Wellden User, Author at Wellden Turnbull Accountants

Employees value inclusive workplaces

June 9, 2015 Posted by Wellden User

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

June 8, 2015 Posted by Wellden User

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

June 5, 2015 Posted by Wellden User

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

June 4, 2015 Posted by Wellden User

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

June 3, 2015 Posted by Wellden User

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.

Small employers begin auto-enrolment process

June 2, 2015 Posted by Wellden User

Small and micro businesses employing fewer than 30 employees have begun auto-enrolling their staff onto workplace pension schemes.

The process will last until April 2017 and the exact timing of business’ staging dates will depend on the last 2 characters of their PAYE reference numbers.

Firms employing between 40 and 49 workers will stage in August 2015 while those with 30-39 members of staff will start complying in October 2015.

The auto-enrolment process has been ongoing from October 2012, with all large and medium-sized firms now having passed their staging dates and enrolled their employees onto a company scheme.

Figures from the Pensions Regulator show that around 769,000 small and micro firms will pass their staging dates by April 2017.

Up to 14,000 businesses with fewer than 30 employees will begin the process from June 2015, according to the Federation of Small Businesses (FSB).

John Allan, national chairman of the FSB, said the process will present a “major challenge” for small businesses:

“Awareness of the impending changes has picked up, but many have still yet to put into place plans to meet their duties.

“Small business owners are not pension experts and a significant number will not have any staff saving into an existing workplace pension scheme. These businesses require a clear and simple process, and readily available impartial advice and support.”

Talk to us today about complying with auto-enrolment.

Employers want auto-enrolment contribution increase

May 28, 2015 Posted by Wellden User

More than three quarters of employers think that auto-enrolment pension contributions should be increased, according to research by Jelf Employee Benefits.

Employers operating auto-enrolment workplace pension schemes are required by law to pay a minimum of 1% into employees’ pension pots. This is due to rise to 2% from 1 October 2017 and 3% from 1 October 2018.

However, the research reveals that the majority of employers think this should rise further. The survey of 200 HR and finance experts found that 76% want minimum contribution rates to increase. Just 15% thought that no increase was needed.

The research found:

85% of respondents said employers should bear part or all of the contribution increases
14% thought employees should pay for increased contributions
4 in 10 said they would raise contributions ahead of legislated increases to spread the cost over several years.

Steve Herbert, head of benefits strategy at Jelf, said:

“Frankly, we were a little surprised at these results. Many employers are yet to reach their staging date for auto-enrolment, and a significant proportion of those who have already staged are not yet at the full contribution rate. It is therefore somewhat surprising that employers appear so supportive about a further increase to their pension contribution costs already.”

Auto-enrolment minimum contribution schedule

Employer’s staging date	Employer minimum contribution	Total minimum contribution
To 30 September 2017	1%	2%
1 October 2017 to 30 September 2018	2%	5%
1 October 2018 onwards	3%	8%

Childcare most costly aspect of raising children

May 27, 2015 Posted by Wellden User

Raising a child costs parents around £35,000 in the first 5 years of its life, research by Aviva has found.

The survey of more than 2,000 parents with children aged between 0-5 shows they spend an average of £7,026 a year on their child.

This works out at £586 a month and a total of £35,000 by the time they reach their fifth birthday.

The study reveals the most costly expenses associated with raising a child:

childcare has the biggest impact on parents’ wallets, costing an average £95 a month or £1,140 a year
parents spend £62.30 each month or£747.60 every year on equipment
clothes cost £58 every month or £696 each year.

The research also shows that many parents are planning for their children’s financial futures:

52% have set up a savings account in their children’s names
37% have opened a Junior ISA or child trust fund
8% have begun saving for a house deposit for their children
8% have started saving into a university fund.

Louise Colley, protection director for Aviva, said:

“As every parent knows having children can be an expensive business, but it’s incredible to see how this stacks up over the years! This is why it’s so important for parents to consider how they might cover the cost of raising a child if they were to unexpectedly lose an income through illness or even worse, bereavement.”

Are you planning to start a family? Contact us today for financial advice.

Directors call for fiscal discipline

May 21, 2015 Posted by Wellden User

The majority of company directors want the government to press ahead and achieve a budget surplus by the end of the parliament, an Institute of Directors (IoD) member survey has found.

Members of the IoD have listed their top priorities for the new government, which include a reduction of the deficit, increased spending on infrastructure and the lowering of taxes for businesses and individuals.

A majority of 85% support the government’s goal of eliminating the budget deficit by 2020. 12% of respondents want to achieve this entirely through spending cuts while just 1% said tax rises should be the only means of getting the deficit down. A fifth thought an equal mixture of spending and tax rises would be the preferable way of achieving a surplus.

Of the 1,211 IoD members surveyed:

more than half opposed a rise in national insurance, income tax and business rates
56% want the government to invest in the country’s broadband infrastructure
55% said there should be more investment in energy generation
many want the government to spend more on developing transport infrastructure: railways (50%), roads (44%) and airports (34%)
89% support a crackdown on tax avoidance.

Simon Walker, director general of the IoD, called on the government to stick to its pre-election plans to reduce spending:

“Returning the budget to surplus must be the overriding goal in this parliament, but businesses want the emphasis to be on finding further reductions in spending, not significantly raising taxes.

“If we do not even begin to deal with the pile of debt, the situation will only be more dangerous if we encounter another economic shock.”

Walker also urged the government to implement “much more fundamental [tax] reforms”:

“A hugely complex tax code also remains a barrier to growth for many businesses.

“Businesses want national insurance brought down, business rates reformed and a tax code which encourages investment and entrepreneurialism. This will not be achieved by tinkering at the edges.”

We can help you plan for your business’s future. Speak to one of our expert advisers today.

Saving picks up among UK households

May 21, 2015 Posted by Wellden User

More than two thirds of people in the UK have managed to save over the past 12 months, according to research by Lloyds Bank.

The latest Savings Report reveals that people are feeling increasingly confident in their financial positions and are boosting the amount they are saving as a result.

In the first quarter of 2015 almost 7 in 10 people said they have saved regularly over the past 12 months, up 5% from Q4 2014.

Of the 6,210 people surveyed:

44% saved at least once a month during Q1 2015, up from 37% in Q4 2014
23% have more than 4 times their monthly household income in savings
18% have saved more than £500 in the last month and 9% have save more than £1,000.

Philip Robinson, savings director for Lloyds Bank, said:

“For people who may not be as confident with their current savings habits, it’s important to try and save a small and regular amount each month. This can help to build a strong savings pot over time, which can be increased as circumstances improve.”

Contact us today to discuss your savings options.

Business secretary announces Enterprise Bill

May 20, 2015 Posted by Wellden User

A new Enterprise Bill designed to reduce regulation on businesses by at least £10 billion over the next 5 years has been announced by Business Secretary Sajid Javid.

In his first speech at the head of the Department for Business, Innovation and Skills, Javid announced a host of radical regulatory changes and committed them to the first Queen’s Speech of the parliament on 27th May.

The Enterprise Bill will target independent regulators for the first time, who will be asked to contribute significantly to the target of at least £10 billion in regulatory cuts.

The bill will allow for the creation of a Small Business Conciliation Service that will settle disputes between small and large companies over issues such as late payment.

It will also extend and simplify the Primary Authority system, which allows local authorities to provide businesses with regulatory advice. Under Primary Authority rules, advice given by a local council must be followed by all other councils, preventing businesses from having to comply with different rules.

Business Secretary Sajid Javid said the bill will “sweep away burdensome red tape” and remove “heavy handed” regulators from the backs of small businesses.

Business Minister Anna Soubry added:

“We will be asking businesses for evidence in the coming weeks and months. We want them to be our partners in identifying and scrapping needless burdens at home and in Europe.”

Responding to the government’s announcement, Katja Hall, CBI deputy director-general, said:

“Businesses will welcome the government getting back out of the blocks early by following through on its commitment to cut red tape.”

Contact us today to discuss your business planning.

Company Car Taxation

April 14, 2015 Posted by Wellden User

In our guide we discuss the company car tax rules and how legislation encourages businesses to acquire more environmentally-friendly vehicles.Our guide is intended to help individuals with their financial and tax planning.