Chancellor’s latest Autumn Statement

By Ken Maggs, Moore Thompson

The lack of big changes to tax or regulations in the Autumn Statement will help businesses plan for the year ahead, according to East of England-based accountants Moore Thompson.

There was much anticipation ahead of the Chancellor’s latest Autumn Statement, especially following the big announcements made during his three previous announcements to Parliament.

However, it soon became clear that George Osborne’s focus was on the economy and public finances. He said “economic and national security” was at the heart of his Autumn Statement and that he wanted to create “an economic recovery for all, in all parts of the country.”

During his speech the Chancellor announced that the Government would double the housing budget to £2 billion a year, which will fund the creation of an additional 400,000 homes in England.

This measure will provide a significant boost to the construction industry and the suppliers that support it.

Mr Osborne also announced that 98 per cent of businesses would not have to contribute to the apprenticeship levy, following the introduction of a £15,000 allowance. The levy will see some businesses pay 0.5 per cent of their payroll budget to support future apprentices in the UK.

The Chancellor also announced that the 3 per cent company car benefit-in-kind diesel supplement would be retained until 2021, instead of being removed in 2016.

In his speech to the Commons he reaffirmed the creation of 26 new or extended enterprise zones and said that plans to devolve business rates powers to local councils would go ahead.

The Chancellor’s latest Statement has been pretty quiet compared to the last few that he has delivered and may have surprised many small businesses.

While there may not be any big moves to support SMEs, the fact that the Chancellor has decided not to make big changes to tax or regulations should be welcomed.

Knowing that the next six to seven months will hold fewer surprises will allow businesses to plan, invest and grow more easily, without the fear of a sudden change to their operations.

The Statement did contain some significant changes, especially for those looking to invest in the property market.

The introduction of an additional 3 per cent surcharge on stamp duty land tax for individuals looking to purchase buy-to-let properties or second homes will be a big disappointment for those seeking to make a strong return on their hard earned money and may shelve many people’s long-term plans.

Individuals should consult a professional if this measure affects their future retirement or investment plans.

 

More details on www.moorethompson.co.uk

 

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Are you considered progressive too?

What do your staff think of you as their employer? Is it in the words of the Strawbs song, “I say what I think that the company stinks” (sorry 1970s, show my age) or do they see you as an employer of choice and “Great to work for”?

Asking these question may give you some interesting answers and not always what you might expect. Measuring staff attitudes can be a highly effective activity to keep your finger on the pulse and gauge whether your employee relations and internal communication policies are as effective as you believe.

Over the years we have conducted a number of comprehensive staff surveys for our clients. These are always valuable and generate a good deal of information on what activities are well received and worthwhile and what issues staff feel uncomfortable about and where there is room for improvement. Managed appropriately, the responses can lead to such things as improved employee engagement, retention rates and increased productivity – all areas where HR can have a genuine impact on the bottom line of a business.

A good survey will be conducted independently and be structured carefully and might well include various activities such as teamwork, morale, pay and benefits, training, prospects and performance management. Results are likely to show your strengths and not so good points, of course, but will indicate where to concentrate efforts to improve.

One survey that we have done over recent weeks shows that our client, an international public limited company, is in remarkably good shape. Responses showed an overall 85% positive rate across their exceptional 100% level of participation. Although obviously delighted by the very healthy outcome, the company were able to pick up on a few areas where it can make comparative improvements, as well as the need to keep up their good work.

As part of the survey, we asked staff to select from a list of positive and negative adjectives how they saw the business. We fed the results into our computer and generated what is a quite fantastic Word Cloud. The words that were chosen are represented pictorially in direct proportion to their use in the survey. So what employer wouldn’t want their staff to acclaim they work for a company that is Progressive, Dynamic, Efficient, Supportive, Loyal and Fair? Descriptors such as Dull, Prejudiced and Unresponsive literally didn’t get a look in.

So how do you think it looks – Are you considered progressive too

 

David S Dixon – Principal, Personnel Matters

November 2015. ©Personnel Matters 2015

 

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Calls to scrap ineffective carbon taxes

By Ken Maggs, Moore Thompson

The Government should scrap “ineffective” carbon taxes and offer tax incentives to reduce emissions instead, according to manufacturing lobby group the EEF, which has recently produced a report in response to Chancellor George Osborne’s pledge to review energy taxes.

According to the EEF, the carbon floor price, which is the amount companies must pay per tonne of carbon dioxide produced, and the carbon reduction commitment (CRC) scheme are examples of “over-complex taxes”, which have been less than effective in reducing emissions and have actually raised prices for UK consumers.

The report estimates that the carbon price floor will end up costing energy consumers £23bn between 2013 and 2020, but only £6.5bn of this will achieve its intended aim of supporting investment in renewables.

With these facts in mind, the group is calling for the introduction of a new energy efficiency tax discount to incentivise investments in greener energy models, bringing it line with the higher levels of investment in the EU.

As a spokesman for the EEF points out, there are technologies such as carbon capture and storage that could be exploited or firms could use biomass materials in place of fossil fuels, as well as promoting energy efficient technologies and decarbonising the National Grid by using low-carbon electric alternatives.

He adds that many businesses know they are wasting energy but are too afraid of the risks involved in investing in the technologies to improve energy efficiency, as these are not within their expertise. However, if the incentives were in place, he argues that there are significant rewards on offer, as the global market for low-carbon environmental goods and services was estimated to be worth £3.4trn as long ago as 2012.

 

 

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Giving taxpayers a nudge

HM Revenue & Customs (HMRC), which has been in the news lately for its new system of accelerated payment notices (APNs), has now come under fire for the use of so-called ‘nudge’ letters sent by its Behavioural Insights Team.

These letters are being sent directly to individuals involved in disputes with the taxman instead of via their lawyers or accountants, which was previously the norm. The language in the letters, described as “intimidating” is used in such a way as to subconsciously ‘nudge’ them into settling the disputes.

The Behavioural Insights Team was originally set up as a central Whitehall function in 2010 in order to subtly alter the way people behave. HMRC has also set up it own ‘nudge’ unit to target high net worth individuals and other taxpayers they suspect of not paying the correct amount of tax.

According to a study of the practice undertaken by a leading law firm, the sending of these letters directly to clients in any other areas of litigation would be seen as applying undue pressure and would almost certainly be frowned upon by regulators.

As one of the lawyers commented, HMRC believes that by placing pressure directly on taxpayers engaged in a dispute, they can force them to pull out and settle but if a financial services business were found to be using a similar tactic, the Financial Conduct Authority (FCA) would soon be knocking on their door.

As he pointed out, the department is sending letters about often highly complex issues to individuals who have no technical knowledge of tax issues, which demonstrates just how far HMRC is prepared to go in its attempt to persuade taxpayers not to pursue their dispute.

He added that if the taxman were confident of their technical arguments, they would have nothing to fear from the dispute resolution process, so do not need to spend taxpayers’ money on behavioural scientists to ‘nudge’ people to abandon their appeals.

 

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Posted in Tax

Print marketing is dead – long live print!

In a marketing world dominated by social media, what’s the point of print?

That’s easy, print marketing supports your online marketing efforts – okay, you may say not very ‘environmentally friendly’ and in today’s world and the emphasis on sustainability, the print industry has put ever more demands on the paper mills to give the end user what they desire in terms of recycled or recyclable materials.

That’s easy for us to say right?

You be surprised at how much choice there is these days when it comes to affordable but high-quality environmentally-friendly paper.

If you don’t spend your days immersed in design and print, then you might feel a bit confuddled by the different paper types and weights when it comes to choosing what would be best for your brochure, leaflets or business cards.

The paper weight you choose will impact on how much you would need to spend on postage for a direct mail campaign, as well as the feel, substance and perception of quality of the item.

One of the great things about working with an experienced graphic designer is that we have an exceptional grasp of all the different options and can advise you on what would work best for your promotional materials. Most graphic designers also have a strong network of print suppliers – we certainly do at Grafixbiz.

If you’re beginning to think about having some marketing materials created and printed and wondering what options might be available, you should find this guide a helpful starting point.

The language of printing

When we talk about printing, you’ll hear certain words and acronyms that may be unfamiliar:

  • CMYK – A colour system that uses cyan, magenta, yellow and black, and delivers better results for printed items than RGB.
  • Coated paper – Coated paper is manufactured with a thin coating, typically made from clay, to give a range of finishes, e.g. matt or gloss. We tend to see coated paper in magazines, brochures, posters and catalogues. Coated paper is great for when you’re printing vibrant images.
  • GSM – Grams per square metre: the larger the GSM, the thicker the paper.
  • Digital printing – With digital printing, the printer works from a digital-based image directly to a variety of media, typically using high-volume laser or inkjet printers to print the work. (short run work)
  • Gravure – Method of printing using metal cylinders etched with millions of tiny wells that hold ink. (very large print runs such as catalogues)
  • Greyscale – Strips of grey, ranging from white to black.
  • Litho printing – Litho printing or lithography is a process for printing from a smooth surface, called a plate, to a layer such as paper. It tends to be used for medium to large print runs. (wet ink for mid to large runs)
  • RGB – This is a colour system, which uses a mix of red, green and blue. The RGB system is better for websites and on-screen designs.
  • Uncoated paper – Uncoated paper tends to have more of a textured feel to it (think newspapers and notebooks) and soaks up ink more easily than coated paper. Uncoated paper is often the best choice for stationery and printed materials that feature a lot of text.

Understanding paper weights

80gsm-100gsm

This is the usual thickness of paper that you would use in a photocopier.

110gsm-120gsm

You would probably expect stationery paper, such as letterheads and compliment slips to be this thickness. Before ordering stationery on this weight of paper, it’s worth asking for a sample to check whether it runs through your inkjet or laser printer without problems.

130gsm-170gsm

These papers are a good thickness for leaflets, pamphlets and flyers. You might also want to consider these paper weights for the interior pages of your company brochure, annual report or prospectus.

170gsm-200gsm

This is a midway point between paper and card. These paper weights are ideal for posters and more substantial leaflets and flyers.

200gsm-250gsm

This tends to be the starting point for heavier card and is ideal for brochure covers.

300gsm-400gsm

This falls into the board category; most business cards are printed on board within this weight range because it’s durable and has a high quality feel. You can use this weight for your brochure cover but this may have some stitching and folding implications.

400gsm+

Luxury business cards are often printed on board of 400gsm or above. You can even choose weights up to 1200gsm for a really durable, luxurious finish.

Before you have anything printed, you’ll be able to handle paper samples and get our advice about your options. Keep your eyes peeled for our forthcoming blog on paper materials, which should help you understand your printing options even more.

 

Source: Kindly reproduced with the express permissison of AnneMarie Gilbert, Grafixbiz

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Women to benefit from new Living Wage

By Ken Maggs, Moore Thompson

New research suggests that women will benefit the most from the new National Living Wage rate that comes into effect from next April, with some 3.7 million of them due to receive a pay rise by 2020. The new rate will also benefit over 2 million men.

The National Living Wage will be £7.20 an hour for workers over the age of 25, considerably more than the National Minimum Wage, which is currently £6.50 per hour but which will rise to £6.70 next month.

The study undertaken by the Resolution Foundation, whose work on the future of the minimum wage was cited by Chancellor George Osborne when he announced the policy in July’s budget, found that around a quarter of all workers, numbering some six million people, will get a wage rise by the end of the decade. This will be worth an average of £1,210. The rise will benefit almost 30 per cent of the female workforce, mainly because they have traditionally been in lower-paid jobs than men.

Meanwhile, according to the report, a further 2.8 million employees already being paid the new minimum would gain as firms maintained pay gaps between different workers. There will be considerable regional differences, with workers in areas including Yorkshire and the Humber, Midlands and Wales expected to be amongst those benefiting most from the higher wage.

However, while a number of organisations have welcomed the new policy, the think tank’s report points out that the income boost many workers will receive from the minimum wage rise will be more than offset by the cuts to tax credits and other benefits that were also announced in the July Budget, particularly for lower-income households.

 

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Economic growth forecast increased by Confederation of British Industry

By Ken Maggs, Moore Thompson

The Confederation of British Industry (CBI) has upgraded its forecast for UK economic growth following evidence of increased productivity, the strengthening of consumer spending and improved business prospects.

According to the CBI, the economy will grow by 2.6 per cent this year, up from a forecast of 2.4 per cent in June, after what the business organisation called “strong domestic demand and upbeat official data” since their last prediction. It has also upgraded its forecast for next year, foreseeing growth of 2.8 per cent compared with its former forecast of 2.5 per cent.

However, the CBI’s forecast is still below the 2.8 per cent expected by the Bank of England, although it is in line with other private sector forecasts and is higher than the 2.4 per cent predicted last month by the Office for Budget Responsibility (OBR).

The business lobby group now also expects interest rates to rise sooner than it originally thought. It had expected rates to begin rising from their historic low of 0.5 per cent from the beginning of next April but now believes they could rise to 0.75 per cent in the first quarter of 2016 and then continue to rise at a very gradual pace.

Looking further into next year, the CBI said it expects growth to continue at a similar pace to the three months to the end of June all year long, averaging 0.7 per cent a quarter as long as household spending and business investment continue strongly.

Total business spending could rise by 6.2 per cent this year, the group predicts, with manufacturing fixed investment jumping to a 12.6 per cent expansion. However, it added that all the growth this year will come from domestic demand, as the strong pound is hampering competitiveness abroad and growth in the Eurozone, the UK’s biggest trading partner, will remain subdued.

 

 

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Crowdfunding guide

By Lynn Munday ACA, Forecast Flow

Crowdfunding is now becoming a more popular way to raise finance for businesses. Many people will have heard of crowdfunding, but what is it and how do you go about raising finance through crowdfunding?

ICAEW has published a comprehensive guide which they have called “Crowdfunding Explained – A guide for small and medium sized enterprises on crowdfunding and how to use it”.

EC-Guide-to-Crowdfunding-EN-1If you follow this link http://bit.ly/1B7kf4P it will take you to the ICAEW website where you can download the guide by selecting the ‘crowdfunding explained’ tab.

 

 

 

 

 

 

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Warning over keeping interest rates too low for too long

By Ken Maggs, Moore Thompson

Despite Bank of England Governor Mark Carney saying last month that interest rates should not be increased from their historic low of 0.5 per cent too soon, a Bank policymaker has warned that keeping them too low for too long risks undermining the economic recovery.

Kristin Forbes, a US economist and member of the Monetary Policy Committee (MPC), which sets the rate, agreed with the majority of members earlier this month when the Committee broke unanimity and voted 8-1 to keep the rate where it was. However, she has now said that there is “peril to living only in the moment”.

According to Ms Forbes, who joined the nine-strong MPC last July, a rate hike takes between one and two years to take full effect. As a result, rates would need to rise well before inflation hits the Bank’s two per cent target. She warned that waiting too long risks undermining the UKs economic recovery, particularly if interest rates then need to be increased faster than the gradual path that the MPC expects.

However, the economist also commented that the continued strength of Sterling, together with recent falls in energy and commodity prices, would keep inflation low for longer and give the Committee “a bit more time”. In fact, she said that there is no need to act before the members are confident that inflation is heading back towards two per cent within about two years.

Meanwhile, fellow member David Miles said last week that there are arguments for starting towards a rate increase now, which suggests that the balance within the MPC is shifting towards a hike sooner rather than later. At the moment, a rise is expected next year.

 

 

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Why does my business need a cash flow forecast?

By Lynn Munday ACA, Forecast Flow

My last few blog entries have shown you what needs to be included in a rolling three month cash flow forecast.

As mentioned previously the cash flow forecast will show you if you have a cash shortfall or cash surplus over the next three months and I have described some of the short term measures you might use to improve your cash situation.

A cash flow forecast helps you to be proactive in your business so you can start to plan your short term cash requirements, as the forecast is a rolling three month forecast. The forecast needs to be updated each week with the actual transactions which have been cleared by the bank and then the forecast is extended for another week to keep the three month forecast.

Once the cash flow forecast is up and running it does not take much time to update it each week as long as it is kept up to date. In addition CEOs like to see the weekly cash position so they can plan for the short term – so what is stopping you from setting up a weekly cash flow forecast?

So if you want a tool where you can forecast your cash balance for the next three months on a rolling basis and you want to be proactive when it comes to your cash situation rather then being reactive, why not set up a weekly cash flow forecast? If you need any help or advice on this then please let me know.

 

 

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