6 Retirement Planning Questions To Ask Yourself!

It has been said “Only two things are certain in life. Death and Taxes”, but what about before we reach the former? As we move into our 50’s and look towards our 60’s, health and retirement become more important than ever before. Assuming we are in reasonable health the big question we should ask ourselves is “will I have a comfortable retirement?” Too many of us retire without any planning and things often do not turn out as we would have wished, and as we get older many of us cannot rely on others for support, we will be on our own, so maybe we should be planning and thinking about retirement a little earlier? We cannot advise on everything about retirement and certainly you wouldn’t want us to, but below are a few questions to consider that may help you focus on the issues BEFORE you retire and maybe help you to think about some of the practicalities of retirement. 1.       Are you sure you want to retire? 2.       Have you set a date?  Are you flexible on your retirement date? 3.       Have you considered life away from work? 4.       Where are you going to live?  5.       Have you discussed retirement with your family? 6.       Can you afford to retire financially? Create an investment plan. Do a dry run. Know what your expenses will be in retirement. ·         Visualise your new lifestyle, any (new) sources of income and price out revised costs.  More leisure, more family time, more charitable work, “pocket money” income, non-executive income, investment management time ·         What can you expect i)         Early years expenses to be near pre-retirement levels but these should drop off as the routine of retirement kicks in BUT, at some point, health care & medical costs may drive expenses back up and you should be prepared for this. ii)       If you have an employer-sponsored retiree health care plan, consider the possibility that your employer might cancel or trim this benefit in the future. iii)      On average, retirees spend anywhere from 11% to 16% of their after-tax income on expected health care BUT don't forget (to plan to pay for) unexpected health care expenses, too. d.       For couples, plan for two eras in retirement; i)         when both are living, and ii)       when either one is the survivor. iii)      Pension choices can range from 0% to 100% to the survivor. Your initial retirement choice has a massive effect on the second retirement era. e.       Get a good feel for life expectancy i)         Life expectancy is the #1 driver for calculating your savings requirements There is a lot more thought needed to retiring than first meets the eye and if you need guidance on pre-retirement planning then talk to us, we can help you focus on achieving your goals and helping you set a financial plan that will work for you.

Getting The UK “Match Fit” for BREXIT!

Introduction
The Chancellor Philip Hammond announced that his first Autumn Statement will also be his last.  In future the main Budget announcements will be made in the autumn rather than the spring.

We were not expecting that many tax announcements, and many that were made we already knew about. He could not afford too many give-aways as he expects the economy to have a bumpy ride during the BREXIT transition.

There will still be a Budget next March but thereafter the annual Budget will be in the Autumn to allow longer consideration of the announcements and draft legislation before enactment the following summer.

KEY TAX ANNOUNCEMENTS:
• Personal allowance to increase to £11,500 in 2017/18, rising to £12,500 by 2020/21
• Higher rate tax threshold to increase to £45,000 in 2017/18, rising to £50,000 by 2020/21
• National Insurance threshold to be raised to £157 a week for employees and employers
• Corporation tax rate to reduce to 17% in 2020
• Business tax “roadmap” to continue, in particular new rules for company losses
• Insurance premium tax to increase from10% to 12% from 1 June 2017
• More anti-avoidance measures, in particular a new VAT flat rate percentage for “limited cost traders”

HELP FOR THOSE JUST ABOUT MANAGING (JAM)

The Chancellor made a number of announcements that were intended to help those families that a just about managing, given the acronym - JAM. Raising the personal allowance to £11,500 and higher rate threshold to £45,000 will mean they pay less income tax and keep more of what they earn.

This group will also benefit from the increase in the National Living Wage to £7.50 an hour and the changes to Universal Credit.

The Universal Credit taper rate will be cut from 65% to 63% from April  2017 which will mean that fewer benefits will be clawed back as claimants’ income increases. The planned reductions in the overall benefits caps will however go ahead.

CORPORATE AND BUSINESS TAX CHANGES

Many of the corporate tax changes had already been announced and are set out in the business tax "roadmap" which details the government tax strategy for the life of this Parliament and beyond.

The currently 20% corporation tax rate is planned to fall to 19% from 1 April 2017 and then to 17% on 1 April 2020. The government is committed to keeping the UK corporate tax rate the lowest in the G20 and there is talk of a rate as low as 15% in the future.

The Chancellor raised concerns that there continues to be a rise in tax-driven incorporations as there are still tax savings compared to unincorporated businesses operating at a similar level of profit. That may suggest that the government is still considering the introduction of a new “look through entity” suggested by the Office of Tax Simplification so that the tax treatment will be the same, thereby creating a level playing field.

The new flexible corporate tax loss rules announced in the spring budget have been subject to consultation and will go ahead from 1 April 2017.

CAPITAL ALLOWANCES

From 23 November 2016 to 31 March/ 5 April 2019, businesses will be entitled to a 100% First Year Allowance (FYA) for the cost of installing electric charge-point equipment for electric vehicles. This measure is intended to complement the 100% FYA available for low CO₂ emission vehicles and to encourage their uptake.

HIGHER RATE TAX RELIEF FOR PENSIONS CONTINUES

There has been much speculation that the government would further limit tax relief for pension contributions by removing higher rate tax relief. That measure would save the country £34 billion in tax but the only change announced concerns a new lower limit on amounts that can be saved in a pension when individuals have started drawing down from their private pension.

Currently the net effect of pension tax relief for a higher rate taxpayer is that saving £10,000 in a pension costs £6,000. The taxpayer pays £8,000 into their pension and the government tops this up by £2,000 with a further £2,000 deducted from the individual’s income tax liability, reducing the net cost to £6,000. For additional rate taxpayers the net cost would be just £5,500.

Remember that there is currently an annual pension input limit of £40,000 which caps the combined contributions by an individual and his or her employer. For those with high income this is tapered and can be as low as £10,000.

One new pension restriction that was announced was a measure to limit pension “recycling”. Those individuals who have started drawing down their personal pension will in future only be able to reinvest up to £4,000 in their pension.  Please contact us if you want to discuss pension planning further.

SALARY SACRIFICE RULES TO BE TIGHTENED UP

Many employers now provide flexible remuneration packages that allow employees to give up some of their contractual salary in exchange for benefits in kind. This can have the effect of saving tax and national Insurance contributions for both the employee and employer, particularly where the benefit provided is exempt from tax.

These tax and NIC advantages are to be withdrawn from 6 April 2017. Arrangements involving pensions, childcare, Cycle to Work and ultra-low emission cars will be excluded; existing arrangements will be protected for a transitional period until April 2018, and existing arrangements for cars, accommodation and school fees will be protected until April 2021.

The Chancellor has announced a wider review of the taxation of benefits, with the intention of making this area ‘fairer and more coherent’. This appears likely to have a significant effect on any employee who is in receipt of benefits from their employer.

OTHER EMPLOYEE BENEFIT CHANGES

MAKING GOOD

An employee who repays to their employer, or ‘makes good’, the cost of a benefit, avoids a tax charge. As previously announced, from April 2017 such making good will have to take place by 6 July in the following tax year if it is to be effective.

CHANGES TO TERMINATION PAYMENTS TO GO AHEAD

As announced in March, from April 2018 termination payments over £30,000, which are subject to Income Tax, will also be subject to employer’s NIC. Tax will only be applied to the equivalent of an employee’s basic pay if their notice is not worked. The first £30,000 of a genuine termination payment will remain exempt from tax and NIC.

“ABUSE” OF THE VAT FLAT RATE SCHEME

The VAT flat rate scheme is a simple scheme that enables small businesses to calculate and pay their VAT based on a flat rate percentage of total takings rather than deducting input tax on purchases and expenses and deducting that from total output tax on sales in the period. HMRC believe that the scheme is being abused by certain traders who have minimal costs who charge 20% VAT to their customers and then pay a lower percentage over to HMRC.

The flat rate percentage varies depending on the nature of the trade, ranging from 4% for food retailers up to 14.5% for IT consultants and labour only construction workers. A new 16.5% rate will apply from 1 April 2017 for businesses spending less than 2% of their turnover or less than £1,000 per year on goods, excluding capital goods, food, vehicles and fuel. Any business affected will almost certainly be better off returning to the normal VAT system with effect from that date. If you are currently using the flat rate scheme please contact us to check whether this change is likely to affect your business.

Please call us and we’d be delighted to discuss the above further.
APJ Accountancy | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

The Theory Of Marginal Gains

Sir Dave Brailsford, Performance Director of Team Sky, and previously British Olympic Cycling, has been instrumental in leading a period of huge success in sport. He has transformed the sport during his tenure in terms of thinking, performance, and results, winning eight gold medals at the last three Olympics, and masterminding Tour de France wins in 2012, 2013 and 2015. So what can we learn from this and how could the theory of marginal gains be applied in business?

Brailsford’s philosophy of 'marginal gains' came from the idea that if you break down everything that goes into riding a bike, and then improved each by 1%, you will get a significant increase when you put them all together.

As well as looking at traditional components of success such as physical fitness and tactics, Brailsford's approach focused on a more holistic strategy, embracing technological developments and athlete psychology. He is noted for his emphasis on constant monitoring of key statistics, developing training regimes which target any observed weaknesses, however minor.

So how can this theory be applied to your business?
Start by identifying your goals. Consider where you want to be and how you are going to get there. Analyse relevant data and see if there is statistical evidence to support the attainment of your goals over time.

Next, spend some time thinking about the gap between current performance and your goals. Create a tangible measure for assessing how far away each goal is, and how well the business will need to progress in order to achieve those goals.

Now consider what is needed to close that gap. Break the gap down into its component parts and identify the differences between where the firm is now, and where it needs to be in order to achieve its goals. Look at successful firms in your industry sector and create a comparison document. What do they do well that you could implement in your business?

Execute your plan. Commit to carrying out the plan meticulously and reassure employees of the importance their roles and responsibilities play in the process. Use KPIs and regular reports to monitor progress and continually refine and tweak your plan as you move towards achieving your goals. If you stick to your plan you should get there in the end.

Millennials vs Generation Z: What Businesses Need to Know!

Generation Z (Gen Z) is a demographic group born after 1995. The oldest members of Gen Z are turning 21 this year, which means that some have already graduated from University. Gen Z is a much smaller demographic cohort than Gen Y (also known as millennials).

It would be easy to assume that Gen Z are just an exaggerated version of the generation that came before them, spending even more of their lives on social media, doing even more of their shopping online, and demonstrating an ever-greater collaborative nature. But Gen Z grew up in a starkly different historical context than millennials, which has given them a distinct outlook on the world.

Millennials invented Facebook, shopped from their smartphones, and moved from satellite TV to Netflix. Gen Z, meanwhile, doesn't remember life without these basics of 21st century life. Millennials came of age during a time of economic expansion and were shocked to find a diminished, difficult job market after university; whereas Gen Z sees a tough job market as the norm. They are a generation that has been shaped by the recession and are prepared to fight hard to create a stable future for themselves.

Market research has shown that compared to any generation before them, Gen Z is less trusting of brands. They have grown up in an era where information is always available via the internet, social media, etc. They can research products and brands and see other users' reviews of them online.
Gen Z are financially cautious.

They grew up hearing horror stories about how many millennials ended up living at home after university, sitting on a mountain of debt, so they tend to save more and spend less than millennials. In a recent study, 89% said they remain optimistic about their futures, which is higher than any other generation on record.

So what should you be aware of when you are thinking about hiring Gen Z employees? Gen Z wants to do work that makes a difference and has a positive impact on the world. But they’re also more concerned about job security than the generation just before them.

They were at a very impressionable age during the financial crisis. This implies Gen Z would rather develop a career in one place than hop from employer to employer.

Speech Recognition Technology

Speech recognition applications have been around for a long time but until recently haven't seen a huge uptake by the business community. With high accuracy and professional apps available for mobile devices, is voice recognition a technology that your business could make effective use of today?

Many business users may have already experienced what voice recognition can offer. Apple's Siri is already quite popular but Windows 10 users have Cortana, which moves the digital assistant to a whole new level of functionality. More importantly for today's businesses is the fact that Cortana is available on phones, tablets and desktop PCs offering a level of integration and familiarity across several devices being used across most firms.

Users can set up their systems to easily trigger voice recognition. They can use these systems to check calendars, book travel tickets or dictate rather than type. Being able to dictate at normal speaking speed and have your words accurately transcribed is a huge productivity bonus that most businesses can benefit from.

If your business requires typing the same blocks of text into numerous documents, speech recognition applications can have special commands defined that will enter these blocks of text for you. This is useful for standard clauses in contracts or email signatures.

Businesses in highly specialised sectors such as professional services or finance are in an ideal position to take advantage of what voice recognition can offer. All of the systems are learning machines - the more you use them, the more accurate they become. If your business often uses specialised terminology, voice recognition systems can learn these terms over time to ensure high levels of accuracy.

Ultimately, it's the time-saving factor that attracts businesses to voice recognition. Being able to spend less time typing and more time working on other things, is why an increasing number of businesses are adopting voice recognition into their IT systems.

What Can We Learn From Disruptive Innovation?

Disruptive innovation is a term, created by Clayton Christensen, to describe a new invention or product that alters its market. It typically refers to innovation that results in changes on a large scale. For example, the digital camera which replaced Kodak's traditional film cameras or digital streaming services which have effectively replaced CDs as the primary way to consume and listen to music.

With each innovation, there is risk taken on by the firm that introduces it and there is disruption faced by the users. The businesses that promote the new product or service innovation face uncertainty in not knowing if it will succeed since they are challenging an established market. They are introducing an alternative, which, if it catches on, will mean that users have to adjust and accept a new way of doing things.

 

So, what can we learn from disruptive innovators which we can then apply to our own businesses? For a start, not all innovation has to be on a large-scale; small changes can make all the difference. For example, process innovation could have a positive impact on the profitability and efficiency of your business. Aim to create a benefit to your business; e.g. to reduce the time it takes to produce a product or service or a new, more efficient way of delivering your end product or service to your customers.

 

As with any innovative development, your employees will probably see a disruption to their day job. Perhaps they have to learn a new way of doing things or even learn how to use a completely new system. The business is taking a risk in changing what has always worked and the employees may be unsure as to how the changes will impact them. They will need time to become accustomed to new ways of working and this could create a degree of disruption across the firm. 

 

That said, with appropriate training and change management processes, you should be able to ensure that your new innovations are adopted quickly and with minimum fuss. And as with any change in business, success is all about planning.

 

What is Management Coaching? How does it work?

Coaching - NOT an implication of failure

In the past, coaching was not offered as a benefit but mandated to those who were failing to achieve their workplace goals. The term "coaching" was synonymous with "remedial training" and carried an implication of failure. Fortunately, those days have passed and savvy business leaders and HR professionals have realised that coaching can be a great benefit for high performers.

Traditionally employers have turned to training programmes to develop talented employee’s skills. However in recent years that trend has been shifting towards a newer tool for talent management: management coaching.

What is Management Coaching?

Technically the term "management coaching" applies to the act of coaching C-level employees; but more recently this type of support has been offered to mid-level managers and high potential employees across firms. Regardless of the intended audience, the goals are largely the same - to improve the effectiveness and enhance the performance of the individual, with the intent of improving the business as a whole.

How does it work?

The core value of coaching is in its ability to focus on the specific needs of the individual as viewed through the lens of their firm’s ecosystem. While training can develop general skills such as time management or planning, coaching allows the manager to focus on the exact challenges of their personal environment, and to develop targeted strategies to overcome them. This combination of the trusted adviser relationship and intense focus on applicable skills makes coaching one of the fastest and most effective tools in resolving workplace performance issues.

A further benefit of management coaching is its focus on the development of skills by the individual being coached. Rather than forming a dependent relationship where the manager must always rely on (and have access to) their mentor, an effective coach will work to reduce the amount their client depends on them, thus building confidence and self-sufficiency in the recipient of the coaching.

GROW Model for Coaching

Some coaches employ the Goal, Reality, Options and Will (GROW) model. By defining the goal, accounting for the current realities of the environment in which the individual operates, finding options to achieve the goal and then applying the individual's will or commitment to complete the process, coaches can lead managers through a structured process to achieve their targets.

Other coaches use a holistic model to incorporate aspects of self-awareness and personal growth into the process of developing the manager's leadership abilities.

What is Flexible Working? What are the Business Benefits?

The businesses that will thrive today and tomorrow are those that can be truly flexible. Businesses that are embracing flexible working can use it to help cut costs, attract talent and radically improve productivity.

Technology has changed the way we communicate and it is currently changing the way we work. Gone are the days when office workers spent every working moment in a cubicle or at a desk. The rise of digital communication tools, collaboration apps and productivity suites, coupled with the benefits of the 'always on' nature of the web, have set the modern business free.

Flexible working is the natural evolution of work in the brave new digital world. Today, businesses large and small can operate anytime, anywhere.

What do we really mean by Flexible Working?

Essentially, it means freeing up your employees to work in the way that suits them best. That can mean mobile working via a smartphone or laptop, working from different locations thanks to remote access to the business network, holding meetings through video conferencing, home-working and flexi-time, which allows staff to tweak their working hours. Underpinning it all is the technology that helps your team to work in a way that suits them best, from any location.

Benefits for business

By putting the technology and processes in place to facilitate flexible working, rigid and old-fashioned infrastructure can be overhauled, allowing businesses to install more efficient systems. Flexible working can also be invaluable in both staff recruitment and retention, especially for those with family commitments. Beyond parents, flexible working can help keep work/life balance in check for all employees, as they have the right systems and technologies in place to better manage their workload.

By cutting the time your staff spend travelling and by giving them the tools they need to work on the go when they do travel, dead time is converted back into productive time. These hours add up. And it's not just businesses that benefit, people do too. The boost to morale and productivity generated by scrapping an employee's commute or their endless travel to and from meetings cannot be underestimated.

-PJ 
☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

4 Key Tips for an Effective Business Presentation!

Most of us will have to give a presentation at some point. You will probably use PowerPoint, which can be a good thing, if it is used correctly. Here are a few top tips.

1. Engage your audience

When it comes to delivering a presentation, your goal is to engage your audience. The presentation itself is only the start - your aim should be that your audience will want to continue to interact with you again in the future. This will give you the opportunity to work on your business relationship with them, positioning yourself as a subject matter expert, and building trust.

2. Encourage your audience members to interact 

Using PowerPoint becomes much less of a crutch if you have an interacting audience. Instead, it becomes a nice tool to help you along. The real catalyst in that situation is the discussion itself and you should use your slides as discussion points. They will help you to keep your thoughts organised and act as a framework for the discussion.

3. Ask thought-provoking questions 

Asking the right questions will help you to bring your presentation to life. You want your audience to think about the points that you are making and engage in conversation. Make it clear that you value the views of your audience and encourage them to share their opinions with the rest of the room.

4. Follow up in a new way

It is important to follow up with your audience after your presentation. However, you could think of new ways to follow up. For example - set a PDF of the key points on a timer so that it is automatically emailed to your attendees at the end of your presentation. Another option would be to send a hand written thank you note with a USB key attached containing the slides. The key is to be a bit different, and therefore memorable.

Effective presentation will set you apart from the generic crowd and keep your audience engaged.

-PJ 
☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Quarterly Report By Employment Intermediaries!

Ever since 6 April 2015, employment agencies and other intermediaries have been required to make quarterly reports of payments made directly to workers or via partnerships, LLPs and companies where no tax has been deducted from the payments.

HMRC have recently updated their guidance to intermediaries to make it clear that, where an employment intermediary has supplied no workers in a specific quarter, a “nil report” must still be filed by the reporting period's deadline.

From 6 April 2015, employment intermediaries must use the template to send information about workers where they don't operate Pay As You Earn.

Separate HMRC guidance on how to use the employment intermediaries online report template has also been updated. 

Don’t Miss Out On Tax Relief On R&D

The government is concerned that many small companies are missing out on generous R&D tax credits.  For the last year HMRC have been offering companies an advance assurance scheme to check whether or not their activities qualify before they make a claim. So far over 200 applications for advance assurance have been made.

There is a general misconception that R&D involves scientists in white coats but it should be remembered that R&D may be necessary to resolve a problem with a product or a process.

So some of the work by your engineers or technical staff may qualify as R&D. For Small and Medium-sized Enterprises (SMEs) the tax credit is 230% of the expenditure on qualifying R&D, and where the company incurs a trading loss, HMRC will provide an immediate cash refund rather than waiting until there is a profit in a future period.

By applying for advance assurance the company’s R&D claim will not be subject to an HMRC enquiry and HMRC will then accept the first three years of claims.

Companies eligible to apply for advance assurance:
• turnover below £2m
• fewer than 50 employees
• no previous R&D claims
Then claim “patent box” in respect of your innovation

If the R&D results in a product or process that can be patented there is a further tax break available. The “Patent Box”, introduced in 2013, will provide a 10% rate of tax on profits derived from that product or process.

Please contact us if you would like to discuss whether these generous tax breaks could be available to your company: 
APJ Accountancy | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Have You Declared All Of Your Credit Card Sales & Your Overseas Income And Gains?

Credit Card Sales

Where credit card sales have been omitted from business takings, HMRC are encouraging taxpayers to come forward and make a disclosure of the income that has been omitted to avoid incurring interest and penalties on top of the unpaid tax.

As you may be aware HMRC now receive information from third parties such as banks and credit card companies and will then match that data with business accounts, and will then open detailed enquiries if the figures appear to be inconsistent. They can go back up to 20 years and the more serious cases can lead to criminal prosecution.

If you have other undeclared income or gains that don’t relate to credit card sales, there are other HMRC disclosure facilities to enable you to bring your tax affairs up to date.

Please get in touch with us if you wish to discuss this as full co-operation can help minimise penalties.

Overseas Income And Gains:

Where an individual is resident in the UK, he or she is generally taxable on worldwide income and gains whether or not it is brought back into the UK. Again, there can be significant interest and penalties on top of the unpaid tax if HMRC find out.

HMRC now exchange information involving savings and investments overseas with about 90 other countries and again match that data with individuals’ tax returns.

There is a special HMRC worldwide disclosure facility to allow taxpayers to bring their tax affairs up to date.

Note that there are special rules for individuals who are resident but not domiciled in the UK and those people’s tax status is likely to change from April 2017.

Please contact us if you need advice on this matter: 
APJ Accountancy | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Splitting The Income Of Married Couples

Where a married couple hold savings accounts and other investments in joint names, the income from those investments is split 50:50 for tax purposes, unless there is an election to allocate the income in accordance with their beneficial interests. This is particularly important where the couples' marginal tax rates are different now that there are different personal savings allowances.

Where the husband pays tax at 40% and the wife is only a 20% basic rate taxpayer, there can be significant tax savings.

HMRC need to be notified that the split of income is other than 50:50 and we can of course help you complete the appropriate forms.

Note that in the case of buy to let properties, the election can only be made where the property is owned as “tenants in common” and you may need to get your solicitor to check the ownership position.

-PJ 
☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Christmas is Coming - New Rules for Gifts to Staff!

From 6 April 2016 new rules were introduced to allow employers to provide their directors and employees with certain “trivial” benefits in kind, tax-free.

The new rules are a simplification measure so that certain benefits in kind will not need to be reported to HMRC, as well as being tax free for the employee. There are of course a number of conditions that need to be satisfied to qualify for the exemption.

Conditions for the exemption to apply:
• the cost of providing the benefit does not exceed £50
• the benefit is not cash or a cash voucher
• the employee is not entitled to the benefit as part of any contractual obligation such as a salary sacrifice scheme
• the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties (or in anticipation of such services)

So this exemption will generally apply to small gifts to staff at Christmas or on their birthday.
Prior to this change in the rules, the benefit in kind would have had to be reported on the employee’s P11D form at the end of the year, or alternatively the employer would have dealt with the tax and national insurance under a PAYE settlement agreement. Under such an arrangement a £50 Christmas turkey to a higher rate taxpayer could end up costing the employer nearly £95!

Note that where the employer is a “close” company and the benefit is provided to an individual who is a director or other office holder of the company, the exemption is capped at a total cost of £300 in the tax year.

Please feel free to contact us if you are considering taking advantage of this new exemption.

-PJ 
☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

3 Tips for Better Talent Management!

The "war on talent" seems to be raging on. Large businesses are competing to recruit the best graduates straight from university and many firms are prepared to pay well for the most experienced candidates. As a result, all businesses need to manage the talent they already have.

Talent management is often considered to be an HR matter but the management team in any business should be involved in managing the firm’s most valuable resource – its people. Start by identifying the high potential people in your firm and work towards developing them and retaining them in the business.

Talent Development

Create a strategy to hire the best people and nurture them throughout their careers. Managers should set the tone and work to develop employee’s skills and knowledge to help them to realise their potential in the firm. Your firm’s talent development programme should include theory and practice as well as coaching and mentoring sessions for your high potential employees. If your team feels like they have an opportunity to develop at their current firm, they are less likely to look for opportunities elsewhere.

Learn from Others 

Consider what talent management looks like at other firms within your industry sector. What do the biggest international firms do well and what could you offer to your team members that would differentiate your firm from the competition? Even if you run a smaller business, you can learn from the market leaders and implement some of their ideas.

Recognition and Reward

Consider the skills, knowledge and performance of employees and identify those who are high performers and/or exhibit leadership potential. Formal performance appraisals should happen at least annually and “top talent” within the business should be sufficiently challenged with objectives which will encourage them to perform, while retaining their commitment to the firm. The appraisal process should be transparent in order to avoid any potential conflict between employees.

Continuous Professional Development

Good businesses tend to promote a culture of life long learning. All members of your team should be offered access to and encouraged to take part in training courses, development opportunities, etc. Investment in continuous professional development should be viewed by the firm as an investment in the future of the business as today’s “top talent” are the business leaders of tomorrow.

4 Advantages of Being a Sustainable Business!

The “green agenda” has moved to the forefront of the modern business world. Society is experiencing an increasing shift in focus to sustainable business and environmental responsibility.

For businesses, embracing sustainability includes encouraging active preservation of the environment and communities, while also promising attractive cost savings. Many firms have made considerable savings through implementing sustainability programs across their value chains.

1. Reducing Operational Costs

Low-cost initiatives can have a profound impact on reducing energy consumption. Legislation in the form of tax incentives is also encouraging businesses to implement sustainable practices. This includes property tax exemptions, income tax credits or easier access to financing and government grants. To qualify for these programmes, businesses must either install certain equipment, implement pollution control mechanisms or utilise environmentally friendly materials, recycled components etc.

2. Strengthening Brands

With the increasing global concern about the environment, businesses can now leverage their sustainability and related achievements, investments, and skills, to strengthen their value and reputation. Conversely, those businesses that fail to resonate with what consumers and stakeholders deem to be important could see a detrimental impact on their brands.

3. Improving Employee Recruitment and Retention

The next generation of professionals (millennials) are more environmentally aware and focused on sustainability. They are attracted to businesses that are socially responsible, and want to work for companies with a positive impact on the world around them. Therefore, building your firm's brand around sustainability will help you to attract the best new generation recruits.

4. Enhancing Innovation

Building a more sustainable business encourages your people to become more innovative. This focus on innovation encourages the development of new products or services and new ways of doing business.  Nike, who used plastic bottles from landfills in Japan to manufacture soccer jerseys, being a great example.

-PJ 
☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

Knowledge Management - Importance & Strategy!

Knowledge management in business is all about identifying and developing critical technical and management knowledge and deploying it across the firm in a way that adds value.

Importance of Knowledge Management:

Most businesses will have considered the risk of losing valuable knowledge to the extent that when talent walks out the door, the prime concern is losing the technical know-how which those people possess. Exit interviews are reactive, somewhat ineffective and instead managers should adopt more proactive practices.

Knowledge Management Strategy:

Collaboration Systems

Collaboration systems such as internal forums can be useful in encouraging teams to share know-how across the firm. Some firms even create wiki sites which can be searched by staff who need to access important knowledge or information quickly and easily.

Central Repository

The firm should have a central repository, with policies and procedures as well as relevant know-how documents and guides. The majority of this knowledge will be internal and the focus should be on documenting and sharing know-how around operational efficiency and effectiveness.

Customer Focused

Your knowledge management strategy can also be customer focused. The key here is to create and share know-how that helps to ensure that customer relationships are maintained, service levels are high and sales volumes are increased. The crucial knowledge is centered around the products or services that the business offers, as well as knowledge about the customers themselves, the market, competitors and other firms in the sector. The majority of this knowledge will be internal with some external knowledge (such as market information) being needed to fully understand the client, your competitors and the sector in which you operate.

Innovation Focused

Your knowledge management strategy could also have an innovation focus. This involves the creation and utilisation of new and existing knowledge in order to create new products and services. Much of this knowledge will be external and may include market research, analysing client data, etc.

A successful management strategy must identify the key needs and issues within the firm, and provide a framework for addressing these.

Contact us for your business help requirement:
PJ | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com

UK Tax Changes: October-November 2016!

Changes To Farmers Averaging:

From 2016/17 onwards farmers now have the option to smooth out their profits over two or five tax years as the result of a change in Finance Act 2016.

Farmers’ and market gardeners’ profits often fluctuate wildly from one year to the next and the tax rules for many years have allowed them to average their profits in order to smooth out those fluctuations.

It is expected that there could be even greater fluctuations as the result of changes to subsidies and support payments following Britain’s exit from the EU so 2 or 5-year averaging will need to be carefully considered. We can of course assist you in this decision process.

Paying 20% Instead Of 28% On The Sale Of Property:

The latest Finance Act has retained the 28% CGT rate for sales of residential property, whereas the general rate was reduced to 20% for higher rate taxpayers.

It has been suggested that it is possible to reduce the rate from 28% to 20% by deferring the gain temporarily into qualifying EIS company shares.

The tax planning opportunity arises because reinvesting the property gain in Enterprise Investment Scheme (EIS) company shares defers the gain until the shares are sold when the gain comes back into charge at the general rate of CGT, currently 20% for a higher rate taxpayer.

There is no minimum holding period for EIS deferral relief, however where the investor is seeking income tax relief and CGT exemption on the sale of the shares they need to be an unconnected investor and retain the EIS shares for at least 3 years.

The reinvestment in EIS shares must take place during the period of 12 months before to 36 months after the date of disposal of the property.

Shares in EIS qualifying companies are risky investments and specialist investment advice should be taken. There is also a chance that HMRC may block this tax planning strategy in the future.

Advisory Fuel Rate For Company Cars:

These are the suggested reimbursement rates for employees' private mileage using their company car from 1 September 2016. Where there has been a change the previous rate is shown in brackets.

Engine Size	Petrol	Diesel	LPG
1400cc or less	10p		7p
1600cc or less		9p (8p)
1401cc to 2000cc	13p (12p)		9p (8p)
1601 to 2000cc		10p
Over 2000cc	20p (19p)	12p (11p)	13p

You can continue to use the previous rates for up to 1 month from the date the new rates apply.

VAT Implications of Employee Mileage Claims:

Note that where employers reimburse their employees 45p per mile for using their own cars they are able to reclaim input VAT based on the amounts shown in the table. 

In the case of a 1600cc diesel car that would be 1.5 pence per mile.  (9p x 20/120). Such a claim needs to be supported by a receipt from the filling station.

Contact us if you need business help:
PJ | ☎ 020 89310165 | ☏ 07900537459 | ✉ info@apjaccountancy.com