I hope you are keeping safe and well.
Wishing you a Merry Christmas and a Happy Prosperous New Year.
This will be my last newsletter before Christmas and the New Year break so I wish you a happy Christmas and a prosperous New Year.
Let us have hope that in 2022 we return to a more normal way of life free of the restrictions that we have faced over the last two years.
Our Christmas Opening Hours
Our office will be closed for the Christmas and New Year period from 5pm on Wednesday 22nd December, re-opening at 9am on Tuesday 4th January.
I wish you and those close to you the happiest and safest of Christmases.
Stay safe and well.
Kind regards,
Steve
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
2021 – A year of resilience and recovery?
Let us have hope that in 2022 we return to a more normal way of life free of the restrictions that we have faced over the last two years.
The pandemic happened and now is not the time to reflect how it happened or judge how it was managed, indeed further restrictions have recently been introduced and all we can do is take precautions individually to prevent the Omicron virus spreading and continue to take responsibility in the community to socially distance and help prevent the spread.
This year, despite the lockdowns and restrictions, we have been amazed at the resilience of clients and how they have energetically repurposed or pivoted their businesses into new areas, products and services. Businesses have redesigned delivery and payment systems, moved their entire processes digital, accepted remote working or new safe working environments and adopted to new technologies to survive and indeed prosper in the Covid-19 era.
Clients have demonstrated to us how we can all readily adapt to a change in circumstances and have given us inspiration and optimism for the future.
We believe that by this time next year we will be back to where we want to be and more of our daily lives will resemble some kind of normality again.
Do not give in to the virus, stay strong, be resilient and together we will move forward!
Consumer prices rose by 4.6% in the 12 months to November 2021, according to the lead measure of the Consumer Prices Index including owner occupiers’ housing costs (CPIH). This is up from 3.8% in the year to October 2021. Annual inflation rates at this time are influenced by the effects of coronavirus (COVID-19) in 2020.
The Consumer Price Index (CPI) also rose from 4.2% to 5.1% in November 2021.
A wide range of prices contributed to the rise in inflation, with the largest upward contributions coming from motor fuels as well as clothing and footwear, where prices rose this year but fell a year ago.
See: UK economy latest - Office for National Statistics (https://www.ons.gov.uk/economy/economicoutputandproductivity/output/articles/ukeconomylatest/2021-01-25#inflation)
The Office for National Statistics (ONS) latest figures show the UK’s average house price increased by 10.2% over the year to October, down from 12.3% in the year to September 2021. The average UK house price was £268,000 in October 2021, which is £24,000 higher than this time last year.
The temporary changes to Stamp Duty, Land and Buildings Transaction Tax, and Land Transaction Tax may have allowed sellers to request higher prices as buyers’ overall costs are reduced. As the tax breaks were originally due to conclude at the end of March 2021, it is likely that March’s average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline.
This effect was then further exaggerated in June 2021, in line with the extension to the holiday on taxes paid on property purchases in England, Wales and Northern Ireland. Following a decrease in July, average house prices increased in the months of August and September 2021, reaching a record level in September 2021 (when the last of the tax holidays came to an end in England). Despite a slight fall in the month of October 2021, average house prices remain higher than the previous peak seen in June.
Private rental prices paid by tenants in the UK rose by 1.7% in the 12 months to November 2021, up from 1.6% in the 12 months to October 2021. The beginning of 2021 saw a slowdown in rental price growth, which was driven by prices in London.
In England the October data shows, on average, house prices have fallen by 1.5% since September 2021. The annual price rise of 9.8% takes the average property value to £285,113.
See: UK economy latest - Office for National Statistics (https://www.ons.gov.uk/economy/economicoutputandproductivity/output/articles/ukeconomylatest/2021-01-25#hpi)
In partnership with Hubbub, the John Lewis Partnership is launching a £1 million fund to support trailblazing ideas and innovations that can accelerate the transition towards a more circular economy.
Whether it's rethinking waste with new products or materials, finding creative ways to shift consumer mindsets or developing new business models and services, then the Challenge would like to hear from you.
The fund will provide grants between £150,000 to £300,000. If you would like to be involved, then complete your application by 9 January 2022.
See: The Circular Future Fund — https://www.circularfuturefund.co.uk/about
The Construction Employer's Federation (CEF) health and safety initiative Safety Reboot returns for a second year in January 2022. The month-long program aims to encourage construction companies to stop work for about 15 minutes, once a week throughout January, to take time to focus on key areas of health and safety.
Resources on eight topics, developed by the CEF Health and Safety committee last year, are available as they cover key areas of construction health and safety. Question packs and discussion aids on three new topics for 2022 - asbestos, respirable crystalline silica and underground services - have also been developed to increase the scope of the initiative.
The resources should be used to start conversation and interaction between the workforce on issues that they encounter every day on site.
See: Safety Reboot 2022 Resources (https://www.cefni.co.uk/news/safety-reboot-2022-resources)
Help to Grow: Digital is a new UK-wide scheme to help small and medium size businesses (SMEs) adopt digital technologies that are proven to increase productivity.
From December 2021, the scheme will offer SMEs free and impartial advice on how technology can help their business. A new online platform will be set up to help them to:
• identify their digital technology needs
• assess technology purchasing options
• implement new technologies in their operations
Eligible businesses will also be able claim a voucher covering up to 50 per cent of the costs of approved digital software, up to a maximum of £5,000.
These vouchers are expected to be available for software that helps businesses:
• build customer relationships and increase sales
• make the most of selling online
• manage their accounts and finances digitally
The voucher will be available to UK businesses that:
• are registered at Companies House
• employ between 5 and 249 employees
• have been trading for more than 12 months
• are purchasing the approved software for the first time
See: Help to Grow – Take your business to the next level (https://helptogrow.campaign.gov.uk/)
Customers who currently receive HMRC benefit payments into a Post Office card account will be given extra time to switch their account, HM Revenue and Customs (HMRC) has confirmed.
HMRC recognises the vital financial support tax credits, Child Benefit and Guardian’s Allowance can provide to individuals and families; and wants to give them every opportunity possible to receive the benefits to which they are entitled.
The department has arranged a one-off extension to the contract with the Post Office allowing customers until 5 April 2022 to provide alternative account details to HMRC.
This means that the 13,000 customers, who are still to notify HMRC, will temporarily be able to continue to receive their payments into their Post Office account, giving them extra time to set up new accounts and notify the department.
HMRC is still encouraging those benefitting from the extension to switch their account at the earliest opportunity.
See: HMRC customers with Post Office card accounts given extra time to switch accounts - GOV.UK (https://www.gov.uk/government/news/hmrc-customers-with-post-office-card-accounts-given-extra-time-to-switch-accounts)
Certain gifts to staff at Christmas are tax free if structured correctly.
Employers are allowed to provide their directors and employees with certain “trivial” benefits in kind tax free.
This exemption applies to small gifts worth no more than £50 to staff at Christmas, on their birthday, or other occasions and includes gifts of food, wine, or store vouchers.
December 2021 COVID Update:In view of the latest Government COVID guidelines, our staff that are able to work from home will do so with effect from Monday 13th December 2021.
However, our Worle office remains open with a skeleton staff, and all staff can be contacted on the normal number (01934 444100).
Our reception is open for deliveries of post, books and records.
In view of the current uncertainty regarding the Omicron COVID variant, we will be offering meetings via telephone call or Zoom video call in place of in-person meetings until the Government guidance is updated.
HMRC are reminding traders to prepare for customs changes that come into effect on 1 January 2022. You will no longer be able to delay making import customs declarations under the Staged Customs Controls rules that have applied during 2021. Most customers will have to make declarations and pay relevant tariffs at the point of import.
You should consider before 1 January 2022 how you are going to submit your customs declarations and pay any duties that are due. You can appoint an intermediary, such as a customs agent, to deal with your declarations on your behalf or you can submit them yourself.
Some businesses already have a ‘Simplified Declarations’ authorisation from HMRC that allows their goods to be released directly to a specified customs procedure without having to provide a full customs declaration at the point of release.
If you want to use Simplified Declarations, you will need authorisation to do so. It can take up to 60 calendar days to complete the checks needed for this and you will also need to have a Duty Deferment Account in place. Therefore a new application made now may not be authorised before 1 January 2022.
For a summary of the changes see: Less than a month until full customs controls are introduced - GOV.UK (https://www.gov.uk/government/news/less-than-a-month-until-full-customs-controls-are-introduced)
Last year many businesses put on a “virtual” Christmas party event and HMRC agreed that would be acceptable in order for there to be no taxable benefit for the employees involved.
There continues to be no taxable benefit for employees provided that all staff are invited, and the cost does not exceed £150 a head, inclusive of VAT.
If you have also had an annual summer event then provided the combined cost of the two events is no more than £150 a head then there would be no taxable benefit in kind. If, however the summer event cost £80 a head and the Christmas party £100 a head only one event would qualify for the exemption.
Where possible taxpayers should “Gift Aid” any payments to charity to provide a further benefit to the charity. Higher rate taxpayers obtain additional tax relief on the grossed-up amount donated.
For example, where an individual makes a £20 cash donation to charity the charity is able to reclaim a further £5 from HMRC making a gross gift of £25. Where the individual is a 40% higher rate taxpayer he or she is able to claim a further £5 tax relief under self-assessment, reducing the net cost of their donation to £15.
Note that the donor is required to make a declaration that they are a UK taxpayer and those that have not suffered sufficient UK tax to support the Gift Aid amount will taxed on the shortfall.
Remember that Gift Aid does not just apply to gifts of cash. Many charity shops will now sell donated items on your behalf and are able to treat the sale proceeds as Gift Aided donations. It is also possible to gift quoted securities and land and buildings to charity and claim Gift Aid on the market value of those assets.
One tax planning opportunity that many thought the chancellor might restrict was the exemption from inheritance tax for regular gifts out of an individual’s income.
Inheritance tax is designed to tax transfers of capital so if the donor can demonstrate that the gifts are made out of surplus income then the transfers are not taken into consideration for IHT. The exemption applies where there is a regularity to the payments, such as a standing order to pay school fees.
HMRC will also require proof that the payments are paid out of post-tax income and do not limit the donor’s normal lifestyle. Detailed records are required, and we can help you with a suitable spreadsheet.
Many were expecting the chancellor to announce changes to inheritance tax (IHT) in his Autumn Budget, However, like capital gains tax (CGT), the rules have remained broadly the same as last year. That means that each tax year individuals may make gifts of up to £3,000 in total and that amount is not included in their cumulative total of gifts for IHT. Even if the £3,000 annual exempt amount is exceeded, provided it is an outright gift to an individual, there would be no inheritance tax payable provided the donor survives for 7 years.
Note that the gift of an asset other than cash may also give rise to a capital gain and CGT may be payable where the asset has increased in value. However if you give away a business asset such as shares in your trading company it is possible to make a claim to hold over the gain so that no CGT is payable. We can of course advise you on the procedure to follow.
In their recent labour market review, the Office for National Statistics (ONS) show that in October there were 29.3 million employees, up 160,000 on the revised September 2021.
It is possible that those made redundant at the end of the furlough scheme will be included in the RTI data for a few further months, while they work out their notice period. However, responses to the ONS business survey suggest that the numbers made redundant were likely to be a small share of those still on furlough at the end of September 2021.
The number of job vacancies in August to October 2021 continued to rise to a new record of 1,172,000, an increase of 388,000 from the pre-coronavirus pandemic January to March 2020 level, with 15 of the 18 industry sectors showing record highs. Both single month vacancies and Adzuna's online job advert estimates reached record levels of vacancy numbers in October 2021.
There are a number of actions you can take to make your business attractive to new staff. In addition to reviewing your pay and conditions to be as competitive as possible, these include:
• Tasking recruitment as a permanent process;
• Regularly asking existing staff, customers and suppliers for introductions;
• Offering incentives for referrals;
• Make sure you are running constant online social media and local advertisements;
• Embracing flexibility in hours and location in your business;
• Introducing a “Golden Hello” and loyalty bonuses for length of service (typically one to three years);
• Advertising testimonials from existing staff;
• Using government initiatives for apprentices;
• Make your company and the job sound as attractive as possible by outlining the position to sound prestigious and challenging. These two factors are big incentives for bright potential candidates;
• Knowing that job satisfaction comes from feeling respected and having the opportunity to learn new things and excel in the face of obstacles when advertising the role; and
• Convey your businesses personality so potential employees get a feel for what it would be like to work for you;
Recruiting new employees is tough just now so be different! For example, some employers are now offering “Wellbeing leave” in addition to the usual holiday package. If you want to recruit more you have to get serious about the process and be on it 24/7, 365!
Useful guidance on the procedures for recruitment can be seen in the ACAS guide “Recruiting staff” which can be seen here: Recruiting staff (acas.org.uk)
