an accountant's perspective

houses of parliament


Leave a comment

How did politics alienate a nation?

The country is full of educated and insightful people. They will discuss the length and breath of politics with ease because the policies do contain variety and the political figureheads do appear to present different characteristics from time to time. There is often lively and passionate debate and the news stations fulfill their due diligence by giving the run up to elections their share of footage.

But, an underlying issue that has been growing for some time now, has remained unresolved. The majority of the British people have lost all faith in politics. They have no respect for the individuals campaigning and even less hope for an outcome in the general election that will actually benefit anyone but the politicians themselves. We can dance around this issue by raising these educated points:

  • the policies are becoming too similar – left and right wings have become murky waters as politics seems to be occupying central territory
  • There are no powerful public speakers or stand out leaders among Cameron, Miliband, Clegg, Farage that can sway public opinion with any gusto
  • The American style of promotion and theatre does not suit British politics and is turning voters off rather than on
  • In a world of stress and heavy work schedules people just do not have the head space for politics and they are not convinced the result will have any real effect on their current lifestyle

But these are polite points. They would cause a small drop off in voters and procrastination in others. What leads to disillusionment is something embedded into the hearts of voters that leads to annoyance, celebrated ignorance, anger, disinterest and worse of all total abandonment. I am a woman and as is the case for many of our kind, the memory of the suffragette struggle, ensures my trip to the ballot box. If it wasn’t for their passion, fight and sacrifice I would have been tempted to let this one pass me by.

Not because I consider myself out of touch with the political policies, ignorant to the importance of our democratic system, or bone idol, but because I genuinely can’t see a positive outcome given what I have seen to date. So here are seven points that are brutally honest and run around my brain whenever I see any of the local or national candidates pledging their service to their party and to the people:

1. U-Turns

It has to be top of the list. Anyone who voted for the Liberal Democrats at the last election will have noted that their 0% tuition fees policy was abandoned as Nick Clegg agreed to (or should I say wholeheartedly supported) tuition fee hikes as proposed by the Conservative wing of the coalition. So, when presented with a more powerful position in the lime light unfortunately party policies take a back seat, or rather are abandoned entirely, by politicians.

2. Left verses Right

A coalition between the Liberal Democrats and the Conservatives four years ago essentially united two parties that stood at polar opposites on the politics spectrum. I mean come on the words liberal and conservative themselves sum up this utter divide in viewpoint and yet they ran the country together….how did that happen and why were we not more vocal about it?

3. Expenses scandal

Politicians knowingly defrauded the system that our taxes fund by putting in expenses claims for money they were not entitled to. That is theft and in any other company no cover-up would have ensued and the employees would have felt ashamed and hopefully bad about their actions. Not in politics where everything can be defended and mind boggling issues become minor errors of judgement that happen in any institution – do they? How do we trust politicians who chose to enhance their extortionate pay packets with more perks that we paid for? It infuriated me then and it still does now.

4. Childish

They hurl insult after insult at each other like bickering school children in Prime Ministers Questions. Isn’t that a serious sign of a broken system. Instead of concentrating on real issues they choose to poke fun at each other like they are trying to impress their mates. Enough said on this one, it speaks for itself.

5. They never answer the question

They all do this religiously and it is annoying to watch and ultimately tells the audience one thing – they do not want to answer the question because the answer would be damming to them. We always know the answer so why can’t these serious party leaders answer something straight. Just tell the truth, apologise if you need to, admit a weakness and then rebuff it with your strengths, but don’t just dodge the question. It makes you look like complete idiots.

6. They are detached from real life

Some of the one liners they come out with quickly tell us all we need to know about what they actually understand about life for working men/women. I could list all the faux pas but I think it is more important to list the statements made or sentences spoken that resonated with the voters and made them feel like politicians were on their exact wavelength and not preaching from atop an ivory tower.

I didn’t find any of those.

7. Likeability

It is not a competition based on their looks, humour and charisma. But there are some similarities that I find robotic, false, engineered…because of course they are. The scenes with family, children, babies etc etc that show them in a particular light. Staged perfectly for maximum exposure. Those slick, gelled hair cuts, crisp shirts, immaculately shaven faces, moisturised glowing skin…well there is just something a little smug and slippery about it all isn’t there? I don’t like politicians, well there is the occasional one, but in general not so much.

So will it be a hung parliament? I genuinely hope so because that, and only that, will be a true representation of what this nation is thinking. We don’t know who to trust. We don’t know if they even care about what people live with on a day to day basis. And, how can we possibly know if the policies they enter term with will be the ones they stick with when the time comes and it matters most.

Show us a politician with integrity, character, and drive who is down to earth and we will vote for them…where is that person?

Next week I shall endeavour to compare the political policies of each party so we are somewhat the wiser on who shall get our disillusioned vote in May. I vote out of duty and pride and neither of those are currently levelled at this nation or its politicians.

Spring


Leave a comment

Preparing the Office for Spring/Summer

The ABC office is feeling a little bit giddy like so many other offices across the UK. Why? Because the sun is shining! And what does that mean? Absolutely everything to anyone with a sense of humour, a fun loving attitude and an appreciation for life/nature/tans/dry sunny joy filled days!

Yes, we are beginning to sound flowery, girly and somewhat silly but there is just something about those first days of great weather in Spring that cannot help but lift the spirits. And, there might not be tons of scientific evidence (or there might, I haven’t checked) but on sunny days we all feel that little bit more motivated because we are happy to be alive, even if that does mean we are at work.

So here is our roundup of great things that happen in spring and what you need to start thinking about to prepare for summer. That and we should all take a moment to say – thanks nature, you may soak us with your rain, blow our bins across the street, hurtle hail at us, threaten snow and deliver sludge, and serve us up many long dreary grey days – BUT you also give us sun on occasions. And we are grateful right now for your rays of sunshine, flowers, plants and green trees. Of course, we will go off you if it starts raining again tomorrow!

1. Beautiful views from office windows and on the journey into work

Spring

It is lovely looking out at greener than green landscapes. There are lots of flowers springing up everywhere, the trees look green and leafy, the plants are starting to bud, and you can see some individual sun rays. It leads people to speculate whether there is a higher power, if the rays are pointing something out to us or just let the mind wonder on how beautiful the world can be and how lucky we are to get to see it.

2. Air Conditioning

If you are going to stay appreciative of the warmer climate then air conditioning will seriously help with productivity levels. Right now the heat is nowhere near intolerable, it is just beginning to enter our radar. So now is the perfect opportunity to sort out those air conditioning units and ensure your staff are comfortable when the temperature gets turned up. It fans and windows are all you can budget for then make sure you do all you can to keep those offices as breezy as possible.

3. Smiley Faces

Smiley

The sun delivers us a dose of vitamin D which brings some people out of their seasonal defective disorders (SADs). This makes them happier in general and far more likely to smile. It can actually transform some people’s lives and is a serious problem for them, making them depressed, anxious ad generally glum all winter. Sunlight does make us smile more because it is uplifting.

4.  Refreshments

Ice lollies

There is always a place for tea and coffee in the workplace but as spring lands there is need for other refreshments, including but not limited to:

  • sparkling water
  • chilled water
  • ice lollies
  • iced tea and coffee
  • fruit juices
  • salads (time for those summer diets)

5. Spring/summer clothing

Fashion woman wearing a pretty spring dress

It is finally time to shelve the boots and get the shoes and sandals out…well almost. That means summer dresses, skits and light breezy tops. For guys there is the less dramatic shift to short sleeve shirts! It is nice to go out and get some new summer clothing that makes you feel beautiful and fabulous. There can be something incredibly empowering about a tailored dress. Of course, there are those among us that will find dresses uncomfortable, heels impossible to walk on, and flowery patterns just girly and annoying. But for many the feminine attire will make them feel pretty and liberated.

So there you have it – plenty of reasons to welcome spring with open arms. Embrace the moment, acknowledge the sunshine as you are standing with your colleagues and smile. If the sun cannot put a smile on your face you either need another job or more windows where you work! I accept that it will not help shift workers or those who work in windowless factories but hopefully these people will make the most of long weekends and have days off to enjoy the good weather to come. Let’s be optimistic, even though it always rains more than we want it to, it’s the British way after all! Have fun everyone!

taxes


1 Comment

IR35 Personal Service Companies: The Facts

HMRC are using their powers to crack down on those who break IR35 rules. The problem we are seeing with many clients is that those rules can be incredibly complex to unravel. So here is your walk-through of the legislation in place, who it applies to and what HMRC are trying to crack down on.

What is it?

HMRC have special IR35 rules which are designed to prevent the avoidance of tax and national insurance contributions through the use of personal service companies and partnerships.

Note, individuals can still operate through either their own personal companies or a partnership, but IR35 seeks to remove any possible tax advantages from doing so.

Removal of tax advantages

The tax advantages mainly arise by extracting the net taxable profits of the company by way of dividend. This avoids any national insurance contributions which would have been due if that profit had been extracted by way of a salary or bonus.

The intention of the IR35 rules is to tax most of the income of the company as if it were salary of the person doing the work.

To whom does it apply?

The rules apply if; had the individual sold their services directly rather than through a company or partnership they would have been classed by HMRC as employed rather than self-employed.

  1. An individual operating through a personal service company, but with only one customer for whom they work full time is likely to be caught by the rules. On the other hand an individual providing similar services to many customers is far less likely to be affected.

Planning consequences

The main points to consider if you are caught by the IR35 rules are

  • The income of your company will be charged to income tax and national insurance at personal tax rates rather than company tax rates
  • Consequently there may be little difference to your net income whether you operate as a company or as an individual
  • If you have a choice in the matter would you want to continue to operate through a limited company
  • If the client requires you to continue as a limited company can you negotiate with the client for an increase in fees to cover the extra tax and national insurance due

Employment V self-employment

One of the major issues under the rules is to establish whether particular relationships or contracts are caught by the IR35 legislation. This is because the dividing line between employment and self-employment has always been a fine one.

All of the factors will be considered, but overall it is the intention and reality of the relationship that matters.

The following factors are relevant to the decision. HMRC will consider the following to decide whether a contract is caught under the IR35 rules

  • Mutuality of obligation

The customer will offer work and the worker accept it as an on-going understanding

  • Control

The customer has control over tasks undertaken and hours worked

  • Equipment

The customer provides all of the necessary equipment

  • Substitution

The individual can do the job or send a substitute

  • Financial Risk

The company bears the financial risk

  • Basis of payment

The company is paid a fixed sum for a particular job

  • Benefits

The individual is entitled to sick pay, holiday pay, expenses etc.

  • Intention

The customer and the worker have agreed there is no intention of an employment relationship

  • Personal factors

The individual works for a number of different customers and the company obtains new work in a business-like way

Exceptions to the rules

If a company has employees who have 5% or less of the shares in their employer company the rules do not apply to the income that those employees generate for the company.

Note, in establishing whether the 5% test is met any shares held by family members or associates must be included.

How the rules operate

The company operates Pay as You Earn (PAYE) and national insurance on actual payments of salary to the individual during the year in the normal way.

If on 5th April the individual salary from the salary included benefits in kind amounts to less than the company income from all of the contracts to which IR35 applies the difference net of allowable expenses is deemed to have been paid to the individual as salary on 5th April and PAYE & NIC’s are due to HMRC by 19th April.

This is a potentially complex area and we will be pleased to review any contracts you may have with customers to ascertain whether they are IR35 friendly. Please note that there is no such thing as an IR35 compliant contract.

For advice on this just email: shell@abc-accounting-services.co.uk or call 01427 613613 and ask to talk to Shell or Ian.

1


Leave a comment

Key Budget Takeaways 2015

George Osborne promised no giveaways or gimmicks in his 2015 Budget which is a bold statement given that this was his last chance to impress voters. Whether you believe his words or not matters little when you consider this simple fact: if you vote conservative in May you will wish to believe that this Budget shows no bias. If you vote for another party in May then you only stand to benefit from this Budget if it was intended as a sweetener. So either way the Budget before an election is often beneficial to the masses, delivered as unbiased by the standing political party, and hotly contested by opposing parties – business as usual then!

There have been tax cuts – what a huge surprise! And here are the rest of the predictably small Budget announcements.

1 2 3 4 5 6 7

8721354_s


Leave a comment

Why you need to take a break!

Sometimes we need to take a break but there are so many obstacles in our way:

  • I won’t fit everything in
  • People will think I am lazy
  • I can’t afford to take time out
  • People are relying on me
  • Nobody else is taking a break

Then ultimately, we put the idea out of our minds and soldier on. But, is that the healthy option here? Are we a nation of workaholics? Do we take enough breaks?

And of course the answer is no we do not take enough breaks and this in itself can have detrimental effects on our health. Workaholics end up stressed which in turn clouds their judgment, makes them emotional wrecks and seriously reduces their level of productivity. If you do not take breaks away from work and small ones during your busiest days then you will end up being:

  • Stressed
  • Suffering from poor posture and maybe even poor physical appearance (looking tired/exhausted)
  • Tired and less productive
  • Ill because your immune system is not operating on full power
  • Mentally wrought and edging your way towards anxiety and panic issues

Here are six ways you can make a massive difference to your life and find time for those all-important breaks that you need to keep your energy and sanity levels intact.

1) Prioritise

Everyday there is 100 and 1 things to get done and we could all quite easily rush from one thing to the next without taking time to grab any food or talk to the person that works next to us. In effect all we are achieving is being chained to our desks and when one workload is quickly replaced by another there is no end to it in sight either.

So, the only answer is to start saying no sometimes. I know – how scary is that? But, the fact is that you can afford to turn down some work, you can afford to put some things on a lower priority list and you can afford to delegate some stuff to others. The skill of saying no is essential to a happy and well balanced life. If you cannot prioritise your workload then you will burn yourself out.

Set a routine for your day and stick to it. You will be surprised because people do wait and they will respect the fact that you are taking a lunch break or taking fifteen minutes for a cuppa and brainstorming session. Be ruthless about your day and map it out for you – everything else will fall into place and you will end up working harder during the time that you are at your desk.

2) Allow worries to surface

Do not bury your head in the sand or pretend nothing is wrong when it is. If you allow those worries and stresses to come to the surface then you are enabling yourself to deal with them. This may mean sharing them with someone else, doing a little research or simply admitting to yourself that they are a concern.

It can be liberating just to admit that something’s are beyond your control and no matter how hard you work there will always be stresses. Let them out, write them down, tell someone about them and they will instantly diminish in size and importance.

3) Make time for reflection

Go over your decisions and try and look at them from different perspectives. This means that you can catch problems early and keep evaluating your choices based on now – making sure they are still the best ones for you to make.

Mind maps are always good for this as you can visualise what is going on in that complex brain. There is always a cluster of thoughts revolving around one decision so get them onto paper and then you can see how they relate at which thoughts hold more weight.

4) Turn down your emotions

Try to view the world in a more rational way and do not look at peoples choices as personal. Most decisions are business minded so try and think of their reasons for making them. Annoyance and anger towards others only fuels a stressful working environment and fills you with doubts that are not easily resolved.

5) Enjoy yourself and your accomplishments

There are lots of reasons for not making time with friends and family: deadlines, workload, the expectations of others, it’s the social norm these days! But when you do stop you relax and you take in exactly what you are meant to be working so hard to enjoy. There is far too little enjoyment and living going on these days and far too much working long hours taking its place.

6) Do what comes up

It is not always the things that you are used to and comfortable with that make you the happiest in life. Take the chances that you are not sure of or just nudge you outside of your comfort zone because those are the ones that tend to open up more doors. Mix up your stable income with something that is a little riskier but could put you in perfect stead further up the line. You never know what you will be missing if you flatly turn down opportunities.

1


Leave a comment

Your Business is Your Baby

Babies keep you up all night, they demand all of your time and energy. They are costly and the responsibility of keeping them safe and giving them a nurturing upbringing is sometimes overwhelming.

But they are also immensely rewarding and nothing can put a smile on your face quite like a happy and content giggling baby that you helped create and raise.

These emotions and sacrifices may well sound familiar.

When you decided to start your business you practically gave birth to a baby. No really…you did!

Building your business is a huge commitment and at times it will take every ounce of strength, energy and sanity that you have available. People will not understand the sacrifices you make to keep your business on track because unless you have your own baby you do not understand what other parents are going through.

The sooner you admit what your business means to you the easier it will be to communicate that to others. It is not just a source of income or the product of you pursuing your passion. It is a combination of those things which makes it incredibly important to you.

If you asked yourself what you wanted most from your life as a teenager, you are not going to say a reliable partner and two healthy and happy children. You might – but it is unlikely. You are more likely to answer: to be living the dream – have money and be doing something I love. You want to reach your potential, make your mark on the world and earn a living while doing those things.

No matter the sex, ethnicity, or culture of your baby they all need the same:
  • Understanding/ Communication
  • Protection
  • Feeding
  • Clothing
  • Nappy Changing
  • Love and Nurturing
  • Introducing to the world around them

No matter the type, industry, or location of your business they all need the same:IT/Business Plan/Forecasts/Communications

  • Business Insurance/Health & Safety/Security
  • Credit/Sales
  • Branding
  • Debit/Supply
  • Team Building/Advice/Support
  • Marketing/PR/Networking

Babies inevitably grow.

You created your business and that makes it an extension of you. You want it to have your values – your drive – and
be made in your image. That is a natural desire as a parent.

In the beginning and to some extent throughout that journey your ambition is simply to survive. But, crafting your voice, building your story and standing for something (whatever that might be) can have a huge impact on your chances of survival.

Your business has a solid place within your heart. As soppy as that sounds it’s true. You cannot prevent the connection from forming because you have put your whole world into it and potentially jeopardised a lot of family and leisure time
to pull it off.

Sculpting your business in your own image works to a point, and it is imperative to ensure the ethos of your
company captures your core values. But, as the business grows there will be lots of other influences that will mold
and shape it for the better.

A company created entirely in ones own image has been suffocated. Whereas one that has grown through a multitude of experiences, mistakes, and leaps of faith is more able to adapt and evolve to suit the changing times and landscapes around it.

How will you parent your baby? These are some of the things our Director, Belinda Darley has learnt along the way which you may relate to:

1 2 3 4 5 6

Baby business workshops will be coming to the local area in the coming months – to discuss your business problems, get support and advice from business veterans and have the chance to network with like-minded individuals – watch this space…

10562948_s


Leave a comment

Auto-enrolment and the 2015 General Election

This is a big year for accountancy and business. There are plenty of factors that will effect out political and economical climate. We are covering two of the big issues being debated daily at the moment and those are auto-enrolment and of course the General Election in May.

Workplace Pensions Automatic Enrolment: What you need to know

As a business owner, by employing even just a single individual you may be obligated to provide a workplace pension for that member of staff. The new pension automatic enrolment scheme is gathering momentum as more are expected to comply, eventually it will be normal practice. The effect of non-compliance could lead to hefty fines and even in some extremes jail time. An automatic enrolment simply means that the staff members who meet the criteria as defined in legislation will be automatically allocated a pension. That does not mean that the employer does not have to action that scheme and have a provider and planned process in place.

Not all businesses are required to do this at the same time so you need to find when your staging date will be. Ideally, you will start the process sooner rather than later since it is inevitable, it would make sense to be prepared. You will need to seek advice and decide on the best pension scheme for your employees and your business moving forward. There are different options so there are choices to be made.

The process generally works by nominating a contact. The Pension Regulator will communicate the needed information and processes to the contact. The contact will also be the one to register new staff members on the pension scheme. So who does this apply to?

The criteria for auto-enrolment is as follows:

  • The employee needs to be aged between 22 and State Pension age
  • They need to earn more than £ 10 000 a year
  • The employee must work in the UK

The best action you can take right now is to go and seek advice from an experienced pension advisor. They will talk you through your options and help you find the right scheme for you and your staff.

Types of Workplace Pensions are:

  • Defined Contribution Pension Schemes
    • This is usually expressed as a fund value and usually depends on the amount that’s been paid in, for how long it’s been paid in and how long the investment has done.
    • When you retire and the markets are not doing well at the time of retirement, you may end up with less than you anticipated, however, the reverse is also true should the markets do well.
  • Because your employer is purchasing the scheme from the provider in bulk, the fees negotiation in terms of managing your fund is usually less.
  • Defined Benefit Pension Schemes
    • These are usually expressed as a percentage
    • What defines the pay-out, depends on your pensionable income and the amount of years you have worked for your employer.

The percentages each party has to pay:

This gets to the core of the fear that most employers are wrestling with – how much will it cost? The fact that it is beneficial and makes sound sense for retirement doesn’t make the outlay any easier to manage with a tight cash flow.

  • The employee:
    • Minimum 0.8% of your ‘qualifying earnings’ rising to 4% by 2018
  • The employer:
    • Minimum 1% of your ‘qualifying earnings’ rising to 3% by 2018
  • The government pays:
    • 2% of your ‘qualifying earnings’ rising to 1% by 2018

The rise is staggered to help small businesses with the financial commitment they are making. To some it will be a testing time but the scheme is designed for ease of integration and it offers employees a securer future.

When will you have access to your pension fund?

The pension fund only becomes available to you when you reach the age of 60 or 65, depending on when you decide to retire. You can take early retirement in some instances at the age of 55, however, it is very seldom that it is recommended as we tend to live far longer than previous generations. The extra five to ten years spent at work may just make a very big difference to an employee’s pension fund.

Tax charge

Bear in mind that if you contribute more than 100% of your salary to a pension, or more than £40 000, whichever is the lowest, you may have to pay a tax charge. Your lifetime allowance is £ 1.25 million. This is not limited to your workplace pensions, this will include all your pension contributions. For most this will not be a huge concern! But you never know – live the dream!

 

What does 2015 hold in store for the UK?

With the 2015 General Elections coming up, it is a well-known fact that David Cameron along with all the other party leaders, will be marketing their way onto our screens, into our newspapers and onto our social media feeds a lot in the coming months.

There is a big question over what this election will bring and there are plenty of theories. But, what this election does have, perhaps more than any that have preceded it, is a hell of a lot of doubt over which way this one is going to swing.

  • Is Ed Miliband really the right face and fit to lead Labour to victory – most doubt it
  • Will Nick Clegg and the Liberal Democrats hold any traction at all after his famous U-turn on tuition fees after joining forces with the Conservatives four years ago?
  • Can Cameron muster enough votes to avoid a coalition, or worse, complete indecision which will signal a loss of faith in his actions to date?
  • Will the UK Independence Party or Scottish National Party draw enough votes to cause a serious upset and even feature in coalition talks – doubtable but can we really say for sure?

The future of British politics has never been more in doubt. As hard as the decision is the importance of each single vote has never been greater. It may well come down to a few votes in the end and one of those could be yours! Make it count, even if you spoil the paper and vote for democracy in a form that is not currently represented in the houses of parliament. This year is the year to vote and who knows what outcome we will have when May is over!

Follow

Get every new post delivered to your Inbox.

Join 11,175 other followers