission unless it is exempt or excepted, with most being excepted.

This excepted status is achieved by proving that the charitable church is

  • used wholly or mainly for public religious worship,
  • has annual income of less than £100,000
  • already supervised by an oversight body (listed by the commission) that has clear guidance about the management and financial operations of the Church, and
  • not using the new CIO structure

Examples include most Baptist Churches, PCC (Parochial Church Council) and the FIEC (Fellowship of Independent Evangelical Churches) members.

The Commission has always had the power to demand that a church registers with them if they have reason to believe that further supervision is needed.

What will this change mean?

The short answer, additional compliance burden.

In a similar way to charitable companies being answerable to the demands of the Charities Commission/Charities Act and Companies House/Companies Act, previously excepted churches will have to report to their current oversight body and the Commission.

This will involve submitting accounts that consider the guidance of both their oversight body and the Charities SORP to both bodies.  They will also need to complete the Commission’s Annual Return.

In his 2012 review, Lord Hodgson recommended that the compulsory registration be phased over 3 years, by gradually reducing the £100,000 exception limit, but that suggestion has yet to be included in any Commission guidance.

Fortunately for me, the excepted Churches I act for are governed by the PCC whose accounting guidance closely reflects the SORP, so it should be a simple matter of filing the accounts and annual return with the commission.  Fingers crossed!

Further Guidance

If your charity or church needs guidance about it’s reporting responsibilities, please do not hesitate to give me a call on 01480 426500.

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

52873351bc40c The Naughty Step Childrens Wall Sticker 300x232 Charities put on the naughty stepThe Charity Commission has recently sent final warnings to over 70  charities, who have failed to submit annual reports or accounts for at least two of the last five years.

Previous warnings ignored

According to reports, each of the charities has an annual income exceeding £250,000; and have been contacted previously by the Charity Commission and were told that they will be tarnished with the “double defaulters” black mark if the continue to fail to meet reporting deadlines.

Charity status at stake

Those with this indelible black mark will with out doubt be top of the list when it comes to selecting organisations for inspection and could easily jeopardise their charity status if they fail to satisfy the Commissions inquiries.

Support is at hand

8755031604 4c7381ce2f t Charities put on the naughty stepAs the holder of an ICAEW issued Diploma in Charity Accounting, I can help these forlorn organisations to get back on track, develop robust systems and to publish accounts that demonstrate public benefit and inspire stakeholders to continue their support.

Make sure your organisation’s charitable status is never in doubt. 

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.

Another quality business development tip from by Caroline Robinson of Sandler Training in Cambridge.

Hate asking for introductions so avoid doing it?

10772137703 bc1df2e195 m Do you avoid asking for referrals?Do you hate asking for introductions as much as I do, so much so that you never do it, or “forget” to ask?  You know it’s the best way to grow your business so why procrastinate? How can we ensure we do it systematically and effectively?

Firstly commit to doing it and be clear about what is a good referral for you.

Then, at the beginning of your meeting, lay your cards on the table, own up to your issue and get them to help you solve it.

An example

‘Being completely honest with you I have a problem. I hate asking for introductions but as I’ve committed myself to growing my business I’ve made a promise that I can’t leave without having asked you.  Can you help me with this? 

When we get to the end of this meeting please can you remind me to ask you if there are any other business owners you know who may be interested in X, Y, Z? ‘

What have you got to lose?

10797722765 1cf2c9b607 m Do you avoid asking for referrals?Try it.  You may be surprised at the results you get and very soon it becomes a lot easier to ask for referrals.

 

To find out more about how to get these things right more often in your business come to the next Business Leaders seminar. Click here for more details,  or here to sign up to the Sandler monthly newsletter with practical sales and prospecting tips.

 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If you found this post interesting/useful please share it with your social network and/or bookmark it.  Also, your comments are always valued and will help me to write new posts that are relevant to readers of this blog.