News article

Looking ahead: exiting lockdown

Considering how businesses can restart operations once the COVID-19 lockdown ends.

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The coronavirus (COVID-19) lockdown happened quickly and with relatively little warning. Businesses were forced to make a rapid transition to home working where this was possible or pause operations altogether. Few firms were fully prepared for this shift and some have adapted better than others. Although the lockdown caused major disruption, it also meant new operating practices were established and new efficiencies gained.

The emergence from lockdown looks likely to be a more gradual process; it may even by a cyclical one if we face further peaks of infection. Here we look at some of the practical issues that firms will need to address if they are to map out a successful recovery from the pandemic.

The 'new normal'

Nobody can say for certain how workplaces will look and function when we return to them. One thing is for sure though: they will look different to the ones left behind in March. However, where working practices and newly adopted technologies have proved a success during lockdown, businesses will be keen to keep digital alternatives in place rather than return to conventional working practices.

Reduced operations

Because of the benefits outlined above and the imperative to maintain social distancing, many organisations will be planning for a greater volume of employees requesting to work flexibly. The ability to implement social distancing in the workplace will be key to a successful return. However, it will mean reduced capacity in most workspaces, so staffing requirements and working patterns will have to be reviewed.

Crucial to managing a flexible return to work will be technological capabilities that support a combination of office and remote working, which will mean a continued reliance on video conferencing in many cases.

Staying safe

Updated hygiene practices will also be vital to a safe return, especially if a business is expecting to welcome visitors onto its premises. Firms will need to consider measures such as creating one-way walkthroughs, installing hand sanitising stations, opening more entrances and exits and changing seating layouts in break rooms. Where people cannot be two metres apart, employers must manage the risk of transmission.

An event such as the COVID-19 pandemic triggers the need to review risk assessments and record the findings of the review. Firms will need to follow all normal safety practices while also incorporating any new regulatory policies, procedures and control measures (for example, using the latest guidance published by the Health and Safety Executive). Additionally, employees will need to be informed of any new procedures and protocols that must be followed, for example the use of hot desking and deep cleaning.

Keep the cash flowing

As well as keeping a close eye on order books, stocks and supply chains, managing cashflow will be vital for firms aiming to exit the lockdown successfully. This means having a thorough understanding of your business's cash position both prior to exit and for the immediate future.

Understanding the cash position in the short and medium-term will help firms assess what steps they need to take in order to keep the business moving. Devising forecasts with different scenarios will help gain an understanding of what the organisation's options might be.

Many businesses are likely to need some additional help as they start back up again. Existing banks and lenders should be the first port of call, but remember there are other sources of finance available. These include the various government COVID-19 support schemes: we can provide help and advice if your business needs to raise finance.

Also, businesses must make sure that they utilise the tax reliefs available to them. There are various reliefs available for business owners which can assist with tax planning. We can offer advice and guidance to make sure your business is benefiting from the appropriate reliefs.

Road ahead

The road ahead may not be an easy one. It is unlikely to be straightforward and setbacks are probable. However, careful planning will help businesses be prepared to take advantage of a surge in economic activity and return of market confidence.

Our team can help businesses with a range of financial planning issues. For more information, please contact us.

News article

COVID-19: the Coronavirus Job Retention Scheme

Analysis of the Coronavirus Job Retention Scheme.

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The government has announced a range of extraordinary measures to try and prop up the UK economy and safeguard jobs during the COVID-19 lockdown. There are business interruption loan schemes to help firms secure funding, VAT deferrals to aid cashflow issues and special schemes for organisations including charities, tech start-ups and the arts. The importance of the Coronavirus Job Retention Scheme was underlined when 140,000 companies applied to claim wages for over one million UK employees on the day it was launched.

Here, we analyse the Coronavirus Job Retention Scheme and offer some practical guidance on applying for it.

What is the Coronavirus Job Retention Scheme?

The Coronavirus Job Retention Scheme (CJRS) is a temporary scheme open to all UK employers. It offers salary support from 1 March 2020 and will stay open until at least the end of June. The CJRS aims to encourage employers who cannot pay staff wages to not make redundancies. Instead, they can keep employees on the payroll and claim a government grant to cover some of the wage cost.

Who is eligible?

The scheme is open to all UK employers that have created and started a Pay as You Earn (PAYE) payroll scheme on or before 19 March 2020, have enrolled for PAYE online and have a UK bank account. Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.

What can be claimed?

Businesses can claim a grant from HMRC to cover the lower of 80% of an employee's salary or £2,500 per month, plus the associated employers' national insurance contributions (NICs) and the minimum automatic enrolment employer pension contributions on that subsidised wage.

How is the grant claimed?

Employers must calculate the amount for the claim and apply themselves, although an authorised agent can make a claim on an employer's behalf. Claims can only be made online, so employers need to have a Government Gateway (GG) ID and password and be enrolled for PAYE online.

Various information will be required to make a claim, including the employer PAYE reference number, the number of employees being furloughed, the claim period (including the start and end date), the amount claimed (per the minimum length of furloughing of three weeks) and the UK bank account number and sort code.

HMRC will undertake initial checks on the claim, and if they believe the employer to be eligible, pay the grant by BACS to a UK bank account.

The employer must pay the (relevant) employee the full amount of grant received in the form of money, without adjustment for benefits in kind, administration fees or any other costs in connection with the employment. More information on the CJRS can be found here.

Off-payroll workers

Those workers who are not eligible for the CJRS, such as contractors and the self-employed, will need to use the government's Self-employment Income Support Scheme (SEISS).

This scheme will allow businesses to claim a taxable grant worth 80% of trading profits up to a maximum of £2,500 per month for the next three months. It is open to those who have submitted their self-assessment return for 2018/19, have traded in 2019/20, are trading when they apply (or would be except for COVID-19), intend to continue to trade in 2020/21 and have lost trading/partnership trading profits due to COVID-19.

HMRC will contact relevant businesses if they are eligible for the scheme and invite them to apply online. HMRC will aim to contact businesses by mid-May 2020 and will make payments by early June 2020. More information can be found here.

We are here to help and advise you in these difficult times. Additionally, the latest government guidance can be found by accessing the GOV.UK COVID-19 webpage.

News article

Chancellor unveils help for self-employed workers

Government support for the impact of COVID-19.

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On the 26 March, Chancellor Rishi Sunak announced a scheme to help self-employed workers who have been hit by the COVID-19 crisis.

Under the scheme the government will pay self-employed people a taxable grant based on an average of their earnings over the past three years.

The grant will cover up to 80% of earnings up to a limit of £2,500 a month.

To be eligible self-employed workers must have filed a tax return for the 2018/19 tax year and have average trading profits under £50,000 for the past three years.

Directors of their own companies who are paid through PAYE may be able to get support using the Coronavirus Job Retention Scheme.

The self-employed scheme will be available from June this year and run for three months but may be extended if necessary. In the meantime the Chancellor said people can access Universal Credit, business loans or keep on working.

HMRC will contact self-employed workers if eligible for the scheme and invite them to apply online.

Detailed guidance about the grants can be found here.

Business groups welcome Chancellor's support for the self employed

Business groups have backed Chancellor Rishi Sunak's scheme to help self-employed workers through the COVID-19 crisis.

Dame Carolyn Fairbairn, CBI Director-General, said: 'Many self-employed people across the UK will be hugely relieved.   

'These new measures will provide essential support to those facing significant uncertainty and loss of income.

'Given the complexity of the task, it's understandable this will take time to deliver. Fast clarity on how and when money will reach their bank accounts will help individuals to plan.'

Derek Cribb, CEO of the Association of Independent Professionals and the Self-Employed, said: 'This is an unprecedented package and a very welcome response to our campaign for freelancers and the self-employed.

'While this assistance is practical and wide-ranging it does not, however, cover all self-employed people. We will keep working to fill in these gaps.'

Mike Cherry, the National Chairman of the Federation of Small Businesses, said: 'This bold support package from the government will give much-needed help to vast numbers of self-employed workers.

'The self-employed community underpins the UK economy. They are the individual risk-takers who don't expect the same benefits as employees.

'Many tax-paying self-employed who will be helped by today's measures will be relieved. Although the deal is not perfect, the government has moved a very long way today.'

News article

COVID-19: measures for UK businesses

Reviewing official guidance on COVID-19.

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The coronavirus (COVID-19) pandemic that began in China and spread rapidly around the globe has caused major disruption to businesses and economies worldwide. The UK government has responded to COVID-19 with measures aimed at delaying its spread and mitigating damage to the economy with a substantial stimulus package.

Chancellor Rishi Sunak has set out a package of temporary, targeted measures to support public services, people and businesses through the period of disruption caused by COVID-19. This is a fast-moving area and the government will publish the details of further measures on: https://bit.ly/33vU1cD.

Here we consider the measures announced to support businesses including the significant package of measures announced on 17 March 2020:

  • grant funding of £10,000 for small firms in receipt of Small Business Rate Relief (SBRR) and Rural Rates Relief
  • grant funding of £25,000 for certain businesses in the retail, hospitality and leisure sectors
  • a 12-month business rates holiday for businesses in the retail, hospitality and leisure sectors
  • a temporary Coronavirus Business Interruption Loan Scheme to support businesses in accessing bank lending and overdrafts
  • extended access to Statutory Sick Pay (SSP), with reliefs available to SMEs
  • expanded access to HMRC's Time to Pay scheme.

Increases and extensions to business rates reliefs

The government had previously announced business rates discounts of 50% for retailers, cinemas and music venues with a rateable value below £51,000, and a £5,000 discount for pubs. On 17 March the Chancellor announced that the business rates discount will be increased to 100% and expanded further to include all hospitality, retail and leisure businesses, no matter what their rateable value, for the 2020/21 tax year.

Many small businesses pay little or no business rates because of SBRR. The government will supply funding for local authorities in England, which will provide one-off £10,000 grants to businesses currently eligible for SBRR or Rural Rate Relief. In addition, one-off grants of £25,000 will be available to retail, hospitality and leisure businesses operating from premises with a rateable value between £15,000 and £51,000.

Business rates have been devolved to Scotland, Northern Ireland and Wales, so the UK government has announced measures that affect business rates in England. We have not considered other parts of the UK in this summary.

The Coronavirus Business Interruption Loan Scheme

In the Budget the Chancellor announced the implementation of the Coronavirus Business Interruption Loan Scheme, which will support the continued provision of finance to UK businesses during the COVID-19 outbreak. Delivered by the British Business Bank, the scheme will temporarily replace the Bank's Enterprise Finance Guarantee scheme, with an additional £1 billion made available on top of existing support supplied via the programme.

The government will increase the scope of the Business Interruption Loan Scheme announced in the Budget from £1.2 million to £5 million, with no interest due for the first six months.

Extended access to Statutory Sick Pay (SSP)

As part of a package to widen the scope of SSP and make it more accessible, SSP entitlement will begin from the first day of sickness absence, rather than the fourth, for those who have COVID-19,or self-isolate in accordance with government guidance.

SSP relief for SMEs

Small and medium-sized businesses will be allowed to reclaim SSP paid for absence due to COVID-19. The refund will cover up to two weeks' SSP per eligible employee who has been off work because of COVID-19. Employers with fewer than 250 employees will be eligible, with the size of an employer being determined by the number of people they employed as of 28 February 2020. Employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19. Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.

The eligible period for the scheme commenced the day after the regulations on the extension of SSP to self-isolators came into force on 13 March 2020. The government intends to work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. It stated that existing systems are not designed to facilitate employer refunds for SSP.

Expanded access to Time to Pay

The government will ensure that businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs.

HMRC has set up a dedicated COVID-19 helpline, on 0800 0159 559, for those in need, and they may be able to agree a bespoke Time to Pay arrangement. Time to Pay gives businesses a time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back.

We are here to help and advise you in these difficult times. The latest government guidance can be found by accessing GOV.UK coronavirus webpage.

News article

Don't let flooding sink your business

Considering ways in which you can safeguard your business from flooding.

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Flooding has become a sad fact of life in many areas of the UK, with homes and businesses washed out by torrential rainfall and swollen rivers. Last year ended with one of the wettest autumns in living memory, while 2020 began with storms Ciara and Dennis saturating areas of the country. Flooding causes damage to buildings and machinery, the loss of records and stops businesses from running normally. Dealing with the aftermath of flooding while trying to stay afloat is an anxious and challenging time for any affected business.

Be prepared

Protecting your property against the threat of flood damage should be a priority for any business, and there is plenty of support and advice available. The government advises all businesses to take seven steps to protect themselves.

  1. Sign up for Environment Agency flood warnings.
  2. Create a flood plan.
  3. Train staff in flood safety procedures.
  4. Create a stockpile of potentially useful materials.
  5. Consider installing flood protection products.
  6. Make sure the business has appropriate flood insurance.
  7. Store insurance policy documents digitally, or away from the premises.

The aftermath

Once the shock of being flooded has passed, businesses will want to act. The Association of British Insurers (ABI) advises anyone who has suffered flood damage to contact their insurer or broker as soon as possible. Most will have 24-hour emergency helplines that give advice and help arrange repairs. Insurers also have teams on the ground helping their customers and managing the claims process.

Once the floodwater begins to recede, businesses will be eager to begin the recovery process. However, the ABI also recommends warns people not to return until it is safe to do so. It also advises businesses premises not to throw away damaged items in case they can be repaired while redecoration should wait until a property is fully dried out.

Maintaining vital cashflow

Flooded businesses will still need to pay many of their expenses, despite suffering a loss of income. HMRC's payment deadlines will still loom large, even for a business crippled by flooding. The tax authority can offer payment plans to those in financial difficulty. However, early dialogue with HMRC is essential in advance of payment deadlines.

Loss of business records

Floods can destroy paper and damage computers. Books, receipts and other records needed for filing tax returns could be lost, possibly irretrievably. Even a temporary loss could cause problems in meeting HMRC's deadlines for filing corporation, tax, VAT or self assessment returns. For businesses afflicted by flooding reconstructing records and bringing paperwork up to date as quickly as possible will be as important as property recovery.

Those affected should not wait until the deadline has passed before notifying HMRC and opening discussions. Following past floods HMRC has shown a degree of leniency around filing deadlines, although it must receive advance notification of the delay to filing and a revised submission date.

Making financial recoveries

Ideally, most businesses will have flood cover as part of their property insurance, so will be able to make a claim for damages.  A full insurance recovery will result in a tax neutral position. However, full recovery is unlikely if there is a policy excess.

Following this year's floods, the government announced that affected small and medium-sized enterprises (SMEs) would be eligible for 100% business rates relief for at least three months. Also, those SMEs that suffered uninsurable losses can claim up to £2,500 from the Business Recovery Grant.

Additionally, the government announced that businesses affected by flooding can apply for up to £5,000 to help make them more resilient to future flooding.

Finding relief

The availability of tax relief for expenditure on remedial works will be an important consideration for business-owners. This is particularly the case where there is no valid insurance policy in place. Expenses that are classed under 'repair and refurbish' will qualify for a deduction against taxable profits as revenue expenses. However, any 'improvements' will be regarded as investments and treated as capital expenses, so will not qualify for a deduction against taxable profits.

Learning the lessons

Sadly, flooding is becoming a fact of life in some parts of the UK. For businesses that are based in these areas, preparing for the worst will be key to surviving. A measured response will also be vital to an effective recovery.

Our team can help businesses with tax returns or negotiating with HMRC: please contact us.

News article

Is time finally up for late payers?

Statutory 30-day limit for payment of all invoices proposed.

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The scourge of late payments has continued to worsen over the past few years with larger numbers of UK businesses now owed more money for longer periods of time. Those businesses are also finding it increasingly expensive to get their outstanding invoices settled. However, hope may have finally arrived with a potential new law going through Parliament following a long campaign by the Association of Accounting Technicians (AAT), as well as MPs from across the political spectrum.

Staggering debts

Last year saw the debts owed to the UK's small and medium-sized enterprises (SMEs) spiral up to a staggering £23.4 billion. This represents an increase of up £10.4 billion on the £13 billion owed in 2018, according to figures released by Pay.UK. Meanwhile, the number of businesses experiencing overdue payments has hit 54% among SMEs; this represents the highest level since 2015, when the figure stood at 55%.

The average late payment debt burden has also increased to £25,000 per business, up from just over £17,000 in 2018, with SMEs reporting that, on average, a debt burden of £35,000 could jeopardise their business.

On top of that, the research shows that UK SMEs are now facing a total bill of £4.4 billion a year just to collect money they are owed, with around a quarter of those waiting on funds spending more than £500 a month chasing payments.

Double delay

Separate research carried out by online business finance platform MarketFinance found that UK SMEs are waiting longer than ever before to get paid. The time it took for late payments to be settled more than doubled from 12 days in 2018 to 23 days in 2019, according to the research, which analysed late payment trends between 2013 and 2019 by examining over 100,000 invoices.

The push for prompt payment

According to the AAT, almost a quarter of insolvencies are caused by late payment issues. Even for those businesses that manage to absorb late payments, the loss of income can stop small businesses from investing and growing. Late payments can also damage productivity, and generally such payments have a very negative impact – including on many business owners' mental health.

The AAT is campaigning to tackle this problem by making three major changes. These are:

  • that the Prompt Payment Code should be made compulsory for businesses with more than 250 staff
  • that payment terms should be halved from a maximum of 60 days to a maximum of 30 days
  • that a clear, simple financial penalty regime for persistent late payers should be introduced and enforced by the Small Business Commissioner.

The AAT says there is no reason why any business should be paying its suppliers in more than 30 days, and the Small Business Commissioner must have powers to impose fines on persistent late payers.

Time limits and sanctions

There is now hope of real action after Labour Peer Lord Mendelsohn introduced a Private Members' Bill that promises to introduce a statutory 30-day limit for payment of all invoices to Parliament. This time limit will be backed up by giving the Small Business Commissioner the necessary power to deal with serial offenders.

The Bill will also ban the most predatory payment practices like prompt payment discounts, where purchasers demand discounts for prompt payment of invoices, charges for onboarding and staying on supplier lists.

Lord Mendelsohn said: 'Late payment is crippling small businesses while the UK economy is crying out for investment. By failing to tackle late payment, we are starving our small businesses of the capacity to act.

'The recent huge escalation in outstanding payments shows that decades of promoting 'culture change' has only made things worse. This Bill will tackle the issue once and for all with a package of measures that is operable, impactful and measurable.'

Our team can help businesses with a range of financial planning issues. If late payments are a problem for your firm, please contact us.

News article

Making Tax Digital and the rise of online accounting software

Analysing the rise in popularity of online accounting.

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HMRC's Making Tax Digital (MTD) initiative is foremost amongst several significant trends that are helping drive businesses to move their accounting records online through the use of accounting software. Industry, regulatory and technology shifts include the increased use of cloud technology, as well as the digitisation of tax and compliance systems. We examine this growth and ask what businesses should look for when selecting the right online accounting package for their requirements.

The implementation of Making Tax Digital for VAT (MTD for VAT) in April 2019 was clearly a major driver in the uptake of online accounting software, as evidenced by one major supplier growing its UK customer base by over 50% this year.

Although the initial MTD for VAT returns have now been made, there were around 1.1 million organisations that were able to defer its introduction until the final quarter of 2019, due to their complex VAT requirements. Meanwhile, HMRC will continue to phase in other elements of MTD in the coming years.

What are the benefits of online accounting software?

Broadly speaking, online accounting software will bring a number of benefits to a business. These include the ability to automate the bookkeeping processes, improvements in managing workloads and speeding up the payment process.

Some packages will help businesses predict cashflow better and forecast management accounts. Others can help businesses with financing, from online bank accounts to instant flexible loans. A few software providers have linked up with high street banks, a move which allows lenders to offer financial solutions, including funding, products or advice, directly through the platforms to customers.

Software solutions

There are over 400 software solutions listed on HMRC's website and each will have its own functionality. However, these systems only have to satisfy a minimum set of requirements to be recognised by HMRC, so finding the functionality that suits a business's own unique requirements is essential. HMRC-compliant software must be able to create a digital VAT return from digital records and submit a VAT return via the HMRC Application Programming Interface (API). End-to-end solutions need to keep digital VAT records, including summary data; store records for six years; and be able to receive information digitally from HMRC.

There are several other factors that firms will need to weigh for themselves, including functionality, cost, longevity and the ability to exchange information with other IT systems.

Reviews of the available online software accounting packages suggest that the sector is blessed with a number of well-designed and easy-to-use systems. These will not only make it easier for businesses to manage their accounts and track profits but will also ensure they are ready for the firm's accountant too, thus reducing costs. Some accounting packages are downloadable software, but it is increasingly common for applications to run in the cloud, so they can be accessed on devices while on the move.

Key criteria

A prime cost in implementing MTD will be systems integration, potentially requiring a change management project. Ease of integration is therefore fundamental if the business is to reduce this cost. Firms should look to diminish the capability for error by minimising the amount of human input and protecting access to data. Restrictions should limit data manipulation and determine when and by whom any changes are made. Solutions must also be able to scale on demand with the needs of the business.

Those organisations that need to comply with MTD for VAT will clearly need to find a system that is able to automate complex VAT calculations. Deferred businesses typically need to be able to aggregate large volumes of data from across groups and third parties and handle a diverse range of VAT calculations, such as groups, exemptions and charges, which would benefit from being automated.

It is likely that HMRC will introduce near or real-time reporting of transactions, while MTD for corporation tax is expected sometime after 2021, so a system that is ready to deal with further regulatory change is essential.

Our team are familiar with all types of online accounting packages and can help you to choose the correct accounts software. To benefit from our expertise, please contact us.

News article

Staying pension wise

Looking at how individuals can protect their pension pots from pension scammers.

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The dangers of pension scams are currently being highlighted by a high-profile media campaign. Adverts, both on television and online, warn pension savers not to let a scammer 'enjoy their retirement'. The perils of cashing in a pension pot without the proper advice and protection under the freedoms introduced in 2015 are spelt out by the ads.

So, it is vital that pension savers are educated to spot a potential scam and avoid it.  Access to regulated, impartial advice is a crucial part of helping people make wise decisions with their retirement savings.

Scam victims losing pension pots in 24 hours

The Pensions Regulator (TPR) and the Financial Conduct Authority (FCA) have joined forces to highlight the scale of pensions scamming. In a joint report from the two organisations, the FCA suggested that it could take up to 22 years for a saver to build a pension pot of £82,000 – the average amount individuals lost to pension scams in 2018.

But despite this, many savers could be at risk of falling for scammers' tactics, as research reveals that almost a quarter of people surveyed admitted to taking 24 hours or less to decide on a pension offer.

Worryingly, overconfidence could also lead to savers missing the signs of a scam. Two-thirds of savers say they are confident enough to make an independent decision about their pension. The same proportion would trust someone offering pensions advice out of the blue – one of the main warning signs of a scam.

Recognising scam warning signs

It is vital that pension savers are aware of the common tactics used by scammers, so they can spot the warning signs.

Pension scam artists are often articulate and financially knowledgeable. They can often point to credible websites, testimonials and materials that are hard to distinguish from the real thing. They will design attractive offers to persuade the transfer of a pension pot, or the release of funds from it. It is then invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units, or is simply stolen outright.

Scam tactics include:

  • contact out of the blue
  • promises of high and/or guaranteed returns
  • free pension reviews
  • access to a pension before age 55 – with no mention of potential tax liabilities
  • complicated investment structures, or unusual, high-risk investments
  • high-pressure sales tactics, or pressure to act quickly.

Protecting your pension

Although a ban on cold calling in the UK, including emails and texts, was introduced at the beginning of 2019, the problem continues. Cold calls are a major red flag for scams and unsolicited offers should be ignored or rejected. Cold callers will often offer a free pension review. Professional advice on pensions is not free – a free offer out of the blue is probably a scam.

It is crucial that pension savers know who they are dealing with so checking the FCA Register is imperative. Dealing with an authorised firm gives access to the Financial Ombudsman Service or the Financial Services Compensation Scheme (FSCS), which can hold firms to account and give financial protection.

A common scam is to pretend to be a genuine FCA-authorised firm (called a 'clone firm'). The contact details on the FCA Register should always be used, not the details the firm gives out.

Pension savers should never allow themselves to be rushed or pressured into making a decision. They should not be afraid to miss out on an 'amazing deal' because of artificial deadlines, and if promised returns sound too good to be true, they probably are.

Impartial information, financial guidance and advice are all key to making a good decision before changing pension arrangements.

Looking for advice

Free, independent and impartial information and guidance is available from The Pensions Advisory Service, while for those over 50 with a defined contribution (DC) pension, Pension Wise offers pre-booked appointments to talk through retirement options. Those opting for the services of a financial adviser must be sure to use one that is regulated by the FCA.

Further pensions help can be found on the Pensions Regulator, Action Fraud, ScamSmart and Citizens Advice websites.  

Planning for your retirement in advance is vital. We would be only too pleased to provide any further assistance you may need. Please contact us.

News article

Getting payroll right

Considering the UK's employment rights and looking at how employers must meet them.

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Chancellor Sajid Javid's pledge to raise the National Living Wage (NLW) over the next few years was one of a series of recent reminders to employers that they must be increasingly careful to meet the employment rights of their employees. The government's 'Good Work Plan' consultation ended in October and may mean changes to the enforcement of employment laws. So, complying with payroll issues from salary to holiday entitlements, payslips to pensions is increasingly important for employers.  

The National Minimum Wage and the National Living Wage

Since the establishment of the National Minimum Wage (NMW) in 1999, there have been constant changes to both rates and regulations, with perhaps the biggest being the introduction of the National Living Wage (NLW) in 2016.

The minimum wage is paid at an hourly rate, with payment bands depending on age, and special provisions applying to apprentices. The NLW is the minimum wage for those aged 25 and over, whilst the NMW applies to those above school leaving age and individuals aged under 25. For convenience, we refer to 'minimum wage' to cover both the NMW and the NLW.

Current minimum wage rates

Minimum wage rate Hourly rate from 1 April 2019
NLW £8.21
21-24 year-old rate £7.70
18-20 year-old rate £6.15
16-17 year-old rate £4.35
Apprentice rate £3.90

Recently, Chancellor Javid pledged to raise the NLW to £10.50 within the next five years and lower the qualifying age for the NLW from 25 to 21. Getting minimum wage obligations right can be challenging for employers, and failure to pay the minimum wage correctly can lead to penalties. A notice of underpayment will calculate the arrears of pay to be paid and the penalty set at 100% of the total underpayment, which can be doubled to 200%, unless the arrears are paid within 14 days. The maximum fine for non-payment is £20,000 per worker, and employers who fail to pay will be banned from being a company director for up to 15 years.

Payslips and holidays

Employees are legally entitled to receive a payslip showing their earnings before and after deductions. However, one in ten workers are not currently receiving a payslip, according to research from think tank the Resolution Foundation. This makes it hard for them to calculate whether they are receiving the right level of pay, pension and holiday entitlement, and check Pay as You Earn (PAYE) deductions.

The research also showed that around one in 20 workers receive no paid holiday entitlement, despite being legally entitled to at least 28 days' paid holiday a year. In addition, failure to offer staff workplace pensions under auto-enrolment rules can end in prosecution, with up to two years' imprisonment and unlimited fines possible.

The 'Good Work Plan'

The government's recent 'Good Work Plan' consultation examined a proposal to create a new single enforcement agency to regulate employment law. This should leave it better placed to tackle labour market violations than the multiple bodies currently operating.

The government is being encouraged to target investigations into labour market violations into sectors like hotels and restaurants, along with firms who make large use of atypical employment contracts, as that's where abuse is most prevalent.

Getting payroll right

Administering payroll and complying with the Real Time Information (RTI) regulations can be burdensome for businesses. The creation of customised payslips and the effective administration of PAYE, national insurance, Statutory Sick Pay and Statutory Maternity Pay is a time-consuming process. Many small and medium-sized enterprises (SMEs) may not have the resources or expertise to handle this themselves, but professional payroll services are available.

Employment law and the minimum wage are complex areas, and we have only been able to touch on key points here. We would be only too pleased to provide any further assistance you may need. Please contact us.

News article

Fighting business crime

Highlighting some key steps to take in order to combat business crime.

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Business crime is a major problem for UK businesses facing threats ranging from theft and property damage to fraud and cyber-attacks. The costs suffered by firms as a result of these crimes run into the billions every year. Here we take a look at some of the most common risks and ask what businesses can do to protect themselves.

Counting the cost

The financial cost of crime incurred by UK businesses on an annual basis is exorbitant.

Traditional crime, including robbery and criminal damage, costs nearly £17 billion a year, a number that rises even higher when indirect costs such as store closures and staff absences are factored in. In addition, cybercrime is a major risk to modern, connected businesses. Small businesses alone suffer an average of almost 10,000 attacks a day, at an annual cost of £4.5 billion, according to the Federation of Small Businesses (FSB). Phishing attempts are the most frequent type of attack, followed by malware, fraudulent payment requests and ransomware.

However, both the numbers for physical and cybercrime pale beside the estimated £130 billion in losses incurred annually as a result of fraud, according to the Centre for Counter Fraud Studies (CCFS) at the University of Portsmouth.

Tackling business crime

Traditional methods remain the best way of tackling traditional business crimes, according to the FSB. The business group recently urged the government to increase police numbers, as a 'critical step' in helping to prevent and investigate business crime. The FSB also called for the Home Office to link funding to the 'proper resourcing of business crime'.

Businesses can play their part be ensuring crimes are reported to the police. They should also review their physical security measures and business processes to make sure they are robust.

Cyber security

The implementation of stringent new data laws, which form the General Data Protection Regulation (GDPR), have helped to reduce cyber security breaches. However, the government is still urging business leaders to 'do more' in order to protect their firms from cyber-attacks and cybercrime. Businesses are being encouraged to follow the 'ten steps to cyber security' guidance, which can be found on the National Cyber Security Centre (NCSC) website.

Although it is impossible to eliminate the threat completely, there are steps all businesses can take to defend themselves. It is vital to ensure anti-virus software is up-to-date, and that passwords are strong and regularly updated. Also, firms should have clear policies on the usage of both personal and business devices. Despite the frequency of attacks, over a third of small firms have not yet installed security software, and almost half do not regularly update their software.

Fighting fraud

Although the costs of fraud are enormous, it is possible for businesses to significantly reduce them. Collectively, reducing fraud losses by 40% would 'free up more than £76 billion each year', says the CCFS.

At present, organisations adopt a reactive approach to fraud, and only look to tackle it once it has taken place, and losses have already occurred, the CCFS found. Instead, firms should view fraud as a business cost – by understanding the nature and scale of the cost, they can help to reduce its extent.

In addition, the CCFS says working to measure losses is highly cost-effective. Data shows that organisations which re-measure the same area of expenditure have consistently lower loss rates. The NHS, for example, reduced its fraud losses by 60% over a seven-year period by measuring them and gathering information on their nature.

Businesses should stay up-to-date on crime-related issues and protect themselves wherever possible.