Author Archives: Peggy Nightingale

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Do your employees have permission to work, and do you know how to conduct Right to Work Checks?

One of the basic requirements on all employers is to ensure that the people they employ have permission to work in the UK.

From April 2022 the process that employers need to follow when conducting right to work checks changed – you can no longer accept physical cards or permits, you must undertake digital checks.

Civil penalties are imposed on organisations that have employed an individual who does not have permission to work. If found to be employing workers who do not have the right to work, employers can face a penalty of up to £20,000 per worker.

The Home Office has produced guidance – but at 72 pages long, many employers may not be familiar with the specifics.

It’s very important that employers understand how to conduct right to work checks. If a right to work check is undertaken correctly, employers are likely to have a statutory excuse against liability for a civil penalty. If not undertaken properly, a civil penalty may be imposed.

We have produced a helpful guide to help employers understand their obligations and what checks they need to undertake to ensure that someone they recruit has a right to work.

You can find a copy of the guide below.

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Considering Buying or Selling a Business? 11 Key Considerations

During the pandemic, we’ve received an increased number of enquiries from people wanting to buy or sell businesses and this shows no sign of letting up in the near future.

Therefore, we have produced a useful guide which covers some of the key considerations for those buying or selling a business.

A recent article by PWC states “The conditions for Merger & Acquisition (M&A) activity appear well aligned: many businesses have a strategic need to consolidate, divest non-core businesses, or quickly acquire new capabilities and skills. And there is plenty of money available to fund deals.”

This is supported by the latest Merger and Acquisition (M&A) figures from the Office of National Statistics (ONS), showing an overall increase in 2021.

If you are considering buying or selling a business, or planning on doing so in the coming years and want to ensure you are properly prepared, there are some key things you can do to ensure that:
• If selling – that you maximise the value, ensure that the people aspects are handled sensitively and ensure the smooth sale of your business.
• If buying – that you get the best possible price (value) and conduct suitable due diligence so there are no ‘nasty’ surprises.

Many points overlap when selling a business or buying; you both want the transaction to complete smoothly, so having a robust and thorough approach, with conscientious and thorough paperwork, financial data, due diligence and open and clear communication, benefits all parties.

You can grab your copy of our helpful guide – Considering Buying or Selling a Business? 11 Key Considerations – below.

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The Martlet Partnership is delighted to announce that our Jarrad Gilbertson has passed his final paper and has now completed all his examinations to become a member of the Chartered Association of Certified Accountants.

I am sure you will wish to pass on your good wishes to Jarrad, who works mainly in our tax department, and with whom many of you therefore are likely to come into contact during the coming year.

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Managing economic uncertainty – 20 Practical Actions Businesses can take

Having just emerged from the pandemic, the UK and global economy is facing a challenging future with rising inflation and interest rates globally. Global stock markets continue to perform well, but many would argue too well.

Closer to home households are facing significant price rises in pretty much everything from fuel to tomatoes. This will inevitably start to impact businesses, many of which have little, if any reserves left to face challenging times.

Alongside this backdrop, many businesses are facing challenges with their staff, with high sickness rates and ongoing implications from Covid.

What should businesses be doing to protect themselves, their people and their customers?

From prioritising debt and cashflow, to being highly communicative with your people, your customers and your suppliers; this handy guide provides you with a helpful action plan that will enable you to focus on and act in the right areas.

Most importantly, don’t wait, at a time of economic uncertainty, it is vital that you act quickly and decisively.

You can download your copy of the Managing Economic Uncertainty 2022: 20 Practical Actions Businesses can take guide here.

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Happy New Year!

Today marks the start of the 2022/23 tax year and we are giving a summary of the changes which come in with effect from today or in some cases from 1st April.

  1. From 1 April 2022, all VAT registered businesses are required to follow the Making Tax Digital rule submitting VAT returns using HMRC approved software. This will cause difficulty for some businesses who have continued to maintain manual records and we will be contacting all our clients in this situation in the coming weeks.
  • The temporary 12.5% VAT rate for hospitality businesses has finished and from 1 April 2022, the standard rate of 20% applies once more.
  • From 1 April 2022 until 31 March 2027, VAT on installations of energy saving materials such as solar panels, insulation and heat pumps, will be 0%.
  • From today, National Insurance contributions for employers and employees alike increase by 1.25%.
  • From today, the Employment Allowance allowing small businesses to reduce their National Insurance liability increases from £4,000 to £5,000.
  • The National Minimum Wage and National Living Wage increase by 11.9% for apprentices and 6.6% for workers aged 23 or over.
  • A new Plastic Packaging Tax has come into being. A charge of £200 per tonne of plastic packaging manufactured or imported into the UK that does not contain at least 30% recycled plastic, is now applicable. Exemption is given to manufacturers or importers of less than 10 tonnes of plastic packaging per annum.

If you would like to speak with us about how any of these changes impact your own situation, then please do not hesitate to contact us.

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Year-end Tax Tips

We are now very close to the end of Income Tax year ending 5 April 2022 but there is still time to implement a few steps which may help reduce tax liabilities and protect wealth for some of our clients so therefore please have a look at the points below and if they are applicable to you, there is still just about time to act.

  • Annual pensions allowances

If you are a higher rate taxpayer, you can reduce your tax liability by making pension contributions up to a total of £40,000. If you have spare funds, then it is far more attractive to get tax relief at higher rates.

  • Individual Savings Account (ISA) allowances

Tax free saving products like ISAs have not been of enormous value over recent years because of the appalling low interest rates, but interest rates are now rising. Up to £20,000 per adult can be subscribed to an ISA before midnight on 5th April.

  • Saving for children

Making investments for children when they are young, (and the younger the better), is a powerful tool which can generate large funds by the time they reach adulthood. Up to £9,000 a year can be paid into a junior ISA and also pension contributions up to £2,880, which are topped up to £3,600 can be made for children, even if they have no tax liabilities.

  • Capital Gains Tax allowances

Not that many people are likely to have capital gains on a regular basis but each person can make capital gains tax free up to £12,300 per annum. It is far better to make a £12,300 gain today and then another £12,300 gain in early April rather than a £24,600 gain after 6 April, which will give rise to tax. Also, if you have capital gains liability this year, it might be worth disposing of other assets which would give rise to a loss which could offset the gain.

  • Other tax-friendly investments

Subscriptions can be made to venture capital trusts which offer 30% Income Tax relief on new share issues can be offset against Income Tax liability during the tax year of purchase. Therefore, if this relief is attractive, there is still time to use these vehicles.

  • Gifts to reduce Inheritance Tax

There are many urban myths surrounding Inheritance Tax liabilities but if you are likely to have an Inheritance Tax liability, and wish to make gifts to family, you can make gifts up to £3,000 each year and it will not be counted as part of your Estate.

It is appreciated that these measures will not apply to many people at all but if anybody would like further information, then please do not hesitate to contact us.

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Spring Statement

We are pleased to attach our summary of the Spring Budget Statement which also includes a number of potential tax saving tips and a summary of tax rates applicable for the tax year ending 5 April 2023.

If you have any queries as to how the changes announced in the Spring Statement over and above those in the Autumn Budget might affect you, then please do not hesitate to contact us.

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The Martlet Partnership extends its warm congratulations to our Henry Van Perlstein who passed his Level 4 Financial Accounting exam this week with an excellent mark of 79%

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Companies House Reforms

The Government has set out plans to stop manipulation of the use of anonymous and fraudulent shell companies and partnerships.

This means that going forward, Companies House will become more active over company formation and receipt of information, rather than just acting as a “passive” processor.

More importantly, it will change the accounts filing requirements for small and micro companies which constitute by far the majority of the 4.4 million active companies registered with Companies House.

It will also mean that overseas agents will no longer be able to form UK companies and anyone setting up, running or controlling a UK company, will need to verify their identity with Companies House.

We do not yet know what format these changes will take.

Some of the more complicated and unnecessary filing options for smaller companies will be removed and there will be just two options, one for micro-entity and one for a small company.

The big change for small companies will be that they will be required to file a profit and loss account as well as a balance sheet.

There is also a prospect of simplification of using a File Once with Government approach so that the accounts need only to be filed once with Government which will probably mean the accounts will be filed simultaneously with HMRC although more details will be provided in due course.

We do not know the timetable for these changes but they will be at the forefront of our thinking and our advice to you as to how to deal with them.

The changes will be brought in through statutory instrument and there is no specific timetable for the introduction of these new rules but we understand that it is a priority for Government and part of the Economic Crime Bill.

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National Insurance Update

The Statutory Sick Pay Rebate Scheme expires on 17th March.

All claims for absences through COVID up to 17 March must be submitted to HMRC by 24 March which is of course an extremely tight deadline.

If we process your payroll and you would like us to assist with submitting claims for any members of staff who have been off sick with COVID, could you please let us have your details as soon as possible.

If you process these claims yourselves and you have relevant claim to make, please note that the time limit is extremely tight indeed.

It will not be possible to claim Statutory Sick Pay for employees who were absent from work due to coronavirus related or self-isolation absences that occur after 17 March 2022.

From 25 March normal SSP rules will return meaning that you will not be able to make a claim from HMRC in respect of any staff who are absent from work with illness.

National Insurance rate increase

We are sure that you are already aware of it but the rate of National Insurance both employees and employers and Dividend Tax will increase by 1.25% from 6 April 2022 in order to contribute towards the cost of the Health and Social Care Levy.

This increase is being processed as National Insurance for the time being but in the following tax year will give rise to separate entry on payslips and be denominated as the Health and Social Care Levy as distinct from National Insurance.

To that end, people whose dividend income is considerably short of the thresholds which increase a rate rise of income tax, should consider taking additional dividends before 5 April to mitigate liabilities.

The rate of Dividend Tax after 6 April for basic rate taxpayers will be 8.75%, for higher rate taxpayers will be 33.75% and for people whose income is more than £150,000 will be an eye watering 39.35% and that is after Corporation Tax of 19% (rising to 25%) has already been paid.

This will mean that very successful entrepreneurs operating through a company will next year pay tax at 64.35% at the top rate whereas employees on similar income will pay 47% – a point that the Chancellor does not seem to understand.

If you have any questions relating to the change in National Insurance and Dividend Tax Rates or the operation of sick pay recovery, please do not hesitate to contact us.

Contact Us

The Martlet Partnership LLP
Martlet House
E1 Yeoman Gate
Yeoman Way
West Sussex
BN13 3QZ

Tel.: +44 (0) 1903 600555
Fax.: +44 (0) 1903 600828