insight spring/summer 2012

Spring/Summer 2012

Building the framework for growth — top business tips for tough times

Post Budget round-up — will you be caught out?

Don't let your business suffer from Olympic Fever — a guide to managing the impact

InsightNews and comment from HW Fisher & Company

But it can be done – and is being doneby many businesses in a wide varietyof sectors. Here we look at what ittakes to survive in these turbulenteconomic times, with some top tips tosupport you along the way.

Current climate

It is tempting to see the almost dailybarrage of bad economic headlines asan omen of impending financialapocalypse. Certainly there is clearevidence that the economy is doingmore than simply struggling. GDPgrowth was stagnant for much of lastyear, and even shrank in the finalquarter of 2011. And both businessand consumer confidence remain atrock bottom.

A January survey of senior economists’predictions for 2012 by the FinancialTimes read like the minutes of adoomsayers’ convention. Even theusually upbeat governor of the Bankof England, Sir Mervyn King, haswarned that the economy is likely to“zig-zag” this year.

Despite the rate of inflation sliding,the high cost of living is still eatinginto people’s disposable incomes. Andunemployment is steadily creeping upas businesses fold and the publicsector cuts bite.

In the face of such difficult economicheadwinds, many businesses arestruggling to make ends meet. Eventhe best run businesses can find ithard to maintain a steady cashflow.

Quality customer service

We work with entrepreneurs and longestablished businesses and whatever acompany’s plans for growth, if itscustomers’ experience tails off, so willthe profits!

The tough economic climate meansthat competition is more intense thanever, and if a client feels let down bythe service received, it’s the easiestthing in the world for them to switchto a rival who’s already offering themincentives to win their business.

“Following a number of commercial‘challenges’ a few years ago, thecompany was struggling to survive butthanks to quick and clear advice fromHW Fisher our business is nowthriving. They advised us and helpedimplement radical change which hasensured our business has gone from apoint of weakness to one of strength.Having a mobile, alert and decisiveadviser with a clear head with all thestakeholder’s interests in mind madeall the difference. Since then we havebeen leaner and more agile, betterprepared to take maximum advantageof opportunities that come our way.”3Sixty, Brian Keegan, Managing Director

Cashflow and funds forgrowth

In March the Government launchedthe National Loan Guarantee Scheme,a £20 billion initiative to boost lendingto SMEs.

But the fact remains that banks’lending criteria are stricter than ever,and few businesses can rely on bankcredit or overdrafts alone as a meansof ironing out their cashflow peaksand troughs.

Often a company’s cashflowproblems are caused bymismanagement of client payments.Accounts departments can help byinvoicing earlier and agreeingpayment dates up front.

Alternatively they can realise themoney they’re owed more quickly byselling on their invoices through aninvoice trading website.

There are alternative sources offunding for SMEs who are looking togrow too. Private, or angel investorsare one source of capital. Otherfirms seek investment through“crowdfunding” – pitching tothousands of small investors via the web.

Listening to your clients

Another critical piece of advice intimes of economic hardship is neverstop listening to your clients,responding to their concerns andtailoring your company processesaccordingly.

Building the framework for growth – top business tips for tough times

Businesses today are facing a tough and unforgiving set of economic conditions. With somany companies battling just to stand still, the idea of growing a business in the currentclimate may seem more than a little optimistic.

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Even the best run businessescan find it hard to maintaina steady cashflow.

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Used correctly, this feedback shouldhelp you improve customersatisfaction and identify the aspects ofyour service that your clients do notappreciate or want.

You must be flexible and responsive,and avoid the temptation toovercomplicate your companyprocesses. If something is not addingvalue to your bottom line or improvingthe customer’s experience, cut it out.

Cost control

Clearly you must also take a long hardlook at your costs, and trim themwhere you can do but withoutdamaging the fabric of your business.

When times are tough, anything thatis not directly contributing to thebusiness must be called into question.

But becoming more competitive israrely as simple as just wielding theknife. While streamlining and costsaving are important, there may beareas where you need to spend morein order to increase income.

Investment in improving your productor processes is seldom money wasted.Ditto a marketing campaign thatdelivers measurably better salesfigures. The greater revenuegenerated should offset the cost andthe extra cash should be reinvested tohelp with future growth.

Confidence and the willingness to aimhigh are crucial too. While thebusiness environment is tough, it isvital that you stay positive and enjoywhat you do. This is about more thanjust maintaining staff morale. If youlose your own self-belief, it’s very hardto recover it.

“Any business owner will tell you,running your own business in thesetesting times can be difficult toachieve. Making tough decisions is allpart of the trials and tribulations buthaving an adviser to act as yoursounding board can really make adifference to success or failure. HW Fisher are always available toprovide expert advice which helpedme take those difficult decisions andgave me the confidence an d focus tomove the business forward.”Roger Belcher, Director, Countryliner

Use your contacts

Never be afraid to ask for adviceeither, or to discuss the challenges youface. Your business contacts may wellhave reserves of knowledge andexperience that you can tap into,simply for the cost of a phone call.You can learn from both theirsuccesses and their mistakes.

Running a business in a toughenvironment can feel lonely, but thechallenges you face have beenencountered and overcome bycountless others. Talking to someonewho has been through the same millcan be a great source of inspiration.And at the most basic level, a problemshared is a problem halved.

While these are far from boom times,businesses that concentrate on theircore strengths, keep on top of theircash flow and actively chaseopportunities should be able to boththrive and grow.

In this issue...

Building the framework for growth

Post Budget round-up

The good, the bad and the pre-pack

A decade and more of LLPs

Seeing the light

Looking to the future

Being carbon-efficient boosts thebottom line

HMRC set to GAARd itself against tax avoidance

Charities scrapbook

Striking the right balance

In the spotlight... Liz Barclay

Kingfisher Collections is launched

Get the BIRs in!

Beating down the door to the UK

Don’t let your businesssuffer from Olympic Fever

Named and shamed

Underinsured and overcharged…consolidation is key

Auto-enrolment to create a seismic shift

News in brief

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David Breger, Audit PartnerT 020 7380 4943E [email protected]

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• Take a long hard look at your costs. Anything unnecessary, CUTIT OUT

• Ensure your service levels remain high - if not higher than ever

• Listen to your customers/clients, so you are offering them exactly what they want

• Investigate your funding options – cash is king

• Don’t immediately switch off marketing. It is often the one thing that can make a difference in a difficult economy

• Ask for advice from other businesses you know, especially those who have survived hard times before

• Keep on top of cash flow

• Stay focused, stay cheery, stay positive.

Top tips for tough times

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Uncapped reliefs

It has been suggested that certain taxreliefs, mainly relating to losses, interestrelief and charitable donations are beingabused by overly aggressive packagedschemes. The rules regarding the offsetof trading losses have already beentightened by degrees over recent years in response. The proposal is that from 6 April 2013 the tax saving for thosereliefs not capped by absolute limits willbe restricted. The proposed limit is thegreater of £50,000 or 25% of a person’sincome. The charitable sector has beenparticularly vocal in its opposition tothese proposals since the Budget. Theconsultation process beginning in thesummer is likely to see some softening inthis area but it is worth reviewing whatwill not be caught.

Reliefs which are subject to absolutelimits, such as the annual £50,000 limitfor pension contributions or the£1,000,000 for Enterprise InvestmentScheme investments will not be affected.Business losses which are set against theprofits from the same business, either bybeing carried forward against future

profits or by carrying back will also remainunchanged. It is the “uncapped reliefs”such as sideways relief for trading losseswhich are now in the spotlight, togetherwith certain rental losses or gifts of landand quoted shares to charities.

www.hwfisher.co.uk4 | Insight

Residential property - The Devil is in the detail

The key phrase used when introducingthe new rules for Capital Gains Tax (CGT)and Stamp Duty Land Tax (SDLT) was"non-natural persons". However, it hasemerged that this term has a differentmeaning for CGT than it does for SDLTand the Annual Charge.

The perceived abuse of SDLT rules wasa clear target of the Chancellor'smeasures, applying to the purchase ofhigh value (over £2m) residentialproperties through companies, whetherresident in the UK or not.

Having immediately increased the SDLT on such properties to 15%, comparedwith 7% for other properties, he alsoannounced further measures to taxstructures already in existence. Theseinclude:

• an Annual Charge of between £15,000 and £140,000 on high value properties, broadly referred to as the “2% levy” (or perhaps ‘Mansion Tax’ to give it another name). This charge will apply whether or not the property is occupied by the owner.

• CGT will also be levied on properties owned by certain non-natural persons apparently irrespective of value.

For SDLT and the Annual Charge ‘non-natural persons’ include a company, apartnership or LLP with a company as amember, or an overseas collectiveinvestment scheme (a property fund or similar).

However, for the CGT charge this isextended to also include overseas trusts.Therefore, overseas trusts are notexposed to the higher levels of SDLT orthe Annual Charge if the property isowned directly by the Trust, but sincemany “excluded property trusts” areestablished using non-resident companiesin order to mitigate UK Inheritance Taxexposure, the Annual Charge may still beof real concern if these benefits are to be maintained.

It may now be necessary to remove thecompany from the structure. Theoccupation of such properties is oftenrent-free, meaning no funds would beavailable to pay the annual charge butlevying a rent would create a tax chargein itself. Care must clearly be taken inunwinding these arrangements,particularly where the property is

mortgaged, if unexpected tax charges areto be avoided. The imposition of CGT oncertain offshore companies, mentioned above, means such restructuring needs tohave been completed by 5 April 2013. Todate there is no sign of any rebasing forexisting properties. The introduction of aCapital Gains Tax charge on this narrowclass of owners is a major departure fromprevious policy. Most UK tax residents,both individuals and corporates, are likelyto be caught by existing anti-avoidancelegislation, which already attribute tothem gains of foreign entities they benefit from.

Since the Budget announcement in March, the implications of the proposals have emerged toprovide some opportunities and pitfalls.

Post Budget round-up: will you be caught out?

It is the“uncapped reliefs” suchas sideways relief for tradinglosses which are now in thespotlight...

Most UK tax residents, bothindividuals and corporates, arelikely to be caught by existinganti-avoidance legislation...

Care must clearly be takenin unwinding thesearrangements...

One area of continuing confusion is theeffect of the cap on Gift Aid payments.Whilst gifts of shares and land give adirect offset against income, Gift Aidpayments only give higher and additionalrate relief. The donor still pays basic rate(20%) tax on the donation. That tax isthen reclaimed by the charity so theTreasury still pays out but it doesn’t havethe reported impact on an individual’s tax bill.

The technical notes from the Treasury andHMRC have indicated that the Gift Aidpayments will be limited to give the sameeffect as a direct offset would. This willmean a more complicated calculationwill need to be made in each case todetermine the precise amount that canbe donated but the relievable donationwill normally be significantly greater than25% of income.

Child’s play?

The tapered removal of Child Benefitfrom 2013 is expected to cause a lot ofpeople to move into self-assessment witha consequence that tax returns will berequired to be submitted. The proposal isthat households with children where thehigher earner has an income below£50,000 will not lose their Child Benefit.For those between £50,000 and £60,000the benefit will taper away, necessitatingthe completion of a tax return todetermine the amount repayable by thefamily. Anyone with an income over£60,000 has two choices, complete a taxreturn to repay the benefit or disclaim theChild Benefit entirely.

A glimmer of light

Whilst not mentioned in the Budget,HMRC have clarified the proposals fromlast year relating to inward investmentsby remittance basis users. Normally, anyoverseas income or gains brought intothe UK by a non-UK domiciled individualwould be taxed as a remittance of thosefunds. New rules operational from 6 April2012 permit them to bring such fundsinto the UK to invest into qualifyingbusinesses without immediatelytriggering a UK tax charge. This willinclude investments in companiesoperating UK property businesses, either development or investment and regardless of whether the properties are commercial or residential (the latter having been quietly added since the original proposals were published).

The proposals are likely to be particularlyuseful where monies have been trappedoffshore in accounts containing mixedincome, gains and clean capital. Therewill be an opportunity to free up suchcontaminated accounts at a lower UK tax rate than would have previously applied.

www.hwfisher.co.uk Insight | 5

Tim Walford-Fitzgerald, Senior Tax ManagerT 020 7380 4927E [email protected]

Changes from last year's Budget

Here are some of the bigger changes as a refresher. Ifyou would like to discuss how any of these may affectyou, just call your usual point of contact at the firm.

• The benefit of company cars is no longer capped for cars over £80,000

• Capital allowance rates are dropping by 20%

• The annual investment allowance has dropped from £100,000 to £25,000

• The new Seed EIS gives up to 78% tax relief on qualifying investments

• Foreign currency bank accounts are now exempt from CGT

• The remittance basis charge for long term residents has increased to £50,000

Don’t forget April 2012

Do pre-packs deserve the badname?

In some cases, there is no doubt that thepre-pack mechanism has been abused byunscrupulous insolvency practitioners andcompany directors - and in these instancesthey deserve the 'quicky bankruptcy' tagthey are often given. In these cases, thevarious parties have worked secretlytogether to essentially restart the business,sans debts, with no concern whatsoeverfor the creditors - and this is wrong.However, if done correctly andtransparently, where the creditors areprovided with a full breakdown of therationale for the pre-pack, pre-packadministrations are without doubt a usefulmechanism as they keep businesses aliveand they keep people in jobs.

What happens now?

While the proposed Government legislationhas been scrapped, the Insolvency Service,which regulates the industry, intends tomake its own changes to the existingregulatory framework for pre-packs. Its aimis to increase transparency and reinstallconfidence off its own bat. More on this indue course.

Could a pre-pack work for me?

If your business is struggling in any way,then by all means speak to us. We look atall the different options that are availableto a business both formal and informaland one may be a pre-pack administration.What I will stress is that a pre-pack is notas simple as it seems and that you need tobe in the right hands: done incorrectly,you can be vulnerable from all sides. Thepurchaser, in particular, needs to beconfident that the insolvency practitioneris on top of all the issues and will missnone of the small print.

Pre-pack administrations – your questions answered

The good, the bad andthe pre-pack

practitioners (IPs) would have to givecreditors three full days' notice before apre-pack went through, although thenotice requirement would have beenwaived if the business had been‘marketed’ in the 3 months leading upto administration. Also, it did not applyin pre-pack sales to non-connectedparties. The idea was that creditorswould have enough time to scrutinisethe deal and raise any objections whereconnected parties were involved. Thelegislation was intended to mitigate theongoing allegation, from some corners,that pre-packs are a way for companiesto effectively carry on trading whilefreeing themselves of their debts and inthe process leaving creditors severelyout of pocket. However, in January theGovernment did a U-turn and has nowdecided to ditch the proposals. As aresult the debate rumbles on.

Is the decision to scrap theproposed legislation a goodor bad thing?

It depends on who you are. None ofthe interested parties; lenders, equityinvestors, creditors representatives,landlords, HM Revenue & Customs(HMRC) or IPs felt that the 3 day noticeidea worked. Creditors, landlords andHMRC thought it was too shortwhereas IPs thought it was far too long,since 3 days would inevitably extend toa week to 14 days, during which timethe business, which may not havefunding, would be dying. It's alsoimportant to look at what pre-packsdo achieve, namely preventing abusiness from having to close, whichmeans further job losses. In thecurrent climate, with unemploymentrising at a rate of knots and theeconomy contracting, I would say thatanything that can keep businessesrunning - and prevent even more joblosses - is a good thing. TheGovernment, or at least Ed Davey, theformer Minister for the Department ofBusiness, Innovation and Skills (BIS),clearly came to the same conclusion.


Pre-pack administrations are once againin the news, following a decision by theGovernment to scrap proposedlegislation that would have requiredinsolvency practitioners to give creditorsthree days' notice of a pre-pack. Lostalready? Don't worry. Brian Johnsonexplains all - and says that pre-packsdon't necessarily deserve the bad pressthey get.

What are pre-packadministrations?

A pre-pack administration is amechanism that involves the sale of the business and assets of a company,free of liabilities, to predominantly a'connected party' immediatelyfollowing the appointment of anadministrator. More often than not,the people buying the business are theexisting management team (hence the'phoenix' tag often given to pre-packs,as the previous business rises from theashes of the old company but with thesame people involved). Speed is at theheart of the pre-pack as the quicktransition from old company to newenables the business to minimisedisruption and retain much of its value and goodwill (with bothsuppliers and customers). Recent high-profile examples of pre-packsinclude Bonmarche, La Senza andBlacks. However, a major criticism ofpre-packs is that they enable directorsto effectively set up as a new corporateentity while leaving the old liabilitiesbehind. In some vocal quarters thefeeling was that the process was beingabused and the business and assetswere not being properly marketed tomaximise values.

Why are pre-packs back inthe news?

In its early days, the CoalitionGovernment proposed new legislationthat would tighten the rules on pre-packs. At the heart of the reforms wasa requirement that insolvency

Brian Johnson, Insolvency PartnerT 020 7380 4989E [email protected]


A decade and moreof LLPs

Nauzer Siganporia, Technical PartnerT 020 7380 4965E [email protected]

The Limited Liability Partnerships Act 2000 established the LLP in the UK, creating an entirelynew type of business structure. It enabled partnerships to acquire many of the legal protectionsenjoyed by limited companies – while retaining a number of their existing flexibilities.

this is in contrast to partnerships,which require no public disclosure oftheir finances. Depending on size, anLLP may also have to declare itshighest earner and have its accountsaudited. Although an audit mayinvolve some additional costs, manyLLPs are likely to derive substantialbenefit from a formal externalscrutiny of their accounting processesand systems.

So which structure is bestfor a business?

This depends on what that business isand what it is trying to achieve.Limited liability is the major sellingpoint of LLPs over traditionalpartnerships, but the need for thatlevel of protection depends on thetype of work the organisationundertakes and its client portfolio.This protection also brings with it agreater level of administration andpossible public scrutiny.

LLPs will probably still be mostattractive to firms that currentlyoperate under traditional partnershiparrangements, but it is not an entirelystraightforward decision. Add to thisthe fact that businesses can utilisemultiple formats at once (for example,partnerships and service companies)in order to maximise tax efficiencyand the need for professionalguidance becomes apparent.

And now, over a decade later, the LLPstructure has been firmly embeddedwithin the UK’s business culture.Around nine years ago there wereapproximately 4,500 LLPs. As of mid-2011, there were some 64,000 firmsusing the LLP structure, from globalenterprises to small UK-onlybusinesses.

To date, the LLP has been mostcommonly employed by professionalpractices, in particular legal andaccountancy firms – businesses thatpreviously operated as conventionalpartnerships. Property-based LLPshave also proved popular.

Although it is fairly straightforward toregister a new LLP at CompaniesHouse, the process of transferring anexisting partnership into it is slightlymore involved – matters such as thetransfer of staff, client contracts andproperty require careful considerationand timely communication.

Additionally, there are a host ofadministrative tasks such as thetransfer of VAT and PAYEregistrations to deal with. It would bewise not to skimp on professionaladvice during the conversion processand essential to deal with suchmatters as drawing up a propermembers’ agreement dealing with theinternal relationship betweenmembers of the new LLP.

The transfer process does not usuallyinvolve any major tax considerations -the members of the new LLP arenormally treated in the same way asthe partners of the old partnership fortax purposes.

So why would a businesstransfer?

Crucially, partnerships that becomeLLPs are separate legal entities andhave reduced liability, covering onlythe assets of the LLP and the capitalcontributed by its members undernormal circumstances.

Compared to the unlimited liabilityfaced by traditional partnerships,where after a large claim partnerscould lose all their personal assets andface personal bankruptcy, the appealof this is entirely understandable.Although, as with limited companies,liability could, under exceptionalcircumstances, extend to individualpartners of an LLP. In addition to thiskey benefit, LLPs retain the taxbenefits that have historically madepartnerships attractive. In particular,members are taxed as self-employedand tend to pay tax significantly laterthan employees on similarremuneration packages. A wellchosen accounting date can increasethe benefit of this considerably.

However, it is worth bearing in mindthat LLPs are not always the perfectmiddle ground between limitedcompanies and partnerships, cherry-picking the best bits of each. For onething, it is normally more tax-effectiveto retain profits required for workingcapital purposes within a companyrather than a partnership. This isparticularly so with the recent trendfor decreasing corporation tax rates.

Also, much like their limited companycounterparts, LLPS are obliged to filetheir accounts at Companies House –



It is worth noting a growing number ofpublic sector organisations and largebusinesses - M&S, for example - have

begun to flow sustainability downthrough their supply chains so if asupplier does not meet M&S'sustainability criteria then it is out of the running. It is going to become farmore expensive to run a business movingforward with these financial and PRstrains. It is also clear that there are realbrand dangers for those that fail toadopt a sustainability strategy, whichcould also directly impact companies'bottom lines. The key is to remove thesethreats through a concerted long-termsustainability strategy.

HW Fisher & Company’s SustainabilityGroup has reduced annual energy bills by15-25% in the companies it has workedwith so far. For more information onhow we could help your businessbecome sustainable, save money andboost your brand, contact us.

Here is a fact. The physical environment, which we cannot control (and which is thereforesynonymous with risk), is undergoing tremendous change. This change is leading to ever-increasingdemand for finite resources, which is slowly starting to impact upon businesses everywhere. I say'slowly' because we are really just at the beginning of the changes that are on the way.

Ultimately, these changes will affect allbusinesses by pushing up electricity, gas,fuel and other utility costs. In 2011, gasbills typically went up by 12% andelectricity bills by 16%. There are nowstrong indications that gas bills could riseby 20% within 2012 alone. But it isgoing to get worse: these types ofannual price rises will increasinglybecome the norm. Companies, in otherwords, are at risk from these price hikes.

These days, the word 'sustainability' isubiquitous, appearing on corporateagendas, in government policy andacross current affairs. Despite this, it is a term that is still often fundamentallymisunderstood.

For some, sustainability is purely aboutthe environment, for others it has strongbusiness connotations. But as we see it,sustainability is all about helpingcompanies to manage risk. And rightnow, risk is spiraling. However, the risk tocompanies is not just financial.Businesses also are beginning tounderstand that their brands are alsounder threat if they fail to put positiveenvironmental practices in place.Sustainability strategies are not just about

reducing cost and reducing the impacton the environment, but are also key toreducing exposure to negative PR.

While sustainability reporting is not yetcompulsory for SMEs, this is likely tochange soon. As the government rises tothe challenge of meeting its ambitiouscarbon reduction targets, it will have toextend energy legislation beyond the toppercentage of business.

Therefore all SMEs need to be pro-active,rather than reactive, and get ahead of

Seeing the

the game before regulations begin tocascade down. Installing LED lightingthroughout their premises is an exampleof how this would work in practice.For most company directors, LED lightingwill not even be a flicker on their radar.What on earth has lighting got to dowith my business, they cry? Well quite alot, in fact. The savings LED lighting cangenerate relative to standard fluorescentlighting are such that this fourthgeneration of lighting (after fire,incandescent and fluorescent) should behigh on most companies’ agenda.

Depending on the size of a company’spremises, and the nature of its business,potentially huge sums of money can besaved, too. And in sectors where thelights are on for potentially long periodsof time, the bigger the saving still.Therefore, for pubs and clubs, hotels,restaurants, retail outlets and offices, LEDlighting should be an especial priority.

LED lighting saves money because a lowoperating heat is required to deliver thesame output, which requires less energy.The low operating heat, in turn, means alonger life, which means lowerreplacement cost and associated facilitiescharges. There are other favourablefinancial implications of adopting LEDlighting, including enhanced capitalallowances, leasing opportunities andpayback periods. So while the initialcapital outlay may seem high, LEDlighting needs to be compared withtraditional light bulbs in a different waybecause of the combination of offering asignificantly longer life span as well asreduced energy consumption, it helps toprotect against rising electricity and lampreplacement costs.

Of course, as well as saving companiesmoney, adopting LED lighting enablesbusinesses to demonstrate how they arewalking the walk in regards to theenvironment and sustainability.

...there are real brand dangersfor those that fail to adopt asustainability strategy...

But as we see it, sustainabilityis all about helping companiesto manage risk.

Jae Mather, Sustainability DirectorT 020 7874 7985E [email protected]

light


Surprisingly, the most successful people in business,are often the least successful when it comes tomanaging their personal finances.

Looking to the future

Eos Wealth Management Limited is authorised and regulated by the Financial Services Authority.You should be aware that past performance is no guarantee of future performance. The price of investments and the income fromthem can fall as well as rise. An investor may not get back the original amount invested. Any tax reliefs or legislation mentioned arethose currently available or in force and are subject to change. Eos Wealth Management is a related company of HW Fisher & Company

Company directors planning to sell their companies to fund their retirements need to be aware that marketconditions may move against them at the time they wish to sell. Therefore by making regular pensioncontributions throughout their working life a fund can be amassed to be drawn on when they retire. Pensioncontributions are an allowable expense for the business and can also reduce a company’s corporation taxliability. Should the business fail, the monies that have been paid into a pension are not usually available tocreditors. This therefore provides a safety net for the individual’s future.

Every day, directors are walking the tightrope, ignoring how quickly their company and personal situationcould change. Responsible and pro-active pension planning is one way to ensure a secure andcomfortable retirement.

Planning tip 1 - Pensions

Personal life insurance is often paid by directors either from their taxed income or by the company, whereit is a taxable benefit. However, an alternative is available where the premiums are an allowable expensefor the company and are not classed as a benefit-in-kind.

Establishing a ‘Group Life’ insurance policy through the company, also known as death-in-service scheme,can provide a lump sum benefit in the event of a directors or employees death. This is generally arrangedon a multiple of salary basis and is a cost-effective way of providing cover for both directors and staff.

Whilst being an attractive structure for directors to establish their own life cover, this type of employeebenefit can also help in the attraction and retention of staff.

Planning tip 2 - Life insurance, the efficient way

Richard Brand, Financial AdviserEos Wealth ManagementT 020 7874 1194E [email protected]

In fact, it is fair to say that for many extremely busy company directors, such mundane matters as pensions, investments and insurance are firmly bottom of their agenda. Understandably, many business owners utilise all available funds to investin their own enterprise and view the eventual business sale as their pension plan. However, this can lead to a situation where many directors are unprepared and heading towards retirement with the realisation that perhaps their business willnot sell for the valuation envisaged. This is unfortunate but all too often true.

A linear focus and lack of pension and investment planning is not just a threat to the quality of their retirements, it canalso lead to problems many years before. Insufficient or zero insurance is just one example. Still, many company directorsdo not have key man insurance, despite the fact that if they were incapacitated, their company would almost certainlysuffer financial losses.

Here we give you some planning tips to offset the risks of a bleak retirement:


Being carbon-efficientboosts the bottom line

such that SMEs will be required to adopt

sustainability strategies and reduce their

own emissions sooner than they think. Ironically, the Government recentlyfailed to make greenhouse gas reportingmandatory for organisations that areoutside of the CRC, but this is only ablip. The dilly-dallying of the CoalitionGovernment will not prevent thestructural changes that are taking place- and being co-ordinated - globally inrelation to CO2 reduction, embodied inthings like the Rio+20 Agreement or theEU 20-20-20 targets.

Sustainability is coming to everydaybusinesses but it’s something theyshould embrace, not fear.

Making your business‘carbon-efficient’ can reducerisk and save you money

In the UK, for example, we have a legalcommitment to 50% CO2 reduction by2027 and 80% CO2 reduction by 2050.These are massive targets and there isno chance whatsoever we will meetthem unless CO2 reduction is alsoundertaken by small and medium-sized

businesses. It is therefore only a matterof time before we move to mandatoryreporting on CO2 by all UK businesses,not just large ones, which will be closelyfollowed by practical steps to reduceCO2 emissions.

To many SME directors, this will soundlike another headache, and another costat a time when the UK economy has justgone back into recession. But reportingon emissions shouldn’t be looked at as aburden - quite the opposite in fact. Making a business carbon-efficient isabout saving money and reducing risk.As well as producing fewer emissionsthrough the energy-saving solutionsthey implement, carbon-efficientbusinesses are far more protected fromrising electricity, fuel, gas and otherutility bills.

The world is changing but by changingwith it and before their competitors -SMEs can gain a competitive edge intender scoring processes, increasedcost efficiency, improved brandrecognition and a reduced carbonfootprint. With this in mind, change isno bad thing at all.

For the majority of SME directors, theCarbon Reduction Commitment (CRC)Energy Efficiency Scheme (EES) issomething they will probably have heardof, but won’t be fully up to speed with - and understandably so.

The background

Introduced by the previous Governmentin 2008 with the aim of reducing UKcarbon emissions and helpingorganisations to save money by reducingtheir energy bills, the CRC EES is stillonly focused on the largest companiesin the private and public sector.

But that won’t be the case for muchlonger. The changes that are beingforced upon large companies will sooncascade down to SMEs, too. Recentlythe Government launched a

consultation to see if the CRC should be

simplified or even scrapped so that is

can be replaced with another form of

emission taxation that would be easier

to implement. Whether this happens or

not, the momentum of the global

movement seeking CO2 reduction is

The Government’s CRC Energy Efficiency Scheme is still not on the radar of most SMEs, but someversion of emission reporting will have to be a reality very soon if the UK is to meet its legal obligationto reduce carbon emissions. "But that is no bad thing. Making themselves carbon-efficient can drivesignificant cost savings and genuinely boost SMEs’ bottom lines," says Louisa Harris.

The changes that are beingforced upon large companieswill soon cascade down toSMEs, too.

Sustainability is coming toeveryday businesses but it’ssomething they shouldembrace, not fear.

Louisa Harris,Sustainability ManagerT 020 7874 1156E [email protected]


such as investment in British filmmaking or the rejuvenation of deprivedareas - only for the reliefs to be seen asoverly generous or over-exploited afew years later.

The result in cases like this is that ofteninnocent, albeit wealthy, taxpayersspend years waiting for the courts todecide whether they have been saintsor sinners.

Ultimately, the fact that a GAAR is feltnecessary may be seen as an admissionthat the Disclosure of Tax AvoidanceSchemes (DOTAS) regime is notworking. This was supposed to allowHMRC to introduce targeted provisionsto close the perceived abuses quicklyand efficiently. Could it be that the UKtax code is too complex (or contains toomany holes in its drafting) for them todo this effectively? Perhaps a wholesalerevamp would be more effective thanadding another layer of legislation. It isa tough question with no easy answer.

A consultation document will be issuedin Summer 2012.

And that probably is not far from thetruth, as what GAAR does is exactlythat: many professionals feel it canintroduce uncertainty into the taxsystem in the form of rules that arebased on principles rather thanprecise terminology.

The word ‘principles’ is key. WhatGAAR effectively does is bringsubjectivity into the assessment of anygiven tax situation, which will enableHM Revenue & Customs (HMRC) tobase a decision on what it feels to bethe case rather than what may be thecase on paper.

But what is the GAAR all about andwhy are we talking about it in the first place?

The premise for the introduction ofany GAAR is the belief by aGovernment that there is a ‘tax gap’,namely a difference between whattaxpayers actually pay and whatHMRC thinks they should pay (lotsmore, basically).

The GAAR was first broached back in2010 when the Coalition Governmentasked Graham Aaronson QC to lead astudy that would consider whether aGAAR could deter and counter taxavoidance, without alienatingbusiness - and therefore be beneficialfor the UK tax system.

His study was subsequently publishedin November of last year and itsconclusion was that introducing abroad spectrum GAAR would not bebeneficial for the UK tax system, as itwould carry a real risk of underminingthe ability of business and individualsto carry out sensible and responsibletax planning.

However, before you rejoice - thestudy did conclude that introducing amoderate rule which does not applyto responsible tax planning, but isinstead targeted at abusive

arrangements, would be beneficial forthe UK tax system. Anotherconclusion is that it would enable awholesale simplification of thenumerous and often complex anti-avoidance rules.

Cutting through the voluminousstudy, what is effectively beingproposed is that GAAR provisionshould be focused on larger,organised avoidance schemes -effectively ‘pre-packed’ products -and will not apply to the centreground of responsible tax planning.However, it is worth noting that evenwith pre-packed avoidance schemes,HMRC will have to prove somedegree of ‘abnormality’ in a taxscheme before it can start diggingany deeper.

While this is fine and ‘morally’ robustin theory, if previous anti-avoidancemeasures are any guide then whilethe legislation may be targeted atlarge schemes utilising aggressivemeasures, there is every chance thatover time, it will catch ordinarytaxpayers, too. This is the worry of allcampaigners against a GAAR.Aaronson’s study concluded thatGAAR should initially apply to the

main direct taxes – income tax, capitalgains tax, corporation tax andpetroleum revenue tax. However, it isnot clear whether the introduction ofGAAR would be ‘joined up’. Forexample, it is not uncommon formany tax breaks to be promoted byone specific Government departmentto encourage certain behaviour -

HMRC set to GAARd itself against tax avoidance

Getting your head around GAAR - a General Anti-Avoidance Rule - is by no means easy. Itis as if the term was specifically chosen to make it hard to understand, to create a generalatmosphere of uncertainty.

Martin Taylor, Tax PartnerT 020 7380 4976E [email protected]

While the legislation maybe targeted at largeschemes utilisingaggressive measures,there is every chance thatover time, it will catchordinary taxpayers, too.

According to the Aaronson study, GAAR would:

• deter abusive tax avoidance

schemes;

• contribute to providing a more

level playing field for business;

• reduce legal uncertainty around

tax avoidance schemes;

• help build trust between taxpayers

and HMRC;

• offer opportunities to simplify

the tax system.


Happy to help

On 12 January, outsourcing company,Charity Business, closed with immediateeffect, leaving many charities vulnerableand without access to the key datanecessary to run themselves - not tomention countless unpaid tax bills.Before its collapse, Charity Business hadoffered a mixture of payroll,bookkeeping and general accountingservices to around 200 charities. Wehave subsequently come across anumber of charities who are strugglingdue to the winding up of CharityBusiness and have let them know thatwe will happily meet them - on a no-commitment basis initially - to help gettheir affairs back in order. If your charityhas been affected in any way by thecollapse of Charity Business, we will doour best to get you back on track.

Tough year ahead

The third sector is in for another toughyear, facing local and nationalgovernment cuts of up to £5.5 billion,according to a report published inMarch by the Association of ChiefExecutives of Voluntary Organisations(ACEVO). The report found that, onaverage, charities will loseapproximately 45% of their totalincomes. In time-honoured fashion,Government and opposition saw thereport through a different lens. ShadowCharities Minister, Gareth Thomas, whothe report was leaked to, said that:“David Cameron's claim that in his BigSociety we're all in it together wasnever credible, but this report confirmsthat ministers were being givenindependent evidence showing thatcharities were going to be hit very hardby funding cuts, with the poorest andmost deprived areas being hit hardest."The Cabinet Office responded asfollows: "ACEVO’s report is amisrepresentation as it is only based on

applicants to the Transition Fund andnot all voluntary organisations. Ouranalysis shows that some applicantsover-stated their expected reductionsand therefore we do not consider thesefigures reliable.” Whoever you believe,what is not in doubt is that charitiescontinue to feel the pinch.

How donations are spent

In the current climate, donors aremuch more likely to question charitieson whether the money they are givingis being put to good use. But whileso-called impact reporting is necessaryfor any charity, many still get itwrong. A charity certainly cannotmeasure its impact by how much ithas spent, but rather by the impact itis having in relation to clearlyidentified goals and targets.

For example, a charity focused on givingpeople skills to find employment wouldno doubt highlight, as a measure of itssuccess, the number of applicantssuccessfully finding a job or achievingother milestones such as passing atraining course, or obtaining a jobinterview. But quantitative data alone isnot guaranteed to paint a properpicture of the impact a charity is having.Qualitative data can also be invaluable.For example, a charity might want toconsider collecting case studies orpersonal stories from its beneficiaries.Comments from users on the differencea service has made to them can greatlyreinforce the impact a charity is having.The best impact measures, of course,are those that offer both quantitativeand qualitative evidence relating to theproblem the charity is addressing.

Pension deficits

It is no secret that pension deficits are agrowing problem for many charities andvoluntary organisations. There is alsoevery reason to believe, in the currentclimate, that a number of charities withfinal salary pension schemes will betrading while insolvent as a result ofthose deficits. We are therefore urgingany charity that suspects its pensionscheme is in trouble to get in touchwith us, or your professional adviser asa matter of priority, so that appropriateaction can be taken. In order to ensurethe trustees do not become personallyliable, it is vital to get a dialogue goingat an early stage with the PensionsRegulator. We are well-placed to help inthese matters, being very experiencedat restructuring pension schemes andachieving outcomes that are in the bestinterests of the charity concerned.

Do not go into auto-pilotmode

As covered in more depth on page 21,auto-enrolment is looming - and fast.This new, compulsory pensions regimewill affect charities like any otherbusiness and is certainly something theyneed to be on top of, as it will involveextra costs at a time when their financesare already under pressure. Auto-enrolment essentially involves workersbeing automatically enrolled into theiremployer's qualifying pension schemewithout any active decision on theirpart. It is the Government’s solution tothe ticking pensions timebomb. Ourteam of experts can advise charities onwhat they need to do and when and,where required, help them to set uptheir own pension schemes.

Below we take a look at some of the issues affecting charities, including pensions,funding and impact reporting.

Andy Rich, Charity PartnerT 020 7380 4988E [email protected]

Charities scrapbook

The UK Accounting Standards Board (ASB) has issued further proposals on ‘The Future of FinancialReporting in the UK and the Republic of Ireland.’

entities not already covered by the EURegulation. For other entities, thepolicy was to maximise internationalconsistency by keeping the differencesbetween the UK FRSME and the IFRSfor SMEs to an absolute minimum. Ina number of areas this would havecaused difficulties to users of UK accounts.


We were among those whocommented on these proposals,arguing that a balance had to be metbetween international consistency(which for entities which do notoperate internationally is lessimportant) and the need for objectivityand verifiability in the informationpresented by most companies.

In this context we argued that, while itwas beneficial to use the IFRS for SMEsas a starting point, it was better toallow clearly defined differences wherethe resulting accounting made moresense. A further difficulty with theoriginal proposals was that there weresome differences between the

accounting layouts which would havebeen required by the new standardand those already required by theCompanies Act. The suggestion in theFRSME that with skillful drafting, itwould be possible to meet both sets ofrequirements was not very helpful.

We also supported comments made byothers that the removal of some of theavailable options, for example theoption to revalue assets as a basis forborrowing, would cause difficulties forsome particular entities.

The ASB is consulting widely on theseproposals. Comments were requestedby 30 April 2012 with implementationplanned for 2015. There is a lot ofdetail, and the changeover will cause practical difficulties, but overallthe revised proposals appear far more realistic.

These proposals are best understood inthe context of the recent history ofaccounting standards.

It had long been a criticism thataccounting standards have differedbetween countries, so that a companycould report significantly differentresults depending on geography.

From 2005, listed EU companies havebeen required by EU regulation toprepare their consolidated accountsaccording to EU-adopted versions ofthe International Financial ReportingStandards (IFRS).

UK company legislation was amendedto allow companies to follow IFRSs. Atthis stage the ASB’s policy was toconverge with IFRSs by graduallydeveloping UK standards to beequivalent to their IFRS counterparts.Those companies not obliged to followIFRSs by the EU Regulation were giventhe choice to do so. Few did.

Lack of enthusiasm

The lack of enthusiasm for adoptingthe IFRS standards is partly attributableto their complexity. They weredeveloped with the largest enterprisesin mind and assume a level ofaccounting resource that mostcompanies do not possess.

At international level this criticism wasmet by the issue of a simplified ‘IFRSfor SMEs’ for use by smaller entities.

The ASB announced that it wouldabandon its project of graduallyaligning UK standards with the fullIFRS and would instead replace themain UK accounting standards with aUK version of the ‘IFRS for SMEs.’

A draft of the resulting FinancialReporting Standard for Medium-sizedEntities (FRSME) was issued in October2010 as part of the ASB's proposals fora wider overhaul of UK accounting.One proposal was to require the useof IFRSs for ‘publicly accountable’

Michael Comeau, Technical PrincipalT 020 7380 4917E [email protected]

Latest ASB proposals

• The attempt to extend the use of IFRSs to ‘publicly accountable’ entities has

been abandoned, although financial institutions will have to make some

additional disclosures. For entities not already obliged to follow IFRSs by the

EU Regulation, their use will remain voluntary

• In the short term, small companies would continue to be able to use the

FRSSE if they so desire - there are further EC proposals to further simplify

accounting for small companies and ‘micro-entities’ and these will inform

future changes for such companies

• The new standard, now to be called ‘The Financial Reporting Standard

applicable in the UK and Republic of Ireland’, would apply to the remainder of

UK companies. The draft standard still takes the IFRS for SMEs as a starting

point, but diverts from it in a number of ways to effectively restore many of

the existing features of UK accounting, including allowing a number of

optional treatments, restoring exemptions and bringing the format

requirements into line with the existing requirements of the Companies Act




Alongside her ongoing media work, both broadcast and print, Liz also runs her own personalfinance web community at www.moneyagonyaunt.com and small business community atwww.thebizkit.co.uk.

Your voice is often described as 'the mostrecognisable on radio' - how would youdescribe it?

“A dog's dinner of different accents. It's hard to distinguishbetween the Irish and the Scottish twangs and the longer I spendin either place the more I sound as if I belong there. I like to thinkof myself as warm and authoritative, caring and approachableand I have been told I sound all of those. However, I’ve also beentold I sound like everything from a 'strident harpy to a ‘foul-mouthed trucker’ (by my mum) - so it's obviously in the ear ofthe listener.”

Have you always been interested in moneyand business issues?

“I started my career in the advice charity, Citizens AdviceBureau, in deepest Suffolk in the late 80's. I specialised inhelping people on low income manage their money and get outof debt. Small businesses were going under at the rate of 1,000a week then and household incomes and business financeswere, and still are for small businesses, inextricably linked.Because I had so many small business clients who were in debtat home I got to know a lot about how small businesses operateand fail. They became a lifetime passion.”

You recently launched a new website forsmall businesses - do you feel they getenough support?

“No. There's a lot around about the banks not lending, and it isvery difficult and expensive for business to borrow but it isn'talways financial support that small businesses need. They needthe right people to talk to at the right time. They need goodexperienced advisers who understand small businesses andaffordable counselling from people who can spot the problems.”

In your experience, what are the biggestchallenges small businesses face?

“Finding people with the right skills to grow their businesses.Even with enough money to hand the challenge is often findingthe correct skills and attributes to grow the business. Throwingmoney at it won't help unless the right people are workingtogether to spend it well.”

What's the one area you think smallbusinesses get wrong?

“The person who set up the business might be a brilliant salesperson. As the business grows he or she moves into the MD'sseat without the necessary skills to grow the business. He or sheoften hires the wrong first employee. Everyone is then muddlingthrough without any vison or leadership. The business eventuallyfails 'because of cashflow' but there's an underlying flaw thatcontributed to that cashflow problem that's never beenidentified.”

Do you feel the banks are doing enough tosupport the UK's SMEs in the current climate?

“No, but as I said it's not only money they need to be offering.Businesses need banks that support them through thick and thinbut how many bankers do you know who really understand theneeds of small business?”

Do you feel the UK does enough to encourageentrepreneurs generally?

“No. We love failure - we still prefer it to success. Even thebusiness press seems to applaud failure. We need to encouragepeople to try things, take more risks and be more innovative.People need to know they can fail and learn from their failuresand get back on the horse.”

Who's the most interesting person you've everinterviewed?

“Celebrities and politicians aren't always interesting. The mostinteresting people I've interviewed had real stories to tell like thewomen in the rape crisis centre in Haifa or the six families living ina one room flat with a shared bathroom and single burner stovein Hong Kong. But my favourite interviewee was also interesting -Tony Benn. A real gentleman with interesting points to make onjust about everything and a real passion for other people.”

What's the best piece of advice you've everbeen given?

“Wear one contact lens when you're reading the autocue. Thatway when they move the camera you will never be too close andlooking like the rabbit or too far away and squinting. Thank youSue Lawley.”

In the spotlight... Liz Barclay


The business world is changing - and fast. Advances in technology, especially digital technology,have meant ‘lite’, (purely online businesses) launched at little cost can rapidly gain mainstreamappeal and evolve at breakneck pace into more conventional, offline channels.

One of the better examples of a 'lite'business is Moshi Monsters, an onlinegame and virtual pet site, whichlaunched just a few years ago and nowhas all sorts of brand merchandise onshop shelves including books, toys,video games, magazines and tradingcards. The long and the short of it isthat the company overseeing thelicensing requirements of MoshiMonsters has its work cut out.

The brand has proliferated acrosschannels in a matter of just three yearsand controlling its ever-growing hordesof licensees will be a formidable task.

While the kind of breakneck growththat is possible these days will begleefully welcomed by anyentrepreneur or start-up, it does requirecompanies to manage their brandmerchandise and other licensingcontracts extremely well to ensure theyare getting the correct level of royalties- and on time.

To this end, you will be pleased tohear we have launched a new royaltyreporting and collections service,called Kingfisher Collections, thatessentially acts as a back-officefunction for a Licensor, Brand Owneror Licensing Agent.

It enables our clients to focusexclusively on their core businessrather than making sure they aregetting paid what they should bewhen they should be.Among other things, this new ‘back-office’ function for our clients coversthe following areas:

• Send Licensees standard notificationthat a statement is due prior to each reporting date. If no statementis received, chase the Licensee by email/phone to ensure statement is received promptly

• Check royalty statements to ensure all calculations are correct

• Review statements to ensure that the Royalty Rate, Territory, Product Type, Sell-off Period and Minimum Guarantee offsets comply with the contractual terms

• Where errors are found, liaise with the Licensee, and client if necessary,to resolve these errors

• Invoices the Licensee when Minimum Guarantee payments become contractually due

• After the royalty reports have been verified, invoice the Licensees for the relevant amount

• Monitor the relevant bank account to ensure that Licensee payments are made on a timely basis. Where payments are not made as prescribed, we will pursue the Licensee for these payments on the client’s behalf.

Rafi Saville, IP and Royalties PartnerT 020 7874 7967E [email protected]

Managing the royalties maelstrom –

Kingfisher Collectionsis launched


Alan Lester, Property PartnerT 020 7380 4979E [email protected]

Get the BIRs in!

With rules like this, we encourage anypotential investors to seek specialistprofessional advice to ensure they donot accidentally incur tax chargesthrough misinterpretation — orunderstandable oversight. But what wewould say is, used and implementedcorrectly, this new relief can provemore attractive than it first appears.

Be wary of business rates onnew builds

Late last year, our very own PhilipClarke, Managing Director of FisherProperty Services, had a letter publishedin Property Week about the rateburden on furnished versus unfurnishednew homes for sale, which could trapthe unwary. Having funded a numberof houses, Philip and his fellowinvestors found initial appetite for sales,but a balance remained unsold.

To try and improve the saleability of theremaining houses, Fisher Propertyconsidered furnishing the properties.One consequence of this, perhaps littleknown to many, is that in doing soCouncil Tax increases dramatically onsuch properties. It is essential that thisis factored into your calculations beforemaking amendments to the status ofyour assets to ensure the best overallsolution is arrived at.

Sombre start to 2012 forcommercial property

UK commercial property has not hadthe best start to the year, according tothe latest numbers from the InvestmentProperty Databank (IPD). Across retail,offices and warehouses, capital valuesand rents have both dipped, withfragile occupier demand anduncertainty the key driver of the slump.You only need to look at the touch-and-go state of the UK and Eurozoneeconomies to see why.

Phil Tily of the IPD says: “With so muchuncertainty still surrounding the futureof the UK and the Eurozone andreports indicating that the UK economyis falling back into recession, it’s nosurprise that demand from tenantsremains lacklustre across all sectors.”Commercial property thrives onconfidence and there is little of thatabout right now.

Business Investment Reliefs

With the introduction of BusinessInvestment Relief (BIR), UK residentnon-doms who claim the remittancebasis can now invest foreign incomeand capital gains in UK companieswithout falling foul of a tax charge ofup to 50% on the remittance of thosefunds to the UK. This generous taxrelief is being introduced, to inject theinward investment capital theGovernment can get right now, intothe economy. The BIR is being viewedas a way to facilitate this process.

The BIR enables investments to bemade into UK property, albeit througha company. The new relief applies tocommercial and residential propertydevelopment, although some activitiesare not allowed at all and others, suchas the letting of property for residentialpurposes, have certain restrictions. Butthe main thing is that non-doms can

get solid exposure to UK property in asignificantly more tax-efficient waythan before.

As ever, and specifically in light of whatconstitutes a ‘qualifying investment’,advice in this area is paramount — therules can be extremely complex. Forexample, any funds remitted to the UKmust be used to make a qualifyinginvestment within 45 days; and once

the investment is sold, the investor willhave a further 45 days to get the fundsback out of the UK or into anotherqualifying investment. And that is justthe start of it.

Since 6 April, property investment in the UK has been a lot more attractive for UK-residentnon-domiciled individuals.

The BIR enablesinvestments to be madeinto UK property, albeitthrough a company.

The new relief applies tocommercial and residentialproperty development...

www.hwfisher.co.uk

With the UK economy stagnating and levels of business confidencestuck in the doldrums, “investment in business” are three words rarelyseen together these days.

But the dark economic clouds are notwithout silver linings. The UK remainsan appealing place for overseasbusinesses to invest in, for a numberof reasons:

• The Pound is relatively cheap compared to many of the more buoyant foreign currencies, and Britain has long been one of the easiest European countries in which to set up and run a business.

• This March the Chancellor sought to make it a cheaper place to do business too. George Osborne announced a larger than expected cut in the main rate of corporation tax, and a reduction in the top rateof income tax, in what he described as an “unashamedly pro-business” Budget.

• Britain’s enviable reputation for being business-friendly has led many overseas companies to establish a UK subsidiary or branchas a base from which to develop their share of both the UK and European markets. With more than half a billion inhabitants, the European Union is the world’s largest single market – and a plum target for investors from further afield.

• By being outside the Eurozone, theUK can provide the perfect beachhead – with easy access to the EU market, but insulated to some degree from concerns over the Euro.

• UK employment laws and red tape are frequently less onerous than those of our European neighbours,and the country has rightly earned an image as a business-friendly place to invest.

• As an English-speaking country, the UK also has an advantage over many of our continental rivals. Investors in Britain can feel

Beating down the door to the UK

Britain’s enviablereputation for beingbusiness-friendly has ledmany overseas companiesto establish a UK subsidiaryor branch as a base fromwhich to develop theirshare of both the UK andEuropean markets.

Michael Davis, Managing PartnerT 020 7380 4963E [email protected]


anticipate and overcome anydifficulties they may face.

Our goal is to become strategicpartners who they can count on tohelp them navigate successfully any issues faced by their business and products.

We offer a menu of services, runningfrom the bare necessities of findingpremises and staff, managing payrolland compiling year-end accounts tosophisticated international taxplanning. While no one is predictinghuge growth for Britain’s economythis year, the UK is still seen as a stableand attractive place to do business.

For all its economic problems, Britainhas not lost its appeal for foreigncapital. Our rock bottom interest ratesare hardly a draw, but for overseasbusinesses seeking a foothold inEurope, UK Plc is as appealing as ever.

We now offer a “one-stop-shop”service to overseasinvestors of various sizeswho need help navigatingthe UK’s commercial andlegal framework.

confident that everyone in the country speaks the international business language, English.

• The UK also has good access to many world markets – particularly those of its trading partners in theCommonwealth. The logistics of doing business in an overseas market are much easier now than they once were.

• The advent of online purchasing and procurement has made cross border transactions easy, and the need to have a large workforce on the ground is reducing. Online bookkeeping and accounting services aid companies to operate their accounting and treasury centrally, and therefore keep overheads to a minimum.

At HW Fisher & Company, we’ve beenhelping individuals and companies toinvest in the UK for nearly 80 years.We now offer a “one-stop-shop”service to overseas investors of varioussizes who need help navigating theUK’s commercial and legal framework.We offer a range of expertise andservices to assist investors throughthechallenges of starting a businessin what may seem a strange andforeign land.

Our international investment expertsare familiar with the issues facing anew business, and are particularlyskilled in assisting overseas investors to

This summer London will play host to a little shindig known as the Olympic and ParalympicGames. The former begins on 27 July and lasts until 12 August, then there is a transition periodas athletes and spectators leave (and arrive), followed by the Paralympic Games from 29 Augustto 9 September.

The Games are going to have a hugeimpact on London and the SouthEast, so any business based there orlikely to have operations in that areaduring July-September shouldprepare accordingly:

Transport

This is the big one, so plan ahead.Stations such as London Bridge, KingsCross St Pancras and Waterloo arelikely to see huge crowds at peakperiods, plus there will be closures inthe road network and buses will beextremely busy. See if it is possible to

allow staff to work from home, useother premises, work different hoursto avoid peak periods, or arrangealternative routes and transportation.This will also affect customerjourneys, whether they are coming to

you or vice versa, plus business travel.Transport for London and London2012 have produced booklets thatcan advise on access, timing andtransport availability, but make sureyou tell your customers what yourplans are and how they can reachyou. With videoconferencing andother technology, the impact shouldbe minimal.

Nonetheless, during the Olympics youshould only plan meetings which areessential, which can be rescheduled if necessary, or held at alternativevenues.

Absences

With so many people going to the Games, there will be an effect on

staff absences. Most businesses will have planned accordingly and know which employees

are going to be away and when, but if not you

should do so now – particularly if the influx of tourists

and athletes means more customersfor your business.

There are, of course, legal and HRimplications to annual leave but byplanning ahead and identifying yourrequired staffing levels over thesummer you should be able tomanage it across the organisation.You might even need to take onadditional employees, so be awarethat demand will be very high duringthe Olympics and you should planany temporary staff needs as early as possible.

Deliveries and collections

With road closures and accessaffected by the Games, businessesthat rely on regular deliveries andcollections or freight transport need to ensure they have spokenwith suppliers to determine anypossible impact.

It may be necessary to postpone non-essential deliveries and stockpilenon-perishables during those weeks,and it may make sense to sharedeliveries with other businessesnearby or reschedule for non-peaktimes, such as early in the morning orlater at night. Again, doing this nowmeans fewer headaches once theGames have begun.

Managing the Olympics is aboutbeing prepared. Create a plan andstick to it, and the Games should befun and exciting, as they should be,rather than just another hassle.


Managing the Olympics isabout being prepared.Create a plan and stick toit, and the Games shouldbe fun and exciting, asthey should be, ratherthan just another hassle.

Julian Challis,HR PartnerT 020 7380 4969E [email protected]

Don’t let your businesssuffer from Olympic Fever


In Medieval Britain, people committing serious but nottreasonous offences were often placed in the stocks and leftat the mercy of the elements and passers-by. The stockswere intended to name and shame them in full public view.

But it does not stop there. Whensomeone is first suspected of beingguilty of deliberate evasion, they areplaced into HMRC’s EnhancedMonitoring Programme (EMP), whichwill closely monitor their tax affairsuntil they are no longer considered tobe a high risk.

For most people, HMRC says themonitoring period will last forbetween two and five years, so itcould clearly last even longer thanthis. In short, this is not somethingthat should be taken lightly. What willthe effects of this be for theindividuals named? There are anumber of ramifications. Firstly,HMRC will be all over their affairs forpotentially a long period of time. Evenafter they are removed from the EMP,there is every chance they will remainunder a watchful eye.

Secondly, because they will be namedand shamed online, this could leavean indelible stain on Google andother search engines. The last thinganyone would want when someonetaps in their name is for their HMRCblack mark to be screaming out onpage one of Google.

If they are looking for employment, orto raise funds for a new venture, eventhe most cursory due diligence coulduncover their history as a deliberatedefaulter, which will not count in their favour.

This is also the chance, although weare only speculating here, that themajor credit checking agencies willfactor this readily availableinformation into their credit profile -making it harder for them to borrowin future. And though HMRC will onlypublish for 12 months, other bodiesmay maintain their records for longer.

Here at HW Fisher & Company, ourprimary concern with the new namingand shaming regime is that it couldcatch and condemn taxpayers whogenuinely believe that they have onlycommitted an innocent offence.£25,000, after all, is not such a hugeamount of money particularly if builtup over several years.

Of course, if HMRC does contact yousaying that you have been placed intoits EMP, the first thing is to seek adviceurgently to determine next steps andhopefully prove HMRC wrong.

Even where there is some culpability,proper handling of the enquiry canprevent publication by HMRC. Thelast thing you want is to end up intoday’s equivalent of the stocks.

You will be relieved to know that theCoalition Government has not - as faras we know, anyway - consideredreintroducing the public pillory.

But it has come up with a system fornaming and shaming people guilty ofdeliberate tax evasion, which is likelyto see its first crop of ‘deliberatedefaulters’ be published online sometime this year - for all to view.

The new rules on ‘deliberatedefaulters’ apply to acts of deliberateevasion that either occurred on, orafter, 1 April 2010, or relate to a taxperiod beginning on or after that date.They apply to a wide range of tax andduties, from capital gains, inheritanceand corporation tax to VAT, PAYE andgeneral betting duties (note that in allcases of deliberate evasion, the‘potential lost revenue’ must haveexceeded £25,000). Given that thecompleted 10/11 tax returns haveonly recently been filed, there is everychance that HM Revenue & Customs(HMRC), this very moment, isunderlining in red ink individuals,organisations, companies andpartnerships that it considers may be guilty.

HMRC says it will give everyone thechance to respond before they nameand shame but if they cannot do thisthen their details will be published atwww.hmrc.gov.uk and will remain onthe site for 12 months from the datethey are first published. HMRC willpublish deliberate defaulters’ names,addresses and - most importantly -the details of what they have done.This is in addition to the tax, interestand penalties that the guilty party willhave to pay.

Named and shamed

You will be named andshamed online, this couldleave an indelible stain onGoogle and other searchengines.

If HMRC does contactyou saying that you havebeen placed into its EMP,the first thing is to seekadvice urgently.

Tony Bernstein, Tax PartnerT 020 7380 4977E [email protected]


Underinsured and overcharged…consolidation is key

Insurance should not be left to chance. It should be reviewed periodically,whenever your circumstances change in any material way.

Other than that, trust in the advice you have been given and leave it alone. The important thing is that when you do spend timegetting insurance in place - whether you are a private individual or a company - you spend that time productively. By this we meanarranging the cover you need at the best possible price.

This, of course, is the theory. In practice, many people are seriously underinsured, badly advised or have inappropriate coverrecommended - and often the most vulnerable people are the higher net-worth. Generally, this is either because they believe they donot need insurance as they have the wealth to cover eventualities, are not aware of the value of what they have lying around thehouse, or are just too time-compressed to give it serious thought.

Consolidation is key

And when insurance is in place, it is often the case that people with the most money are spending way too much of it onpremiums. The first reason for this is that they are less inclined to scan the market for the best quotes, the second reason is thatthey have a large collection of unconnected policies. Therefore, scouring the market for the best quotes and also consolidatingmultiple policies into one portfolio can rapidly bring down premium levels and improve cover. It also makes renewing and reassessinginsurance so much easier as it all happens on the same date each year.

Below are three examples of clients we have worked with recently, helping improve the cover they have and, where it was not in place, creating the correct bespoke policies to meet their unique needs.

WilliamVintage –Marylebone VintageClothing BoutiqueWe were approached by

WilliamVintage, an up-and-coming

fashion retailer, which loans out vintage

clothing to celebrities and has a shop in

Marylebone. For a marginal increase in

their premium, we increased the sum

insured on their stock and also added

all-important cover for items of clothing

out on loan. After a survey of the

property, we also negotiated for a

specific risk requirement on the policy

to be removed, which we felt was

unreasonable.

“We were very impressed with the

advice and professionalism of

Stackhouse Fisher and the level of care

and attention they provided to our

insurance renewal. They have saved us

time and given us peace of mind.”

Super-charged Range RoverThe previous insurer of a client was

unwilling to insure their 20-year old live-

out nanny on the family’s 5-litre

super-charged Range Rover. As a result,

they approached us to find a solution.

Having looked at their situation in depth,

we not only found an insurer that was

willing to insure the nanny on all of the

family’s vehicles, but switched their

household insurance, too. Through the

new insurer, we managed to improve the

cover for all of the client’s various

insurances at no extra cost.

“Even though I believed my existing

household insurers were providing a good

deal, out of curiosity, I asked Stackhouse

Fisher for a quotation. The insurance

policy, their price and the level of service

left my existing insurer standing and I

have no hesitation in recommending

them to other HW Fisher clients.”

Antiques RoadshowWe worked with a couple to arrange

contents insurance. We visited the

client’s home and spent time with them

running through their contents inventory

and treasured possessions (and there

were many of them - it was like an

episode of Antiques Roadshow!). This

was a classic case of a client being

unaware of how much contents they

had accumulated over the years. We put

in place a policy (below) that covered all

of their art and valuables for a highly

competitive premium - and included

annual travel & winter sports cover.

Contents - £360,000

Specified art - £50,000

Unspecified art - £35,000

Unspecified silver - £35,000

Clocks - £10,000

Wine - £20,000

Specified jewellery - £58,000

Unspecified jewellery - £25,000

Emily SoppetStackhouse FisherT 020 7089 2922E [email protected]

Stackhouse Fisher Limited is an Appointed Representative of Stackhouse Poland Limited who are authorised and regulated by the Financial Services Authority under reference 309340.

Stackhouse Fisher Limited is a related company of HW Fisher & Company


Auto-enrolment is looming. Blink and it will be upon us. And make no mistake about it, this isa huge development.

Over a period of just three to four years, auto-enrolment is set to take up to 10 million people into pension saving, many for thefirst time ever, and all employers will be part of it.

This can surely only be a good thing, given the pensions time bomb that we all know is ticking. Steve Webb, the Minister forPensions, has said that it will “start a much-needed seismic shift in pension saving in this country.”It is hard to disagree.

Auto-enrolment to create a seismic shift

The timetable for the introductionof auto-enrolment has beentweaked slightly since the lastissue of Insight. Large employers -those with 250 or moreemployees - will face no changein the date they are due to startenrolling their staff. That stays asOctober 2012.

But small businesses will be givenmore time to prepare forautomatic enrolment to help

them out in what the Government concedes are exceptionally tough economic times. For example, companies employing 30-49 staff have had their automatic enrolment start date put back until August 2015, a year or so after the date originallyintended. In another concession, the Department for Work and Pensions has said it will allow employers four weeks to tell staffthat they are being enrolled into a pension scheme, as opposed to the week it had originally stipulated. Again, this is all aboutmaking the introduction of auto-enrolment that little bit smoother - and less of a panic.

But even with the delays, in the new timetable all existing firms will have enrolled their staff by April 2017, followed by all newemployers by February 2018.

In both existing and new firms - the level of pension contributions will also be phased in over time to help employers andindividuals adjust. Full contributions will only have to be paid from 1 October 2018.As distant as this may seem, in reality it is not far off at all.

Enrol into what?

The answer is one of two things. Eligible workers will either need to enroll into a workplace pension scheme, or they will needto enroll into the new pension scheme provided by the Government: NEST, (National Employment Savings Trust) - NEST isbasically a straightforward workplace pension scheme for employers to offer to their UK-based workers.

Directors, for their part, will have to ensure the qualifying pension scheme they offer meet certain standards in respect of thebenefits it provides and level of contributions paid into it. If employers choose to make contributions, the minimum amount is3% towards a defined contribution scheme, based on qualifying pensionable earnings.

Default mode

As to where and how much people will choose to invest once they are enrolled, some interesting conclusions have emergedfrom the Institute of Fiscal Studies (IFS). In a study analysing auto-enrolment in the US, the IFS found that the vast majority ofpeople invariably go with default investment funds and default contribution rates. Prior to auto-enrolment, for example,roughly 4% of US employees put 3% into their pension, but when a 3% contributionwas made the default level after auto-enrolment, 65% of people started paying in thatamount. Similarly, employees putting money into the default investment fund shot upfrom 6% to 80% after auto-enrolment. To do the best for their employees, companydirectors should ensure their staff get some appropriate advice.

250 or more members

50 to 249 members

Test tranche for less than 30 members

30 to 49 members

Less than 30 members

From

1 October 2012

1 April 2014

1 June 2015

1 August 2015

1 January 2016

To

1 February 2014

1 April 2015

30 June 2015

1 October 2015

1 April 2017

Employer size Automatic Enrolment date

Paul Forde, Financial AdviserEos Wealth ManagementT 020 7330 0114E [email protected]

Eos Wealth Management Limited is authorised and regulated by the Financial Services Authority.You should be aware that past performance is no guarantee of future performance. The price of investments and the income from themcan fall as well as rise. An investor may not get back the original amount invested. Any tax reliefs or legislation mentioned are thosecurrently available or in force and are subject to change. Eos Wealth Management is a related company of HW Fisher & Company.


Fisher Okkersen film audits

The combination of Fisher Forensic and Christa Okkersenbrings to the market a specialist with an internationallyestablished reputation in royalty and participation auditing inthis sector, undertaking numerous audits each year acrossthe globe, covering a range of intellectual property (IP) rights.A combination of extensive investigative skills, industryknowledge and keen commercial awareness has resulted inan enviable record of success in generating and maximisingclients’ revenues.

Fisher Okkersen’s clients include producers, sales companiesand talent in the United States, Canada, Asia andthroughout Europe. It acts for some of the biggest names inthe industry, either working directly for the company or forthe agents that represent them on a worldwide basis.Through the medium of audit, it represents their interests in

In March, our very own Brian Johnson of Fisher Partners was interviewed by Laura Kuenssberg,ITN Business Editor, for an evening news slot she was doing on that perennial subject, banksnot lending to business.

Legal benchmarking surveyEarlier this year we carried out our second annual research project among SME legal practices inthe South East. The report is due out shortly, looking at the impact of the Legal Services Act,how firms manage business risks and how their finances stack up. For example, we discoveredthat a third of these legal firms haven’t carried out any succession planning at all and thataverage debtor days, particularly among small firms, are extremely high. To get a copy of the full report and find out more, please contact:

Rest assured, Brian, emerging from the SME trenches, gave Laura all the insight and soundbites she needed. If you’d like tosee Brian basking in the media limelight, the clip is currently on our website. More generally, our media profile continues togrow. Most recently Tony Bernstein’s views on the 2012 Budget were used by the Financial Times, Daily Telegraph, Metro andothers in an effort to make sense of the real impact of Chancellor George Osborne’s decisions.

the worldwide exploitation/distribution of filmed product. Fisher Okkersen also works with: market leaders specialisingin global collections of Minimum Guarantees, exploitationrevenues and rights management, assisting them as required;and US-based specialists experienced in studio level audits.

More of the services offered by Fisher Forensic are covered onpage 15. For further information, or for a no obligationdiscussion about how Fisher Okkersen could help yourbusiness, please contact:

Stuart Burns T 020 7380 4964 E [email protected]

Christa Okkersen T +377 9770 7600 E [email protected]

In association with Christa Okkersen, a Monaco-based expert in film audits, Fisher Forensic has launched Fisher Okkersen. The new venture is a specialist film audit service with over 28 years of experience in the conduct of specialised audits in the film industry, DVD and TV markets.

Brian Johnson basks inthe media limelight!

News in brief

Paul Beber, Audit PartnerT 020 7380 4961E [email protected]


Launch of business turnaround servicesFisher Partners offer a tailored restructuring approachspecifically for the SME sector. The aim of the restructuringteam is to work collaboratively with existing managementteams, lenders, stakeholders and investors to ensure the beststrategy for the recovery of a struggling business.

By using this service it will no longer be necessary to post the signed paper copy of any forms. Completed forms to file will beplaced in our Client Portal and an authorised person will be notified by email. The authorised persons may approve the formby using the electronic 'Approve Document' facility. Once confirmation has been received the form will be e-filed direct fromour software system to Companies House for registration. We believe that this electronic service will be beneficial to ourclients by assisting them to meet their statutory obligations in the minimum time required and provides electronic statutoryfiling by one click from their desk.

Our business is built on referralsHW Fisher would like to take this opportunity to thank all ourclients and contacts for all the new clients you have referred to usover the last year. Our business is built on referrals and we thankyou for your support.

Core services include:

• Performance review

• Recovery strategy

• Implementation

• Cash flow

• Performance improvement

• Specialist solutions

Restructuring services will involve an investigation of current businessperformance, development of a recovery strategy – either financial, operational orboth – and provide support in the implementation of the agreed strategy.

Through HW Fisher & Company’s worldwidenetwork, it is also able to support anyrestructuring situation involving cross-borderrequirements.

Nick O'ReillyBusiness Recovery PartnerT 020 7380 4973E [email protected]

Companies House have announced that most of theirfiling services will be electronic by March 2013. In preparation for this process we are launching anew electronic service using our Client Portal (for more information about our Client Portal see ourwebsite at www.hwfisher.co.uk).

Companies Housegoes technical

www.hwfisher.co.uk

Watford office

Acre House

3-5 Hyde Road

Watford WD17 4WP

United Kingdon

T +44 (0)1923 698 340F +44 (0)1923 698 341

London office

Acre House

11-15 William Road

London NW1 3ER

United Kingdom

T +44 (0)20 7388 7000F +44 (0)20 7380 4900E [email protected]

HW Fisher & CompanyBusiness advisers – A medium-sized firm of chartered accountantsbased in London and Watford.

Related companies and specialist divisions:

Fisher Corporate PlcCorporate finance and business strategy

FisherE@se LimitedOnline accounting and back-office services

Fisher ForensicLitigation support, forensic accounting, licensing and royalty auditing

Kingfisher CollectionsRoyalty administration and collections services for IP owners

Fisher PartnersBusiness recovery, reconstruction and insolvency services

Fisher Property Services LimitedProperty investment, management and finance

Jade Securities LimitedBusiness divestments, mergers, management buy-outs and acquisitions

Stackhouse Fisher LimitedSpecialist insurance services

Eos Wealth Management LtdIntelligent wealth management and financial services

VAT Assist LimitedUK VAT representative

HW Fisher & Company and HW Fisher & Company Limited are registered to carry out audit work in the UK and inIreland. A list of the names of the partners of HW Fisher & Company is open to inspection at our offices.

Fisher Forensic, Fisher Okkersen, Fisher Partners and Kingfisher Collections are trading names of specialist divisions ofHW Fisher & Company, Chartered Accountants.

HW Fisher & Company Limited, Fisher Corporate Plc, Fishere@se Limited, Fisher Property Services Limited, Jade Securities Limited, Fisher Forensic Limited, VAT Assist Limited, Eos Wealth Management Limited and Stackhouse Fisher Limited, are related companies of HW Fisher & Company, Chartered Accountants.

HW Fisher & Company, HW Fisher & Company Limited and Jade Securities Limited are not authorised under theFinancial Services and Markets Act 2000 but are regulated by the Institute of Chartered Accountants in England andWales for a range of investment business activities. They can provide these investment services only if they are anincidental part of the professional services they have been engaged to provide.

Fisher Corporate Plc is authorised and regulated by the Financial Services Authority under reference 193921.

Eos Wealth Management Ltd is authorised and regulated by the Financial Services Authority under reference 543025.

Stackhouse Fisher Limited is an Appointed Representative of Stackhouse Poland Limited who are authorised andregulated by the Financial Services Authority under reference 309340.

HW Fisher & Company is a member of the Leading Edge

Alliance, an alliance of major independently owned accounting

and consulting firms that share an entrepreneurial spirit and a

drive to be the premier providers of professional services in their

chosen markets.

If you would like to subscribe / unsubscribe to our publications, please email [email protected]

This briefing is printed on Essential Velvet recycled paper.

© HW Fisher & Company 2012.

Print date: May 2012. All rights reserved.

insight spring/summer 2012

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