Category Archives: In the News

Depending on the products or services your company offers and the associated production costs, having access to a little bit of cash can make all the difference when you want to create more lines, reach new markets or expand to meet demand. Start-up businesses often face barriers to accessing finance because there is no proof that the model will work and a potential lack of success is a risk big banks might not be willing to take. If your small business loan has been rejected, the bank is legally obligated to refer you to an alternative provider but it is important to understand the reason why you weren’t successful to see if the issue can be addressed.


Alternative Lenders

Independent or alternative financing is often more specialised and so there are a wider number of products to choose from, such as VAT loans, equipment loans and franchise loans. As with any form of purchase it is worth shopping around for lower interest rates but be sure of what you are signing up to; it may be secured or unsecured and there may or may not be flexible repayment terms or overpayment penalties. It is also possible to borrow against your company’s assets but we would advise you speak to your accountant prior to applying for any loan so you can be sure your figures are sound and the lending choice will not damage your business. If you are looking to appoint an accountancy firm to assist you with the right financing option, please call us to arrange a free new client consultation.

Peer-to-peer Lending

Individuals and businesses can borrow money via this method, regulated by the Financial Conduct Authority (FCA), which operates very much like a regular bank loan but often interest rates are more favourable. Funding Circle, Folk 2 Folk and Lendinvest are examples in the UK. Each funder has a minimum capital amount set aside and this is available to as many or as few people as they wish to fund, for any amount requested. Those wishing to borrow have to specify how much they would like and for how long, and they are matched to suitable investors to choose from.

Individuals and businesses can borrow money via peer-to-peer lending, which is regulated by the Financial Conduct Authority (FCA).



This financing method is a sound measure of the market and potentially a more reliable marker of future business success than the thoughts of sector leaders, so you and your ‘amazing’ idea can get a harsh reality check. In some ways, crowdfunding is a natural progression from the group validation which social media brings. The financing method allows for ‘positive feedback loops’ in a similar way social networks do; the start-up receives instant feedback and funds and the funders enjoy the emotional journey that engagement tactics can generate. Momentum can easily build from a small team of passionate advocates, but often you require excellent marketing skills, and ironically funds, to obtain interest in the first place. One option is looking at design, marketing and PR service providers who offer underwriting solutions, whereby they provide support when the business needs it the most in the crowdfunding period and cover the costs.

Bridging Loans

This form of short-term financing has exploded during the current decade, growing from £1 billion in 2011 to £7 million last year. These loans are predominantly used by those looking to buy a property on a tight deadline and don’t need the money for very long, for example to make a purchase while waiting for a sale. Property development companies often opt for bridge finance as monies can be accessible within a couple of weeks, which allows refurbishments to go ahead quickly. If you have equity in an existing mortgage or bridging loan, you utilise this money for your business, whatever its focus. It would be remiss if we didn’t highlight that bridging loans are secured against the value of a property and you run the risk of repossession if repayments aren’t made on time.

Bridging loans and merchant cash advances are a finance option for those wanting to undertake improvement work, and pay back once another property is sold or when seasonal custom returns.


Merchant Cash Advances

This funding option is aimed at established businesses and it particularly suits seasonal firms or services, but it can be a sensible option for some fast-growth start-ups. The quiet season provides the opportunity to make improvements, purchases or other changes, but this is when cash flow is usually a problem. The amount you are able to borrow on a MCA is linked to the average amount that you usually take in card payments, there are no restrictions on what the funding can be spent on and then repayments (the total is agreed in advance) are made as a percentage of the future debit and credit card sales. Essentially, until you have money coming in you don’t pay the money back, but the repayment amount increases along with any increase in sales.

Whether you are looking for a reputable accountancy firm to prepare your accounts for a loan application or require business advice for any aspect of your start-up or SME, please contact us to arrange a consultation. While we are based in Tamworth, we service businesses and individuals nationally and offer cloud accountancy software for effortless bookkeeping. 

We were discussing the etymology of phrases in the office the other day and I learned that the phrase “I’ll scratch your back, if you scratch mine” is over 400 years old and refers to giving an offender a light lashing in the English Navy. The person whipping the crew member tied to the ship’s mast would give a gentle punishment, just in case it was the offender was delivering the lashes to them on another occasion. In the media or movies, the phrase is often used in a negative way, but the original meaning also shows a real kindness to others. It got us thinking about building business relationships for the greater good of everyone involved, at the same time as building success.

Looking for opportunities to strategically partner can originate from your company’s books - who can you help and they help you?


Looking for opportunities to strategically partner can originate from your company’s books; by concentrating on areas where outgoings start to creep up, you can consider approaching the businesses that have assets or expertise you require and yours are needed by them.

For example, an accountants and solicitors could partner with each other as they will likely require each other’s services, but also clients would also benefit by having additional recommended and trusted expertise in related sector. Having new clients sent your way is one of the simplest forms of an alliance. Furthermore, the two companies could enhance profits by sharing the cost of marketing, advertising, product development and other business functions, or even cross-market or generate connected news stories.

A strategic alliance between two businesses is most often made through a cooperation agreement or other type of contract, but joint ventures can also be formed or each firm can have cross-holdings in the other. Entrepreneurs and inventors, or even those offering very specialised services, may find a successfully mutual partnership with established companies who have client contacts or engineering, manufacturing or development resources to kick-start a new product or service. They offer their technical or creative expertise in return for the capital and necessary means with which to get the idea off the ground.

Strategic business partnerships can be a simple gentleman's agreement or more legally, a cooperation agreement.


Nonetheless, a strategic partnership doesn’t have to be as grand as either of those examples, it can just come down to practicality, good ethics and a handshake. This is especially true when friends own companies or are sole traders, and when people operate in a close knit community, office building or business park.

The business offerings don’t even have to be related and I call this everyday networking. For certain businesses, dropping by to other local premises to find out what they offer and to explain what you is a sure fire way of picking up an enquiry here and there; similar conversations with friends you don’t usually talk shop with can always turn up surprising results. At the opposite end of the networking spectrum, there are what are sometimes known as corporate partnerships. These are often accessible, by invitation or otherwise, to a number of businesses by a single coordinating body or business to form a group. For example, Local Chambers of Commerce fall into this category where a fee is paid and you gain access to likeminded and local businesses, education, information, networking events and marketing benefits. Adams Moore is not only a member of the Lichfield and Tamworth Chamber of Commerce, but from September we will be a Corporate Partner of Bishop Vesey Grammar School, as we are excited about the benefits.

The state Grammar school in Sutton Coldfield, which is just a short drive from our offices here in Tamworth, recently asked Adams Moore if they would like to join; just one firm from each business sector is invited join the network comprising around 35 firms. As schools now operate as any other business does, especially dealing with the dips in Government funding, searching for creative new revenue streams is crucial to provide the very best experience for the children who attend. Bishop Vesey Grammar School facilitates a forum to exchange ideas and a marketing benefit to the Corporate Partners while enriching the lives of the students. We’re delighted to be helping a local school raise funds, and we can’t wait to begin attending careers fairs, golf days and BBQs.

Networking through a single entity like the Chamber of Commerce is a good way to find strategic alliances.


By thinking laterally about the benefits your business could have, whether that’s a conversation with a neighbour or contractually forming an alliance with a company in a closely related sector, it can make a difference to your turnover and bottom line.

If you’re looking for ways to reduce spending, capitalise on strategic partnerships or need advice about joint venture structures, call us to arrange a free consultation.


Advice for Individuals and Ltd. Companies

If you don’t own more than one property the changes to the landlord’s tax relief may have completely passed you by, but for those individuals that have just a handful of rental properties, profits are crashing before their eyes. The 2017-18 tax year will be the first in which a change is made to the tax relief system; instead of deducting all mortgage interest payments before calculating the tax, people can now only get tax relief on 75 per cent of that interest. A 20 per cent tax credit for basic rate tax payers will be received on the rest of mortgage payments.

Year-on-year the relief drops to 50, then 25 then zero per cent, meaning property investors are being taxed on their overall turnover and not just the profits. By the time the 31 January 2022 filing deadline comes round, only the tax credit for mortgage interest will be applied. Having an interest only mortgage, which generally increased landlords’ income, is not particularly effective anymore and people who have a small portfolio, who maybe weren’t seeing much profit anyway, are selling up.

The changes to the landlord's tax relief means some are selling as profits crash.


Hitting pockets hard

While on the one hand, people have four years to adjust to the new system fully replacing the old one, on the other, some are finding the legislation severe. The tax credit applied will only at the basic rate of tax for basic rate taxpayers and higher-rate taxpayers can only enjoy a credit of approximately half that; currently the basic rate is 20 per cent for earnings above £11,851, 45 per cent above £46,351 and 45 per cent above £150,000. The punishment doesn’t stop there though, as by being forced to declare a higher income, some are pushed into the higher or additional bracket of tax.

Are people still buying for letting purposes?

For many investors, buying properties to rent out has become less gainful and buy-to-let investment fell by 80 per cent between 2015 and 2017 according to the Intermediary Mortgage Lenders Association. However, one could argue the sector is still very much buoyant as those with large portfolios can often make cash purchases. Also, a demographic that could benefit from the changes are the ‘silver landlords’ who buy properties to rent with their pensions while enjoying their later years.

So called 'silver landlords' are using their pensions to purchase buy-to-let properties.


There are still profits to be made by purchasing and letting properties, but there are a number of considerations:

> Higher mortgage expenses – potential looming increases in the Bank of England base rate and the closure of the Funding for Lending and Term Funding schemes could mean more expensive mortgages.

> Lending regulations – when looking for a lender to purchase a buy-to-let, people who already have four or more mortgaged properties now face tighter restrictions, as the Bank of England’s Prudential Regulation Authority ordered banks to carry out tougher affordability checks.

> Landlord licensing – some local councils require landlords to hold a licence. East Staffordshire, Coventry and Nottingham are the closest councils to our offices here in Tamworth that have brought in such a scheme. This article from Which details a UK map and more information about the three licence types; mandatory, additional and selective.

> Energy efficiency changes – a minimum EPC rating of E is now required on new tenancies and renewals, and on existing tenancies from 2020. Cumulative fines of up to £5,000 will be handed out upon failure to meet the legislation.

At the start of 2017, a record high of 20 per cent of landlords were limited companies, so this could be right for you.


I own and rent properties – what should I do?

If you can see thousands of pounds of potential profits going up in smoke, you may wish to consider setting up a limited company, but it’s not right for everyone’s circumstances and it might only be cost-effective for the medium to long term.

Whether it’s Adams Moore or another firm, do take professional advice from an accountant on whether it’s beneficial for you to set up a limited company for your property rental business.

Countrywide reported that at the start of 2017, a record high of 20 per cent of landlords were limited companies and Kent Reliance saw buy-to-let mortgage applications from firms rise from 45 to 70 per cent between 2016 and the first nine months of 2017. With this increase, likely derived from those seeking to counter changes to landlord’s tax relief, the mortgage market is responding. There are vast amount of mortgage products available to limited companies now, rising from just 17 in April 2013, to 80 in 2016, to 212 the year after and to 235 in April of this year.

There are more mortgage products available to ltd. companies than ever before.


While a mortgage’s interest can be still deducted for relief on a company’s corporation tax, there are disadvantages that must be weighed against the potential tax savings:

> higher mortgage rates for limited companies

> new mortgages are required for current portfolio under the limited company’s name

> corporation tax still must be paid on profits

> additional stamp duty surcharges and capital gains tax bills as you essentially must sell the property to the ltd company

> additional 3 per cent stamp duty surcharges on buy-to-let

> associated fees with switching mortgage

> solicitor’s fees


If incorporating isn’t the best route for you, there are some other options for you to offset your loss in profits:

> Increase rents, being careful not to price the property out of the market and then lose money holding an empty house

> Look for shorter-term fixed rate mortgage deals for low interest, but these come with greater risk

> Transfer property ownership to your spouse but ensure the income doesn’t push them into the higher rate of tax


You may find this recent article about changing from sole trader to a limited company useful, but please contact us if you would like to take advantage of the free consultation we offer to new clients and we’ll get to know more about you and your property business.

If you have run your business as a sole trader with relative ease, you will be understandably cautious about incorporating it due to the extra obligations and associated costs. However, there will be a right time for many people when they can benefit from the tax savings, having limited liability for the business, developing more credibility and the greater potential for borrowing that a limited company offers. Unfortunately there is no magic sales or profit figure that you can hit, which indicates you should make the change, as every business is distinct and each person has a different personal situation. Other income, from property for example, can greatly affect the decision. However, if your sales are over £50,000 and profit is above £20,000, you should have a conversation with your accountant to investigate the advantages.

When is right to change from a sole trader to a limited company when growing?


To help you consider the pros and cons of switching from sole trader to limited company we have listed some important factors for you to consider. We also offer free accounting advice as part of our one-hour, new client consultation so there’s nothing to lose in contacting us if you don’t already employ an accountant. It is entirely possible to undertake the incorporation process and subsequent accounts and tax returns yourself, but a little advice could mean more pennies in your pocket and the avoidance of penalties if all the Ts aren’t crossed.


Potential Benefits

> Potential to pay a lesser amount of income tax and therefore take home more

> You will no longer be personally responsible for the company and its losses

> Additional tax deductible expenses against corporation tax are allowed

Potential Disadvantages

> More paperwork and returns to Government

> Losses can only be used against the company’s own profits

> You can no longer draw money freely out of your business bank account


How You Will Receive Your Income

Instead of all of the company’s money belonging to you and being accessible to you to take at any time, as a company director and shareholder you will instead be paid a salary and dividends; all of the profits belong to the company. You are recompensed for the latter after the year’s corporation tax is paid and be taxed on these amounts; as a sole trader you are personally taxed on all profits, so should you make the move it’s crucial to keep everything separate with personal and company bank accounts. Continuing with a bank account in your name can result in a nasty tax mess and you must notify HMRC that you are no longer operating on a self-employed basis.

When in a growth stage and profits are reaching £20k it is worth considering being a ltd. company


Example of a director’s take home pay:

Your salary is £6,000 – this falls within the personal allowance and under the National Insurance range so you pay no Income Tax or NI

Your dividend is £32,000 – the dividend allowance is £2,000, which you can add the remaining £5,000 of your personal allowance to. This means £7,000 of your dividend is tax free.

Your taxable income is £25,000 – your tax bill will be calculated on the basic marginal tax rate of 7.5 per cent because your earnings haven’t exceeded £46,390. You will pay £1,811 Income Tax.

You take home £36,125 – this is out of the total of your £38,000 earnings.


Corporation Tax

Limited companies pay corporation tax and no national insurance. In 2018/19 the main rate of tax is 19 per cent (if profits are under £30,000) and in 2020 this will be reduced to 18 per cent. Sole traders can pay a combined 47 per cent Income Tax and National Insurance so there is a marked difference. However, when operating as a limited company you will still personally be liable for personal tax and NI, and you should factor in that corporation tax doesn’t come with a tax free allowance. Furthermore, IR35 is associated legislation that is in place to ensure people aren’t working as contractors using limited companies in order to pay less tax than they would as an employee, so be sure you are compliant.


How Will Your Accountancy Requirements Change?

Accountant’s costs for limited companies are more than they are for sole traders, as there are more undertakings. Therefore, freelancers and contractors will likely want to take advantage of online accounting software, which can process invoices, VAT, expenses and much more to help reduce their own and their accountant’s hours on the books. Cloud technologies take away a lot of the strain that comes with running a limited company – you can read more about our Xero Software offering here, but we are also experienced with a number of other providers, so the best option for you can be discussed.

Instead of one self-assessment tax return you will be required to submit a set of accounts, an annual return and a corporation tax return. If it is advantageous to be VAT registered, there will be your VAT return too. As a director you will need to file a self-assessment, as all directors must, and if you take a salary from the business this must be processed correctly through a company payroll.

If appointing a new accountancy firm at the point of switching company structure, you should be sure to ask about how their charging works. For example, are advice phone calls, communication with HMRC and Companies House or using their address for registration purposes billed for on an hourly basis? When moving to a limited set-up it’s likely that you won’t require full service support, but when your turnover is reaching circa one million pounds our fixed-fee accountancy package, Board Support, is a cost effective option.

You can claim for food, drink, travel and employee entertainment when operating as a ltd. company.


Tax Free Expenses

Limited companies can put subsistence claims through their books, so employees, including you as a director, can purchase food and drink at the expense of the company when out on business as well as the travel costs. Entertaining employees is also an allowable expense of up to £150 per employee per year with a limited company, whereas sole traders are restricted in what costs they can claim for.


A More Attractive Proposition

Wrongly or rightly, clients, customers and investors often see limited companies as more professional and able to undertake larger orders or contracts. When looking to proactively grow through investment, incorporation can be a big advantage, as you can easily sell shares in exchange for capital.


Legalities of a Director

If the business is sued, the directors of a limited company are not liable, unless they have been named as a personal guarantor. However, we would advise you speak to your insurance company when changing from being a sole trader to a limited company, and consider additional cover to include costs of defending the directors and officers of a company if personal allegations are made. In comparison, sole traders can find themselves in problematic financial situations as they and the company are legally the same entity; the personal assets of a self-employed person, such as a house or car, can be seized to pay debt.

Nevertheless, directors do have other legal duties, including acting responsibly, ceasing to trade if the business is failing and protecting assets. Directors can be fined or imprisoned if they are found to have not upheld their responsibilities.

If there will be other directors apart from yourself you must agree and record who has responsibility for different areas of the company. Also document what will happen if one of you wants to leave, how the company will be split during a sale and what profits each director can expect to receive.

Adams Moore accountants and business advisers in Tamworth can help sole traders make the switch to being a limited company.


We hope that our overview has given you a few things to think about, but as each situation is different, we would like to assure you that if you have the right accountant you should never have to get involved with the calculations. At Adams Moore we will help you make all major decisions on changing the structure of your business from sole trader to limited company status; if you’re looking for financial security, separating your personal finances from your business as well as saving money, please call us to arrange a free consultation.

Starting a new business or sole trader venture can be stressful, worrying and confusing, and then someone mentions being ready for year end, accounts or filing your tax return – these feeling are likely to multiply and questions flood into your brain about where to start. HMRC also requires some employed people to file a self-assessment too, as it is the system used to collect tax on all income. Often is it deducted from savings and pensions, as well as wages, but people who rent out properties and some who are in receipt of child benefit will need to declare this revenue and pay back the appropriate amount of benefit or tax.

Your first tax return can be stressful, so be organised in good time.

Accountancy fees are not tax deductible in certain circumstances and some people may not feel ready to utilise an accountant like Adams Moore in their first year of business. Therefore, we have written this advice to stand everybody in good stead for the 2017/18 financial year. As that year ended on 31 March, now is the time to organise your tax return. With five days to go before the deadline in January 2018, over 25% of people hadn’t sent it – don’t get caught out and prepare early.

First things first…

Do you need to file a self-assessment tax return? If you’re self-employed and are a sole trader, a partner in a business, a company director (unless it’s an unpaid position for a not-for-profit organisation) or are self-employed as well as hold an employed position you must send a self-assessment. As already mentioned above, self-employment includes income generated from property. If you aren’t sure, visit this page on the Government website to see the full list of those with an obligation.

The first job to do is to register with HMRC, and it can take up to 20 days to receive your activation code. The code must be used within 28 days or it will expire and you will have to re-apply for one. Another task that may take a little time is gathering information from third parties, which could include the interest gained from bank accounts, savings and investments. You should know how much you have contributed to pensions, income from property and all financial information relating to your sole trader earnings and outlay.

Register with HMRC and keep records of everything throughout the year on a weekly basis

Keep neat and tidy records of all financials

Good bookkeeping practice is essential, which simply means carefully recording all your business outgoings and income. If you have been piling receipts into a box, all isn’t lost, but we would suggest you choose a specific time to look after your finances each week, starting this week! Some people choose to employ a bookkeeper, but when starting out this can be an unwarranted expense. ‘Doing the books’ daily may sound like a sure fire way to keep things up to date, but for many it is less efficient than carving out a space in your weekly schedule where you can concentrate for a longer period of time. Keep a place where you can file any hard copy receipts during the week, use a similar system for digital invoices you receive and a have a log of any invoices that need to be raised. Stock taking and creating purchase orders go hand in hand with these tasks, so we suggest this is undertaken weekly, fortnightly or monthly on your ‘finance day’. Really, when you break it down, best practice comes with a routine so items don’t get forgotten, paperwork doesn’t get lost and books don’t get messy – you’ll soon regret the lack of habitual practice when it’s time to collate details for year end.

Great advice, but how do I record the details?

Whether you’re a spreadsheet aficionado or not, using a programme such as Windows Excel is all you need, and create the following column headings on one sheet to record purchases:

> Date, Company, Item, Category, Capital Expense (property, plant or equipment), Total Amount, VAT (if you are VAT registered), Amount Minus VAT.

On another sheet you should detail your income:

> Date, Company/individual, (some won’t have this information), Services/Products, Additional Service/Product Categories, Amount Minus VAT, VAT, Total Amount.

Sole traders must keep records safe for five years after the first 31 January deadline so it’s important to back up in case your computer breaks down.

Keep all information digitally if possible, for example, scan reciepts or use accountancy software

Should you be thinking digitally?

Yes! With the Government’s ‘Making Tax Digital’ initiative it is wise to scan receipts and hold all information digitally. This can be done by yourself or there are a wide number of choices when it comes to software, held locally or on the cloud. Adams Moore uses Xero accounting software, which you can read more about here; it allows you to keep on top of your books on the go and we can access all your records. The days of people making a trip to their accountant with a file full of paperwork and receipts are over.

When filing your tax return, you simply fill in sections that apply to you and the online system reacts to your answers meaning you only complete the necessary information. You can save as you go and send when you’re happy. Should you have got into financial difficulties and anticipate not being able to pay your tax bill by 31 January you should call the Business Payment Support Service and discuss the possible deferral options.

If you are considering hiring an accountant to assist with your bookkeeping and tax return, please contact us and book your free accountant consultation appointment to discuss your requirements.

HMRC employs the equivalent of 56,000 full time workers and is responsible for income tax, corporation tax, capital taxes, National Insurance contributions and the climate change levy… to name but a few. While it is therefore understandable that the Government department changes its priorities and regulations, often it leave individuals and business frustrated. One advantage of using an accountancy and business advice firm like Adams Moore is that we can alert you when your personal or business affairs are affected, present the options and help modify processes or complete paperwork accordingly.

We have created a round-up of the most recent changes your business may not be aware of. Should you require any assistance on these HRMC updates, please get in touch and arrange a free consultation about your needs.


Brexit Forces Prioritisation Reshuffle

HMRC’s priorities have been influenced by Brexit, and on 30 April the Chief Executive, Jon Thomson, outlined the findings of a work programme review to a Public Accounts Committee. The reprioritisation has resulted in some parts of the Making Tax Digital (MTD) initiative being delayed; the deferrals may be troublesome for some, but savings for the department likely make financial sense while HMRC deals with the challenge of leaving the EU – and as accountants, we support intelligent financial decisions!

Some Making Tax Digital (MTD) plans have been deprioritised due to Brexit preparations.

Single Digital Accounts

An ultimate aim of HRMC, creating single digital accounts for businesses, now has a decelerated programme, but it will apparently not impact the delivery of MTD. The prioritisation shake-up has meant the convergence of business taxes from the current range of IT systems onto a single system will now happen at a gentler pace. This will therefore slow the creation of the single account for all business customers and it was announced no further MTD for Business changes will be directed for implementation before 2020.

MTD Services for Individuals

Most individuals should not need to deal with any changes in the near future as no additional requirements will be made on people, unless HMRC deems it will result in a reduction in phone or post contact, or ‘significant savings’. Along with this news, work on the simple assessment and real-time tax code changes is being frozen for the time being. Other delays concerning individuals are PAYE Settlement Agreements, Inheritance Tax payments and Tax Advantaged Venture Capital Schemes applications.

Making Tax Digital for VAT

The mandatory MTD for VAT, due to be introduced from April 2019 is one element that has not changed, but we thought it important to highlight. Small companies that are not currently VAT registered, but are continually growing, may not be aware of the turnover threshold of £85,000 which is the point when businesses must register for VAT. Forecasting is key so that payments can be planned and saved for. While we’ll return to digital VAT a little later in the year in more depth, businesses must be prepared to keep digital records (for VAT purposes only) and provide VAT returns through the MTD software from next April, and a pilot system is now live for simple returns.

Employees will not be taxed on the benefit of electricity for cars at workplace charging facilities.

Rewarding Green-thinking Employees – Have Your Say

In the autumn of last year, the budget summarised the implementation of a new tax exemption; for the benefit of electricity provided at a place of work, by the employer, to charge a car or van. Currently companies who offer charging points for electric or hybrid vehicles must tax individuals for the usage of this gainful facility, in the same way as a company car would be taxed. The technical consultation that closes on 5 July 2018 seeks comments on the provision of workplace charging facilities, which vehicles the exemption covers and the qualifying conditions of the exemption. It is expected legislation will be included in the Finance Bill later this year and its effect will be made retrospective to 6 April 2018.

VAT Scale Charges Change from May

It happens every year for businesses using the VAT scale charge, and 2018 is no different – the road fuel scale charges have been updated, and you can find them here. The scale is used to calculate the amount of VAT that is payable to HMRC on road fuel, without having to split mileage between business and private use; this method adds a fixed amount to account for the private usage, based on CO2 emissions, and therefore must be for each car, not a fleet of vehicles and vans are not eligible. Companies should apply the new scale from the first new accounting period after 1 May, but what are the alternatives?

If the private mileage is very low the scale may not be cost effective and instead the exact business mileage can be used within accounts. Otherwise, a mileage allowance can be paid by the business and VAT can be reclaimed on this, or in the event of business mileage being very low and private mileage is high, a business can choose not to reclaim VAT on fuel costs. Contact us if you would like to discuss the most beneficial option for your company’s cars and financials.

Deadline for P11D Form On 6 July 2018

Benefits and some expenses provided to employees and directors for the financial year ending 5 April 2018 must be reported using the form P11D, through self-assessment or via a PAYE coding notice adjustment, and the deadline for filing the 2017/18 P11D is 6 July 2018. Additionally, if the benefits are being reported via P11D or payroll the company employing the person must pay Class 1A National Insurance Contributions (13.8%) on the majority of the benefits. The P11D(b) form calculates the liability and this payment, which is due for 2017/18 on 19 July.

The deadlines are on the horizon and ensuring the details are gathered and reported correctly may take time. If you require any assistance with this process, calculations or the form completion please get in touch.

As the UK quickly moves towards the enforcement date of the new General Data Protection Regulation (GDPR) later this month, it is likely some smaller businesses are still not one hundred per cent sure if they have fulfilled the requirements. The directive took four years to prepare, and aimed to standardise data protection across the EU, meaning it is the most significant update in this area for 20 years. It was approved in April 2016, meaning UK businesses have already had two years to prepare. However, we understand that when a new, seemingly complicated, law is introduced the day-to-day running of your business can get in the way and sometimes (just sometimes) we all bury our heads in the sand.

Below we have created a simplified list of requirements it so you can take a breath and feel confident about the changes that come in to effect on 25 May 2018. If you are conforming to the current Data Protection Directive 95/46/EC then much of your existing management of data will be valid but there are new elements that you must quickly abide by. Nevertheless, if you think your company may have some adjustments to still make to its processes and documentation, and require guidance, please contact us about meeting with of our business advisers.

Ensure your business is prepared for the changes to data protection in May 2018

Who in the Company is Responsible?

The GDPR applies to ‘controllers’ and ‘processors’. Processors work on behalf of the controllers to process personal data; these people are legally liable for contraventions and must maintain the records accurately. Controllers define the way in which personal data is processed and the purpose of that action; obligations on these people include ensuring contracts with processors comply with the GDPR. Someone in the business should take responsibility for data protection compliance, but a formally designated Data Protection Officer (DPO) is only required in some situations; more information can be found here.

Identify Vulnerable Areas and the Valid Lawful Basis for Processing Personal Data

The controllers and processors, and other key decision makers must quickly identify where any new issues in compliance might lie. If you have a risk register, this is good place to start, but with three weeks before the deadline you may now need to bring in an expert to help you understand and negate the impact rapidly. There are now six available lawful bases to choose from in order to comply, and although having a legitimate reason for holding data is not new, there are additional requirements on transparency and accountability.

> Ensure you can’t achieve the same purpose in a reasonable manner without processing

> The bases are: consent, contract, legal obligation, vital interests, public task and legitimate interests

> Choose the lawful basis wisely, before you begin processing, and document it, as you should only amend with good reason

> Include your lawful basis and the purposes of the processing in your privacy notice

There are currently not many practical implications in this area, but the rights of individuals will become effected under the GDPR, for example, when consent is the lawful basis, people have a stronger right to have data deleted.

Undertake Data Protection Impact Assessments Where Required

A privacy by design approach is required by the GDPR and in some cases, where processing is likely to result in a high risk to individuals, Data Protection Impact Assessments are mandatory. For example where a new technology is being deployed, where a profiling operation is likely to significantly affect individuals or where there is processing on a large scale of the special categories of data. The ICO’s Code of Practice for DPIAs can be found here, and if you cannot address the high risks, the ICO should be consulted.

Comply with Consent Measures - Seeking, Recording and Managing

The ICO has published detailed guidance and a checklist to help businesses review and refresh their consent practices; the key considerations are having opt-in consent, it must be freely given, it must be specific to the data, be clear and the person should feel informed in order to the decision. If you currently process data with consent, it is crucial it meets the new GDPR criteria. If it doesn’t you must get new compliant consent or utilise a new lawful basis; if you are unsure you may wish to seek advice from a business adviser to ensure it is “specific, granular, clear, prominent, opt-in, properly documented and easily withdrawn”.

Document Everything to Illustrate Compliance

What personal data do you hold, where did it come from and who is it shared with? An information audit may be required across different parts of the business, and policies and procedures may need to be updated. Records must be maintained, and if any inaccuracies are found, all parties involved must be given the information so evidences can be amended accordingly.

Be Prepared to Identify and Report Data Breaches

You will be legally required to notify the ICO of a data breach in the event of a risk to the rights and freedoms of individuals; if the risk is high, you will also have to notify the people concerned. Examples of rights and freedoms include, financial loss, loss of confidentiality or damage to reputation. When reviewing procedures to ensure detection, reporting and investigation can be undertaken lawfully, it may be worthwhile categorising data so that if a breach occurs you know without difficulty whether it is reportable to the ICO or individuals. Breaches and failures in reporting breaches can result in fines. If your company required assistance in developing policies and procedures for managing data breaches, Adams Moore can advise and assist.

Where a data breach effects the rights and freedoms of the individuals involved the ICO must be notified immediately.

Communicate Transparently with the People Whose Data is Processed

Currently certain information, such as your identity and how you intend to use any data, must be communicated to people, but the GDPR requires additional disclosures. This can be imparted via a privacy notice, and must include the lawful basis, the data retention period and that a complaint can be made if the person is not content with the way the data is processed. You can view the ICO’s privacy notices code of practice here, which reflect the new requirements.

Ensure the Rights of the Public are Covered in your GDPR Measures

Individuals’ rights now include the right of access, to rectification and to restrict processing, to name just three so you must detail how each right can be met, for example, how you would retrieve and provide data to an individual or company in a commonly used electronic format. Any requests cannot be charged for and must be handled within one month unless the bid is considered excessive so review your procedures and consider whether the logistics of requests will negatively impact your current methods. The ne right to data portability should also be focussed on; it applies when processing is based on the individual’s consent, for the performance of a contract, when personal data has been given to a controller and when processing is carried out by automated means.

Ensure Children’s Data and Verification is Compliant

The GDPR is facilitating special protection for children’s personal data, a new area that is particularly pertinent for commercial internet services or ‘information society services’, which includes social network sites. You will now need a parent or guardian’s consent for those 15 years of age and under if consent is relied on to collect and process information about the minor; this also means the person’s age must be proved and parental responsibility consent has to be verifiable to operate lawfully. It will also be important to ensure your privacy notice is written appropriately so that children will understand it.

Contact Adams Moore for advice about the way your business meets the new GDPR legislation by calling 01827 54944, or use our contact form.


Automatic enrolment? Phasing? Mid-payroll increment? These are just a few terms that might set your heart racing and your brow sweating; it can be a stressful process making sure your business has prepared correctly for the recent changes to workplace pension contributions. While there is a clearly a legal obligation to comply with the April 2018 modification and an ethical outlook in caring for your employees’ future, there is also a financial impact on your business and this also must be planned for.

Adams Moore accountants in Tamworth can advise any business on preparing for financial changes with workplace pension contributions

Companies previously paid 1% of a staff member’s qualifying earnings. This has risen to 2% as of 6 April 2018 and the employee will now pay 3%. In certain circumstances the Government will pay a portion through tax relief or the company can choose to pay all of the minimum contribution, but either way the contribution must total 5%. From the start of the next tax year, on 6 April 2019, the total is going to jump further to 8%, meaning a 3% minimum contribution will be the responsibility of firms.

Since the scheme began, to help ensure people will be better provided for when at a pensionable age, more than 9 million people who had not taken out a pension plan have elected to stay in the system. The 1% provision by both employee and employer has been seen as a very manageable amount and didn’t impact the bottom line or pay packets too much, but sadly even next year’s 8% contribution will not secure a comfortable retirement for many and it should be seen as a baseline upon which to add to. Will the next 12 to 18 month be a rollercoaster ride that’s too much for some people to stomach? We’ve been advising our clients to strap in and keep their eyes open to avoid feeling too queasy about the changes.

Forecasting will more crucial than ever and monthly or quarterly management accounts will flag up what bearings the contribution increase is having on your books. Of course the only way of reducing a business’ contribution is if their employees choose to opt out of the scheme, which is not in the hands of employers; the Government believes over 21% of total UK workers will be opting out in 2018 and 27.5% in 2019, which is a sizeable leap from 10%, recorded in 2017. Younger employees are going to be more likely to opt out of the scheme over the coming year as student debt, high rent, saving to get on the property ladder or even ‘living life’ could be higher on their spending priority lists. Staff in their 50s and 60s also may think there’s not much time left to contribute and therefore opt out, and it has been found that women are more likely to decline the scheme than men due to part-time and lower incomes. Therefore, looking over the make-up of your workforce may be an indicator of how many staff may opt out, and this can be used in the planning process.

While there has been much chatter like these opting out examples and expectations, nobody really knows how it will play out, especially with how the fast approaching Brexit will shape the economy. We suggest businesses completely review their income and expenditure, so that all eventualities can be considered, pension related or otherwise, and costs can be absorbed without danger to the feasibility of the company’s future. It has been reported widely that businesses could start to delay rises in wages as they offset pension contributions and meet with April’s increase of the minimum wage from £7.50 to £7.83. This might seem like a sensible strategy on the face of it, but combined with increasing inflation and interest rates this may leave firms vulnerable when it comes to staff retention; the cost of recruitment and the effect a mutable workforce can have on customers and clients could quickly act against the original approach, leaving the company even more out of pocket.

Businesses must contribute to their employees' pensions, and this rises to 3 per cent in 2019.

Making savings can be done in a wide number of ways, and speaking to your business adviser and accountant is the first step in breaking down the numbers to see what areas can be improved on. Adams Moore welcomes new clients to undertake business reviews and for ongoing support, but here are some ideas on areas that companies can focus on:

> Review working practices and processes to increase performance

> Improve productivity by making changes within department structures and individual roles

> Settle contracts up front to obtain an annual discount

> Negotiate unit prices on larger orders

> Outsourcing services that have traditionally remained in-house, such as payroll

> Offer new or updated services based on customer or client requirements

> Analyse marketing and PR efforts to ensure they are making the proper return on investment

Key Things to Remember about Workplace Pension Schemes

> Ensure changes were effected on 6 April 2018 – payroll must accommodate the update, even if it was mid-pay cycle, to avoid legal action and a fine from The Pensions Regulator

> If none of your employees are currently eligible, the individuals must be assessed each time they are paid, and put into a pension scheme if the automatic enrolment criteria is met – obligations can be found here

> Staff meet the criteria if they are 22 years old or over but are under State Pension age, they earn more than the £10,000 per annum or £768 per month and work in the UK

> Employers and employees can choose to pay more than the minimum contribution levels

> After three years, employees must be re-enrolled if they meet the criteria, even if they have previously opted out

Making Tax Digital could be an opportunity for businesses to embrace a more efficient way of accounting
With the planned roll out of HMRC’s Making Tax Digital in April 2019, initially just for businesses that are VAT registered, there is a big push by the government on bringing tax accounting into the 21st century and creating the online revolution in this area that has already occurred in sectors such as banking.

The system has been piloted with businesses on a small scale from the end of 2017, and this has been stepped up into 2018 to include a wider live pilot. While there are no plans as yet to mandate individuals and businesses into the online filing system – which is part of HMRC’s plan to make tax more manageable for businesses and individuals, and to make it more efficient and accurate – it is worth understanding what it is all about and how it might affect your business in the future.

Why is HMRC launching Making Tax Digital and who does it affect?

HMRC wants to close a tax gap that is costing the government dearly, and is largely due to inaccuracies in tax returns – not as a result of tax avoidance or fraud, but simply mistakes that are being made when filling out tax returns. The plan is to mandate businesses into the system that are VAT registered. These businesses already file VAT online quarterly, but HMRC is integrating digital record keeping. This means that if the business or their accountant uses accountancy software, the accounting records will also be sent along with the VAT return, to make the whole process seamless. For business that use spreadsheets, the data from these can be linked to HMRC’s system using an appropriate interface.

There is the opportunity for businesses to provide quarterly update for other tax obligations too, but they won’t have to do this. Small businesses and individuals won’t be mandated into the system at all in the near future, as the introduction of it in VAT is a trial and must be proven to work well before it is rolled out on a large scale. However, we expect that this should happen eventually as the digitisation of accounting and tax return filing evolves.

Embracing the opportunities that Making Tax Digital will bring

So, if you’re an individual who files a tax return, a sole trader or limited company with no VAT obligation, you can sit back and relax for the moment. But rather than see the Making Tax Digital initiative as a potential future headache that involves more frequent tax information updating, it should be embraced as an opportunity to negate the headache of end-of-year tax return filing and a chance to look at overhauling your book keeping for the new digital era.

Many small businesses will still be keeping paper records of accounts and expenses logs/receipts, or using spreadsheets to keep track of income and expenditure. This works well for many people, but is the equivalent of cheques and a paying in book at the bank! We all use online banking services these days and benefit from a higher level of convenience that this brings. Getting tax accounts into a simple software system that keeps all records electronically, safely in the cloud to avoid loss of important documents or security breaches, and easily accessible by both business and accountant, is the way forward.

Not only will you be glad when it comes to end of year filing that your accounts are up-to-date, in one place and available to your accountant, but your business will benefit from the foresight and planning capability that having real-time accounts brings. Having your expenditure and income figures to hand whenever you need them means you can easily review the status of your business and better plan for business growth plans such equipment investment. You will know your likely tax liability well in advance to plan your finances accordingly.

It is just a matter of time before digitalised book keeping becomes a mandatory requirement, so while there is no need to panic just yet, why not get ahead of the curve and start now for plain-sailing transition.

Adams Moore offers Xero accountancy software. For further details on this, get in touch on 01827 54944.

Over the last decade, Adams Moore has concentrated heavily on developing business solutions to meet the evolving demands and requirements of our clients, and making investment in customer service processes and communication channels – not least of all our website. Providing a quality service is important to us. However, there is one area we thought was due for a major overhaul – and that was our office frontage.

After making several internal improvements to make the office environment nicer for staff and clients, such as new windows to the rear, we thought it was high time we addressed the face of our tired looking building to make it more inviting, and frankly, less shabby!

So, after an investment of almost £10,000 involving a complete new skim to the outside walls and a mighty decent paint job to walls and windowsills, we must say we’re rather pleased with the facelift. In fact, it’s such a transformation that we’ve almost not recognised our offices and walked straight past. We hope our clients don’t do the same!

Perhaps you are thinking of renovating your business premises in some way, or investing in equipment for your business? With the end of the tax year approaching, there’s not much time, but it is a good opportunity to make the investment. For further advice, get in touch with us on 01827 54944.

And just to prove just how much our frontage has been improved, here are some before and after photos to illustrate.