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YOU

UP-TO-DATE

WITH ALL THAT’S

NEW AT PM+M

ISSUE 8

PLUS+KEEPING

In this issue:

Autumn

Statement

Is the

reinvention

of pensions

complete?

A brief look

into 2015

The

PM+M team

continues

to grow…

Page 3

Page5

Page 6

Page 10

PM+M TAKE

HOME THE BEST

ACCOUNTANCY

FIRM OF THE

YEAR GONG AT

THE LANCASHIRE

BUSINESS AWARDS

FIND OUT MORE

ON PAGE 9

GROWTH

IN EAST

LANCASHIRE

FIND OUT MORE

ON PAGES 1 AND 2

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PM+M NEWS

GROWTH

IN EAST

LANCASHIRE

Lancashire contains a number of distinct

regions and is home to a wide variety of

businesses both in size and sector. At the

most westerly part of the county, the coastline

is home to a number of maritime businesses

and Blackpool is still a very popular holiday

destination for many, supporting leisure, hotel

and retail sectors. It is also the host of many

national and international conferences.

Moving easterly across the county highlights

a change in the economic dynamics and the

businesses supporting those local economies.

East Lancashire is not itself a defined region but

what is clear is the level of investment that continues

to be made demonstrates that it is a key area for

future business and economic growth.

The three main political parties have all outlined the

significance they foresee the North West having in

the growth of the UK economy during the next term

of government. It was only in January that David

Cameron and George Osborne were in the North

West to discuss the development of a ‘northern

powerhouse’. Ensuring that East Lancashire is a key

part of those plans is something we should all actively

give support to.

There are a large number of sectors served by

businesses located in East Lancashire, many of which

are world leading providers. Aerospace and precision

engineering are just two examples of where the region

is home to the best in the provision of specialist

services and products. Having such high

calibre businesses retains and attracts highly skilled

individuals. This leads to higher levels of overall

spending and increasing prosperity.

The last five years have witnessed a large level of

spending cuts within the public sector and East

Lancashire has not been sheltered from them. It is

essential that the private sector continues to grow

and generate new roles, reducing the impact of

the reduction in public sector jobs. To attract new

business to the region and retain those already

located here, we must have a persuasive proposition.

We have benefitted from grants but a general election

brings a period of confusion. The grant assistance

that will be available under the next government is

a very grey area and clarity on this is required as

soon as possible to enable businesses to plan with

some certainty.

There is however a general feeling of confidence

within the East Lancashire economy and this has led

to a number of businesses choosing to relocate to

the area, regardless of grant availability. This is due

to a combination of factors including the businesses

already located here and the transport links. The

people and the culture of the area are also other key

factors that attract business owners to this part of

the UK.

As outlined above, there is a continually growing

technical skill base within the region which is an

attraction in itself. However, employers want more

than just people who are technically competent. They

want the workplace to be an environment for both

career and personal development. This culture is

moulded by teams working together. Lancastrians are

optimistic, full of good humour and have a ‘don’t give

up’ attitude. This is a strong asset for the region.

People are an integral part of any business and

having the right, readily available people is a key

factor when businesses are preparing to grow and

potentially relocate. East Lancashire must continue

to be part of those plans.

The region has performed relatively well over the last

few years and the prospects in East Lancashire look

very promising. We are open to new ideas and quick

to adopt new skills. This ‘can do’ attitude (and a good

sense of humour) are vital in the future success of

East Lancashire and the North West.

If you are looking to grow or relocate your business

but don’t know where to start, turn to page 7 to

find out more about possible funding options.

Alternatively, call Tim Mills (Corporate Finance

Partner) on 01254 679131.

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TAX NEWS

AUTUMN

STATEMENT

DON’T DESTROY THOSE RECORDS

Now that the dust has settled on last year’s

Autumn Statement, we will recap some of the

key measures introduced, together with other

measures due to take effect this year. All of

this is, of course, subject to the Spring Budget

on 18 March and the fact that the General

Election means we will probably have a number

of smaller Finance Bills in 2015, rather than

one big one.

For individuals, there are no major changes to income

tax or capital gains tax and the stamp duty land tax

reforms are a welcome change for those buying all

but the most expensive houses.

The much heralded reform of trust taxation has

been watered down and replaced by some specific

anti avoidance provisions. This means that wealthy

individuals will be able to continue to gift surplus

assets to trust on a 7 yearly cycle to get repeated

use of their inheritance tax nil rate band.

The trust anti avoidance measures concern the use

of multiple pilot trusts. Any that have previously set

up should retain their original benefits, but any new

property added, either during lifetime or on death, will

fall foul of the new rules. Anyone with such trusts set

up to work alongside their will should take advice on

whether their will needs updating.

For businesses, the change to entrepreneurs’ relief

which prevents goodwill being sold tax efficiently on

incorporation of a business came as a blow to many

partnerships preparing to incorporate. Many are now

reconsidering their options and deciding whether a

corporate structure is the way forward or whether a

limited liability partnership might be preferable.

For companies, the corporation tax rates finally

become aligned at 20% for any size of company

on 1 April, thus eradicating the corporation tax rate

anomalies that can arise where companies

are associated.

R&D tax credits continue to be very generous and

we are seeing them being claimed by an increasingly

wide range of companies. It is well worth checking

whether there is scope for claims to be made.

The patent box, which reduces the corporation tax

rate from exploitation of qualifying patents down to

10% has sadly proved to be too generous and is to

be phased out following EU wide agreement. The

scheme will close to new entrants from June 2016

and will be phased out altogether by 2021. Any

companies with UK or EU patents should take advice

now to see if they can benefit from the regime before

it closes.

Most business owners will be familiar with

the requirement to retain accounting records

for 6 years in case of an inspection visit by

HMRC. But what does “accounting records”

really mean?

Of course, it includes the actual accounting system

records together with supporting invoices and

reports, but it can also be much wider than that.

For example, if HMRC inspect your business they

will want to trace cash all the way through from

customer receipts to the bank and accounting

records. That means that till rolls, daily reconciliation

sheets, evidence of cash checks and other ancillary

documents need to be retained, as well as the

accounting system entries. Likewise, if you use

PayPal or other online payment methods, all those

reconciliations should be retained. If you do not

retain such documents, it can be much more difficult

to demonstrate to HMRC that your business has

appropriate controls in place over cash and we have

seen recent examples of this adding cost and stress

to HMRC enquiries.

If in doubt, ask us what you should be retaining

and we will be happy to advise. You might also

want to find out about our optional tax investigation

professional fee insurance which covers our fees

for supporting you through a tax enquiry.

For further information or for any tax enquiries, please

email Jane Parry (Tax Partner) at jane.parry@pmm.co.uk

or call a member of the tax team on 01254 679131

3 pmm.co.uk @pmm_acc

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CORPORATE SERVICES

WEALTH MANAGEMENT

FRS102

IS THE REINVENTION

OF PENSIONS

COMPLETE?

It seems hardly a month goes by without

another announcement on pensions, and,

assuming recent proposals are passed, pension

reinvention will be complete! Individuals will

have complete flexibility over how income

is taken, and new death benefits will mean

pension funds can be passed down the

generations without incurring punitive

tax charges.

Taking tax free cash and income

Old rules

If you die before the age of 75

New rules

Tax free cash 25% of fund value 25% of fund value

Income

Lump Sum

• Capped drawdown

limited to 150%

GAD rate*

• Flexible drawdown

- minimum

guaranteed

income required

of £12,000pa.

• Uncrystallised funds

– tax free.

• Crystallised funds

– 55% tax.

• All caps removed

- can take up to

100% of the

fund value.

• All tax free.

The Financial Reporting Council has replaced

current UK GAAP with FRS102: The Financial

Reporting Standard applicable in the UK and

Republic of Ireland with effect from periods

beginning on or after 1 January 2015.

FRS102 will apply to all medium and large sized

companies; it will also apply to financial institutions

(including charities) and Limited Liability Partnerships.

The starting point for applying FRS102 will be to

restate your opening balance sheet at the date of

transition. For example if a company prepares its

first accounts under FRS102 for the year ending

31 December 2015, its date of transition will be

1 January 2014. FRS102 does however include

provisions to ease this transition.

In theory FRS102 is a major change and many of the

changes could directly affect profit figures meaning

that companies will need to consider its impact

on profit sharing agreements, banking covenants,

tax liabilities and the level of reserves available for

dividend distribution. However for the majority of

business in our area, we believe changes will be

more of a presentational nature.

The impact of any changes will vary from business to

business. We recommend you assess the implications

for your business now, to prevent a last minute

exercise when preparing your 2015/2016 accounts.

Considering decisions dating back two years and

assessing the impact these had at transition could

become arduous and costly.

An overview of major changes can

be downloaded from our website

http://www.pmm.co.uk/resources/help-sheets

or scan the below QR code.

We can help by providing you with an impact

assessment report, which will demonstrate

a “before” and “after” summary with options for

any alternative presentation available. For more

information, please email chris.johnson@pmm.co.uk

From April 2015, gone are the requirements to

purchase an annuity and the restrictions on how

much you can withdraw from your pension fund.

The Government has recognised that in order to

encourage people to save for their future, greater

flexibility is required.

The tax free cash element remains the same

and you can still take up to 25% of your fund

value as a tax free lump sum. The remaining

fund is taxable at your marginal income tax rate.

However, there are no longer any restrictions on

income withdrawal, and you can withdraw up to

100% of your fund value.

What’s the catch? The price for savers will be that

access to their pension pots will be pushed back, at

the same pace as the State Retirement Age. Initially it

will move from 55 to age 57 in 2028. This could affect

those around age 40 and under.

For clients looking to pass on their pensions to future

generations and unmarried partners, the prospect

of a 55% tax charge will be reduced to nil, making

pensions a very attractive wealth transfer wrapper.

The changes can be summarised as follows:

Income

• Option only

available to

dependants.

• Taxed as income.

If you die after the age of 75

• Tax free if taken via

new flexible income.

• Option available to

any beneficiary.

Lump Sum • Subject to 55% tax. • Subject to up to

45% tax (marginal

rate from 2016/17).

Income

• Option only

available to

dependants.

• Taxed as income.

• Taxed as income.

• Option available

to any beneficiary.

What does this mean for advice?

Whilst the new rules undoubtedly provide greater

flexibility, care will need to be taken to make sure you

have sufficient assets to last throughout retirement.

Holistic cash flow planning has never been more

important and advice will be required to make

sure investment returns are maximised and the tax

payable is minimised.

*The GAD rate is the rate of income someone can take from a pension

using income drawdown. The rate is based on age and gilt yields from

the Government Actuary’s Department.

For further details or to discuss your retirement

planning contact Antony Keen on 01254 679131.

5 pmm.co.uk @pmm_acc

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CORPORATE FINANCE

A BRIEF LOOK INTO 2015

RUN MY BUSINESS

IS YOUR MANAGEMENT

INFORMATION

UP TO SCRATCH?

In the recent past, management information

(MI) was something that was produced by

the larger, corporate and more complex

businesses. MI wasn’t needed for the smaller,

less complicated businesses – or was it?

With most businesses now using one of the

many available software packages to record their

transactions, the production of MI has, in theory,

become much easier.

As we start a new year, the corporate finance

team takes a quick peek at some of the key areas

for consideration in 2015 for business owners.

Funding should become more readily available

with the variety of funding sources continuing to

increase. There will be a greater use of crowd funding

and peer-to-peer funding and the impact of more

independent invoice discounters will be felt. With the

increasing popularity of these funding options, it will

be interesting to watch how the banks and smaller

private equity funds position themselves as more

and more business owners become aware of the

alternatives available.

An increase in funding will invariably lead to a rise in

the number of owner managed businesses being sold.

Acquirers will include trade buyers and management

buy-out teams. There will also be a number of part

disposals, with business owners selling a percentage

of their shareholding. This will enable them to extract

some value from the business whilst retaining some

interest in its future performance.

For several years, many business owners have not

had the economic conditions to allow them to sell

at an acceptable value. Improving market conditions

will allow them to look at de-risking their own

position. On the flip side, this will also lead to some

excellent buy-in opportunities for many during 2015

and beyond.

With an improving economy and increasing

opportunities, business strategy will be key.

All business owners should have a robust business

plan with clearly defined targets and these should

be set whilst giving consideration to any personal

goals they may have.

PM+M Corporate Finance foresee a busy 2015

across a variety of transactions, with business owners

looking to achieve their goals either through a sale

or an acquisition.

Please feel free to give either Tim Mills or Jim

Akrill a call on 01254 679131 to discuss any of the

above or to have a chat about your future plans.

So what are the properties of quality MI?

• Accurate – MI should be prepared by somebody

who knows what they are doing.

• Cost effective – whether the MI is produced

internally or externally, the benefits should outweigh

the costs.

• Complete – each month end should be like the year

end, all relevant adjustments should be considered

such as accruals, prepayments, depreciation etc.

• User defined – MI should be targeted to the end

user.

• Relevant – information supplied for the user should

be relevant and meaningful.

• Available – should be made available to those

who require it.

• Timely – late MI is as useful as no MI. MI should

be produced within 2 weeks of the period end.

• Easy to use – avoid the use of jargon,

keep it simple.

So what should be included in regular MI?

Well, this depends on the size, nature and complexity

of the business. For some, a simple profit and loss

account and balance sheet is sufficient. For others,

a cash flow statement, key performance indicators,

ratio analysis and a cash flow forecast may be

required. It really does depend on the tools the

management team need to make decisions and take

a business forward to achieve its strategic objectives.

The production of meaningless reports that do

not contribute to the management and control

of a business should be avoided at all costs.

Without doubt, ACCURATE MI is crucial for the

management of any business large or small,

complex or simple.

For more information as to how PM+M can

help your business produce timely and reliable

management information, contact the Run

My Business team on 01254 679131 or email

runmybusiness@pmm.co.uk

7

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PM+M NEWS

PM+M TAKE HOME THE BEST

ACCOUNTANCY FIRM OF THE

YEAR GONG AT THE LANCASHIRE

BUSINESS AWARDS

It’s been a fantastic 2014 for PM+M. We have

seen significant growth over the last couple of

years and we expect this to continue. Last year,

the firm grew by 19% and this is primarily down

to our work ethic and our culture. We are proud

to say the hard work of the PM+M team has been

recognised, yet again!

BEN NEVIS IS NO MATCH

FOR RUN MY BUSINESS

PARTNER JACKIE FISHER

In November 2014, Downtown in Business hosted the

annual Lancashire Business Awards at Stanley House

in Mellor. PM+M were nominated for two awards,

Best Employer of the Year and Best Accountancy

Firm of the Year.

We are delighted to announce that PM+M won in the

Best Accountancy Firm of the Year category! When

asked about the achievement, Stephen Anderson,

PM+M Managing Partner said: “We are extremely

proud to have won this award. It confirms that the

PM+M team is doing the right things in the changing

market for accounting services and that we are being

seen as a great partner for our clients.”

Congratulations to all other LBA winners. We are

looking forward to defending our title this year!

Towards the end of 2014, Run My Business

Partner Jackie Fisher undertook one of the most

gruelling physical challenges in the UK, climbing

Ben Nevis.

Supported by her husband Rob, son Scott and some

friends, Jackie raised over £1,500 for Preston based

ABF The Soldier’s Charity, which provides lifetime

support to serving and retired soldiers and their

families.

Jackie said “We were delighted to reach the summit

and the climb was most certainly a challenge.

However, raising money for a charity that we believe

in so passionately was our inspiration and that really

helped us to get to the top.” Well done Jackie!

PM+M PERSONNEL

THANK YOU FOR SUPPORTING OUR

2014 CHRISTMAS PRESENT APPEAL

THE PM+M TEAM

CONTINUES TO GROW…

Over the last few months we are delighted to have

welcomed 7 new members to the PM+M team –

giving us a total of 14 new people in 2014.

We have strengthened our Run My Business team

with the appointment of Lorna Hargreaves (Accounts

Assistant) and Luke Irving (Accounts Trainee).

Both Lorna and Luke are studying towards their

Accounting Technician qualification.

Laura Fort joined our tax team in August. Laura is

studying towards her Tax Technician qualification.

Also during August our Marketing Team went from

strength to strength with the appointment of Faye

Hughes (Marketing and Business Development

Manager) and Daniel Hill (Marketing Assistant).

Since starting the Christmas present appeal four

years ago, the PM+M team, clients and friends

have donated hundreds of gifts to children in the

local area.

The 2014 appeal was no different, and on 5th

December, Councillor Frank Connor came to collect

over a hundred presents which were distributed to

struggling families in Blackburn with Darwen in time

for Christmas.

The PM+M team would like to take this opportunity

to thank everybody who donated to such a fantastic

cause. Without this kindness and generosity, our

appeal would not be successful.

Within our support team we have seen the

appointment of Lauren Ainsworth as Administration

Assistant. Lauren has commenced studying for her

Business Administration Level 2 Apprenticeship.

We have also welcomed Sharon Pye (Tax Department

Administrator) to our team.

9

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PM+M PERSONNEL

RETIREMENT:

CAROLE

GORZELLA,

TAX

ADMINISTRATOR

How long have you been with PM+M?

When I leave it will be 25 years.

What made you stay so long?

I only ever intended to stay a couple of years but

before I knew it over 5 years had passed and I felt

comfortable and happy. PM+M are good employers

so why try to fix what isn’t broken!

One thing you’ll miss?

I will certainly miss the people and the lunch time

card school.

One thing you are looking forward to?

I am looking forward to not having to drive to work

in winter when it’s cold, dark & icy.

How will you be spending your time?

Retirement brings a freedom to do what you want,

when you want. But one thing I won’t be doing is

sitting at home waiting to grow old gracefully!!

SUCCESS IN THE

BOARDROOM

We are pleased to announce the following promotions

to Assistant Manager; Jonathan Cunningham (Tax),

Lucy O’Gorman (Run My Business) and Ben Thornley

(Corporate Services).

SUCCESS IN THE

CLASSROOM

The recent months have seen some great

examination and qualification success.

Congratulations go to Jane Parry who has obtained

her STEP qualification (Society of Trust and Estate

Practitioners) and to Lucy O’Gorman who is now

a qualified chartered accountant.

Sarah Clancey has been successful in her final

examinations and has qualified as an Accounting

Technician. In our Wealth Management teams

Richard Hesketh has qualified as a Chartered

Financial Planner and Laura Bolton has gained

the Certificate in Financial Planning.

Congratulations!

Blackburn office

Greenbank Technology Park, Challenge Way,

Blackburn BB1 5QB

Telephone: 01254 679131

Facsimile: 01254 681759

Email: blackburn@pmm.co.uk

Burnley office

Lodge House, Lodge Square, Cow Lane,

Burnley BB11 1NN

Telephone: 01282 438035

Facsimile: 01254 681759

Email: burnley@pmm.co.uk

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