Martyn Benstead, Partner at Stephenson Smart Chartered Accountants and Business Advisors explains why now, more than ever, employing an accountant is important:

Financially, as well as politically, these are turbulent times.

Replacements in Prime Minister and Chancellor of the Exchequer are coming thick and fast and with these changes, volatility in the financial markets and economic climate inevitably follow.

Why employ an accountant at times likes these?

Good accountants relish change as it enables them to advise clients to take advantage of tax reliefs and of opportunities to maximise wealth.

Interest rates, tax rates and the markets are all changing constantly and it is hard to follow and understand what to do for the best with our finances and how to plan for the future.

Employing an accountant to your team at times like these is crucial and at Stephenson Smart, we’re available to help.

“Martyn was extremely helpful and clear and went above and beyond in trying to resolve the issues we had – even though it was our first meeting with him. We definitely got the sense that he cared about his work and clients and would do all he could to help. We had a very positive experience and would highly recommend Martyn and Stephenson Smart.”

Key areas that may affect you:

Property

If you are thinking about selling a residential property, you may need to be aware of the requirement to submit a Capital Gains Tax (CGT) Return and pay the tax due online within 60 days of completion. We can calculate the likely CGT to assist you in making an informed decision over whether to sell or rent your property.

Depending on the asset, you may be able to reduce any tax you pay by claiming reliefs.

As well as CGT, another factor needing consideration over whether to sell would be your inheritance tax position. Some assets would be subject to inheritance tax if left to beneficiaries in your estate at your death. Careful planning can assist in minimising the impact of this.

Business

There have been a raft of changes in the rates and thresholds in Income Tax, Corporation Tax, National Insurance and Dividend Tax.

It’s more important than ever to consider your business structure – whether you’re operating as a sole trader, partnership or limited company, it may no longer be the best for your circumstances.

Please contact us if you need a fresh look at how you structure your business.

Embarking on a new business start up is both an exciting and a challenging task, which carries with it an element of risk. Key decisions need to be made, and there are many factors to consider.  Partner, Chris Goad, highlights some of the key areas.

Business Plan

A business plan is an essential document that will guide you in establishing and growing your new venture; helping you focus your thoughts, providing you with targets and goals as well as giving you an indication of your cash requirements.

Finance

Business financing can take two forms: debt or equity. Debt means borrowing money. Loans may come from family, friends, banks, other financial institutions, or professional investors. Equity relates to selling an ownership interest in your business. Such a sale can take many forms, such as the admitting of a partner or, if you are in a company, issuing of additional shares to investors.

Getting a grant is also an option. There are many different small business and start-up grants available depending on where your business is based, how large it is and what you do.

Taxes, legalities, and insurance

A significant task for a new business owner is ensuring that the business complies with the extensive tax, legislation and insurance requirements that are imposed by various authorities. To avoid problems, penalties and – in some cases – legal action, it is important to understand your obligations.

“Chris has been brilliant. I can literally send him a text with a quick question, and he is always so helpful. With each start-up I have worked on Chris has guided me through the process and helped me with the business model. I haven’t had the need to worry about anything because I know Chris is always at the end of the phone with an answer.”

Sean Brown, owner, Cambridgeshire Hair and Beauty.

Stephenson Smart are specialist business start-up advisors. We can guide you through the decision-making processes, help you make the appropriate registrations, assist with cash flow forecasts and offer regular updates to enable you to monitor the performance of your business. Please get in touch if we can support you on your new business start-up journey.

Related articles: Stephenson Smart helps new business start up flourish

Kayleigh Wilson, Tax Specialist at Stephenson Smart Chartered Accountants and Business Advisors, talks through the ongoing changes to Capital Gains Tax (CGT) and the areas to be aware of.

Capital Gains Tax

Capital Gains Tax is a tax on the profit made after a sale of an asset (i.e a property) that’s increased in value.

The gain you make is the part that is taxed, not the amount of money you receive.

If you sold a UK residential property on or after April 6, 2020, and you have a Capital Gains Tax liability, you must report and pay the tax due online using a CGT on UK property account.

Depending on the asset, you may be able to reduce any tax you pay by claiming a relief.

Principal Private Residence Relief

There’s been lots of changes since 2020, particularly with the rules of principal private residence (PPR) relief.

In a nutshell, when a person sells their only or main residence the gain is exempt from Capital Gains Tax due to PPR.

It may apply to all or part of a gain on a property and for most taxpayers, any gain made on the sale of their home will be completely exempt as it will be covered by PPR relief.

The charge may arise though if the taxpayer has been absent from the property during their ownership, or if they own more than one residence.

Lettings Relief

Lettings relief can only be applied where the residence qualifies for PPR relief – it must have been a person’s main or only home at some point. It’s given after PPR relief, where part of the gain remains chargeable due to residential letting during a period of absence.

Since 2020, lettings relief is available only if there is shared occupancy, the owner and the tenant both live in the residence at the same time, it is just this period of joint occupancy that qualifies for lettings relief. Lettings that occurred prior to 6 April 2020 that would have qualified for lettings relief under the pre-6 April 2020 rules is not banked.

It’s also worth noting that penalties are being issued by HMRC for the late filing of Capital Gains Tax returns on the sale of UK residential property, whether or not you are a UK resident. Depending on the date of the disposal, you now have either 30 or 60 days from the date of completion, to submit your CGT Return online.

I am an expert in Capital Gains Tax, please get in touch if I can help you.

National Payroll Week was established by the Chartered Institute of Payroll Professionals in 1998 to celebrate the profession and to give it the recognition it deserves.

Here at Stephenson Smart, we are proud to do our bit in keeping the UK paid with 827 payroll clients across our offices.

We have payroll experts in our Gorleston, King’s Lynn, Wisbech and March offices, and due to demand we are investing in our next generation of payroll professionals by adding two new members of staff to our teams.

Abi Bisset-Smith is our new Trainee Payroll Administrator in our East Coast office, while Hannah Carter has joined our King’s Lynn team.

Abi, 23, who lives in Great Yarmouth, gained a BTech in art from college and spent three years working for The Post Office before she decided upon a change of career.

“My mum had a couple of friends who worked at Stephenson Smart, so I knew that it was a good company to work for.

“I didn’t know much about payroll, but I knew what an important role in plays in everyday life. My training is going well, I’ve still got a lot to learn, but I have got a great team who help answer my questions.

“I’m processing some of the simpler payrolls and I’m working towards getting my basic payroll qualification. I really like speaking to the clients, it’s really satisfying to see a payroll be processed successfully and know that I’ve helped.

“I like the fact that this career has longevity and that it’s doing something really positive for people.”

In her spare time Abi still puts her art qualification to good use by creating digital stylised portraits of people’s pets, as well as spending time with her identical twin.

Hannah, 20, is the latest payroll trainee in the King’s Lynn office. She initially studied history at the University of Lincoln before deciding it wasn’t the correct route for her.

“I’ve lived in Lynn for my whole life and I knew of Stephenson Smart from walking by it many times. I wanted to try something very different to what I had tried before, and I wanted a change from university type education.

Hannah said anyone choosing a career in payroll should be prepared to work to deadlines, be a team player and a good communicator.

“Payroll is very much deadline based, with remembering to get all parts of the job done by a specific date. It also involves working within a team and constant communication within that team.

“It’s so important for society because it makes sure everything is done according to legislation and it takes the weight off employers so they can focus their time on other aspects of their business.”

Hannah’s other passion is her role as a guide leader.

She is the fourth generation of her family to fulfil the role and is travelling to Switzerland with her unit in October. It will be the eighth time she has been, but the first as a leader.

Zoe Taylor, Payroll Manager at the East Coast office, said Stephenson Smart was focused on providing a strategic answer to all payroll issues, whatever the size or location of a business.

“We have four extremely busy payroll departments across our offices. It’s a key part of our business and our ethos is to completely absorb our clients’ payroll administration responsibilities so they can focus on other elements of their business.

“We’re delighted to have Abi and Hannah on board. Investing in our next generation of payroll experts is imperative as we build on our offer even further and it is good to take the opportunity to acknowledge them as part of National Payroll Week. ”

If you would like more information about our payroll services please contact us.

Are you making the most of your allowances from your residential property income?

If you receive income from letting a room in your property or renting out another property permanently or as a holiday let, there are various reliefs and allowances that can be applied to your income to reduce your tax bill.

Neil Gayton, manager at our King’s Lynn office, examines the reliefs and allowances that you may need to consider when completing your tax return.

The Rent a Room Scheme

The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.

You can let out as much of your home as you want. The tax exemption is automatic if you earn less than £7,500. If you earn more than this you must complete a tax return, you can then opt into the scheme at any time if you are a resident landlord or run a bed and breakfast or guest house and claim your tax-free allowance on your tax return.

You can choose not to opt into the scheme and instead record your income and expenses on the property pages of your tax return.

You cannot use the scheme for homes converted into separate flats.

Property Income Allowance

If you are a landlord earning rental income from your property you can get up to £1,000 rental income tax-free each year from Property Income Allowance.

If you earn less than £1,000 from rental income, you don’t need to do anything. However, if you claim the Property Income Allowance, you cannot claim any other rental expenses.

If you own a property jointly with others (spouses, civil partners, etc.), you can each claim this £1,000 allowance – even though you divide the rental income between yourselves.

If you’re renting out a buy-to-let or a second property, usually your expenses are higher than £1,000 a year, so only use this allowance if you can’t find your receipts or if in one year you somehow have just a few expenses.

Residential Finance Costs

Relief for finance costs on residential properties is restricted to the basic rate of Income Tax. Finance costs include mortgage interest, interest on loans to buy furnishings and fees incurred when taking out or repaying mortgages or loans. No relief is available for capital repayments of a mortgage or loan.

When completing a tax return for income from a residential property it is possible to bring forward losses from previous years.

There are many things to consider when using a residential property for income purposes.  At Stephenson Smart we are experts in helping people fully understand their liabilities.  Please get in touch if we can help you.

Profile: Neil Gayton

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