Autumn 2013 Newsletter

Employers – don’t let auto-enrolment sneak up on you

Reforms to get more people saving for their retirement are already underway for the country’s largest employers.

From autumn Auto Enrolment – the new legislation making it compulsory for companies to enrol their workers into a pension scheme – will be gradually phased in to include businesses of all sizes.

Under the new laws, employees will be automatically enrolled into a pension scheme with employer contributions if they are aged between 22 and the state pension age, earn at least £8,105 a year, and are not already in a scheme that meets minimum standards.

From November this will involve businesses employing 350 people or more. Gradually it will cover employers of all sizes and by April 2017, those with less than 30 people on their books will be included.

Barringtons’ Client Payroll Manager Sue Howie said: “This landmark scheme represents a massive shake-up to the way we save for our retirement and it’s important that employers don’t let these changes sneak up on them. Setting up your Auto Enrolment infrastructure is a legal requirement and needs to be addressed now, certainly for medium to large employers.”

Here are some facts about Auto Enrolment:

  • This is a new legal requirement for employers to automatically enrol their eligible employees into a qualifying pension scheme and to make minimum contributions for them.
  • Employees are eligible for Auto Enrolment if they are at least 22, below State Pension age and have qualifying earnings and work in UK
  • If employees do not automatically qualify to be enrolled they can choose to opt into the scheme
  • Also, eligible employees can opt out after they have been automatically enrolled
  • Contributions have to total 3% – 8% from employers and 5% from employees once the scheme is fully operational by October 2018 and onwards – lower contributions are acceptable until that date
  • If employees opt out they can choose to re-join later and employers have to automatically enrol employees back into the scheme every 3 years if they are eligible but have opted out
  • Every employer will be notified of their staging date by the Pensions Regulator. This has been determined based on the numbers of employees in the PAYE scheme.
  • A new National Workplace Pension scheme called NEST has been set up and is open to any Employer who wants to use it – NEST will be a qualifying scheme

The state pension was first introduced in 1909 when the maximum payment was five shillings – 25p – a week. Thanks to healthier lifestyles and medical advances, today’s 65-year-olds are expected to live to 86.

The Government says Auto Enrolment will help tackle concerns about an old age poverty crisis, with people living longer but failing to put away enough for their later years.

Barringtons are here to help employers get to grips with Auto Enrolment – call us on 01782 713700

Weather kind to Late Summer Drop In

Office dog George was a well-behaved ‘host’ and enjoyed much attention

Clients and guests turned out in force to the event

Hearty platefuls were served up by The Whole Hog of Shrewsbury

Barringtons and BCR welcomed a wide range of clients and contacts to its Late Summer Drop In event.

Hog roast, hot potatoes, beers, wines and soft drinks went down well with our visitors as many arrived straight from their workplaces.

Among them were representatives of HSBC, Cooperative Bank, Butters John Bee, Freeth Cartwright LLP, Beswicks Solicitors, Lloyds TSB, P & L Joinery, Bespoke Bathrooms and Interiors, Jacks of Norton, Lawrence Business Finance, Advance Mortgage Solutions, Myers & Co Solicitors, Hinson Parry & Co, Pure PR Solutions, Santander, Harris Motor Company and local doctors Rajendra Yadava and Pravin Shah.

From all of us we would like to say a big thank you to everyone who was able to attend. It was great to see everyone enjoying the tail end of the summer weather – we certainly feel lucky it held out for us!

The delicious hog roast and baked potatoes provided by The Whole Hog and Leigh Vickers potato van went down a treat, as did the fine selection of drinks available at the bar from Old School Wines. We hope that everyone who attended had as much of a good time as we did.

To those of you who weren’t able to attend, we’re sorry to have missed you, hopefully we can catch up next time!

Thanks again to everyone who came along.

From the Barringtons and BCR Team

Universal credit – are you affected?

If you currently claim Tax Credits you may be aware that the Government has proposed some major changes which may affect your claim.

Tax Credits are one of a number of working age benefits which look set to be merged into a single new benefit called Universal Credit.  The details are still being finalised but the key points to emerge so far are as follows:

  • No new Tax Credits claims will be accepted after April 2014.
  • Existing Tax Credits claimants will be moved onto the new regime in a staged process running across the tax years 2015/16 and 2016/17.
  • All claimants will need to make a completely new claim for Universal Credit if they are still eligible as there will be no automatic transfer of records from the existing Tax Credits system.
  • The criteria to be eligible for an award under the new system will be substantially different to that which applies to Tax Credits at present – most notably the working hours requirements look set to be removed and there will be a taper of the award available to claimants who hold capital of more than £6,000.  No award will be available for those whose capital is above £16,000.
  • The reporting requirements to make a successful claim will also be changing, particularly for the self-employed who will need to start reporting their income on a monthly basis rather than annually as at present.

The timescales and full details of how Universal Credit will work are still under review by the Government but all claimants can expect to receive correspondence from HMRC/DWP in due course to advise how and when they will be affected.

Helen Bridgwood & Joanne Hamilton
Tax & Payroll
Barringtons Ltd.

Payroll heroes scoop national recognition

Sue Howie and Helen Bridgwood of the Payroll Bureau at Barringtons are thrilled to be through to the national award scheme finals

Barringtons’ Payroll Bureau has won through to the finals of a high-profile competition!

And even more thrilling is that we are the only Staffordshire finalists in the top team category of the Payroll World Awards 2013.

The awards, staged by industry magazine Payroll World, recognise exceptional customer care and high standards of accuracy provided by specialists across the country.

Winners will be announced at the plush Millennium Hotel in Mayfair, London on October 24.

MD Phil Wood said: “Our Payroll team has been shortlisted as a finalist in the annual Payroll World Awards 2013 at the first time of entering.

“These prestigious awards are made in recognition of excellent customer service and are subject to fierce competition from a large number of well-established payroll providers throughout the UK and we are thrilled to have been shortlisted in such exalted company.”

The team relieves employers of the headache of calculating staff payments and tax deductions for more than more 270 businesses across Stoke-on-Trent. Together they beat off strong competition from payroll bureau service providers across the country.

Close Companies – The Good and Bad News

Following on from the Budget 2013, and consequent Royal Assent of the Finance Act 2013, there has been more focus made by HMRC with regards to loans taken by owner managers from their own companies and the tax treatment thereof.

There is good news and bad news:

  • The good news is that from April 2014, the limit to which a low or interest free loan is liable to a benefit in kind is only for balances of over £10,000 at any time during the tax year, rather than for balances over £5,000 as previously.
  • The bad news is that the new rules concerning the repayment of loans but consequent redraw of loans shortly after have now been set as law. This is where loans are repaid and within 30 days funds are redrawn over £5,000 and where at any time repayments and redrawn amounts give a balance of over £15,000 and there is an intention to withdraw the funds. This means that the ‘section 455’ corporation tax charge of 25% of the balance at the end of the accounting period would be payable, rather than relief from the tax being payable being given, if the loan was repaid. However, where repayments are made using funds that are of taxable income e.g salary and/or dividends the new rules, are not applicable.
  • Further bad news is that HMRC are consulting on the same area as to whether ‘section 455 tax’ should be changed. Therefore it is expected that any rule changes may be considered in the Budget 2014 in response to the consultation. In the meantime this may then give uncertainty for the future to companies that regularly have their directors/shareholders lending money from them as to the tax consequences thereon. Once we have any further news on this subject then we will update accordingly.

If you think that you may be affected by any of these issues please contact the Barringtons Tax Department or your usual contact’

Joanne Hamilton
Tax Manager
Barringtons Ltd.

Books offer support to new businesses

Barringtons specialise in helping start-up businesses get a flying start and here our managing director, Phil Wood, shows a book we have produced offering sound advice

Barringtons are specialists in helping fledgling businesses get off to a flying start.

We are experts in the financial aspects of running a business – so much so we have decided to put all our combined knowledge into two handbooks packed with useful information for the budding entrepreneur.

Jargon-free, The New Business Kit and 57 Ways to Grow Your Business offer sound advice in layman’s terms.

Barringtons MD Phil Wood (pictured) said: “We take great pride in seeing clients make a success of their business interests especially those who come to us in their first year. It’s not just about ‘doing their books’ but advising them on all manner of financial issues which can impact on their lives and businesses.

“It is a fully rounded service offering businesses all the support and advice they need year in, year out.”

Spanning businesses of all sizes, from sole traders to limited companies, many clients have been with us since the outset and have benefited greatly from a long-standing relationship of respect and trust.

New clients, in particular start-up businesses, flourish from being able to tap in to the wealth of knowledge from various specialist departments and friendly guidance on complex financial matters.

The books, which are free to download from this website, will give you tips on how to become more productive, profitable and empowered – and not only keep your head above water but swim faster than the rest.

They are also available to collect from our various offices.

European VAT Refunds – Deadline Extended?

Those visiting Europe on business will often find that they will have incurred foreign VAT on their expenses. Most affected are likely to be businesses making regular trips onto the continent, such as hauliers, coach operators, or certain contractors, which are likely to have to purchase road fuel, and pay other expenses, most or all of which include an element of VAT.

VAT charged in an overseas country cannot be claimed on a UK VAT return. It must instead be reclaimed via applications to the overseas authorities which collected the VAT. These claims are subject to very strict rules and procedures, one of which involves time limits.

The basic rule is that a claim involving VAT incurred elsewhere in the European Union cannot be accepted if it is received more than nine months after the end of the year to which it relates. Therefore, claims for VAT incurred in 2012 must be submitted before 30 September 2013. This is an absolute deadline with no means of extension.

There are some variations in the rules of VAT recovery in the various EU Member. However, we make these claims on behalf of a number of clients and are therefore fully up to speed with what is required.

Finally, there is often scope to recover VAT incurred in non-EU countries, subject to certain conditions. Bearing in mind that VAT, in one form or another, exists in well over 130 countries (and that number is growing) this is something well worth considering when making business trips.

Colin Woodward
VAT & Duties Director
Barringtons Ltd

Changes to National Minimum Wage

From 1st October 2013, the National Minimum Wage will be increasing. National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law. The minimum wage depends on a worker’s age and if they are an apprentice.

The table below shows the current and previous rates, and the new rate from 1st October 2013.

YEAR

21 and Over

18 – 20

Under 18

Apprentice*

2013 (from 1st October)

£6.31

£5.03

£3.72

£2.86

2012 (Current rate)

£6.19

£4.98

£3.68

£2.65

2011

£6.08

£4.98

£3.68

£2.60

2010

£5.93

£4.92

£3.64

£2.50

Helen rides on a crest of a wave passing exams

There was good news awaiting Payroll assistant Helen Bridgwood when she returned from her holiday at the Welsh seaside.

She had passed the business tax module of the AAT (Association of Accounting Technicians) Level 4 Diploma in Accounting.

It means Helen has passed all the AAT accounting qualifications and is entitled to use the letters MAAT after her name.

She said: “I studied AAT at night for the last five years, starting off with levels 2 & 3 of the Certificate in Payroll Administration at Stoke-on-Trent College and then I moved on to do levels 2, 3 and 4 of the accounting qualification at Newcastle under Lyme College.

“It’s a long process but well worth it and I work in a very friendly team at Barringtons.”

Helen looks after payroll matters for a wide range of clients from small employers with less than five members of staff to large concerns with more than 50. They include pubs, restaurants and a chemical company.

Emma’s Exam Congratulations

Congratulations are also in order to Emma Fergusson, who has passed another ACCA qualification!

With only two exams left, and fingers crossed this time next year she will be fully qualified.

Emma works in Book-keeping and VAT, and when she’s not revising for her exams she has two young sons who also keep her very busy.

Emma is looking forward to being fully qualified, and says “it’s a relief that the end is in sight and I won’t have to do any more revision!”

Best of Luck to Emma for her next exams, keep up the good work!

Barringtons’ Lee is a Tough Mudder!

Good luck to Lee Bridgwood as he continues his training for Tough Mudder in October.

The legendary event will see Lee face-off against obstacles such as “Fire Walker”, “Electroshock Therapy”, “Mud Mile” and “Ball Shrinker” across a half marathon, cross-country assault course.

Lee is running in aid of Douglas Macmillan, and you can donate through his Just Giving site – www.justgiving.com/leemustbemental – All donations would be hugely appreciated and are going to a great cause.

Since signing up in February, Lee has had to overcome a few injuries. Despite these setbacks he has been training extremely hard and says he is “100% committed”.

No stranger to extreme pursuits, Lee has indulged his adrenaline addiction before by sky-diving and bungee jumping, however Tough Mudder might just be his most gruelling challenge yet.

Best of Luck Lee!