New edition of the employer bulletin

HMRC has released the latest issue of the 'Employer Bulletin' publication which includes summaries of recent changes and updates that have been announced which are relevant to employers and agents.

The topics covered in the latest edition include the following:

  • Coronavirus relief measures. Updates on the Coronavirus Job Retention Scheme, COVID-19 Statutory Sick Pay Rebate Scheme, Deferral of VAT payments, general Coronavirus guidance on supporting employees and a Benefits and Tax Credits Update.
  • Short term business visitor changes. HMRC’s rules for employers with short term business visitors (STBVs) from overseas branches or territories with which the UK does not have a Double Taxation Agreement changed from 6 April 2020. This is known as STBV Appendix 8. A number of changes have been made to HMRC’s guidance due to the COVID-19 outbreak.
  • Off-payroll working rules. The government has postponed the roll-out of off-payroll working rules to the private sector until 6 April 2021. This deferral was announced in response to COVID-19, to help businesses and individuals deal with the economic impacts of the pandemic and the government remains committed to introducing this policy.
  • COVID 19 – Salary Sacrifice. If an employee wishes to amend their terms and conditions of employment and opt out of a salary sacrifice arrangement directly because of the change in their circumstances due to COVID-19 (including furlough arrangements), this can be done. HMRC’s guidance includes further details.
  • Claiming Employment Allowance. The Employment Allowance increased by a third to £4,000 from 6 April 2020. The allowance is now only available to employers with employer NIC liabilities of under £100,000 in the previous tax year. Connected employers or those with multiple PAYE schemes will have their contributions aggregated to assess eligibility for the allowance.
  • Official Rate of Interest for the 2020-21 tax year. From 6 April 2020, the official rate of interest was reduced to 2.25% (from 2.5%). This interest rate is used to calculate the Income Tax charge on the benefit of employment related loans and the taxable benefit of some employer-provided living accommodation.

HMRC has released the latest issue of the ‘Employer Bulletin’ publication which includes summaries of recent changes and updates that have been announced which are relevant to employers and agents.

The topics covered in the latest edition include the following:

  • Employment allowance. The employment allowance of £2,000 per year for all businesses and charities was made available from April 2014. The allowance is offset against the employers Class 1 secondary NICs and can be claimed as part of the normal payroll process through their regular payroll processes. The maximum amount available is capped at £2,000 per year. 725,000 employers across the UK have used the employment allowance to date.
  • RTI Penalties. The introduction of new in-year late filing and payment penalties is approaching. Late filing penalties and late payment penalties will commence in October 2014 and April 2015 respectively. Interest has been charged daily from April 2014 on any in-year payments not made by the due date.
  • Basic PAYE Tools. The Basic PAYE Tools software for the 2014-15 has been updated. This is an update to the existing version rather than a separate download, so existing users do not need to go to the HMRC website to get the update. Employers should ensure that they are using the latest version (14.1.14168).
  • Annual tax summaries. Annual tax summaries for the 2012-13 tax year are currently being prepared and will be sent to taxpayers across the UK in October of this year. The annual tax summary will show individual taxpayers Income Tax and National Insurance Contributions for the previous tax year and will include a table and chart to show how this contributes to different areas of public expenditure, such as health, education and defence. An estimated 24 million UK taxpayers will receive a personalised summary, 4 million more taxpayers than the previous year.
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Case Studies

The Tax Man

Minimise the stress of an investigation and make use of our extensive experience in securing best outcome for our clients

Business Valuation in Distress

Take advantage of our impartial and rigorous due diligence procedures

FD in The Cupboard

Our innovative ideas are here to improve your business performance and secure appropriate and cost effective funding

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The Tax Man

The Tax Man

A new client was introduced to us via a recommendation with whom we arranged to meet on a regular basis in order to determine a number of changes that we felt were needed to their business structure. The client was at the time operating as a husband and wife partnership. The business was flourishing and had a number of large contracts with big organisations.

At the start of the process they were still heavily immersed in their day to day operations so we can get a full flavour for their ambitions, aspirations and growth plans. We quickly recognised there were sufficient tax savings which can be achieved by changing the structure from a partnership to a corporate entity. We carried out a business valuation and disposed of the goodwill from the old to the new business. Unfortunately, as often is the case with efficient tax planning, HMRC got involved and disputed our valuation.

An HMRC investigation can be a very stressful time for any client, even for those best prepared. However, our client had minimal input in the HMRC communication as we dealt with this professionally behind the scene. As an added benefit, our client could rest on the security that all work was covered by insurance and therefore all costs and time in dealing with this enquiry were covered by the fee protection policy we had put in place.

The initial approach taken by HMRC was very aggressive and they tried to present an argument that there was no goodwill in the business. We challenged HMRC’s view that the goodwill was worthless. After lengthy correspondence and numerous telephone calls, HMRC agreed 100% with our original valuation, which preserved our original tax saving plan for the client. Tax savings on this case where in the region of £75K at the outset, with ongoing savings of £6,000 per annum. We are pleased to add another happy client to our portfolio.

Business Valuation in Distress

Business Valuation in Distress

Selling a business is never an easy process, but when disputes arise, the need for a reliable third party due diligence process is even greater.

Tearle & Carver have extensive understanding of the requirements for remaining objective when managing a potentially difficult company buyout. In one such case, we were approached by the courts to act as independent accountant for an acrimonious business sale in which one partner was exiting the business and selling shares to the other. Given the circumstances, both sides had totally polar views of what their business was worth.

After arranging an initial meeting with the company, we were thorough in ensuring we completed due diligence, validating the figures in the accounting records, carrying out adjustments where appropriate, and drafting a set of reliable management figures within the framework required by the court.

A draft version of the report detailing our findings and conclusions was submitted to both parties, giving them the opportunity to voice any queries or concerns and ensure all relevant factors had been taken into account.

Through this process, we were able to submit a final report to the courts that was both binding and acceptable to both parties, effectively resolving what could otherwise have been a time consuming and costly process for all sides.

FD in The Cupboard

FD in The Cupboard

For smaller companies, it is often not possible or cost effective to pay for a full-time Financial Director.
Many of our clients therefore make use of Tearle & Carver’s extensive expertise to provide the services of an FD as and when required.

In this case, we were approached by the management team of an organisation looking to acquire the existing business via an MBO (Management buy out). Their business plan had proved ineffective for securing funding, and what they needed was financial expertise from someone with a developed understanding of the company’s internal workings.

Tearle & Carver helped deliver the solution our clients were looking through utilising our bank contacts in order to make the MBO viable, while also building a robust business plan and preparing our client for the rigorous vetting process. To help with cash flow issues, we introduced factoring which led to improved cash flow management.

We advised on the appropriate business valuation and structure, and continued to prepare monthly accounts to track profgress once the management were fully in command of all the information they needed to move their business forward.

In order to best assist these clients through the crucial first year of ownership, we attended board meetings on a regular basis, a service that we continue to provide to date.

With our continually developing understanding of their business, this client is able to remain confident that Tearle & Carver can provide any financial support they may need, now and in the future.