It has been another busy year as the office raised funds for designated charity the Queen Elizabeth Hospital Birmingham (QEHB) raising money specifically for children’s medical and recuperation treatments.
A total of £2,000 was raised from initiatives including a weekly dress down Friday, bake sales and organised events. Insurers also kindly donated luxury gifts towards last year’s summer raffle including a case of wine, iPod and Top Gear racing experience.
A cheque was presented to Justine Davy, Head of Fundraising at the QEHB charity by Richard Doubleday, Executive Director for Perkins Slade, along with members of the office Social Committee. The money raised will go towards funding treatments for sick and vulnerable children as well as providing support and bereavement counselling to families.
The Social Committee commented:
“We are very pleased by the amount of money we’ve raised to help fund children’s hospital treatments and provide the facilities to ensure their time in hospital is as comfortable as possible. We would also like to thank all members of staff who have each contributed towards supporting this worthy cause”.
Justine Davy also commented:
“I want to thank the staff at Perkins Slade, Birmingham for their fundraising during 2015/16 and for the fabulous cheque of £2,000 which they presented to the Charity. QEHB Charity rely on the support of businesses and the community to support the work that we, as a charity do, in supporting the Queen Elizabeth Hospital Birmingham with cutting edge equipment and ground- breaking research both of which, in turn, benefit patients at QEHB who come to the hospital not only from the Midlands but beyond.
We hope that all the staff at Perkins Slade enjoyed fundraising for QEHB Charity – especially the cake sales which are always a personal favourite of mine!”
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Advancements in technology have made business travel easier in recent years but there are still a number of security risks to consider before travelling including cyber-crime which is a growing concern for many businesses operating overseas.
Cyber criminals conduct their attack through numerous sophisticated methods to obtain sensitive corporate data through phishing, whaling and other forms of social engineering.
Before travelling it is advisable your company carries out a risk assessment to ensure company information is safe and secure whilst working overseas.
Failure to implement appropriate security measures could result in data loss and lead to a breach of confidentiality, damage to business reputations, financial losses and compromised client relationships.
Tips on keeping your technology safe when travelling:
- Do not leave electronic devices unattended including mobile phones as SIM cards could easily be removed by someone to make expensive calls from your account.
- Ensure locks are secure in your hotel room to avoid someone breaking and entering to steal your valuables.
- Be cautious when using public networks in hotels and cafes as pop ups could be malicious spyware.
- Entities in foreign countries have been known to create fake security updates when a user connects to the local network and then installs malware and spyware to the user’s computer.
- Ensure your computer is installed with the latest anti-virus, spyware, security and firewalls.
- Before you travel it is wise to email yourself electronic copies of your passport, travel documentation, driver’s licence and credit cards in the event these items are lost or stolen. Therefore you must ensure your email account is locked by a password only you have access to.
- Clear your internet browser after each use.
- Never store valuables or electronic devices in checked luggage.
- If you run into trouble keep the phone number and address of your Embassy or Consulate in the country you are visiting
- Be cautious when speaking to strangers who could be probing you for personal information and be aware of your surroundings as conversations may not be private.
- When you return from your visit review your computer system and electronic devices for malware and change all passwords including voicemail.
Travel is a necessary requirement for conducting business agreements overseas and should be a legal obligation of organisations to ensure both staff and company equipment are protected when working abroad.
Travel insurance can provide protection to cover the costs of stolen technology and cyber policies can also provide valuable access to specialist resources in the event of a loss of data or system failure, but you should check with your insurance provider first before you travel to ensure business travel is conducted as safely as possible.
How can we help?
For more information please speak to your usual insurance representative or call us on 0121 698 8000.Back to top
Perkins Slade guest blog is brought to you by Drum Cussac.
Following more recent terror attacks the blog provides some useful guidance for anyone travelling abroad and outlines the precautionary measures individuals can take to minimise their personal risk.
While some of the following advice may seem obvious, it is worth reiterating. Often taking the simplest precautions can make a dramatic difference.
While travelling or going about your business:
- Though by its nature a bombing may occur with little or no warning, stay well informed of the security environment and the threats
- Read foreign travel advice and information given by your nearest embassy or consulate
- Be vigilant, take notice of your surroundings, and report any suspicious object, package, person or activity to police immediately
- Limit the time you spend in hotel lobbies, in the vicinity of security installations and in transport hubs – all of these are popular targets
- If you are in an environment with a raised threat of improvised explosive devices (IEDs), selection of your hotel room can make all the difference. The optimum floor is the third floor as it offers distance from a vehicle-borne IED and yet keeps you in reach of ladders for emergency services. Try to select a room which is not above reception, preferably at the rear of the building
- In higher risk geographies, avoid queues (vehicle or pedestrian) outside potential targets such as embassies, night clubs, sports events, refineries etc.
- Note any individuals loitering outside restricted and controlled security zones, suspicious vehicles and any other unusual incidents
- Do not leave any luggage unattended. Terrorists have planted bombs in the luggage of unsuspecting travellers. Wrapping bags in plastic may improve security when using airports and train stations
- Only accept luggage or packages from a friend, colleague or family member whom you know very well indeed – it can be easier to have a blanket ban and refuse all such requests
- Trust your instincts. If you feel threatened in any way, leave the immediate area. Attempt to put distance between you and the threat and, if possible, stay out of line-of-sight
- Plan your exit in advance: know how you would get out of a building, public area or transport hub in an emergency. Know where your emergency exits are and identify which floor you are on in case you need to take the stairs or notify someone of your location
- On arrival at your hotel, walk the route from your room to the street via the fire escape. It will improve your chances of finding it safely in the dark or in smoke. It will also prove that the route is clear and not locked
Potential suspicious activity that may indicate an attack is being planned could take the form of:
- Groups or individuals taking significant interest in the location of CCTV, parking areas, service yards, doors and entrances
- Activity inconsistent with the nature and routine of the building or working environment
- Individuals loitering in restricted areas
- Missing security passes, uniforms or vehicles
- A pattern or series of false alarms indicating possible testing of security systems and observation of response behaviour and procedures (bomb threats, leaving hoax devices or packages)
- Overt or covert photography, video cameras, possession of photographs, maps and blueprints of facilities and critical infrastructures, including electricity transformers, gas pipelines and telephone cables
If there is an explosion:
- It may sound obvious, but get under a sturdy table or structure if things are falling around you. When they stop falling, leave quickly, watching for obviously weakened structures
- Leave the area as quickly as possible once it is safe to do so. Do not stop to retrieve personal possessions or make phone calls
- Do not use elevators or block emergency exits
- An initial explosion may be designed to force people into a larger, main attack, so be aware of the dangers of secondary devices. A secondary explosion may be larger than the first in a bid to snare emergency responders or those trying to help the injured. Avoid moving to crowded areas as these are obvious targets for secondary attacks
- Beware of flying glass debris, from either a primary or secondary incidents. Avoid buildings constructed predominantly of glass and be sure to take refuge away from such buildings when evacuating
- If there is a fire after the blast, stay low to the ground, cover your mouth with a handkerchief or clothing, and leave the area as quickly as possible
Guidance on vehicle bombs
Be vigilant of:
- Vehicles that appear weighed-down and may have had their interiors stripped down and rebuilt. The interior of the vehicle may also have odd protrusions or visible wires
- Vehicles parked outside entrances or unusual areas for longer than normal, possibly with one or more people remaining in the vehicle
- Delivery vehicles arriving at premises outside normal delivery times
- Vehicles emitting suspicious odours, such as fuel or gas
- Vehicles looking out of place (terrorists sometimes use the ruse of a broken down vehicle)
- Suspicious vehicles left in car parks, possibly for a prolonged period of time
- Erratic or suspicious driving of vehicles around buildings
- The same or similar individuals returning to carry out the same activity in different sized vehicles
Please note, for more guidance relating to the locations where you have people and assets or which your business travellers visit, talk to us and we will be able to provide personalised advice. Visit Drum Cussac.Back to top
Perkins Slade guest blog is brought to you by Claritas Tax Limited.
Last Wednesday was a day dominated by sugary drinks. After all, how would we get through 63 Budget announcements plus a “Business Tax road map” without a healthy dose of Coke and Dr Pepper? There are times when aspartame is simply not enough, despite the increasing cost of the full fat variety!
Anyway, George Osborne delivered his eighth Budget today and there were, genuinely, some nice surprises. There were also, of course, some bitter medicinal pills. A spoonful of sugar may help the medicine go down, but, as an example, the joy of reduced capital gains tax for the seller of a commercial property will be significantly offset by the increased stamp duty land tax for the purchaser of the same building.
More significantly for our clients, there are general reforms to capital gains tax which will be welcomed, even if some merely rectify the problems caused by botched and rushed legislation in 2015. Businesses will welcome the reduction in the corporation tax rate to 17% from April 2020, but institutional investors may be less impressed at the restriction of tax deductions for interest to 30% of Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA).
There is mixed news on the use of brought forward losses, as the UK will be moving closer to a European model of consolidated tax returns but companies with profits over £5 million will only be able to offset 50% of their profits against brought forward losses in a given year.
Our normal objective when analysing the Budget is to restrict our commentary to the 5 or 6 key items and to leave everything else to the News at Ten. However, this year, there are 10 measures we feel we need to tell you about.
Because this mailer is so unusually long, we’ve taken the unusual step of listing the topics so that you can decide whether or not to read on. However, if you do get to the bottom, there’s a great piece about Jeremy Clarkson!
- Capital gains tax rate changes
- Entrepreneur’s relief on disposals of goodwill
- Entrepreneur’s relief and joint venture companies
- Investors’ Relief
- Lifetime limit for employee shareholder status shares
- New rules on the use of corporate tax losses
- Tax deductions for interest
- Loans to participators
- Stamp Duty Land Tax increase on commercial property
- Company car taxation
Reduction of capital gains tax rate
The main rate of CGT has been reduced from 28% to 20% (10% for basic rate taxpayers). This will apply from 6 April 2016 to all disposals other than of residential property and private equity carried interest. The 10% rate for entrepreneur’s relief remains as before.
What this means to you
Bluntly, don’t sell that Picasso, office block or share portfolio until 6th April 2016!
Entrepreneur’s relief on disposal of goodwill
In December 2014, entrepreneur’s relief was abolished for sales of goodwill to companies by sole traders or partnerships if the seller was a shareholder in the acquiring company afterwards. This was designed to counter perceived abuse of entrepreneur’s relief, mainly by partners selling goodwill to companies on incorporation and then extracting several years’ worth of profits with only 10% tax.
The application of this rule has obviously caught transactions where there was no intention to avoid tax, and so the rule has been relaxed so that entrepreneur’s relief will still be available where the seller has less than 5% of the shares and voting power of the purchasing company.
What it means to you
This clearly won’t reopen the door to tax driven partnership incorporations, but partners or sole traders wishing to sell their businesses and retain a small stake in the acquirer, for example to ensure an orderly handover, will benefit.
The change applies to all transactions since December 2014. If you are looking to sell a partnership or trade, or have done so since December 2014, please talk to us.
Entrepreneur’s relief for joint venture companies
In an attempt to block further tax avoidance concerning entrepreneur’s relief, changes were made in 2015 to the treatment of companies which had entered into joint venture arrangements. The object of the legislation was to prevent “Management Companies” or “Mancos”, which were designed to get around the entrepreneur’s relief requirements for an individual to have a 5% shareholding and 5% of the voting rights in a trading company. However, the legislation was poorly drafted and so has now been amended.
The activities of joint ventures held by companies will now be apportioned to the shareholders in the parent company when calculating entitlement to entrepreneur’s relief. If an individual owns 20% of a holding company which has a 40% share in a joint venture trading company, that individual will be treated as having 8% of the trading company and so will qualify for entrepreneur’s relief.
What it means to you
The structure of joint ventures held by a company should be reviewed to determine whether entrepreneur’s relief will be available for shareholders of the parent.
Entrepreneur’s relief will be extended through a new Investors’ Relief to individuals who invest in trading companies, meaning that they will pay 10% capital gains tax on sales.
The relief will be subject to a lifetime limit of £10m (although we assume that this will be part of the lifetime entrepreneur’s relief limit rather than an additional limit). An individual will need to hold the shares for at least three years and must not be an officer or employee of the company.
The shares must be subscribed for at any time from 17 March 2016 as this is designed to encourage support for business. Shares purchased from a selling shareholder will not qualify.
The shares must be in unlisted trading companies, but there appears to be no limit on the size of companies which benefit.
What it means to you
This could be a useful extension to the enterprise investment scheme for companies which are ineligible. However, it does not address the problem faced by minority employee shareholders in companies who cannot qualify for entrepreneur’s relief because they do not have a 5% shareholding. Equally, and more surprisingly, it discriminates against angel investors who may wish to invest in a company and then provide expertise to it.
Nevertheless, if you are looking to acquire shares or if your company is looking to raise capital, this could be a useful addition to the tools available.
Overall, this feels disappointingly like a measure which has missed its target and which may need to be refined in future Budgets to increase its usefulness.
Lifetime limit for employee shareholder status shares
ESS shares were introduced as part of the Coalition government’s attempt to create a “John Lewis economy” of employee owned businesses. The aim was that employees would give up employment rights in return for the gift of shares by their employers and that we would achieve a new worker’s paradise of happy engaged employees owning shares in their rapidly growing employer.
If you have an image of fluffy bunnies jumping through lush green meadows whilst birds sing, the Chancellor clearly wants to disabuse you of those notions. There is a feeling that the rules have been abused and that the beneficiaries of corporate largesse have not been the downtrodden proletariat but their plutocrat bosses, benefiting from substantial tax free gains.
As a result, a lifetime limit of £100,000 on tax exempt gains has been imposed to all ESS shares issued after midnight tonight.
What this means to you
If you already have ESS shares, this will have no impact. However, it will reduce (but not remove) the attractiveness of the scheme for future awards. With the new capital gains tax rate of 20%, this benefit is still worth up to £20,000 per employee.
However, we have been worried for a while that changes could be made to ESS. This is the first change that has been made and, whilst there are no indications that more are to come, further changes cannot be ruled out. Therefore, wherever possible, structuring share awards in order to enable entrepreneur’s relief to be claimed, such as by issuing EMI options as a back up or alternative to ESS, will remain valid.
Increase to the loan to participators tax charge
From 6 April 2016, there will be an increase on the tax charged on loans made by close companies to participators. The tax charge will increase from 25% to 32.5%.
What it means for you
Following the introduction of the new dividend tax rules, which will apply from 6 April 2016, the amendment to the loan to participator tax charge has been made in order to continue mirroring the taxation of dividends.
This change ensures that no tax advantage is obtained where a participator receives a loan from their company rather taking a salary or dividends.
The Business Tax Road Map
There are two key reform objectives outlined in the Government’s tax map:
- New rules on the tax deductibility of corporate interest expense; and
- Reform of the corporation tax loss relief rules.
Both measures will come into force from April 2017.
What it means for you
Limit on corporate interest expense
The Government have tried many times to limit the interest expense a company can offset against its taxable profit (e.g. Transfer Pricing, World Wide Debt Cap etc) but clearly these rules have not gone far enough in their view. They are concerned that some multinational groups borrow more in the UK than they need for their UK activities, for example because the funds are used for activities in other countries which are not taxed by the UK.
Therefore, new rules will be introduced to replace the current complicated rules which will limit the interest expense a UK company can take against its taxable profits. Conceptually, the Government will introduce the following rules:
- Fixed Ratio Rule limiting corporation tax deductions for net interest expense to 30% of a group’s UK EBITDA.
- Group ratio rule based on the net interest to EBITDA ratio for the worldwide group. This is to help groups where high external gearing is required for commercial reasons.
A consultation will take place on how these OECD recommendations should be incorporated in the UK tax system. No detailed guidance has been published and but we suspect the rules will be tweaked to ensure the operation of the rules does not catch innocent debt structures.
Groups should review their current debt structures to ensure their arrangements are not impacted by the new rules. If they are caught, a group/debt restructure maybe required before the commencement date.
Reform of the corporation tax loss rules
Under the current UK tax rules, there are a number of restrictions in place that dictate how carried forward losses can be used. For example, in some cases, they can be used only against certain types of taxable income and cannot be surrendered as group relief to other group companies.
The Government has decided to remove these restrictions for any losses incurred after 1 April 2017. The new measures will allow:
- companies to use carried forward losses against profits from other income stream;
- or from other companies within a group.
However, the Government will introduce a restriction on the level of carried forward losses that can be off set against taxable profits. This restriction will be equal to 50% of the profits, but this only applies to profits in excess of £5m. The result is that large profitable companies will always pay tax even where they have brought forward losses and seems designed to appease the ‘Daily Mail’ rather than to promote a competitive tax system.
The new measures are a welcome surprise as it means groups will no longer have trapped losses for losses generated after 1 April 2017 and ensures the cash tax flows payable by group companies can be managed.
Stamp Duty Land Tax increase on commercial property
A year ago, SDLT was reformed for residential property with the introduction of graded bands rather than the old single rate system. This reform will now be extended to commercial properties.
The SDLT rate will be 0% on the first £150,000 consideration, 1% on the next £100,000 and 5% on all consideration over £250,000.
The rate on leases is based on the net present value of the lease, derived by a complex formula designed by the computer which beat the world’s number one player of the Asian game “Go” last week! In summary, there is no SDLT on the first £150,000 of NPV, 1% on the NPV up to £5 million and 2% above that level.
What it means to you
As with houses, this means an end to the objective of paying consideration just under an SDLT threshold, so may increase the value of properties around those thresholds. However, this is a tax increase, forecast to raise £590 million for the Exchequer in 2020-21.
This increase applies from tomorrow, so there is little time for planning!
Company car tax increase
The benefit in kind on low emission cars is increasing from April 2017 onwards.
In this job, I probably get asked more questions about which car to buy than Jeremy Clarkson. Fortunately, I won’t punch you if you don’t offer me a steak dinner and I’ve never insulted an entire Latin American country, although I did once complain about an undercooked enchilada on a night out in Birmingham! The answer invariably is that low emission cars are the best company cars…in the world. This may be about to change.
From April 2017, electric cars will be subject to a 9% benefit in kind charge based on their list price, rising to 16% from April 2019. Low emission cars, producing less than 50g CO2 will be subject to similar benefit in kind charges.
What it means to you
If you’re fortunate enough to drive a BMW i8 or a Tesla Model S, your tax liability is about to increase. The same applies to more modest low emission cars, of course. This will be another factor in the decision as to whether to have a company car or to buy a car privately and, if you can’t decide, just go for Powerrrrrrrrr!
Please visit www.claritastax.co.uk to learn more about Claritas Tax Limited.Back to top
Following today’s Budget 2016, it has been confirmed Insurance Premium Tax (IPT) placed on premiums will increase to 10% in the second rise in nine months.
The Chancellor, George Osborne has proposed the 0.5% increase will raise £700m in order to help fund flood defences.
The IPT tax rate was last increased in November 2015 from 6% to 9.5% to bring the UK in line with the rest of Europe.
The previous rise in November 2015 came unexpectedly and has placed a strain on the insurance sector, with many insurance providers having to adjust their previous policies to keep costs competitive and to ensure policy holders still receive adequate protection.
Following the increase, insurers will be required to impose a 10% tax on customers general insurance premiums for home, contents, motor, van, car breakdown cover, business, pet, health and medical insurance policies. A higher rate of tax charged at 20% will continue to be issued on private travel, vehicle and electrical appliances insurance.
Following last year’s increase, some insurance firms are providing their customers with a breakdown summary of tax on their renewal documents to enable customers to better understand the reasons why their insurance premiums have increased.
The increase doesn’t come into effect until 1st October 2016, which gives the insurance industry time to prepare for the new changes and to continue finding the best cover on behalf of clients.
How can we help?
Perkins Slade is committed to keeping all of our clients fully aware of any changes to regulation and how this may impact them.
For more information on the Insurance Premium Tax (IPT) increase please speak to your usual Perkins Slade representative or call us on 0121 698 8000.Back to top
From February 2016 new sentencing guidelines for health and safety offences came into force which means from now on fines will be significantly higher than before and some larger companies can expect to pay fines in excess of £1 million.
The Health and Safety Executive (HSE) operates a Fee for Intervention (FFI) cost recovery scheme, which was initially introduced on 1st October 2012 to place more responsibility on businesses, organisations and duty holders to comply with health and safety laws. Before the new changes these investigations were funded by the taxpayer.
Businesses found liable of breaking Health and Safety laws face a fee for recovery of the HSE’s services, including inspection, investigation and taking enforcement action. In addition, custodial sentences could be imposed on the individual if their negligent actions have been found to have resulted in the injury or death of another employee.
The new guidelines will focus on the risk that has been created, rather than the actual damage caused and investigate whether the risk was deliberate or accidental. Fines will then be issued based on the company’s annual turnover.
Organisations who are compliant with the law, or where a breach is not material, will not be charged for a (FFI) for any work that HSE does with them. A material breach will be granted if a HSE inspector believes there has been a contravention of health and safety law that requires them to issue a notice in writing to the duty holder.
A breach includes:
- Operating a business with poorly fitted machinery
- Exposing employees to hazardous materials
- Failing to apply current health and safety working practices which could endanger your staff
- Not arranging for your staff to have the correct training
Who does it apply to?
Fee for Intervention applies to duty holders including, employers and self-employed business owners who put employees or members of the public at risk, and some individuals acting in a capacity other than as an employee, e.g. partners.
It also includes:
- Public and limited companies
- General, limited and limited liability partnerships; and
- Crown and public bodies
- Charities, voluntary organisations, sports governing bodies and clubs are not exempt.
How much would I need to pay if found liable?
Since its introduction the fee payable by duty holders found to be in material breach of the law is £124 per hour and any additional costs based on the amount of time it takes HSE to identify and conclude its regulatory action. The new sentencing guidelines have seen fees increase significantly with the average cost of an invoice issued under FFI being in excess of £700, with companies in the manufacturing sector being hit the hardest.
Invoicing and debt recovery functions are carried out centrally within HSE. Inspectors are not responsible for issuing invoices or for any follow-up actions relating to non-payment of invoices. Invoices will generally be sent to duty holders every two months, within 30 days working invoicing period.
How will this affect insurance policies?
Fines are uninsurable and your Public Liability policy will not cover you in the event you are found to be in breach of health and safety law. Insurers may need to review and amend their policy wordings to identify whether it includes prosecution costs for regulatory proceedings.
It is advisable you keep a copy of all of your health and safety practices and procedures as evidence of your company’s compliance should you face a prosecution by the HSE.
How can we help?
For more information on managing your risk more effectively or to review your current liability policy, please contact your usual Perkins Slade representative, alternatively contact us on 0121 698 8000 or email email@example.comBack to top
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