HB&O Headlines - April 2019

26th April 2019

 
Go paper free with the help of Cloud Accounting 

At HB&O, we are huge advocates of Cloud Accounting. The benefits of going digital are significant and digital software puts you firmly in control of your business finances.
 
Cloud Accounting systems are designed to provide a complete and up to date overview of your financial position. These intuitive systems support every financial process from time and expense recording to invoicing and banking. The information you gain from your accounting system can be invaluable in helping you be more productive, improve your cash flow and respond quickly to new business opportunities.
 
VFO Manager, Hannah Roe, gives an overview of Cloud Accounting and the benefits it can bring in this short video recorded at a recent business event.

Watch the video here
 
Tax efficient succession planning 
Helen C and Client
Succession planning is not just for large corporates. Sole traders, micro limited companies and larger organisations all need to plan how to sell or close their business and seek professional input to minimise tax liability. In our latest blog, we cover what you need to know to ensure the value of your hard work is maximised when it comes to selling or exiting your business.
Each individual scenario is different but through careful planning, you can be in the strongest position possible when you do come to exit your business. Time gives you greater flexibility to opt for the best approach for you, your business and your personal finances, including maximising the tax reliefs available. Our tax specialists’ work in partnership with our corporate finance and financial services teams on a daily basis so we’re well versed in the complexities of tax reliefs and schemes that can apply to a business sale and can talk you through different approaches to suit your circumstances.
 
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VAT road fuel scale charges to increase with effect from 1 May 2019
When your business reclaims all the VAT that it pays on fuel, purchased for the cars and vans used in the business, it is necessary to make an adjustment to account for the fuel used for any private use of the vehicle. By adding a road fuel scale charge to your VAT return, you do not need to keep detailed mileage records.
HMRC has released updated valuation tables, reflecting the upcoming increase, in order to calculate the VAT due to HMRC to account for the private use which can be found here.
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Making Tax Digital for VAT has arrived. Are you switched on?

MTD
Making Tax Digital for VAT is now live. For new VAT periods beginning on or after 1 April,  VAT-registered businesses will have to submit digital VAT returns using MTD-compliant software. However, many business are still not prepared for the change as, according to HMRC, only around 100,000 businesses have signed up to the new service so far.
While this suggests as many as 900,000 businesses have yet to sign up, the good news is that approximately 4,000 are signing up every day.
 
We have a wealth of useful information and advice on our website to help you comply with MTD, and our team can advise you on the best solution for your business so you’re ready ahead of your compliance deadline.

Don’t forget all businesses need to create their own Government Gateway account in order to submit tax returns in line with new data protection regulations – see our how to video for details. Once your gateway has been set up, you will need to activate the MTD feature in your accounting software. We will be sending out emails to all affected clients over the coming weeks to explain how to do this.
 

Click here for more help on getting ready for Making Tax Digital
 

Temporary increase in the AIA and the timing of capital expenditure

plant and machinery
The Annual Investment Allowance (AIA) allows a business to claim tax relief on qualifying plant and machinery. Potentially, you can deduct 100% of the cost of the asset from your profits, before working out how much tax you will be required to pay for that financial year. Introduced in 2008, the allowance was created to incentivise investment and boost economic growth.
AIA has undergone a number of changes since its inception and most recently, the AIA limit has been temporarily increased to £1m from 1 January 2019, for a two year period. Whilst the increase means certain businesses will be able to gain additional tax relief on their investments, the change to the allowance also brings about complexities to contend with.
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HB&O Financial Services hosts 'Back to the Future' Seminar

On Wednesday 27th March, HB&O Financial Services hosted an investment seminar themed ‘Back to the Future’. The seminar, held at the Mallory Court Country House Hotel, aimed to cut through the current noise and perceived confusion about economic stability and investment opportunities, by demonstrating that there is a lot to learn about the future by looking at the past.
Approximately 40 clients attended the event which featured guest speakers, Ben Gutteridge, Head of Fund Research, Brewin Dolphin and Sanjay Rijhsinghani, Partner, LGT Vestra, alongside David Stokes, Director, HB&O Financial Services.
 
Sanjay Rijhsinghani provided key insights into how markets have developed over the past 10 years and busted some of the popularly held myths about where growth has come from. Ben Gutteridge then delivered his analysis of current market themes and trends and looked at how this would likely play out in the coming months and years. David Stokes focused on behavioural science and explored why we often find it difficult to ignore the confusion that can be generated by the constant barrage of information we receive – much of it conflicting - due to our in built cognitive biases.
 
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HB&O donates over one hundred Easter Eggs to UHCW charity

Staff from HB&O have rallied together to collect over one hundred Easter Eggs to donate to the University Hospital Coventry Warwickshire (UHCW) Charity. The charity supports staff, patients and family members, providing funding for important equipment, pioneering research and all the important extras which fall outside the remit of the NHS.
The chocolate treats donated by HB&O helped the charity in two ways. Firstly, UHCW Charity hosted an Easter Egg Hunt fundraiser which raised money for research within the hospital. Secondly, as an annual tradition, the hospital hosted an Egg Run on Easter Sunday, where eggs were handed out to patients that spent the holiday on the ward.
 
Lisa Harrison-Byrne, Community and Events Fundraiser for UHCW Charity said: “We are overwhelmed by the donation from HB&O which allowed us to raise more money at our Easter Egg Hunt, supporting vital research projects at UHCW. We’d like to extend a huge thank you to HB&O for their generosity!”
 
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The risks of a tax investigation

It’s a fact – many of us struggle to objectively assess risk.

We may be terrified of things that rarely happen (plane crashes, power station meltdowns) but relatively blasé about things that are statistically more likely to harm us.

The likelihood of HMRC swooping to investigate your business’s tax affairs seems to be a particularly difficult risk to quantify. In 2017, the Government published a report called ‘Understanding evasion by small and mid-sized businesses’.
 
The authors interviewed 45 people known to have engaged in deliberate tax evasion in an attempt to get to the bottom of what made them risk it. It found that tax evaders cited a range of reasons for withholding tax. Some judged the risk of detection to be low, and assumed evasion would be hard to prove even when suspected, or thought that any fine they did incur would be outweighed by the financial benefits of bending the rules. Others were emboldened by a belief that, to paraphrase, “everybody does it, and nobody cares.”
 
However, with HMRC ramping up its investigations to boost tax revenue, it's not a risk worth taking.

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