When trivial can be significant

The following extracts from HMRC’s website explain how certain benefits to employees can be tax-free. Surprisingly, HMRC describe these as “trivial” benefits.

You don’t have to pay tax on a benefit for your employee if all of the following apply:

  • it cost you £50 or less to provide
  • it isn’t cash or a cash voucher
  • it isn’t a reward for their work or performance
  • it isn’t in the terms of their contract

This is known as a ‘trivial benefit’. You don’t need to pay tax or National Insurance or let HMRC know.

You have to pay tax on any benefits that don’t meet all these criteria.

Salary sacrifice arrangements

If you provide trivial benefits as part of a salary sacrifice arrangement they won’t be exempt. You’ll need to report on form P11D whichever amount is higher:

  • the salary given up
  • how much you paid for the trivial benefits

These rules don’t apply to arrangements made before 6 April 2017 – check when the rules will change.

Directors of ‘close’ companies

You can’t receive trivial benefits worth more than £300 in a tax year if you’re the director of a ‘close’ company.

A close company is a limited company that’s run by 5 or fewer shareholders.

So, if you keep to HMRC’s trivial benefit rules, these payments may help you to spread a little festive cheer this Christmas. Goodness knows, we could all do with some of that.

Finalist for Bangor Business Awards 2019

We are pleased to advise that we are one of five short-listed finalists in not one but TWO categories:

(1) Best Company to Work for

(2) Customer Service Excellence, Professional Business Services.

The winner will be announced at the awards GALA night on Friday 11th October in the Clandeboye Lodge Hotel, Bangor.
The event will be hosted by Bangor’s own and Cool FM breakfast host, Pete Snodden.

Blood Donation – David Waugh awarded Certificate for 75 blood donations

David recently received his certificate for having made 75 Blood donations.

My target is to get to 100 donations.

Currently David is donating platelets on a monthly basis.

We all know friends and family who have received or will need to receive platelets as part of their treatment, and it is critical that as many people make blood and platelet donations as possible. Blood donation is vitally important for proper delivery of health care. Blood transfusion is life saving and life enhancing.

David would encourage all of us to make a little effort and help save lives.

Please contact the Northern Ireland Blood Transfusion Services for information.  https://nibts.hscni.net/

Tax investigations are on the increase

Individuals and companies alike are being targeted and under more scrutiny than ever.

Investigations are stressful, time-consuming and costly for the party involved. As your Accountant we want to protect you where possible which is why we offer a Tax Investigation Insurance service which covers you against the cost of professional fees associated with a tax investigation.

Click here to find out about this service and how it can protect you.

Raid on dividends helps bring record income tax haul for HMRC

Income tax receipts have soared to a record £191bn for the 2018-19 tax year, representing a 6% increase on the previous year. Income from self-assessment income tax receipts was 12% higher than in 2017-18, driven in part by a cut to the amount you can earn from dividends without paying tax. Last year, the Government cut the dividend allowance to just £2,000, from £5,000 in April 2018. Just another tax hike on small businesses!

Preparing for a no-deal Brexit

Whatever your opinion on the “leave/remain” debate there is now sufficient momentum in our new government to engineer the UK’s exit from the EU 31 October 2019, come what may.

As the EU seems reluctant to consider any change to its draft withdrawal agreement, the likelihood of a no-deal Brexit is becoming a real possibility.

But I don’t have customers or suppliers in the EU, so I don’t need to worry

Many of us do not have direct dealings with businesses in the EU. However, you will not have to drill down too far into your customer and suppliers’ supply chains to find firms that are dependent on imports from or exports to the EU to some extent. This being so, any delays or price increases in these movements of goods will trickle down and affect our businesses.

Accordingly, we are all going to be affected…

OK, but what can we do? October is just a few weeks away

It’s been announced that the government is investing a considerable sum in no-deal Brexit advice. The information, when it becomes available, will likely be complex and self-defeating as it will take an age to unravel and apply – this is certainly the case with previous information published by HMRC on this topic.

However, there are three key steps that we should all undertake NOW. They are:

1 Supply issues:

Survey your major customers and suppliers and identify those who expect a no-deal Brexit to disrupt their supply lines.

2 Pricing issues:

Identify suppliers who expect that a no-deal Brexit will increase their costs and their price lists. Survey your customers to see if their demand for your products or services will be affected by a no-deal Brexit.

3 Planning

When you have the data from 1 and 2 above create a formal business plan and if necessary, agree additional funding requirements with your shareholders or banks.

 Additionally, you should consider:

 Applying for an Economic Operator Registration and Identification (EORI) number.

Post Brexit, and particularly, after a no-deal Brexit, without this number HMRC will be unable to clear your goods through customs, leading to delays and possible additional storage costs. You can apply online and there are no registration costs. We should all apply as the process only takes a few days. You can register even if you subsequently don’t use the number.

 Also, if your business is reliant on grants from the EU, research replacement UK grants and apply ASAP.

The farming community, not for profit organisations and educational establishments will be particularly affected. Don’t let no-funding be an outcome of no-deal.

And finally,

Check your family passports

If the UK leaves the EU without a deal on 31 October 2019, new rules will apply. If you have an UK passport, you will need to have at least 6 months left on an adult or child passport to travel to most countries in Europe (not including Ireland). If you renewed your current passport before the previous one expired, extra months may have been added to its expiry date. Any extra months on your passport over 10 years may not count towards the 6 months needed.

We can help

If you have concerns that you are going to be adversely affected by a no-deal Brexit, but you are unsure how to plan and counter these issues, please call. We can help.

Contact us today

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Advice Lines

Our Advice lines are completely free of charge for you.

EMPLOYMENT LAW ADVICE LINE
Call the team for help with any issue or question you have relating to managing your employees.

HEALTH & SAFETY ADVICE LINE
Call us for advice on any aspect of managing your Health & Safety obligations within your workplace.

COMMERCIAL LEGAL ADVICE LINE
Call our experienced solicitors for dedicated advice on all aspects of company law.

Don’t sit on the fence

These few steps are the minimum you should consider, and as we have already stressed, we are all going to be affected by a no-deal outcome.

Waiting for the 31 October to come and go in order to judge the effects on our businesses is rather like betting on a blind hand in poker, look at your cards now, assess the risks of a no-deal Brexit and plan accordingly.

Finalists for the first ever Northern Ireland Women’s Awards are revealed

Creative Oceanic are proud to announce the first ever Northern Ireland Women’s Awards 2019 are taking place in Wellington Park Hotel Belfast on 26th June.

Thousands of nominations were cast by the public over recent months and the full list of finalists has now been compiled and made live.

(Click here to view the full list)

Our very own Jenny Waugh has made it to the Finals:

Services to Accounting & Finance
Jenny Waugh – Hamilton Morris Waugh (Bangor)

The awards aim to celebrate the most dedicated, hard-working and successful women across Northern Ireland.

We wish all the finalists the best of luck.

The new State Pension

Prior to April 2016, men born before 6 April 1951 and women born before 6 April 1953, qualified for a basic State Pension and an Additional State Pension.

If you were born after these dates you will qualify for the New State Pension and will no longer be eligible for the Additional State Pension (unless you inherit the Additional State Pension of your partner).

The remainder of this post set out details of the New State Pension (NSP). The basics:

  • The earliest you can claim the NSP is when you reach the relevant State Pension Age.
  • You will need to have paid at least 10 years National Insurance Contributions (NICs) to be eligible for any NSP payment.
  • You will need 35 years of NICs to qualify for the full NSP.
  • The NSP is currently £168.40 per week.

Check your pension record

You can apply online for a Pensions Statement that sets out the number of years contributions you have already made.

Claiming your pension

You have to claim your NSP, there is no automatic entitlement. You can claim online, by phone, by downloading a pension claim form or following a separate claims procedure if you live abroad.

Pension planning

Clearly, if a State Pension is your only income after you reach the State Retirement Age, this will be unlikely to cover the basics and you will need additional income or savings to make up the difference.

And the earlier you start this planning process, the more chance you have of achieving a reasonable income after retirement.

Action plan

We recommend that all readers consider the following action plan:

  1. Apply for a State Pension Statement that clearly sets out the number of years NIC contributions you have made and those you still need to make to qualify for the NSP.
  2. Organise a formal planning meeting with your pension’s advisor to ensure that you are keeping pace with your need to supplement the NSP with a private pension after retirement.

Time flies. Don’t leave this important aspect of your personal financial wellbeing until it is too late to create a reasonable pension fund, from State or private sources.

Philip Nixon

Congratulations to Philip Nixon, our new Client Manager.

Philip has successfully passed his Chartered Accountant Ireland’s FAE examinations in 2018.

Philip has a wealth of knowledge, especially surrounding Making Tax Digital (MTD).

As a valued member of the HMW team, he will ensure a seamless transition for his clients in becoming MTD compliant.