Member Blog

At last it appears that we’ve reached, or will shortly reach the peak of COVID-19 pandemic, meaning that the curve of infection should begin/continue to flatten and decline. And with that, should follow the relaxation of the lockdown, meaning we’ll start to see businesses re-opening allowing us to abandon our home offices and head back to those places of work we left so many weeks ago! But we’re going back to a strange new place of work; it won’t be like going back to work after the Christmas break, and it’s unlikely to be ‘business as usual’ – by any stretch of the imagination. With social distancing and hygiene measures likely to practised until the end of the year, companies will require a range of health and safety products to ensure the safeguarding of staff and customers.  So over the last week or so we’ve been adding products to our Expert Banner website – to help you prepare for the return to your office. And many of these products are ‘ready to go’ – no artwork required. We’ve included vital social distancing tools such as floor stickers, banners and sneeze guards, along with a range of health advice signage, sanitiser stations, posters, strut cards and flyers. You can see our product range here. But please check back regularly, as I’m ‘on this’ now, and will be adding new products on a regular basis. If there’s something specific that you’re looking for, please drop me an email and i’ll do my best to source it for you. Stay safe!

Profits (and losses) for farm businesses are known to fluctuate quite substantially year on year for a number of reasons which are often beyond the control of the farmer.  For an arable farmer, the quality and yields achieved are affected by weather patterns and the effect of uncontrollable pests and weeds, such as flea beetle and blackgrass. Global commodity prices and the value of the pound also dictate the selling price achievable for harvested crops and livestock, as well as input prices for inputs.

The current tax system also adds to the potential fluctuations with the ability to claim 100% tax allowances (the Annual Investment Allowance) on up to £200k (£1m up to 31 December 2020) of machinery purchases each year, through the capital allowances legislation. This can cause substantial peaks and troughs in taxable profits being reported to HMRC each year. The impact this has on personal tax is substantial and this is why for many years farmers and market gardeners have been able to benefit from a well-known tax adjustment known as ‘farmers’ averaging relief’.

The positive effect that farmers averaging relief can have is twofold:

• it can help to keep taxable income below certain tax thresholds and utilise tax allowances to reduce the annual tax burden; and
• there can also be a cash flow benefit with reduced payments on account for the following tax year.

Since 2017, taxpayers eligible for the relief have been able to benefit from an extension to the rules, allowing for the taxable profits to be averaged over either five tax years or two tax years, and have the option to decide which method to use on a year by year basis. This has provided welcome relief to some taxpayers from potentially onerous tax liabilities.

Aside from the headline Income Tax rates, there are other considerations to be made when deciding whether or not to claim farmers’ averaging relief in any given tax year:

• will this affect our ability to access finance?
• will child benefit be repayable in any given year?
• will this impact the ability to gain a full state pension?
• will pension contributions gain maximum tax relief?
• are Gift Aid payments being fully utilised?

If you have any questions, please get in touch with your usual contact at MHA Larking Gowen, or email enquiry@larking-gowen.co.uk

You can find contact details on the Our People section of the MHA Larking Gowen website.

Andrew Whiting

Although it may feel like it was only yesterday that you finalised your self-assessment tax return for the 2018/19 tax year, the uncertainty arising from the COVID-19 pandemic means there is more value than ever in supplying us with the information required to complete and file your 2019/20 tax return early; the potential benefits may include:

• cashflow – if you have a tax liability, early calculation of what you owe should allow you more time to plan payment. If you are due a repayment from HMRC, this could be repaid to you more promptly following an early submission of the return. HMRC has announced extensions for the payments of some taxes as detailed in our blog here https://www.larking-gowen.co.uk/insights/blog-tax-payment-deferrals/.
• tax planning – if your affairs have changed in the year, or you anticipate making key decisions that will affect your future, early completion of your tax return allows for consideration of planning opportunities that could mitigate the tax payable in the future and help manage the challenges ahead.
• making time for you -taking a proactive approach in addressing your tax affairs well before the January deadline will allow you to focus on the things that matter the most to you and your business.

If you have any queries, or would like to discuss your self-assessment tax return or payments on account, please get in touch with your usual MHA Larking Gowen contact in the first instance or email:

enquiry@larking-gowen.co.uk

Cindy Chaplin

If you have previously dismissed claiming child benefit as your income is over the £60,000 per annum threshold, now is a good time to review your situation and maybe start to reclaim.

In these unprecedented times, and with the introduction of the governments Job Retention Scheme (Furlough), many individuals may see their income levels go down. Individuals placed on the 80% Furlough scheme who previously earnt £60,000 (or just over) will now be receiving under £50,000 and may become eligible to claim child benefit. Alternatively, you may see a reduction in your rental or self-employment income.

As it is not known how long such reductions are likely to go on for, or the long-term effects, child benefit may provide you and your family with some extra cash each month.

For the 2020/21 tax year child benefit rates are £21.05 per week for your first child and £13.95 per week for subsequent children. Meaning a family with two children could be entitled to £1,820 a year.

Please be aware however, that a claim for child benefit can only be back dated for three months so you will need to act sooner rather than later to initiate a claim from the beginning of the tax year.

Information on eligibility and how to make a claim can be found on HM Revenue & Customs website here; https://www.gov.uk/child-benefit

Should you make a claim and at the end of the tax year your income exceeds £50,000 but is less than £60,000 you will be required to submit a tax return and repay a proportion of the benefit received. The amount repayable is 1% for every £100 earnt over £50,000. If you earnt over £60,000 the full amount will be repayable via your tax return. The deadline for submitting your 2019/20 tax return online and making the repayment will be the 31 January 2022.

As many families are in different circumstances each case would need to be reviewed on an individual basis. However hopefully this blog gets you thinking about other ways you can ease cash flows.

If you have any questions, please get in touch with your usual contact at MHA Larking Gowen, or email enquiry@larking-gowen.co.uk

You can find contact details on the Our People section of the MHA Larking Gowen website.

Sally Farrow

The COVID-19 pandemic is touching all aspects of our lives. Even though the Government is providing comprehensive support through this difficult time, the personal financial circumstances of many will be dramatically affected by the crisis.

This poses a particular set of challenges to residential landlords, whose income is determined by their tenants’ ability to make rental payments. This may be particularly concerning because renters have been given enhanced protection against eviction. So what can be done if these tenants can’t or won’t pay?

Although this question is mainly a legal one, here are some practical tips which may help before it comes to this.

Honest and open communication with tenants is key. This is a difficult time for everyone and adopting an open-minded, proactive approach may help you and your tenants to understand each other’s situations and perspectives. This may allow you to agree a course of action that provides a way forward satisfactory to both parties.

Is it possible to reduce your expenses?

• Homeowners and landlords can now apply for a three-month mortgage payment holiday by contacting their lender; many of whom have other supportive measures in place, such as payment holidays on personal loans and credit cards, and allowing early access to savings. Contact your lender to find out what support they may be able to offer.
• Check the terms of your rental contracts and identify any expenses which your tenants are obliged to meet, perhaps council tax; the pandemic does not automatically relieve all legal obligations.
• Consider which expenses are essential and whether some could be paused or stopped, perhaps maintenance contracts and other subscription services that you aren’t contractually obliged to sustain.
• If you also have income subject to self-assessment, could you reduce your tax deductions with a change to your tax code?

If you or your tenants need temporary financial support throughout the duration of the crisis, make sure you understand what’s available. This is changing all the time, but consider:

• Making use of government schemes to support incomes, such as the job retention scheme and the self-employed scheme (note that renting property on its own doesn’t qualify).
• If you’re due to make a payment on account in respect of your personal tax or would be liable to HMRC for a VAT payment, read about your ability to defer that payment.
• Can your tenants access universal credit or housing benefit? Although a landlord owning a rental property will be unlikely to have access to universal credit, depending on a tenant’s circumstances, they possibly will.

As always, if you need more help and advice regarding your rental situation, we suggest you speak to a legal or financial professional.

If you have any questions about your personal tax affairs, please get in touch with your usual contact at MHA Larking Gowen, or email enquiry@larking-gowen.co.uk

You can find contact details on the Our People section of the MHA Larking Gowen website.

Ed Millsted

Most companies are trying to figure out what their marketing strategy should be in this unprecedented crisis. Here are a few pointers which we hope you will find useful.

Take Action Now

Don’t hide away and wait for this to blow over. It’s important to do something now to make sure that your brand comes through this in a strong position. Doing nothing will make your brand weaker when things start improving.

Talk To Your Customers

Find out what challenges your customers are facing and how you can help them. They may have many questions about how the COVID-19 crisis will impact on your service and product delivery. Phone lines may be overloaded so make sure you answer all your questions on your website. Set up a COVID-19 FAQs page and ask them to email questions. Also use social media to communicate with your customers and answer any questions they may have.

Increase Social Media Presence

Increase your social media activity with posts to help your customers and knowledge leadership articles that will be useful to them. This is a good way of keeping your brand in front of people especially when most people are at home working, looking after children etc.

Design a Website or Set up a Facebook Page

Many small independent businesses in retail and hospitality can’t rely on footfall now. Start engaging with your customers online as fast as you can with a small website or a Facebook page. See how you can serve your customers online by innovating and using digital. What products can you deliver? Can you provide a service online through video? This crisis will change business and how we do things, so make sure your business has a plan.

Google My Business

If you are a local business then now is the time to get on Digital Marketing then please get in touch with us.

Bigfork 01603 513080

Like many of you reading this I’m working from home (on my newly acquired yoga ball) with one eye on the children who are today “back at school”.  So far, so good, heads are bent over books and laptops and the timetables we drew up together are being followed. However, I’ve little doubt that at some point this week they will be torn up or abandoned as the motivational challenge gets too great.

Keeping up our motivation and staying focussed is hard when you’re working with uncertainty, when you’re dealing with things you’ve never dealt with before and you’re constantly bombarded with information.  In this situation it’s difficult managing the day to day, let alone carving out the space and time to think clearly about “what next”, let alone what comes after “next”.  As a Business Improvement District (BID), supporting over 500 businesses across the retail, hospitality and leisure, professional services and public sectors that’s what we need to try and do.  Up until now, our primary role has been to promote King’s Lynn town centre as a place to visit, shop, relax, work, do business. It’s about boosting footfall and dwell time, shining a light on all the brilliant sights and services that you can find in our town.

Clearly that role isn’t appropriate right now so instead we’ve focussed on signposting our members to reputable and reliable sources of advice, connecting them to people and organisations that might be able to help. We’re listening and gathering issues to champion with our local authority and MP, and collecting up ideas and information from other BIDs and national sources to fuel our thinking about “what next”.  

Working on recovery and beyond recovery to thriving excites and motivates me, guided in part by a blind optimism that things will get better and by the everyday stories of businesses who are adapting and developing. Piecing together ideas to form a plan will involve more listening, understanding, mapping and gathering inspiration from right across the sectors that we support, as well as tapping into the mood of the consumer; there’s a lot of talking (and reflecting) to be done!

In addition, I will draw on the invaluable insights and experiences of our national bodies; British BIDs, ATCM and The BID Foundation who at this time are undertaking very similar tasks to us as a BID, just on a different level. They have been working to ensure that Government is receiving evidence and information about the impact of Covid-19 on town centre economies as well as the impact on organisations like BIDs.  This latest survey for MHCLG will provide specific data relating to occupiers and landlords, it will be used to further understanding about the vulnerability of particular places and will inform decisions about programmes of support. If you can find 5 minutes with a cuppa to complete it, your input would be much valued.

Take part in the survey survey now.

Facing the challenges and causes of climate change and reducing energy emissions have become a major concern for both businesses and governments. And, while approaches such as electric cars and the UK’s Clean Growth Strategy are a step in the right direction, much remains to be done. Many private organisations are trying to reduce greenhouse gas emissions, while others are trying to reduce their fuel consumption to help meet their target. Whatever the reason for their efforts, much of the solution lies in cutting back on excess waste in today’s complex supply chains.

Businesses need to be aware that sustainability is not just a concern for businesses and regulators. Consumers are also becoming more environmentally conscious, so companies trying to reduce their carbon footprint are in a position to benefit from higher sales and increased customer loyalty.

The transition to an environmentally friendly business model means tackling the increase in unnecessary waste in the supply chain. According to experts, overproduction and over-purchase of materials can account for five to eight percent of all waste. Poor inventory management and unnecessary transport of goods are also major waste in the supply chain. Any activity that results in pointless stock movements will increase the carbon footprint of the supply chain without good reason.

How ERP Software Helps

Business management solutions, such as enterprise resource planning (ERP) or material requirements planning (MRP), create seamless communication between sales, planning, inventory, store floor, procurement, administration, and finance. ERP software solutions provide instant updates and analytics, which in turn increases efficiency and transparency throughout the supply chain.

How is it good for the environment? Management systems, such as ERP or MRP, synchronise supply with demand while monitoring losses and waste. Companies can now think about relocating production, packaging and possibly other operations to bring production closer to customers.

Millions of companies have already turned to ERP software to make their processes more efficient and profitable. These companies also understand that the same functions that increase their results also help them achieve environmental goals, such as reducing CO2 emissions and reduce waste.

Reduce Fuel Consumption and CO2 Emissions

Fuel efficiency starts with forecasting and planning tools that help companies optimise full container transport. Without these management tools, the cost of shipping partially filled containers and wasted fuel will pay for the organisation and the environment. On the other hand, advanced demand planning that includes real-time visibility saves money and reduces emissions.

Fuel-saving strategies are also based on smart route management when delivering products. ERP software helps companies develop efficient route schedules to achieve optimal fuel economy, better driver efficiency and less damage to the environment.

Manufacturing software (eg ERP or MRP) makes it possible to anticipate requirements and deliver the right goods in the right quantities to the right place more efficiently. The main goal is to minimise deficiencies and reduce the costs of ordering, transporting and storing goods, thus saving fuel and reducing emissions.

Going Paperless

Reducing a company’s dependence on paper is good for the environment. Paper-based organisations are less efficient, more prone to error, and have a slow decision-making cycle. ERP software minimises typical paper paths and increases functional visibility, resulting in improved decision-making at every level of the organisation.

ERP solutions no longer require the use of paper for sales orders, purchase orders, packing slips, invoices, reports, shipping and confirmation messages, and many other documents. Switching to a paperless business saves your business money and is a green solution. It is more efficient and increases the number of people who have access to the information they need with just a click of the mouse.

MRP software enables your business to integrate data across the organisation by creating detailed, paperless reports for advanced business information and decision making. ERP solutions provide businesses with easy-to-use tools and database mining capabilities to generate, store, and retrieve information as needed. Printing and storing paper reports is a thing of the past, as is the large carbon footprint they help create.

Minimising Returns and Charge-Backs

Retailer compliance issues can be painful for both your business and the environment. Although these charge-backs can significantly drain profits, they also leave a large carbon footprint due to the return and re-shipment of the product. Manufacturing ERP software helps you solve these complex retail problems by enabling refund collection, validation, contesting, and recovery.

Production Software Helps the Environment and your Business

Cutting-edge MRP or ERP solutions are green because they improve business processes from sales to shipment. In the meantime, they help burn less fuel and remove most of the paper you once needed for everything from slipping to bills. By investing in a high-quality ERP system, you can optimise your approach to energy efficiency while facilitating the transition to technology that helps you change the way you communicate with the environment, save money and raise your brand image – all at the same time!

For more information about this topic, please see: MRP vs. ERP: Which Solution is Right for You?

The UK boasts one of the highest internet penetrations with almost everyone now online. Recent data shows 91% of adults in the UK have used the internet. By 2021, about 93% of UK internet users will have shopped online. 

Advances in technology, including augmented and virtual reality (AR/VR), artificial intelligence (AI), 5G connectivity and blockchain have started the 4th industrial revolution in the country. If you are an aspiring entrepreneur in the country, this is a great time to ramp up your investments.

The internet offers diverse opportunities for daring investors. Some of the biggest successful startups in the country have leveraged the latest technology to thrive. They include Streetbees, Revolut, Igloo, Trouva, Soldo, Elder, Guestready and Echo to mention a few.

This guide examines some business ideas that the internet has turned into successful businesses. It is a good place to seek inspiration for your startup.

Start a Blog

Blogs are all over and while this might not look like a great way to make money, you should not ignore it. Most people approach blogging with the wrong attitude and this inevitably leads to failure. You have to blog about something you know and are passionate about. More importantly, you have to add value to the lives of your target readers. This is the only way to boost traffic levels before you start monetising. One of the most lucrative blogging niches today is eSports. There’s an upsurge of eSports in terms of viewership and revenue. In 2018, eSports industry boasted over 165 million enthusiasts. This is in addition to over 215 million viewers who tuned in occasionally. If you started a blog on eSports, you have a rich market across the globe yearning for news, tips, results, live updates and much more. People will search and find your eSports betting site whenever they need tips.

Ecommerce Store

UK residents love shopping and this is evident from the success of most online stores. From fashion, food, jewellery to book and many other items, there’s no shortage of stuff you can sell on your online platform.

An eCommerce store is one of the most common ideas and with proper market research, it can easily pick up. You should offer value to your target customers to start out in the crowded market.

Software Development

Do you have a knack for coding, programming and everything to do with computers? If so, you should think of developing software to solve everyday problems.

Modern society has turned to technology for virtually everything from wellbeing, shopping to stock trading. With a well-designed mobile app or software, you can join the league of some of the most successful startups.

Stock Trading and Forex

You have most likely come across people promoting forex trading and many applications for doing so. Before you dismiss this as another online scam, take to understand how forex works, the legality of the trade in the UK, regulations, among other things. Find someone to train you and start with free trials if you wish to use trading applications.

Affiliate Marketing

Affiliate marketing is an ideal way to make money. As an affiliate, you’ll receive a commission for enabling a sale though you won’t promote products directly. You can sign up with an affiliate company and then advertise their products on your website or blog.

If anyone uses your link to go to the company’s website and makes a purchase, you get a commission. The startup costs are negligible, and as long as you have a great platform, you can rake in good money.

Final Thoughts

Thinking of setting up an online business in the UK? The market is vast and there’s a lot of potential across industries. Do your research and always start a business in a sector you love.

Thursday, 16 April 2020

When someone dies, their estate will still be liable for income tax and capital gains tax during the estate ‘administration period.’ This is the period during which the personal representatives apply for probate, collect in the deceased’s assets and pay their liabilities.

Estates are divided into two categories: complex estates and non-complex estates.

What are complex and non-complex estates?

Complex estates are where:

• The value of the estate exceeds £2.5 million
• Tax due (i.e. income tax and capital gains tax) for the whole of the administration period exceeds £10,000
• The proceeds of assets sold in any one tax year exceeds £500,000 (for deaths after 5 April 2016)

Non-complex estates are where none of the above criteria are met.

If the estate falls into the complex category, self-assessment tax returns will be required annually by 31 January each year in line with the usual self-assessment deadlines.

Informal payment arrangements

The personal representatives (PRs) of non-complex estates do not need to file formal tax returns. Informal payment arrangements can be used. The PRs simply provide HMRC a calculation of the amount of tax due at the end of the administration period and HMRC will issue a payment slip and reference number, which is to be used to make a one-off payment of the total tax due.

Need help?

If you need professional advice or assistance on probate or post-death tax matters, please speak to Ian Webster or Cindy Chaplin or or email probate@larking-gowen.co.uk. You can find contact details on the Our People section of the MHA Larking Gowen website.

We are accredited by the Institute of Chartered Accountants in England & Wales to provide probate services.

Ian Webster

Tuesday, 14 April 2020

This is widely regarded as a Chinese saying: “May he live in interesting times.” Well we certainly are doing that during this COVID-19 crisis. Business viability may seem secondary to keeping all your team fit and well, but really must operate in tandem.

Showing my age, I yearn for a reprint of a Law Society pamphlet called “The Expense of Time.” The basic format of salaries, direct costs, indirect costs and profit is a great financial model for a solicitors practice. However, if this is set up in a spreadsheet, you can perform simple variance calculations that enable you to see where profit and cash flow pinch points occur as you change the assumptions.

This is a vital exercise for legal firms as cash flow should hold up in the short term if you defer paying your VAT or income tax (in accordance with the government scheme), but you need to know what sort of problem this may store up for the future and how long you may need to take any loans out for. We know the banks have made loans available to professional firms already, but you still need a good business case that demonstrates how you can afford to repay it.

This can then help determine the number of people you may need to furlough, place on reduced hours or indeed make redundant. We all work hard to build our teams so we want to try to avoid big life-changing decisions (as far as possible), for what we all hope will be a short-term blip.

In looking at the short-term future, we’re all in the dark about the demand for our services, but carrying out a cash flow forecast by income stream will enable you to react as the situation changes, which is the one certain thing to happen. This should help you to work out the critical decisions, and it’s always better to sort finance out in advance than wait for it to become a crisis. This doesn’t need to be a big document, but something you will refer to and update.

Of course, we’re happy to guide you through the cash flow process and offer any support you need. Call 0330 024 0888 or email enquiry@larking-gowen.co.uk. You can also find contact details on the Our People section of our website.

Jon Woolston

B2B Cashflow Solutions’ role in the business community is to source and structure funding to help businesses with working capital and growth, however, since COVID-19, available resource has been re-focused on helping businesses to re-negotiate existing debt profiles with banks and commercial lenders, including restructuring, repayment ‘holidays’ and re-financing to consolidate.

Simon Reynolds, Director, explained; ‘We believe we have a duty of care as a leading independent finance intermediary to engage with the government, national platforms which provide a collective voice, and local authorities to ensure we are fully informed and able to challenge on behalf of SME’s, many of which are under significant stress.

During this process we have experienced a variety of feedback from those delivering the government’s messages, and those desperate for help.’

Focusing on his first of two key areas of concern, Simon commented; ‘The government has rightly recognised employees and the self-employed, but has so far failed to recognise the owners of around two million ‘limited company’ SME businesses which, on advice from their accountants, are modelled on owners deriving personal income through declaring dividends on the profits they and their businesses work hard to achieve.’

Sole-traders and partnerships (self-employed) are being afforded support by way of an average of their last three years’ (as applicable) annual HMRC self-assessments, therefore the amount self-employed individuals paid themselves from the profits of their business will determine the level of taxable grants they receive (restrictions apply).

This group accounts for around 4 million businesses in the UK.

SME limited companies represent an estimated further two million businesses in the UK, and yet so far the owners of these businesses have been overlooked despite these business owners relying on profits to remunerate themselves in a similar way to the self-employed (albeit via the declaration of dividends).

Whether self-employed, or a business owner by way of company shareholding, these individuals take substantially all the risks to establish, build, finance, and manage their business. They also create significant employment along the way.

The government has rightly taken substantial measures to protect the employees of businesses across the UK, but without help for business owners of SME limited companies, there remains a real risk that an element of this investment will ultimately prove futile if employees are forced to apply for Job Seeker’s Allowance alongside their employers.

Progressing to his second key area of concern, Simon shared data published by UK Finance (the collective voice for the banking and finance industry) in regard to the new ‘Coronavirus Business Interruption Loan Scheme’ (CBILS), which states that CBILS is struggling to have the desired impact.

With just 2,022 loans (totalling £291.9m) having been drawn at time of publication despite just over 300,000 applications having been made so far, a paltry 0.65% of applications have resulted in a CBI loan.

Simon commented; ‘The speed at which these loans re being processed will be a major working capital issue to many businesses trying to survive with little or no income. I am also concerned that many of these applications have not progressed because loans under the scheme have been declined by the scheme lenders’.

While the statistics would appear to support Simon’s concerns, he added; ‘We are aware of this because of the feedback we receive from our Relationship Manager colleagues within the banks who contact us for assistance on behalf of customers they have declined under the scheme, and directly by businesses seeking alternative help having been declined under the scheme.’

In summary, Simon added; ‘It is feasible that delivery of taxable government subsidies to business owners of limited companies to bring them into line with employees and the self-employed would help them preserve cash reserves for longer, and therefore offer a better chance for their business to survive.

‘It may also relieve the strain on the banks and other scheme lenders in what is proving a difficult, and arguably ineffectual CBILS process, which it is clear needs urgent improvement to optimise the number of businesses which may benefit before it is too late for them.

‘My concern is that with so many businesses not generating sufficient income (If any) under circumstances with an unknown timeline, business owners may be tempted to apply for this additional funding simply to pay existing creditors, or to draw personal funds via Directors’ Loans.

Assuming it is unlikely that this additional debt will prove a positive impact on the ability for businesses to generate profits, I foresee a potential debt repayment ‘time-bomb’ for many businesses and their owners.’

If you would like to add your voice to the Coronavirus Support Package for Directors / Shareholders of small Limited Companies to provide a COVID-19 support package in line with that offered to the employed and self-employed, please follow the link: https://petition.parliament.uk/petitions/310515