Government grants for charitable organisations

A £20 million fund to provide grants to around 250 organisations working in the voluntary, community and social enterprise (VCSE) sector has been launched by the government.

The Local Sustainability Fund, which will be administered by the Big Lottery Fund, will provide chosen organisations with money to implement organisational change and access professional advice and services.

The fund also hopes to give VCSE organisations the ability to utilise a wider range of skills and support by building relationships with local businesses. There will also be support offered when it comes to potentially bidding for public service contracts.

The scheme will use £20 million to provide funds to around 250 medium-sized VCSE organisations. A medium-sized organisation is 1 that has an annual income of between £100,000 and £1.5 million.

Organisations that meet the scheme’s eligibility criteria can apply on the Big Lottery Fund’s website.
Eligible organisations can apply by:

  • completing a free diagnostic tool which will automatically generate a sustainability report
  • this report must then be submitted to the Big Lottery Fund.

Rob Wilson, minister of civil society, said he hoped the fund will “establish cross-sector partnerships and build skills crucial to delivering sustainability in the sector.”

Dawn Austwick, chief executive of the Big Lottery Fund, said:

“We are committed to help build a stronger and more vibrant civil society and this funding will help put such organisations on a firmer and more sustainable footing to achieve this.”

Get in touch to discuss funding your organisation.

Flat rate state pension causes confusion

A third of over 50s say they do not have a clear idea about whether they will be better or worse off under the new flat rate state pension, according to Saga.

The insurance provider surveyed 10,010 people aged 50 and over about the introduction of the flat rate pension system in April 2016 and how they feel the changes will affect them. The results show significant confusion about how the new system will work and the effects on people’s standard of living.

The key findings of the survey are:

  • 25% think the new system will be generous
  • 16% think they will definitely receive the new pension
  • 33% think they will definitely not receive it
  • 7% knew how to make extra national insurance top up payments to secure a better pension.

People will be eligible for the new state pension if they are a man born after 6 April 1951 or a woman born after 6 April 1953 who has at least 10 qualifying years on their national insurance record. The government hopes the new system will boost the retirement income of the low-paid and self-employed, who typically fair less well with the current system.

Commenting on the research, Saga’s Paul Green said:

“Our research shows great confusion about changes to the state pension. Whilst there are a minority of people who are savvy who know how to make the most of what is on offer, it should not just be for [sic] savvy few to benefit.

“The government needs to do much more to raise awareness of the ways that people can boost their state pension.”

Get in touch with us today to start making the most of your pension.

Start-ups to hit record number in 2015

The number of new start-ups starting business in 2015 is expected to reach a record 600,000, according to StartUp Britain.

Figures from the Centre for Entrepreneurs, which administers the scheme, show that annual start-up rates have increased each year from 2011.

According to the Centre for Entrepreneurs, there were:

  • 440,600 new start-ups in 2011; and
  • 581,173 in 2014.

The campaign is estimating that this trend will continue and lead to a record 600,000 new businesses setting up this year.

The government-backed national enterprise campaign, which is now entering its fourth year of operation, will begin a national tour to inspire and support budding entrepreneurs. The tour is set to visit 25 locations across the country and will consist of opportunities for one to one advice and workshops on a variety of topics.

Matt Smith, director of StartUp Britain, said:

“Since StartUp Britain launched in 2011 we have seen record breaking numbers of people each year starting businesses, showing that the entrepreneurial spirit within Britain continues to grow.”

Contact us today to talk about starting your business

Summer Budget must provide stability and certainty, says CBI

The chancellor should use the Summer Budget on Wednesday 8th July to ensure that businesses of all sizes have the stability they need to drive growth, the Confederation of British Industry (CBI) has said.

The director general of the CBI, John Cridland, used a meeting with the chancellor to put forward a number of potential measures for inclusion in the Budget. The proposed measures are focused on boosting investing, sealing in deficit progress and creating jobs.

The CBI is calling for:

  • a plan to boost productivity through increasing firms access to long-term capital
  • the introduction of a business tax roadmap to provide clarity on the range of current business taxes
  • details on the fiscal rules regarding future deficit reduction
  • an increase in the Annual Investment Allowance to £250,000 from 2016.

John Cridland said:

“Firms of all sizes, especially ambitious, disruptive and growing ones, need to see the government build on welcome steps in the last Parliament to support investment.

“It should now act now to promote stability and certainty in tax policy through a commitment to introduce a roadmap which covers all business taxes.”

We can help you with your business tax. Contact us today.

HMRC relaxes PAYE late filing penalties

HMRC will begin relaxing automatic late filing penalties for people who send PAYE information late, officials have indicated.

The revenue said it would take a ‘proportionate approach’ instead of issuing automatic penalties in the event that an employer reports PAYE information late.

Investigations will now be concentrated on ‘the more serious defaults on a risk-assessed basis’. The move will allow HMRC to focus on serious cases of non-compliance, and to invest resources in educating employers on compliance issues.

The decision reflects the conclusions of a policy document published by HMRC in February 2015. The report argues that small automated penalties are costly and resource intensive for the revenue to pursue, and detract from its ability to pursue serious compliance failures.

The news comes after a leaked HMRC memo revealed that the revenue would no longer be investigating each individual late filing of self-assessment returns. Officials will now waive the £100 late filing penalty if people provided a ‘reasonable excuse’ on appeal.

Colin Ben-Nathan, chairman of the Chartered Institute of Taxation’s Employment Taxes Sub-Committee, welcomed the announcement:

“The requirement on employers to send PAYE information in ‘real time’ has proved difficult for some employers to comply with, especially the smallest and those whose employees have unpredictable working hours. It has imposed new and sometimes onerous obligations on employers.

“HMRC are right to have taken a pragmatic approach so far to the levying of penalties, initially not imposing them at all for smaller firms and now promising to concentrate on the most serious defaults.”

We can manage your payroll for you. Contact us today for more information.

Business rates review must create ‘fair’ system, says CB

The government’s ongoing business rate review must aim to create a ‘simple, fair and competitive system’, the Confederation of British Industry (CBI) has said.

The business organisation argued that the current system limits investment and impedes competition. It said a new system should be refocused onto promoting investment-led growth.

The CBI is calling for:

  • More frequent property valuations
    This will create a fairer system capable of reacting quickly to the changing economic environment. The CBI suggests introducing a 3-year evaluation period.
  • Raising rates in line with the consumer price index (CPI) instead of the retail price index
    This will ensure that business rates do not rise faster than the official CPI inflation rate. According to the CBI, the change would save ratepayers £1.5bn.
  • Exempting properties with a rateable value under £12,000 from paying business rates
    This will remove the cost of business rates for many small businesses. The CBI also argues that this would also enable efficiency savings which could be reinvested into improving the system.

Katja Hall, deputy director general of the CBI, said:

“The current business rates system harms businesses by relying on a decades-old model that no longer reflects economic conditions. That’s made life tough for retailers in particular.

“These reforms are long overdue so it’s good that the government is following through on its commitment to look closely at how it can help alleviate the most onerous aspects of business rates.”

We can help you plan your business taxes. Contact us for more information.

Retired households face higher tax bills

Retired households face an average annual tax bill of £6,500, research by Prudential has found.

Analysis of data from the Office for National Statistics reveals that pensioners pay thousands in direct and indirect taxes each year.

The figures show that the average retired household income rose to £21,800 in the 2012/13 tax year. However, the amount of tax paid by retired households also increased and pensioners are now paying over 30% of their income to the taxman.

In the 2012/13 tax year:

  • the average retired household paid £3,900 in indirect taxes and £2,600 in direct taxes
  • indirect taxes (including VAT and duties) accounted for 60.2% of the average retired household’s tax bill
  • direct taxes (including income tax and council tax) made up 39.8% of the average tax bill
  • VAT was the biggest tax item, accounting for 8.2% of the average tax bill
  • income tax accounted for 7.4% of the average tax bill.

The Treasury estimates that the newly introduced pension freedoms could lead to an increase in tax revenue of £320 million during the 2015-16 tax year and £1.22 billion in 2018-19. The research highlights this as further proof that people approaching retirement need to factor tax into their plans.

Stan Russell, retirement income expert at Prudential, said:

“Retired households make a major contribution to the Exchequer every year whether it is in direct or indirect taxes and clearly it is not possible to avoid all taxes simply because you’ve stopped working. It’s a stark reminder that not all the income you receive in retirement will be yours to spend as you like.

“Irrespective of the new pension rules and their tax implications, the fundamental principles remain true – the best way to secure enough income for a comfortable retirement is to save as much as possible as early as possible in your working life.”

We can help you minimise your tax liability in retirement. Contact us today

Employees value inclusive workplaces

More than half of employees want their workplace to have an inclusive ‘family feel’, a survey by the Chartered Institute of Personnel and Development (CIPD) has found.

The latest Employee Outlook survey reveals that 55% of the 2,226 respondents prefer a workplace ‘with a family feel, held together by loyalty and tradition’, regardless of the business’s size.

Almost half of workers described their current workplace as a ‘formalised and structured place of work, where procedures govern what people do and hold people together’.

The survey also found:

  • 26% of respondents describe their current workplace as having a ‘family feel’
  • employee engagement is at a 3-year high, having risen from 35% in 2013 to 39% in 2015.

Jessica Cooper, research adviser at the CIPD, called the survey results a “defining moment” for employers:

“Employees want to work somewhere with a ‘family feel’, where they can really feel like they are part of something. Culture is one of the few things that can define a business and if organisations can get it right, it will give them a competitive edge and a strong foundation for business growth.

“Culture can’t change overnight, but organisations can start to think about ways in which they can make changes to better suit their talent’s preferences.”

Contact us today about managing your business.

Wellden Turnbull Summer Newsletter

Wellden Turnbull are pleased to release the summer edition of our quarterly Newsletter, which we’ve filled with topical information to help you and your business.

Here’s a summary of what we’ve included:

  • For those of you who are company car drivers we advise on why you may have seen a large increase in the estimated car benefit in your notice of coding. We also consider the further changes which are planned and what this will mean in terms of future car benefits.
  • If you are self-employed you need to be aware that the system for determining the liability and ways of collecting Class 2 national insurance contributions, generally by direct debit, is about to change. Also there are plans to abolish this class of national insurance contribution altogether.
  • We also consider the tax reliefs available for those businesses planning for capital expenditure on plant and machinery in the next few months. With the amount of the available Annual Investment Allowance (AIA) uncertain we consider whether it may be beneficial to bring forward capital expenditure.
  • Changes to charity audit exemption thresholds mean that some charities may now be audit exempt and will instead fall under the independent examination regime. We consider the scope of the changes to the rules and the options available.
  •  With significant changes to the rules which apply where an individual has not bought an annuity with their pensions savings we look at what happens if their pension fund remains available to pass on to beneficiaries on their death. We summarise the changes and consider the implications of this change on inheritance tax planning.
  • The issue of determining if someone is employed or self-employed is not a new one and the risks to any business paying for the freelance services of an individual are significant. Those who are found to be paying a person as if they are self-employed in error can result in large arrears of PAYE and NIC being payable by the employer. The Office of Tax Simplification (OTS) has some suggestions on this issue.
  • If you offer customers prompt payment discounts or you take up the prompt payment discount offered by your suppliers you should read our article which considers changes to the VAT charge in these situations.
  • With many of us about to set off on our summer holidays, we consider the issues which may affect an employee’s holiday pay entitlement. This needs careful consideration following some cases held before the Employment Appeal Tribunal and the Court of Justice of the European Union

Please contact us if you have any questions regarding any of the articles we have included in our newsletter or if you would like further information on a topic we haven’t covered. Your views are always important to us and we would welcome your feedback.

Company sick pay not available to third of workers

More than a third of UK workers are not entitled to company sick pay, according to a survey by Liverpool Victoria.

The research shows that 34% workers are without an employer’s sickness cover due to a rise in the number of self-employed people and employees on zero-hours contracts.

Of all UK workers:

  • 9% are self-employed
  • 25% work for a company but would only receive statutory sick pay (SSP) of £88.45 a week if they became ill.

Of the workers receiving SSP, 15% are on zero-hours contracts and 10% have not worked for the company long enough to qualify for company sick pay.

The growing number of people working for small and medium-sized businesses (which provide less generous sick pay packages) has meant that many of those entitled to company sick pay do not get their full salary for an extended period.

Myles Rix, managing director of protection at LV=, said:

“The UK economy is changing, with zero-hours contracts, freelancing, contract work, and self-employment all becoming more common. As a result, fewer workers now qualify for company sick pay, meaning they could struggle to meet their financial commitments if suddenly unable to earn a salary due to accident or illness.

“A contingency plan such as income protection offers workers peace of mind so they can focus on recovering without worrying about whether they can pay their bills.”

We can help find the right income protection policy for you. Contact us to find out more.

Life insurance payouts fail to match mortgage costs

Under-insurance is causing a ‘protection gap’ for UK families planning to use life insurance payouts to pay down their mortgage.

The ‘protection gap’ refers to life insurance payouts that fail to match the costs the policyholder was intending the cover to meet.

Figures from the Association of British Insurers (ABI), the Bank of England (BoE) and the British Bankers’ Association (BBA) show that the gap between average mortgage costs and average life insurance payouts is growing.

BoE figures show that the average outstanding mortgage costs £83,000 while ABI stats reveal the average life insurance payout is £51,500. This is a shortfall of £31,500 and would only cover 62% of the costs of the average mortgage.

The gap between life insurance cover and new mortgages is even greater. BBA figures show that the average new mortgage is £167,000. A payout of £51,500 would only cover 31% of the costs of a new mortgage and is a shortfall of £115,500.

Insurance provider SunLife conducted a survey of their customers and found that 29% buy life insurance cover when they take out a mortgage.

Dean Lamble, managing director at SunLife, said:

“People are treating life insurance like a type of mortgage protection. Of course, if for example the breadwinner in a family was to die, being able to pay off the mortgage would be a big help. But, while that would take a significant burden off the family, it wouldn’t leave any money to pay the ongoing household bills, provide an income or mean the everyday things could carry on.”

We can help you choose the right life insurance policy for you. Contact us today.

Families could miss out on IHT relief

Up to 3,000 families may miss out on the government’s proposed changes to inheritance tax (IHT), according to analysis by NFU Mutual.

The Conservatives outlined their plans to raise the IHT threshold to £1 million in their election manifesto. A ‘residence allowance’ of £175,000 would enable married couples to transfer a property of up to £1 million to their children without having to pay IHT.

The £175,000 residence allowance will enable homeowners to extend their current £325,000 IHT threshold to £500,000. Married couples can combine these to give an overall IHT threshold of £1 million.

However, NFU Mutual’s research has revealed that thousands of families could miss out on the tax break because the family home has already been sold.

Data from HMRC shows that thousands of ineligible estates without property must pay IHT bills each year.

The Chancellor is widely expected to officially announce the plans during his Summer Budget in July.

Sean McCann, chartered financial planner at NFU Mutual, said the plans will “stick in the craw” of those who have already sold their houses:

“These proposals are acknowledgement from the government that the existing inheritance tax threshold is far too low. However, it would be much fairer to apply an overall increase rather than tinker with the rules around who can benefit and who can’t.

“Under the new proposals, we could soon start to see more elderly people reluctantly house-sitting for the next generation or even upsizing to make the most of this potential tax break. The wider effects on the property market could be significant.”

Contact us today to discuss your IHT planning.